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Notes on the US Budget for FY2011 as it Affects Afghanistan and Pakistan

Source: US Department of Defense, Budget Document

An earlier post, based on numbers provided by Budget Insight, a Stimson Center Blog on National Security Spending, had taken a preliminary look at the FY2010 US defense budget request, and its implications for Pakistan and Afghanistan. This post adds to, and updates to 31 May 2009, the earlier post; it also reviews the status of pending legislation (the Kerry-Lugar and Berman bills).

Given the complexity of budget documents, what is presented below is in the nature of a “student’s notes” in which there is scope for errors of commission and omission: hence guidance and correction would be both appreciated and incorporated. With this caveat, it seems that:

1. Well over $14 billion of US taxpayers’ money is headed for the “Af/Pak” theatre in FY2010, up from some $11 billion in FY2009;
2. Contrary to noisily announced strategies, the share of military (“security”) expenditures in these totals is rising, not falling; and
3. More money, proportionally, is not being allocated to Pakistan: the Af:Pak ratio being stable at 2.8:1 in FY2010 and FY2009.

Summary

Based on the numbers compiled below (which exclude multi-country allocations, as well as indirect financial flows), it is envisaged that US economic and security assistance for:

1. Afghanistan may rise to a minimum of $10,262 million in fiscal year (ending September 30) 2010, from $8,178 million in FY2009 (25.5% increase) — of these totals, $8,009 million (78.0%) is for security assistance in FY2010, compared to $6,093 million (74.5%), in FY2009. Alternatively, of the total assistance of $10,262 million in FY2010 , $2,762 million (26.9%) is to be administered by the State Department and $7,500 million (73.1%) by the Department of Defense, compared to $2,578 million (31.5%) and $5,600 million (68.5%), respectively, in FY2009; and for
2. Pakistan, to $3,722 million in fiscal year (ending September 30) 2010, from $2,841 million in FY2009 (31% increase) — of these totals, $2,620 million (70.4%) is for security assistance in FY2010, compared to $1,803 million (63.5%), in FY2009. Alternatively, of the total assistance of $3,722 million in FY2010, $1,582 million (42.5%) is to be administered by the State Department and $2,140 million (57.5%) by the Department of Defense, compared to $1,441 million (50.7%) and $1,400 million (49.3%), respectively, in FY2009.

For both countries, these numbers — which exclude: (i) expenditures under multi-country programs for which country-specific numbers are not available, (ii) indirect expenditures in the two countries, especially under the ambitious embassy security and military construction programs, and (iii) the more modest humanitarian assistance recently announced for Pakistan — attest both to the increase, and to the militarisation, of America’s “engagement” in the “Af/Pak” theatre; the latter, seemingly contrary to the announced “new” strategy of the Obama administration in which State Department led economic assistance is said to have been privileged over the military engagement. Nor, proportionally, is more money being allocated to Pakistan.

They also show that for all the noise being made about the effort needed in Pakistan in relation to Afghanistan, the budget request for Afghanistan remains 2.8 times that for Pakistan in both FY2010 and FY2009.

Introduction

To arrive at these numbers, this post provides some introductory notes on key terms and the budget process, and gives additional numbers from budget request documents from the Departments of State and Defence, and from posts at the Stimson Centre blog (here, here, and here), so as to provide a preliminary consolidated look at budget funds that are envisaged to be directed toward Afghanistan and Pakistan in US FY 2010.

Budget Terminology: Authority, Obligation, Outlay

It is the US government “outlay” that is received by, or in, Afghanistan and Pakistan. Outlays, the actual expenditure of money, require the US government to go through the following process:

1. Budget Request: Following some 18 months of preparation led by the Office of Management and Budget (OMB), by the first Monday of every February the US President submits his expenditure proposals (budget request), for the fiscal year beginning on the first of October, to the US Congress. (This year, however, because of an unusually difficult situation at home and abroad, and a new administration, the budget request was delayed to 7 May 2009.)
2. Budget Authority: Based on this request, aided by the Congressional Budget Office (CBO), the US Congress authorizes specific agencies of the government (i.e. provides budget authority) to enter into legal obligations (usually, by contract or purchase orders) for specific amounts, during a fiscal year, to pay for goods or services received, This is done in one of two ways: either (i) by appropriation of funds (discretionary spending); or (ii) by specific (direct spending) legislation, that creates a budget authority that is subject not to the appropriations committees, but to authorisation committees, of the Congress.
3. Budget Outlay: Based on this budget authority, the government enters into obligations (signs contracts, issues purchase orders, employs personnel, etc.); budget outlays occur when these obligations are liquidated, mainly by issue of cheques, electronic fund transfers, and cash payments.

In this process, two points are noteworthy: (1) the President’s budget request is only an estimate of outlays; and (2) the authority to incur an obligation of say $100 million in FY 2010, may lead to outlays of say $50 million in FY 2010, $30 million in FY 2011, and $20 million in FY 2012. In this system, control over the budget is exercised indirectly, by both the President (by placing limits on obligations that can be incurred), and the Congress (by the amount of authority provided).

This is a highly abbreviated introduction to three key terms — authority, obligation, and outlay — and does not begin to do justice to the complexities of the budget. In particular, no mention has been made of the process by which budget control is achieved and exercised, nor of the audit process. From just this account, however, it should be clear that the “budget” in the United States is more like a “multi-year rolling plan” in the budget terminology of Afghanistan and Pakistan.

The Budget Cycle

Although much delayed this year, to give a flavour of the normal Congressional budget process, the usual timetable is shown in the Table below.

The President’s Budget Request for FY 2010

The bulk of US assistance to Afghanistan, Pakistan, and other foreign countries, is classified either as:

1. International Assistance (IA; “Function 150″), provided through the State Department; or as
2. Overseas Contingency Operations (OCO; previously Global War on Terror, GWOT, or just WOT: consisting of Operation Iraqi Freedom, OIF, and Operation Enduring Freedom, OEF), through the Department of Defence.

International Assistance funds, controlled in principle by the State Department, can be either for economic, or for security, assistance, as follows:

1. Bilateral Economic Assistance, consisting of:
   • GH&CS:        Global Health and Child Survival (USAID & State);
   • ESF:                Economic Support Funds; or for
2. International Security Assistance, consisting of:
   • INCLE:           International Narcotics Control & Law Enforcement;
   • NADR:           Non-Proliferation, Anti-terrorism, Demining, & Related Programs;
   • IMET:            International Military Education and Training;
   • FMF:               Foreign Military Financing; or
   • PCCF:             Pakistan Counterinsurgency Capability Fund.

Overseas Contingency Operations (OCO) funds, controlled in principle by the Department of Defense, are confined to “security” assistance, and cover

1. CSF:                Coalition Support Funds
2. CERP:             Commander’s Emergency Response Program
3. PCCF:             Pakistan Counterinsurgency Capability Fund
4. ASFF:             Afghanistan National Security Forces; earlier, ASFF: Afghan Security Forces Fund.
5. GT&E:           Global Train and Equip (Section 1260)

Using these acronyms, Tables 1 and 2, below, provide the financial flows that can expected for Afghanistan and Pakistan for FY 2010, in comparison to the current fiscal year (ending 30 September 2009).

Except, where noted, figures presented in these Tables are from the State Department, FY 2010 International Affairs (Function 150) Budget Request – Summary and Highlights [pdf], and the Department of Defense, FY 2010 Budget Request Summary Justification [pdf; for pdf links to all budget request documents for international affairs, see here; and for defence, see here]; supplemented wherever necessary by some figures (and insight) provided by the Stimson Centre blog (here, here, and here).

Afghanistan

Based on the present outlook, Table 1 provides the figures for Afghanistan. (Where country allocations are not available, the total request for FY 2010 is shown in square brackets, after the acronym.)

Notes to figures in Table 1 (above):

1. According to the Administration, the request “represents a major shift” from reconstruction and development activities scattered across Afghanistan to programs “focused on countering the insurgency, primarily in the south and east.” (State/USAID, FY2009 Supplemental Justification, p. 51.)
2. The GH&CS figures include $500 million to be provided through the State Department in both FY2009 and FY2010; the balance is through USAID.
3. Under Overseas Contingency Operations, Commander’s Emergency Response Program (CERP), the FY2010 request is $1.5 billion; a 25% decrease over FY2009. In addition to this request of $1.5 billion, another $500 million is pending in the second FY2009 supplemental appropriations bill. Congress has provided the Commanders Emergency Response Fund (CERP) with a total of $6.4 billion since 2002. CERP is intended to provide commanders in of Iraq and Afghanistan with immediate funds to for local reconstruction projects.

Pakistan

Similarly, Table 2 provides the comparable figures for Pakistan.

Notes to figures in Table 2 (above):

1. In comparison to the FY 2009 figure of US$944 million in economic and security assistance to Pakistan, the FY 2008 figure is US$ 741 million (source).
2. The FY 2010 NADR figures were provided, very kindly, by David Glaudemans of the Stimson Center, in response to a query; the FY 2009 figure is an educated guess, based on the total figure of US$ 944 million.
3. The FY2010 CSF figure of $1,440,000 is based on the statement in the budget documents that currently monthly payments are running at $120 million per month (“due to the escalation of operations” in FATA and NWFP); the FY 2009 figues are from here [pdf]. (Note also that “[s]ince October 2001 through April 2009, the United States has reimbursed Pakistan approximately $6.4 billion for operations in support of OEF [Operation Enduring Freedom]“).
4. Totals exclude GT&E (perhaps $80-100 million, of the $400 million multi-country allocation). As Rebecca Williams was kind enough to clarify in her comments, Pakistan will receive some of the $400 million under the multi-country Global Train and Equip budget request, a 14% increase over FY 2009. Global Train and Equip (Section 1206) authorizes the Secretary of Defense to train and equip foreign military forces and foreign maritime security forces. In the past Pakistan has received 19% of the FY2008 notifications, 5% of the FY2007 obligations, and 23% of FY2006 obligations.

According to the Function 150 Congressional Justification for FY 2010, the majority of the $1.074 billion ESF request is to triple non-military assistance to Pakistan.  This is most likely a euphemism for direct budget support; which accounts for $400 million of the $429.5 million FY 2009 supplementary request (the balance being $21.5 million for “community rehabilitation infrastructure support”, and $8 million for “humanitarian assistance”). The remaining ESF may also include some security initiatives.

Humanitarian Aid for Pakistan

This section reproduces a post by Rebecca Williams, of 20 May 2009, in which it is envisaged that an additional US$100 million in emergency humanitarian assistance may be provided to Pakistan:

[BEGIN QUOTE]  Secretary of State Hillary Rodham Clinton announced yesterday that the United States will give $110 million in emergency aid to support the roughly two million Pakistani civilians displaced by the fighting in Swat Valley.

This funding is separate from the $1.6 billion that the State Department has requested in the FY 2010 budget for Pakistan.  A little more than half of the requested funds for FY 2010 are security related, designed to support Pakistani military training, reimburse the Pakistan Government for GWOT costs, and bolster programs dealing with counter-narcotics, law enforcement, non-proliferation and anti-terrorism (FMF, INCLE, and NADR accounts).

The $110 million announced by Secretary Clinton for humanitarian assistance is also independent from the $700 million requested in the Defense FY 2010 Overseas Contingency Operations (OCO) budget for the Pakistan Counterinsurgency Capability Fund (PCCF), which supports train and equip programs for the Pakistani security forces and broader stabilization and reconstruction efforts in Pakistan.

The “new” $110 million in humanitarian assistance is divided between State and Defense Departments ($100 million, and $10 million, respectively) and will likely be pulled from available balances, or reserves from several emergency or contingency accounts, such as the Emergency Refugee and Migration Account (ERMA) in State and DoD’s humanitarian assistance program Overseas Humanitarian, Disaster and Civic Assistance (OHDACA).  Therefore, the humanitarian assistance promised by Secretary Clinton yesterday will unlikely influence the total FY 2010 requested amounts for Pakistan.

Secretary Clinton announced this aid package the same time the Senate is deliberating the second FY 2009 Emergency Supplemental.  The FY 2009 pending emergency supplemental would appropriate $497 million for Pakistan in just the International Affairs (Function 150) account alone.  But, similar to FY 2010 request, the money requested in the pending supplemental for Pakistan is split between security and humanitarian assistance (ESF, INCLE, and NADR accounts).

In addition, there are two companion bills currently in the House and the Senate that also deal with U.S. assistance to Pakistan.  House Foreign Affairs Committee introduced a ["the Berman"] bill in April 2009 that would authorize $3 billion to train and equip the Pakistani military and also increase U.S. economic assistance to Pakistan to a total of $7.5 billion over 5 years.  The Kerry-Lugar bill, currently awaiting Senate deliberation, excludes the military assistance component but would also authorize $1.5 billion a year to Pakistan for five years.  That said, the Kerry-Lugar bill does not appear on the Senate calendar or upcoming schedule and looks to be lost in legislative limbo for the time being. (Emphasis added.) [END QUOTE]

Update

To understand what this last remark means, a brief review of US legislative procedure is necessary. Most bills begin by being considered by one or several congressional committees which may “report” the bill favorably or unfavorably to the Senate or House as a whole allowing it to receive consideration by the full body and move forward, or may fail to consider a bill at all preventing the bill from moving forward. Most bills never receive any committee consideration and are never reported out. House bills start in House committees and enter Senate committees only after being passed by the House and received by the Senate, and similarly for Senate bills.

Thus the current Kerry-Lugar bill, for example, revives the Biden-Lugar bill (Kerry was also one of several co-sponsors) [formally, Enhanced Partnership with Pakistan Act of 2008, A bill to authorize appropriations for fiscal years 2009 through 2013 to promote an enhanced strategic partnership with Pakistan and its people, and for other purposes, S-3263, 110th Congress 2007-2008; eText or pdf] that lapsed last year. This bill was introduced on 15 July 2008; was “reported” by Committee on 29 July 2008; was placed on the Senate legislative calendar on 26 September 2008; but was never voted on, with the result that it never became law. Sessions of Congress last two years, and at the end of each session all proposed bills and resolutions that haven’t passed are cleared from the books.

The text of the Kerry-Lugar bill [formally, Enhanced Partnership with Pakistan Act of 2009, A bill to authorize appropriations for fiscal years 2009 through 2013 to promote an enhanced strategic partnership with Pakistan and its people, and for other purposes, S-962, 111th Congress 2009-2010] is available here [eText, or pdf]. It was introduced in the Senate on 4 May 2009, and after two readings was referred to the Senate Committee on Foreign Relations.

In addition there is the Berman bill [formally, Pakistan Enduring Assistance and Cooperation Enhancement Act of 2009, To authorize democratic, economic, and social development assistance for Pakistan, to authorize security assistance for Pakistan, and for other purposes, HR-1886, 111th Congress 2009-2010; original unrevised eText, or pdf]. It was introduced in the House of Representatives on 2 April 2009, and was referred to three House Committees (Foreign Affairs, Rules, and Armed Services): the Foreign Affairs Committee has “reported out” the bill after revising the text on 20 May 2009; and the Rules Committee has “discharged” the bill on 22 May 2009.

As of 23 May 2009, it is reported that after consideration, committee has recommended it be considered by the House as a whole. Although it has been placed on a calendar of business, the order in which bills are considered and voted on is determined by the majority party leadership. It is, however, expected that the text of this bill will be incorporated into the Kerry-Lugar bill, and in such cases the original bill, as it would appear here, would seem to be abandoned.

In terms of the budget terminology explained above, if enacted, this would be a direct spending legislation that would by-pass the appropriations process.