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State Department Plans Cuts in Security Funding, Aid

Feb. 14 (Bloomberg) -- President Barack Obama’s 2012 budget proposes to increase spending on the State Department and its global programs by 1 percent, not including $8.7 billion for operations such as the transition in Iraq as U.S. troops pull out.

The $47 billion core budget would cut foreign assistance and military financing to several countries, including Russia, as Secretary of State Hillary Clinton shuffles funds to areas the administration considers more urgent. Security funding will become more focused on countries such as Israel and Pakistan, according to the plan.

“We certainly understand the tight budget environment,” Clinton said after a meeting with House Speaker John Boehner, an Ohio Republican, to press the need to maintain funding for the State Department. “I’m hopeful we’ll be given the resources we need in order to fulfill the mission,” the top U.S. diplomat said.

For the first time, the Office of Management and Budget is issuing a separate budget for the $8.7 billion the State Department is spending on such operations as the war zones. The budget for State Department “Overseas Contingency Operations” covers Iraq, Afghanistan and Pakistan.

The proposed State Department budget is part of the $3.7 trillion budget Obama sent to Congress today that the administration says would reduce deficits by $1.1 trillion over a decade.

Republican Cuts

Republicans have already made clear they find the cuts insufficient. A plan House Republicans released Feb. 11 would cut the overall State Department budget 16 percent below fiscal 2010 levels, Clinton said.

If those cuts go through, “we would be forced to scale back significantly our missions in Iraq and Afghanistan, where we work side-by-side with the military,” Clinton said.

The State Department’s budget proposal would increase guaranteed loan commitments to the U.S. Export-Import Bank by 21 percent, to support Obama’s goal of doubling U.S. exports in five years. It would also boost spending on food security and global health.

Security Aid

The State proposal would eliminate security assistance in the Foreign Military Financing program for Chile, Haiti, East Timor, Malta and Tonga. The cut, aimed at moving spending away from small programs, yielded about $5 million in savings, said a State Department official who wasn’t authorized to speak on the record.

Nine countries were cut from the International Military Education and Training program, including Equatorial Guinea, Iceland, Kuwait, Qatar, Saudi Arabia, Somalia, the United Arab Emirates, Russia and Madagascar. The funding was to help these countries qualify for discounts for military training. They will still be able to participate in U.S. military education programs at full price, the official said. The cut saved about $1 million.

The budget also suggests $115 million in cuts to programs in Europe, Eurasia and Central Asia in order to focus the funding on areas of greater need, the official said. Those countries -- Albania, Poland, Montenegro, Serbia, Macedonia and Cyprus -- are seen as making enough progress to no longer warrant aid, the official said.

Pakistan Training

Pakistan would be given $1.2 billion largely to support counterinsurgency training for military posted along the border with Afghanistan. And Afghanistan would receive $2.2 billion to support the State Department’s diplomatic presence and to provide assistance.

The budget maintains $1.5 billion in assistance to Egypt, following the protests and President Hosni Mubarak’s resignation from office after 30 years in power. The aid, $1.3 billion of which is directed to the military, may be reviewed depending on developments, administration officials have said.

The budget request comes as Republicans are pledging to cut the fiscal 2011 government funding by $100 billion. Under an earlier plan to cut the federal budget by $35 billion, funding for the State Department and foreign aid programs would be cut by 4 percent.

“Our intent is to make deep but manageable cuts in nearly every area of the government, leaving no stone unturned and allowing no agency or program to be held sacred,” House Appropriations Committee Chairman Harold Rogers, a Kentucky Republican, said in a Feb. 10 statement.

Development Assistance

The U.S. would continue support for multilateral development banks, such as the World Bank, that back U.S. goals in key strategic countries such as Afghanistan and Pakistan. The African Development and Inter-American Foundations would have their funding cut by nearly 20 percent.

Representative Ileana Ros-Lehtinen, the Florida Republican who heads the House Committee on Foreign Affairs, backs cuts to the State Department budget and has charged that the agency has mishandled aid funding to Egypt.

Some Republicans have proposed the elimination of foreign aid.

Deputy Secretary of State James Steinberg told the House committee on Feb. 10 that this would be a “tragedy,” especially in Afghanistan and Iraq, as the military prepares to withdraw and State Department employees step in to aid the country’s emergence from war.

‘Multiplier Effect’

“Our military cannot protect our national interests alone,” Steinberg said. “We’ve seen that in Iraq. We see it in Afghanistan. It has to be a balanced effort, and our contribution, the part that goes to the State Department in assistance, is very small compared to defense, but it has a huge multiplier effect.” As a result, he said, “it has a huge positive impact on the wellbeing of the American people.”

Clinton has launched a reorganization of her agency meant to elevate the importance of diplomacy and development alongside defense, an initiative supported by Obama’s national security advisers.

To contact the reporter on this story: Nicole Gaouette in Washington at

To contact the editor responsible for this story: Mark Silva at

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