The Cable

State Department tries again to create Arab Spring support fund

The State Department is asking Congress for over half a billion dollars next year to help support countries struggling to emerge from the chaos of the Arab Spring - an effort that Congress failed to endorse the first time around.

The State Department and USAID fiscal 2014 budget request, now available online in full, asks for $47.8 billion for the State Department and international programs in fiscal 2014, which represents a 6 percent decrease from the $51.1 billion State will receive in fiscal 2013, due to a drastic reduction in money requested for the Iraq and Afghanistan accounts, known as the Overseas Contingency Operations (OCO) account.

The largest new funding request is for $580 million in new money for a "Middle East and North Africa Fund, which the budget request document says "will capitalize on the opportunities presented by the Arab Spring, supporting those countries that are moving to undertake the democratic and economic reforms necessary to address citizens' demand and provide lasting stability in the region."

The fund would include the $70 million regularly appropriated to the Middle East Partnership Initiative. The fund would be managed by the Middle East Transitions Office stood up last year under the leadership of former USIP expert Bill Taylor, who ran a similar office in the 1990s for countries transitioning to democracy after the fall of the Soviet Union.

Taylor and Deputy Secretary Tom Nides rolled out the fund the first time around last year but didn't have a lot of details of where the money would go.

"The Arab Spring has come. We need to make sure we have the tools and the flexibility in which to fund these initiatives," Nides said at the time. "I cannot tell you today where that money will be spent, because we'll be, obviously, in consultation with the Hill."

But the House didn't include any money in their fiscal 2013 appropriations bill for the fund, citing a lack of detail from the administration. The senate placed $1 billion in their version of the appropriations bill for the fund, but the fund ultimately got no money due to the chaos of the budget process that resulted in a series of continuing resolutions.

A senior state department official told The Cable Wednesday that State is trying again with a smaller number, but there won't be much detail this time around either.

"The basic rationale for the MENA incentive fund is essentially the same as it was last year," the official said. "We're making the argument again and it's even more important now because with the demands on our budget, such as in Syria, we don't want them to crowd out other programs."

"At the end of the day, a lot of this is going to be driven by where we can make the biggest bang for the buck in terms of reform, what countries are interested in working with us, and we don't know where that's going to be and we don't know yet how to apply that to accounts," the official said. "We feel that keeping it open and keeping it as a contingency [fund] is the right way to do it and that's the argument we are going to make."

The largest single program to be cancelled in the State Department's budget is the Pakistan Counterinsurgency Capabilities Fund (PCCF), which received $850 million in fiscal 2013. The administration is not requesting any money for PCCF in 2013 because the administration has decided to end the program, which was meant to support the Pakistan military's ability to fight terrorism, assuming they wanted to do so.

The State Department and the Pentagon have been battling over control over the PCCF program since 2009. Hillary Clinton took the program from the Defense Department in the fiscal 2011 budget request as part of her effort to put diplomats back in charge of foreign policy, but she then had to give the program back to the Pentagon to make room for other items in the State budget. State took control again in 2012, but now that's all over.

"PCCF is one of those programs that we're ending," the official said, noting that Congress didn't fund it in the last continuing resolution anyway. "As part of a general clear eyed view of what we are doing in these countries, we just felt this was not money we could use and the idea between us and DOD was that we should wind it down."

Congress probably wouldn't have funded it in fiscal 2014, the official said. Pakistan would still get $1.2 billion in U.S. funds under the new budget, about $860 million in economic assistance and about $300 million in foreign military financing.

The State Department's budget, like the rest of the president's budget, does not account for sequestration because it is part of the president's overall deficit reduction plan and if implemented would subvert the need for arbitrary cuts under sequestration, the official said.

"As we put together our fiscal 2014 budget we did not assume we would be under a sequester order," another senior State Department official said.

The budget also includes a request for $59.9 million for the office of Secretary of State John Kerry, a 20 percent increase over fiscal 2013 levels. A senior State Department official said Kerry is getting 6 extra staffers to address issues such as cyber security and there is also new money there for other programs.

"When you are looking at the office of the secretary, it's a lot broader than just the secretary and the people that are in the secretary's area. It is a very large organization," the official said.

Another oficial told The Cable the increase for the secretary's office is make of $5.1 million for the office of global women's issues, $3.55 million for the office of foriegn assistance resources, and $967,000 for the office of the coordinator for cyber issues.

"There is no increase in staffing or funding requested in FY2014 for the Secretary's Executive Office," the official said.

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