Wednesday, March 13, 2013

USAID to grantees: Funding cuts possible

The Agency for International Development has told grant recipients that program cuts are possible as the federal government whacks $85 billion from its budget.
A USAID notice reads:
Dear Recipient - As you are likely aware, due to the failure of Congress to reach a deal on balanced deficit reduction to avoid sequestration, the President on March 1, 2013, as required by law, issued a sequestration order canceling approximately $85 billion in budgetary resources across the Federal government for the remainder of the Federal fiscal year.
Aman Djahanbani
As partners with the United States Agency for International Development (USAID), we are writing to provide you with timely and clear information about how these unfortunate budget cuts impact us, and in turn what it may mean for funds provided to USAID assistance recipients.
At this time, USAID is taking every step to mitigate the effects of these cuts, but based on our initial analysis, it is possible that your organization's workforce, revenue, and planning processes may be affected. For example, USAID may determine it necessary to reduce current or future funding of your agreement or completely terminate your assistance agreement.

To the extent that your agreement is affected due to these budget cuts, you will be contacted by the appropriate USAID Agreement Officer with additional details.
Thank you for your continued partnership with the United States Agency for International Development and for your cooperation as we work together to manage these unfortunate circumstances. 
Sincerely, Aman S. Djahanbani 

Senior Procurement Executive
It's not immediately clear how sequestration will affect USAID's Cuba programs.
Devex, which provides business information and other services to some 500,000 members of the international development community, reported on March 2 that sequestration was forcing USAID to cut roughly $2.6 billion from its budget, including nearly $1.7 billion in foreign assistance.
Devex said USAID cuts for fiscal 2013, which ends Sept. 30, would include:

  • Assistance for Europe, Eurasia and Central Asia: $32 million (from $63 million).
  • Capital Investment Fund of USAID: $7 million (from $130 million).
  • Development Assistance Program: $127 million (from $2.5 billion).
  • Development Credit Authority Program Account: less than $1 million (from $8 million).
  • International disaster assistance: $49 million (from $980 million).
  • Office of Inspector General operating expenses: $3 million (from $51 million).
  • Operating expenses: $68 million (from $1.4 billion).
  • Transition initiatives: $3 million (from $57 million).
Devex said other programs facing reductions included:

  • African Development Foundation: $2 million cut (from $30 million).
  • Food for Peace Title II grant: $74 million cut (from $1.5 billion).
  • Inter-­American Foundation: $2 million cut (from $29 million).
  • McGovern-­Dole International Food for Education and Child Nutrition Program: $9 million cut (from $185 million).
  • Millennium Challenge Corp.: $45 million cut (from $904 million).
  • Overseas Private Investment Corp.: $3 million cut (from $58 million)
  • Peace Corps: $19 million cut (from $377 million).
  • Trade and Development Agency: $3 million (from $50 million).

4 comments:

Moses said...

Tracey, the problem with this announcement is that what it really means is that those grantees with the best politics or the most sensitive projects are least likely to be affected. Conversely, those programs which are likely doing the most good are also most likely to be cut the most. For Castro supporters who may read your post and be hopeful that these proposed cuts will "lighten the pressure" put upon the regime by anticastristas I would only add "Fat chance". The money that goes to Cuba (and I what I really mean is Miami) is money granted for purely political reasons since there is little a grantee can say or do to justify that previous funding was money well-spent. Cuban USAID funding is pure politics!

Tracey Eaton said...

I understand what you're saying, Moses, although the budget numbers show that big contractors inside the Beltway run many of the Cuba programs and that money doesn't always trickle down to Miami.

Moses said...

Just for giggles, if one day you were to investigate the direct relationship between the "inside the beltway" law firms, lobbyists and consulting firms that have consistent contractual ties with USAID and Miami even you might be surprised to find how many powerful Miami Cubans have offspring, siblings and 'hermano primos' working in Washington. You are right that the funds stay in Washington but the benefits are felt in Miami. BTW, this strategy also serves as a kind of 'farm system' to borrow a baseball metaphor to ensure the next generation, at a minimum, understands the hardline rationale, history and politics. Former congressional intern Marco Rubio, in a way, is recent example of this strategy. Thanks for your reply

Tracey Eaton said...

that makes sense. it would be interesting to map out all those relationships...