The Cable

Slaughter: State Department to propose some budget increases, some cuts

The State Department and USAID, facing their most challenging fiscal environment in years, will be asking for targeted budget increases while simultaneously arguing that their overall reform effort is a money saver, the head of State's internal think tank said Wednesday. But the upcoming budget battle is going to an uphill battle for both organizations.

The State Department and USAID secured big budget increases in fiscal 2010, which the administration argued was needed due to the shrinking of both organizations' budgets over the years, the need to repair U.S. relationships abroad, and the ever increasing civilian role in Iraq, Afghanistan, and Pakistan.

The grim fiscal picture and altered political landscape on Capitol Hill, however, threaten to reverse those gains. House Republicans leaders are promising to slash State Department and development budgets and to apply a litmus test to disbursements of foreign aid. A large group of conservative Republicans have proposed a drastic defunding of USAID.

Last week, USAID Administrator Rajiv Shah argued in an interview with The Cable that increased funding for development is needed to protect national security. Today, the State Department's outgoing Director of Policy Planning Anne-Marie Slaughter argued in a breakfast meeting that State and USAID need even more funding in order to implement crucial reforms and clear up the bureaucratic confusion of the current system.

"We will still be asking for increases in very targeted areas," she said, referring to the administration's fiscal 2012 budget request which will be released in February. Fiscal 2011 funding will likely stay at 2010 levels due to the likelihood of a year-long continuing resolution. But Slaughter said the budget request will also call for reduced funding in other areas.

"The things that align with our priorities will be funded and those that don't align with some of these priorities will not," Slaughter said.

Slaughter also noted that the Quadrennial Diplomacy and Development Review, which she helped to lead, contains the analytical arguments for more money for some State and USAID programs.

"[The QDDR] is the basis for our budget presentation," she said. "[House Foreign Affairs Committee Chairwoman Ileana] Ros-Lehtinen said we want you to figure out how to work much better and much more efficiently. Secretary [of State Hillary] Clinton's answer is, we've spend the last 18 months doing that."

Meanwhile, State will immediately begin work on the 60 percent of the initiatives in the QDDR that can be implemented without new resources.

What can't be funded in the State Department's budget could come from Pentagon coffers. What State and DOD have been doing in the warzones is to use money from the Pentagon or pooled State-DoD accounts  to support missions abroad.

"It is very unlikely that we are going to see a huge shift in resources from DOD to State and USAID, but it is likely that we are going to find ways to be able to spend these resources together, with State and USAID in the lead," she said. "It's the military that understands better than anyone that is has to be civilians in the lead."

Slaughter doubled down on the QDDR's call for a unified national security budget -- which she hoped would encompass not only the State Department, USAID, and the Pentagon, but also the Department of Homeland Security and parts of the Department of Justice -- but warned it isn't coming soon.

"We do think it's feasible...I do expect a lot of work on that over the next two years," she said. "Getting there is going to take some doing."

Meanwhile, USAID must rely on the leadership of the State Department if it wants to thrive in the current cutthroat political environment, Slaughter argued.

"Could anybody right now think that USAID would be better off at a time when people are calling for defunding it completely if Raj Shah were the only one fighting for it, rather than Secretary Clinton?" she asked. "Could anybody possibly imagine that they would be in better shape to get the funding that they need?"

Slaughter steps down later this month to return to Princeton University and will be replaced by Clinton's Deputy Chief of Staff Jake Sullivan. So what will happen to the implementation of the QDDR, now that its top two officials, Slaughter and former Deputy Secretary Jack Lew, won't be around?

"It would be crazy for me to try to drive the implementation," said Slaughter, who handed off official responsibility for implementation to Deputy Secretary Thomas Nides. "We basically empowered a lot of people in the State Department and USAID who want to do this... They have to actually implement it. Otherwise it remains way too theoretical."

The Cable

The State of the Union on foreign policy – Translated

Tonight The Cable brings you the second annual edition of our attempt to translate the foreign policy portions of President Obama's State of the Union address:

On Trade:

"Before I took office, I made it clear that we would enforce our trade agreements, and that I would only sign deals that keep faith with American workers, and promote American jobs.  That's what we did with Korea, and that's what I intend to do as we pursue agreements with Panama and Colombia, and continue our Asia Pacific and global trade talks."

Translation: I always promised to talk big on trade and there's no reason to stop now. We might actually get one FTA done this year...now that I don't have Pelosi to worry about. But if you were expecting specifics from me on the rest of them, you might want to stop holding your breath. These things are riddled with political land mines and they will get done only if they don't cost too much political capital.

On defense spending:

"The Secretary of Defense has also agreed to cut tens of billions of dollars in spending that he and his generals believe our military can do without."

Translation: I'm going to follow Gates's lead here by pretending that proposed "cuts" to the defense budget are really cuts at all, rather than mentioning that Gates and I are actually asking for increased Pentagon funding. Ain't semantics great?

On Iraq:

"Look to Iraq, where nearly 100,000 of our brave men and women have left with their heads held high; where American combat patrols have ended; violence has come down; and a new government has been formed. This year, our civilians will forge a lasting partnership with the Iraqi people, while we finish the job of bringing our troops out of Iraq. America's commitment has been kept; the Iraq War is coming to an end."

Translation: I'm going to continue to take credit for the one foreign policy problem that actually seems to be getting better and better. But if Maliki turns out to be another Mubarak, boy are we in trouble then.

On Afghanistan:

"Thanks to our heroic troops and civilians, fewer Afghans are under the control of the insurgency. There will be tough fighting ahead, and the Afghan government will need to deliver better governance. But we are strengthening the capacity of the Afghan people and building an enduring partnership with them.  This year, we will work with nearly 50 countries to begin a transition to an Afghan lead. And this July, we will begin to bring our troops home."

Translation: We can control more space so long as we have tons of troops on the ground, but we know that isn't going to solve the overall problem with Karzai. Either way, we're going to have to try to put some lipstick on this pig and begin getting the heck out of there. But, for the meantime, let's just keep confusing everybody by throwing around unclear dates that mark unclear milestones until we figure out what we really want to do.

On Pakistan:

"In Pakistan, al Qaeda's leadership is under more pressure than at any point since 2001. Their leaders and operatives are being removed from the battlefield. Their safe-havens are shrinking. And we have sent a message from the Afghan border to the Arabian Peninsula to all parts of the globe: we will not relent, we will not waver, and we will defeat you."

Translation: Yes, we are killing people in Pakistan when we can find them and hit them with drones, but I'll go ahead and gloss over the fact that our cooperation with Pakistan survives only as long as the Zardari government does.  We've proven to the Arab world that we can't be scared into withdrawing out of the region. Now all we have to do is figure out how to withdraw from the region again.

On Iran and North Korea:

"Because of a diplomatic effort to insist that Iran meet its obligations, the Iranian government now faces tougher and tighter sanctions than ever before. And on the Korean peninsula, we stand with our ally South Korea, and insist that North Korea keeps its commitment to abandon nuclear weapons."

Translation: Here's one sentence of lip service to each of the two perhaps most dangerous foreign policy problems without actually spelling out what I plan to do about either of them going forward. I can't understand why our drive to stop them from building nukes isn't working. I suppose if these  regimes don't see it as in their interest to have positive relations with the United States, there isn't much we can do.

On Latin America:

"This March, I will travel to Brazil, Chile, and El Salvador to forge new alliances for progress in the Americas."

Translation: I was going to have to go to South America sooner or later. I guess if I can spin a visit with the Chinese president so it looks like we get along with China, doing the same with these three governments shouldn't be so difficult.

On Arab revolts:

"We saw that same desire to be free in Tunisia, where the will of the people proved more powerful than the writ of a dictator. And tonight, let us be clear: the United States of America stands with the people of Tunisia, and supports the democratic aspirations of all people. We must never forget that the things we've struggled for, and fought for, live in the hearts of people everywhere. And we must always remember that the Americans who have borne the greatest burden in this struggle are the men and women who serve our country."

Translation: We haven't pushed that whole "democracy" thing with Arab dictators but we can't just come out and say we support their crackdowns on protesters, now can we? I guess I can burn the (former) government of Tunisia but I'll stop short of mentioning the tear gassing of students in Egypt, lest my administration's own complicity in supporting that government come into focus. Hey, I guess maybe we can put a positive spin on WikiLeaks after all.

On China, Guantanamo Bay, the Middle East peace process, Belarus, Cuba, development, foreign aid, the State Department, human rights, cyber warfare, the national export initiative, international currency, and climate change:

Nothing.

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