The State Department is giving the Pakistan Counterinsurgency Capability Fund (PCCF) back to the Pentagon for the rest of the year, as part of the budget deal struck between Congress and the administration to avert a government shutdown.

The budget deal took $8.5 billion away from the State Department and foreign operations for the remainder of fiscal 2011. The administration had requested $1.2 billion in the State Department's budget for PCCF this year, but the new budget deal cuts that request by $400 million and transfers the remaining $800 to the Defense Department, under what DOD calls the Pakistani Counterinsurgency Fund (PCF).

The Pentagon was in fact the original owner of that fund. But transferring the money as well as the program's management to Foggy Bottom was a key part of Secretary of State Hillary Clinton's plan to assert more State Department control of foreign military assistance programs.

The State Department may have agreed to give up the fund out of convenience. By moving the remaining $800 million of PCCF funding back to DOD, State managed to remove about 10 percent of the total $8.5 billion in budget cuts, thereby saving several other programs.

For next year's budget, State has requested $1.0 billion for PCCF, but nobody knows whether or not that money will be given to State or DOD. State perhaps has a better chance of keeping the PCCF money in fiscal 2012, as opposed to fiscal 2011, because next year the money is being requested as emergency war funding and therefore does not have to fit under the regular budget limits.

Overall, the PCCF funding is one piece of a larger puzzle in which State is competing with DOD for authorities and programs that both have a role in. If the PCCF funding is any indication, these decisions are now largely being made to fit budget realities, and are less a result of considerations over which agency is best suited to manage which issue.

"It looks like the transfer of responsibility for Pakistan counterinsurgency programs from DOD to State, which the Congress wanted to do, has been delayed," said Gordon Adams, former Office of Management and Budget director for national security spending, now a professor at American University. "Could be it was easier to fund the program this way, which sets a bad precedent for the future."