Budget crunch could hit USAID, State personnel hard

Agencies responsible for international development and foreign relations will see their budgets shrink as a result of the fiscal climate and at some point might have to consider staff reductions, according to participants in a Capitol Hill briefing on the impact of the debt ceiling deal.

"I've heard nobody at either agency talk about RIFs," said George Ingram, co-chairman of the Modernizing Foreign Assistance Network, referring to reduction-in-force procedures the government uses when it downsizes. He added that agencies don't like to use the "R" word. But Ingram said it could be a real possibility. "When I look at the operating expenses of that budget, that's the first thing that comes to mind," he said.

Ingram is a former top official at the U.S. Agency for International Development and was a senior staff member at the House Committee on Foreign Affairs for more than two decades. The Modernizing Foreign Assistance Network is an alliance of development groups, think tanks and academics.

USAID in particular has been on a hiring spree for the past few years, but that come to a halt as a result of the spending caps included in the deficit reduction package that will be imposed across-the-board at agencies, Ingram said. "They won't just have additional staff; they will have to cut the staff they have," he said. As for what jobs could be vulnerable, Ingram said it likely would be a matter of tenure as to which personnel could be affected -- the first in, first out rule.

The deficit reduction legislation, which President Obama signed into law Tuesday, is projected to save at least $2.1 trillion between 2012 and 2021 through a series of caps on discretionary spending and a comprehensive deficit-reduction package devised by a joint congressional committee of 12 lawmakers. Automatic, across-the-board spending cuts totaling as much as $1.2 trillion beginning in 2013 would be triggered if the committee cannot agree on a deficit-reduction plan. Those cuts would be spread evenly from fiscal 2013 through 2021, and would come from defense and nondefense spending. The Defense Department is expected to sustain significant cuts, which also could affect the resources and priorities of civilian agencies, including USAID and the State Department. Those agencies work closely with the military on international development, security and foreign assistance.

USAID referred questions on the topic to the Office of Management and Budget.

"The nearly $1 trillion in discretionary spending cuts are achieved through spending caps both on security and nonsecurity spending," OMB spokeswoman Moira Mack said in an email. "Specifics about how these levels will be met will be determined through discussions between the administration and appropriators in Congress over the coming months." Mack added that the impact of spending cuts on specific programs are not known yet.

State spokeswoman Joanne Moore said the department will review the details of the deficit reduction package as they become available.

"If you think this is the end of this discussion, forget about it," said Gordon Adams, a former associate director for national security and international affairs at the Office of Management and Budget, who also participated in Tuesday's briefing.

Adams also expressed concern over the impact budget cuts could have on personnel at USAID and State. Given the budget environment now and going forward, Adams said he does not think Congress is prepared to adequately fund areas related to personnel at civilian security agencies, including hiring and training. Adams, currently a distinguished fellow at the Henry Stimson Center, called such human resource issues "critical" to ensuring agencies meet their missions.

Ingram and Adams both mentioned Defense's approach to career-long training and empowerment for its employees as a model for agencies such as USAID and State. "I agree that the military career path is something we would hope the civilian side would adopt, and that doesn't look like that will happen," Ingram said.

The duo said over the past decade more resources generally have been allocated to international development and foreign relations on the civilian side, in large part because of the connection to defense and security. But that will change, they added. Typically, international affairs and development at the civilian agencies has been "a forlorn orphan child of the budget," Adams said. "It would not surprise me if it was an orphan child who lost weight."

The fiscal 2012 State and Foreign Operations Appropriations bill, unveiled last week, contains $11.9 billion in funding for operational costs for State and related agencies, including USAID. That is nearly $4 billion less than the current spending level and $3 billion below Obama's request.