The Commodity Credit Corporation: In Brief

Summary: The Commodity Credit Corporation (CCC) has served as a mandatory funding mechanism for agricultural programs since 1933. The CCC Charter Act enables the CCC to broadly support the U.S. agriculture industry through authorized programs including commodity and income support, natural resources conservation, export promotion, international food aid, disaster assistance, agricultural research, and bioenergy development.

Summary: While CCC is authorized to carry out a number of activities, it has no staff of its own. Rather, U.S. Department of Agriculture (USDA) employees and facilities carry out all of its activities. CCC is overseen by the Secretary of Agriculture and a board of directors, which are also USDA officials. CCC has $100 million in capital stock; buys, owns, sells, and donates commodity stocks; and provides loans to farmers and ranchers. It has a permanent indefinite borrowing authority of $30 billion from the U.S. Treasury. By law, it receives an annual appropriation equal to the amount of the previous year's net realized loss. This replenishes its borrowing authority from the Treasury and allows it to cover authorized expenditures that will not be recovered.

Summary: The majority of CCC activities are authorized through omnibus farm billsâmost recently the Agriculture Improvement Act of 2018 ( P.L. 115-334 ). Farm bill authorization allows programs to utilize CCC's borrowing authority, thereby dispensing with the need for an annual appropriation for individual programs. The use of this mandatory authority has expanded over time and has led to tension between authorizing committees and appropriation committees in previous fiscal years.

Summary: The Charter Act also grants the Secretary of Agriculture broad powers and discretion in the use of the CCC. This discretionary use was restricted in annual appropriations legislation from FY2012 through FY2017, effectively reducing the Secretary's discretionary use of CCC. The FY2018 Consolidated Appropriations Act ( P.L. 115-124 ) did not include these restrictions, which has allowed the Trump Administration to use CCC's authority to address market impacts from China's retaliatory tariffs on certain U.S. agricultural commodities in 2018 and 2019.

T he Commodity Credit Corporation (CCC) has served as the financial institution for carrying out federal farm commodity price support and production programs since 1933. It is a wholly government-owned entity that exists solely to finance authorized programs that support U.S. agriculture. It is subject to the supervision and direction of the Secretary of Agriculture at the U.S. Department of Agriculture (USDA). The CCC mission was conceived mostly as one of commodity support, but over time it has expanded to include an increasingly broad array of programs, including export and commodity programs, resource conservation, disaster assistance, agricultural research, and bioenergy development.

While CCC operates according to a large number of statutory authorities, its broad powers allow it to carry out almost any operation required to meet the objectives of supporting U.S. agriculture. This broad mandate, and its significant borrowing authority, has traditionally drawn little attention. For most of its history, CCC's responsibilities have been expanded through legislative directives such as the farm bill. In past years, Congress took actions to limit the discretional uses of CCC funds through restrictions in appropriations language. These restrictions highlight a tension between authorizers and appropriators when it comes to the use of the CCC (see "Tension Between Authorizers and Appropriators" box). While these restrictions are no longer included, questions remain about what the CCC is, how it operates, what its current uses are, and what it may be used for in the future. This report provides a brief review of CCC's unique history, funding structure, general operation, and recent issues associated with its use. Other CRS reports cover in detail programs and activities authorized through CCC.

For over a decade prior to the creation of CCC in 1933, the farm economy struggled with low levels of income from depressed commodity prices and increasing costs for needed supplies and services. The first major federal effort to boost commodity prices was through the Federal Farm Board, established by the Agricultural Marketing Act of 1929. An inadequate and ultimately failed effort to eliminate surpluses was attempted by making loans to cooperative associations for the purpose of carrying out surplus purchase operations. Without the ability to control production, it was impossible to eliminate surplus stocks. This led to proposals to regulate the harvested acreage of farm commodities and quantities sold. The concept of acreage and marketing controls was incorporated in to the Agricultural Adjustment Act of 1933 (AAA).

The AAA sought to reduce production by paying producers to participate in acreage control programs. Funding came from a tax on companies that processed farm products. Additional provisions of the law dealt with fair marketing practices and voluntary agreements between producers and handlers of commodities to regulate marketing. A financial institution was needed to carry out the newly authorized farm legislation, and this was accomplished with the creation of the Commodity Credit Corporation. Executive Order 6340 of October 17, 1933, directed the incorporation of CCC in the state of Delaware.

The Delaware charter authorized CCC, among other things, to buy and sell farm commodities; lend; undertake activities for the purpose of increasing production, stabilizing prices, and insuring adequate supplies; and facilitate the efficient distribution of agricultural commodities. It was originally capitalized with $3 million appropriated by Congress. In 1936, sufficient stock was acquired to raise the capitalization to $100 million. Its capital stock remains at this level today. In 1939, Executive Order 8219 ordered that all rights of the United States arising out of the ownership of CCC be transferred to the Secretary of Agriculture.

At that time, low prices became so critical for cotton and corn producers that waiting for another season for supply controls to impact the market was judged to be untenable. With the establishment of CCC, it became possible to make nonrecourse loans so that farmers would have funds to hold their products off the market until prices improve. The first loans were made to cotton farmers at the rate of 10 cents per pound, while the average market price was between eight and nine cents per pound. Since loans were higher than the market price and were nonrecourse, they could be satisfied by forfeiting the cotton pledged as collateral against the loan, they served as a form of price support and set the floor for the domestic market. Funding for these first loan operations came from a tax on commodity processing and from CCC's $3 million capital account, which was appropriated under authority of the National Industrial Recovery Act and the Fourth Deficiency Act.

Constitutional difficulties with some provisions of the AAA, and practical shortcomings with elements of the law, led to additional legislation in the 1930s that continues today as permanent authority for many USDA activities. Subsequent omnibus "farm bills" now set most of the policy goals and program constraints for farm price and income support operations that are funded through CCC .

The Government Corporation Control Act of 1945 (GCCA) required all wholly owned government corporations to be reincorporated as agencies or instrumentalities of the United States. Accordingly, Congress passed the Commodity Credit Corporation Charter Act of 1948 (Charter Act). All CCC rights, duties, assets, and liabilities were assumed by the federal corporation, and the Delaware corporation was dissolved.

According to the Charter Act, the purpose of CCC is to stabilize, support, and protect farm income and prices; assist in maintaining balanced and adequate supplies of agricultural commodities; and facilitate the orderly distribution of commodities. A list of some of CCC's authorities (paraphrased from Section 5 of the Charter Act, 15 U.S.C. Â§714(c)) conveys a sense of its broadly stated powers:

Support agricultural commodity prices through loans, purchases, payments, and other operations. Make available materials and facilities in connection with the production and marketing of agricultural products. Procure commodities for sale to other government agencies; foreign governments; and domestic, foreign, or international relief or rehabilitation agencies and for domestic requirements. Remove and dispose of surplus agricultural commodities. Increase the domestic consumption of commodities by expanding markets or developing new and additional markets, marketing facilities, and uses for commodities. Export, or cause to be exported, or aid in the development of foreign markets for commodities. Carry out authorized conservation or environmental programs.

Over time, Congress has authorized CCC to fund an increasing number of diverse programs and activities related to its charter (see text box below). In carrying out operations, CCC is directed, to the maximum extent practicable, to use the usual and customary channels, facilities, and arrangements of trade and commerce.

The Charter Act makes CCC an agency and instrumentality of the United States within USDA, subject to the supervision and direction of the Secretary of Agriculture. A board of directors appointed by the President, consisting of the Secretary and seven other USDA officials, is responsible for the management of CCC. CCC officers and advisorsâalso USDA officialsâare charged with maintaining liaisons with other governmental and private trade operations on the CCC's behalf.

The CCC has no personnel of its own. Rather, USDA employees and facilities carry out all of its activities. Administrative functions generally fall to the USDA agencies directed to administer the various CCC programs. The majority of its functions are administered by the Farm Service Agency (FSA), which operates most of the commodity and income support programs. Other agencies that administer CCC programs include the Natural Resources Conservation Service, the Agricultural Marketing Service, the Foreign Agricultural Service, and the United States Agency for International Development (USAID). CCC reimburses other agencies for their administrative costs.

CCC cannot acquire property or interest in property unless it is related to providing storage for program implementation or protecting CCC's financial interests. CCC is allowed to rent or lease space necessary to conduct business (e.g., warehousing of commodities).

CCC is responsible for the direct spending and credit guarantees used to finance the federal government's agricultural commodity price support and related activities that are undertaken by authority of agricultural legislation (such as farm bills) or the Charter Act itself. It is, in brief, a broadly empowered financial institution. The money CCC needs comes from its own funds (including its $100 million capital stock, appropriations from Congress, and its earnings) and from borrowings. In accordance with government accounting statutes and regulations, CCC is required to submit an annual business-type budget statement to Congress. This is typically released annually with the President's budget request.

The Office of Management and Budget (OMB) also plays a role in how CCC funds are administered through an apportionment process, which allows OMB to set a limit on the funds available for obligation and subsequent outlay. OMB apportions funds for select CCC programs and operating expenditures. OMB is precluded, however, from apportioning funds "for price support and surplus removal of agricultural commodities."

Most CCC-funded programs are classified as mandatory spending programs and therefore do not require annual appropriations in order to operate. CCC instead borrows from the U.S. Treasury to finance its programs. CCC has permanent indefinite authority to borrow from the Treasury (and also private lending institutions) within limits set by Congress. As the amount of money needed to carry out its activities has grown over time, the borrowing limit has been steadily increased ( Figure 1 ). At present, CCC's borrowing authority is limited to $30 billion, an amount that has not been increased since 1987.

CCC activity is often described using two similar but different measures. The first is net expenditures , which is a combination of outlays and receipts. The second is net realized losses , which are expenditures that will never be recovered.

CCC recoups some money from authorized activities (e.g., sale of commodity stocks, loan repayments, and fees), though not nearly as much money as it spends, resulting in net expenditures. Net expenditures include all cash outlays minus all cash receipts, commonly referred to as "cash flow." CCC outlays or expenditures represent the total cash outlays of the CCC-funded programs (e.g., loans made, conservation program payments, commodity purchases, and disaster payments). Outlays are offset by receipts (e.g., loan repayment, sale of commodities, and fees). In practice a portion of these net expenditures may be recovered in future years (e.g., through loan repayments).

CCC also has net realized losses, also referred to as nonrecoverable losses. These refer to the outlays that CCC will never recover, such as the cost of commodities sold or donated, uncollectible loans, storage and transportation costs, interest paid to the Treasury, program payments, and operating expenses. The net realized loss is the amount that CCC, by law, is authorized to receive through appropriations to replenish the CCC's borrowing authority (see Figure 2 ).

The annual appropriation for CCC varies each year based on the net realized loss of the previous year. For example, the FY2019 appropriation ( P.L. 116-6 ) continues to provide an indefinite appropriation, covering the net realized loss for FY2018, which was $15.41 billion, 8% more than the net realized loss in FY2017 of $14.28 billion. The increase does not indicate any action by Congress to change program support but rather changes in farm program payments and other CCC activities that fluctuate based on economic circumstances and weather conditions. Also, CCC's assets, which include loans and commodity inventories, are not considered to be "losses" until CCC ultimately disposes of the asset (e.g., by sales, exports, or donations). At that time, the total cost is realized and added to other program expenses less any other program income.

Some CCC operations are financed through appropriated funds and are unrelated to the permanent indefinite borrowing authority described above. These activities include a specific statutory authority for separate reimbursementâfor example, export credit guarantee programs, foreign donations, concessional sales under the Food for Peace Program (P.L. 83-480, also known as P.L. 480), and disaster aid.

CCC has what it refers to as a "parent/child" account relationship with USAID. CCC allocates funds (as the parent) to USAID (as the child) to fund P.L. 480 Title II and Bill Emerson Humanitarian Trust transportation costs and other administrative costs in connection with foreign commodity donations. CCC then reports USAID's budgetary and proprietary activities in its financial statements.

Over time, a number of new activities have been added to CCC's original mission, including conservation, specialty crop support, and bioenergy development. Some have suggested adding other agriculture-related activities to CCC. The idea of expanding CCC's activities generates both concern and support. Some consider this expansion to be beyond CCC's chartered purpose. Others, however, prefer the stability and consistency of mandatory funding to that of the annual appropriations process. Any expansion of mandatory funding authority, however, would require a spending or revenue offset under current budgetary rules.

Although Congress as a whole makes final funding decisions, the rise in the number of agricultural programs with mandatory budget authority from the authorizing committees has not gone unnoticed or untouched by appropriators. In previous years, appropriations bills have reduced mandatory program spending below authorized levels. These reductions, as estimated by the Congressional Budget Office, are commonly referred to as changes in mandatory program spending (CHIMPS). CHIMPS can be used to offset increases in discretionary spending that are above discretionary budget caps.

From FY2012 to FY2017, annual appropriation acts limited USDA's discretion to use CCC's authority to remove surplus commodities and support prices (see text box below). The FY2018 omnibus appropriation did not include this limitation, effectively allowing USDA to use CCC's full authority, including its discretion for surplus removal and price support activities, along with other authorized uses.

USDA's ability to use its administrative powers in the Charter Act, however, may be restricted by executive budgetary rules such as "administrative PAYGO"ââthat is, the need to offset additional spending created by administrative action. Administrative PAYGO has been cited as a potential roadblock to undertaking certain CCC actions but has also been waived or not raised as an issue in other cases involving CCC.

The majority of CCC operations are directed by statutory authorities that specifically direct USDA on how to administer CCC activities and in what amounts to fund them. The broad CCC authorities, however, also allow USDA a level of discretion to carry out effectively any operation that supports U.S. agriculture. This discretion has been used throughout CCC's history for a number of different purposes, including responses to natural disasters, economic conditions, and administrative priorities. The scope and scale of this discretion has traditionally been targeted to specific events, crops, or domestic needs. In the decade before FY2018, administrative discretion was partially restricted (see " Restrictions on Use "). USDA's use of the unrestricted portion of CCC's authority during this period totaled in the hundreds of millions of dollars (see examples below).

This changed in summer 2018, when USDA announced that it would be taking several actions to assist farmers in response to trade damage from retaliatory tariffs targeting various U.S. products. USDA used its administrative discretion to authorize up to $12 billion in assistanceâreferred to as the "trade aid" packageâfor certain agricultural commodities. This authority was then used again in summer 2019, when USDA announced a second trade aid package authorizing up to an additional $16 billion in assistance.

Congressional support for discretionary use of CCC typically varies depending on purpose. Some in Congress have questioned how USDA has used CCC, but few have advocated for a restriction or repeal of the discretionary authority in the last two years. Some Members have called on USDA to use CCC for similar assistance to industries within their states and districts. Congress did require USDA to expand payments under the trade aid program in the FY2019 supplemental appropriations. This expansion could be viewed as congressional support for the trade aid package.

CCC is a government-owned and broadly empowered financial institution that has a mandate to support U.S. agriculture. Its activities are derived from authorities granted by Congress. While it is the primary funding mechanism used in omnibus farm bills, its existence, use, and operations are frequently misunderstood and often confused with USDA itself. One reason for this confusion may be because much of CCC's functional operations support USDA's program activitiesââCCC has no staff of its own; rather, it operates through USDA agencies.

These broad authorities that Congress has granted to CCC allow it to carry out almost any operation that is consistent with the objective of supporting U.S. agriculture. It is these same broad powers that make CCC the object of attention from various interest groups and from Congress.

The mandatory funding nature of CCC activities makes it an attractive funding mechanism. Any expansion of mandatory funding authority by Congress, however, may require a spending/revenue offset or an amendment to current budgetary rules. Recent congressional action restoring CCC's authority have allowed for the Trump Administration's use of CCC to mitigate commodity price declines from retaliatory tariffs on a variety of U.S. agricultural products.

The use of CCC's discretionary authority for the FY2018 and FY2019 trade aid packages is perhaps less controversial than the total amount authorized. Each package is close to the total amount expended by CCC annually in recent fiscal years, effectively doubling the annual net realized loss. This increase in spending brings CCC close to its borrowing authority limit of $30 billion. If the borrowing authority limit were reached before Congress appropriates the net realized loss reimbursement, all functions and operations of CCC would be suspended, including those authorized in the recently enacted 2018 farm bill. Additionally, since the two trade aid packages were undertaken using CCC's discretionary authority, no congressional budget offset was required, and administrative PAYGO was not raised. The corporation's permanent, indefinite funding authority means that trade aid expenditures are reimbursed annually as a net realized loss, thus increasing total federal spending.


Department of State, Foreign Operations, and Related Programs: FY2021 Budget and Appropriations

Summary: Each year, Congress considers 12 distinct appropriations measures to fund federal programs and activities. One of these is the Department of State, Foreign Operations, and Related Programs (SFOPS) bill, which includes funding for U.S. diplomatic activities, cultural exchanges, development and security assistance, and participation in multilateral organizations, among other international activities. On February 10, 2020, the Trump Administration submitted to Congress its SFOPS budget proposal for FY2021, totaling $44.12 billion (including $158.90 million in mandatory State Department retirement funds). Consistent with Administration requests since FY2018, none of the requested SFOPS funds were designated as Overseas Contingency Operations (OCO) funds; nevertheless, Congress has enacted OCO funds for SFOPS each year during this period.

Summary: The Administration's FY2021 request is about 3% higher than its FY2020 request for SFOPS accounts but nearly 24% below the FY2020 SFOPS funding level enacted by Congress (including COVID-19 supplemental funds). Within these totals, funding is divided among two main components:

Summary: Department of State and Related Agency accounts. These funds, provided in Title I of the SFOPS appropriation, primarily support Department of State diplomatic and security activities and would be reduced by 18.9% from FY2020-enacted levels. Noteworthy cuts are proposed for the Educational and Cultural Exchange Programs (-57.6%), International Organizations (-31.8%) accounts, and the Diplomatic Programs account (-12.6%), which funds many of the State Department's day-to-day operations. The Foreign Ope rations accounts, funded in Title II-VI of the SFOPS bill, fund most foreign assistance activities. These accounts would see a total reduction of 25.7%, with particularly steep cuts proposed for global health programs (-37.5%), peacekeeping operations (PKO, -36.6%), multilateral aid (-28.9%), and humanitarian assistance (-28.3%, not including food aid programs funded through the agriculture appropriation).

Summary: This report provides an overview of the FY2021 SFOPS budget request, discusses trends in SFOPS funding, and highlights key policy issues. An account-by-account comparison of the FY2021 SFOPS request and enacted FY2020 SFOPS appropriations is presented in Appendix A . Appendix B provides a similar comparison, focused specifically on the International Affairs budget. Appendix C depicts the organization of the SFOPS appropriation. The report will be updated to reflect congressional action.

Summary: This report is designed to track SFOPS appropriations, with a focus on comparing funding levels for accounts and purposes across enacted FY2020 SFOPS appropriations, FY2021 Administration requests, and FY2021 SFOPS legislation as it moves through the legislative process. It does not provide significant analysis of international affairs policy issues. For in-depth analysis and contextual information on international affairs issues, please consult the wide range of CRS reports on specific subjects, such as global health, diplomatic security, and U.S. participation in the United Nations.

On February 10, 2020, the Trump Administration proposed its FY2021 budget for the Department of State, Foreign Operations, and Related Programs (SFOPS) accounts, totaling $44.12 billion (including $158.90 million in mandatory retirement funds). SFOPS funding typically represents about 1% of the annual federal budget and supports a wide range of U.S. activities around the world, including the operations of U.S. embassies, diplomatic activities, educational and cultural exchanges, development, security, and humanitarian assistance, and U.S. participation in multilateral organizations. Figure 1 shows funding for different SFOPS components based on FY2020 budget authority estimates, relative to each other and to the broader federal budget.

The Administration's request is about 3% higher than the FY2020 request for SFOPS accounts but nearly 23% below the FY2020 SFOPS funding level enacted by Congress, including supplemental funds to help combat the COVID-19 epidemic globally. The Trump Administration has consistently requested far less SFOPS funding than Congress has appropriated. This is a reversal from the Obama Administration, when Congress typically provided less total SFOPS funding than was requested, though the gap narrowed over time during Obama's terms ( Table 1 ).

If enacted, the requested SFOPS funding level would be the lowest in over a decade ( Figure 2 ).

The Budget Control Act and Overseas Contingency Operations

Since FY2012, the appropriations process has been shaped by the discretionary spending caps put in place by the Budget Control Act of 2011 (BCA; P.L. 112-25 ). Congress has since sought ways to manage the constraints imposed by the BCA and has repeatedly amended the BCA to raise the caps, most recently by the Bipartisan Budget Act of 2019 (BBA 2019; P.L. 116-37 ). The BBA 2019 raised discretionary spending limits set by the BCA for FY2020 and FY2021, the final two years the BCA caps are in effect.

In addition to raising the caps, Congress has worked around the BCA limits by using Overseas Contingency Operations (OCO) funding, which is excluded from BCA discretionary budget limits. Congress began appropriating OCO in the SFOPS budget in FY2012, having previously provided OCO funds for the Department of Defense (DOD). Originally used to support shorter-term, contingency-related programming in Afghanistan, Iraq, and Pakistan that was not considered part of the "base" or "core" budget, OCO's use expanded considerably in level and scope between FY2012 and FY2017. Global SFOPS OCO funding peaked at $20.80 billion in FY2017 (nearly 35% of SFOPS funds that year), at which point it was used to support 18 different SFOPS accounts, ranging from USAID operating expenses and the Office of Inspector General to International Disaster Assistance and Foreign Military Financing. This broad use has led many observers to question whether the OCO designation makes a meaningful distinction between core and contingency activities, with some describing OCO (in both SFOPS and Defense appropriations) as a slush fund.

The Administration has not requested OCO funds for SFOPS since FY2018, though it has continued to request OCO funds in the DOD budget. Nevertheless, Congress designated $8.00 billion of enacted SFOPS funding in both FY2019 and FY2020 as OCO, continuing a downward trend in the use of OCO since the FY2017 peak.

FY2020 SFOPS funding also included $2.37 billion in supplemental emergency funding to help combat the COVID-19 pandemic abroad. Like OCO-designated funding, emergency-designated funding does not count toward the BCA discretionary spending caps and may therefore be used as an alternative to the OCO designation. Before the use of OCO in SFOPS, funding for contingency activities was often provided through supplemental emergency appropriations.

Congressional Action on FY2021 SFOPS Legislation

Congressional action on SFOPS and other FY2021 appropriations has been delayed to an uncertain degree by disruption of congressional activity related to the Coronavirus Disease 2019 (COVID-19) pandemic. Congress held some hearings on the FY2021 budget request before all hearings were postponed in March 2020. Subcommittee allocations have not been formally established, nor has SFOPS legislation been introduced for FY2021.

State Department Operations and Related AgencyÂ Highlights

The FY2021 request would cut funding for the Department of State and Related Agency appropriations accounts to $14.03 billion, down 18.9% from an enacted FY2020 level of $17.31 billion (including $588 million in COVID-19 supplemental funds). The Administration's request does not include funds to support the State Department's response to the COVID-19 pandemic. To date, Congress has provided all State Department operations funding for COVID-19-related matters through two FY2020 supplemental appropriations acts ( P.L. 116-123 and P.L. 116-136 ).

The Administration's stated priorities for funding provided via Department of State and Related Agency accounts in FY2021 include

supporting the Indo-Pacific Strategy; countering Chinese, Russian, and Iranian malign influence; protecting U.S. government personnel, facilities, and data assets; and maintaining American leadership in international organizations while asking other nations to increase their support.

Table 2 provides a comparative breakout of the Administration's State Department and Related Agency request, by account.

Consistent with its previous requests, the majority (87.1%) of the funding the Administration is requesting for the Department of State and Related Agency appropriations accounts is for diplomatic programs, diplomatic security and embassy construction, and contributions to international organizations and international peacekeeping activities. For FY2020, such programs composed approximately 88.1% of the Administration's request and 84.8% of the enacted appropriations Congress provided for these accounts. Some of the Administration's priorities within these areas, as identified by the Department of State in its Congressional Budget Justification, are detailed below.

The Diplomatic Programs account is the State Department's principal operating appropriation and serves as the source of funding for several key functions. These include

most domestic and overseas State Department personnel salaries; foreign policy programs administered by State Department regional bureaus, the Bureau of Conflict and Stabilization Operations, and others; public diplomacy programs; and the operations of the department's strategic and managerial units, including the Bureaus of Administration, Budget and Planning, and Legislative Affairs as well as the Office of the Chief of Protocol.

The Administration's FY2021 request for Diplomatic Programs totals $8.49 billion, around 12.6% less than the $9.71 billion Congress provided for this account in FY2020 (this amount includes $588 million Congress provided for Diplomatic Programs in FY2020 supplemental COVID-19 funds; see text box for more detail). The Administration's request seeks $138 million for the Global Engagement Center (GEC), which is responsible for leading interagency efforts to recognize, understand, expose, and counter foreign state and non-state propaganda and disinformation efforts aimed at undermining U.S. interests, including those carried out from Russia, China, and Iran. The Administration maintains that this request, which would constitute a $76 million increase in annual funding for the GEC provided through SFOPS, would alleviate the need for DOD to transfer funds for GEC operations. Some Members of Congress and other observers have expressed concern regarding past DOD transfers, arguing that DOD has not transferred funding to the State Department in an expeditious manner or at funding levels that reflect congressional intent.

The Administration's request also includes a realignment of personnel and funding from the Bureau of Global Talent Management (formerly the Bureau of Human Resources); the Bureau of Arms Control, Verification, and Compliance; and the Office of the Coordinator for Cyber Issues to establish a new Bureau for Cyber Security and Emerging Technologies (CSET). The State Department first notified Congress of its intent to create this new bureau in June 2019. It will be responsible for supporting "foreign policies and initiatives to promote U.S. cyber and emerging technology policies and deter adversaries from malicious and destabilizing behavior in their use and application of such technologies." Some observers have expressed criticism over elements of the State Department's plan for CSET, arguing that additional cyber-related matters such as global internet governance should be included in the bureau's remit. However, it appears that this issue and related matters will instead remain under the purview of the Bureau of Economic and Business Affairs.

For FY2021, the Administration requests around $5.38 billion for the State Department's key diplomatic security accounts: $3.70 billion for the Worldwide Security Protection (WSP) allocation within the Diplomatic Programs account and $1.68 billion for the Embassy Security, Construction, and Maintenance (ESCM) account. The Administration's request represents a decrease of 11.4% from the FY2020 enacted funding level (see Table 3 ).

The Administration is proposing that Congress decouple WSP from Diplomatic Programs and establish a standalone WSP account (see text box). WSP funds the Bureau of Diplomatic Security (DS), which is responsible for implementing the department's security programs to protect U.S. embassies and other overseas posts, diplomatic residences, and domestic State Department offices. In addition, WSP supports many of the State Department's security and emergency response programs, including those pertaining to operational medicine and security and crisis management training. The ESCM account funds the Bureau of Overseas Building Operations (OBO), which is responsible for providing U.S. diplomatic and consular missions overseas with secure, functional, and resilient facilities and managing nonmilitary U.S. government property abroad.

The Administration's WSP-funded priorities for FY2021 include the hiring of an additional 110 special agents at DS, which the Administration maintains is necessary to address critical overseas vacancies. In addition, the Administration intends to deploy High Definition Secure Video Systems (HDSVS) at overseas posts worldwide. The Administration has stated these systems will provide enhanced monitoring capabilities at overseas posts, including greater video resolution and enhanced nighttime visibility. At the same time, the Administration has proposed a cut of $109 million for DS operations in Afghanistan, which it says is consistent with the consolidation of DS-managed locations in the country and a corresponding reduction in costs for guard services and logistical support.

The Administration's ESCM request includes $866.67 million for the State Department's share of the Capital Security Cost Sharing and Maintenance Cost Sharing Programs, which are the sources of funding for the planning, design, construction, and maintenance of the United States' overseas diplomatic posts. The Administration maintains that this request, when combined with funds contributed by other agencies with personnel at overseas posts and visa fee revenues, will fund these programs at the $2.20 billion level recommended by the Benghazi Accountability Review Board. Construction projects the Administration is seeking to fund through this request include a new embassy compound in Riyadh, Saudi Arabia, and new consulate compounds in Adana, Turkey, and Rio de Janeiro, Brazil.

Assessed Contributions to International Organizations and PeacekeepingÂ Missions

The Contributions to International Organizations (CIO) account is the funding vehicle for the United States' payments of its assessed contributions (membership dues) to over 40 organizations. These include the United Nations (U.N.) and its specialized agencies (among them, the World Health Organization, or WHO), inter-American organizations such as the Organization of American States, and the North Atlantic Treaty Organization (NATO), among others. U.S. funding to international organizations is also provided through the various SFOPS multilateral assistance accounts, as described in the " Foreign Operations Highlights " section of this report. Separately, the United States pays its assessed contributions to most U.N. peacekeeping missions through the Contributions for International Peacekeeping Operations (CIPA) account.

For FY2021, the Administration is requesting a combined $2.05 billion for these accounts. If enacted, this funding level would mark a 31.8% cut from that provided by Congress for FY2020. Table 4 shows recent funding levels for each account.

Similar to previous budget requests, the Administration's CIO request prioritizes paying assessments to international organizations "whose missions substantially advance U.S. foreign policy interests" while proposing funding cuts to those organizations whose work it says either does not directly affect U.S. national security interests or renders unclear results. With these intentions in mind, the Administration proposed to eliminate funding to the Organization of Economic Cooperation and Development (OECD), while decreasing U.N. regular budget and specialized agency funding by more than one-third. The request intends to maintain near-recent-year levels of U.S. funding for other organizations, including the International Atomic Energy Agency (IAEA).

For CIPA, the Administration's FY2021 request reflects its ongoing commitment to reduce costs for U.N. peacekeeping missions by reevaluating their respective mandates, design, and implementation. The Administration has stated that its request, when combined with the application of U.N. peacekeeping credits (excess funds from previous U.N. peacekeeping missions), would allow the United States to provide 25% of all assessed global funding for U.N. peacekeeping missions, which is equal to the statutory cap established by Congress. However, the current U.S. assessment for U.N. peacekeeping (last negotiated in 2018) is 27.9%, meaning that around $345 million of anticipated U.S. assessed funding would be carried over into arrears. This practice has resulted in the accumulation of over $900 million in U.S. peacekeeping arrearages since FY2017.

The foreign operations accounts in the SFOPS appropriation compose the majority of U.S. foreign assistance included in the international affairs budget; the remainder is enacted in the agriculture appropriation, which provides funding for the Food for Peace Act, Title II and McGovern-Dole International Food for Education and Child Nutrition programs. The Administration's FY2021 foreign operations request totals $30.09 billion, representing a 3.7% increase from the Administration's FY2020 request and a 25.7% decrease from FY2020-enacted levels. Total foreign assistance requested for FY2021, including the food assistance funds provided in the agriculture appropriation, would represent a 29.1% reduction from FY2020-enacted levels.

The Administration's budget request articulates five primary goals for U.S. foreign assistance that are meant to align with both the National Security Strategy and the State-USAID Joint Strategic Plan:

prioritize global strategic challenges, including countering Chinese, Russian, and Iranian influence; support strategic partners and allies, including Israel, Egypt, Jordan, Colombia, and Venezuela; enhance commitment to long-term development; strengthen key areas of U.S. leadership, to include global health and humanitarian assistance; and advance U.S. national security and economic interests.

These goals are also meant to guide the Administration's regional thematic priorities (see " Country and Regional Assistance "), as well as how funds are allocated across assistance types. The Administration's FY2021 budget request proposes cuts in nearly all assistance types ( Table 5 ). The only exception is export promotion assistance, which would see a significant increase. This increase is largely due to proposed funding for the new U.S. Development Finance Corporation (DFC), which the Administration states represents an "expansion of the role of development finance in advancing U.S. interests around the world," and an estimated increase in offsetting collections from the Export-Import Bank.

Consistent with prior year funding and the FY2020 enacted levels, proposed funding for global health programs, humanitarian assistance, and security assistance comprises approximately two-thirds of the $30.09 billion FY2021 foreign operations budget request ( Figure 3 ).

The total FY2021 request for the Global Health Programs (GHP) account is nearly $6.00 billion, representing a 5.4% reduction from the FY2020 budget request and a 37.5% reduction from the FY2020-enacted level, including supplemental appropriations. When compared with FY2020-enacted levels before enactment of supplemental funding for COVID-19, all but one GHP subaccount would be reduced under the budget proposal ( Table 6 ).

Budget documents indicate that the increase to pandemic influenza funding (when compared with FY2020-enacted appropriations prior to the COVID-19 supplemental funding) would include a $25.00 million deposit of nonexpiring funds to replenish the Emergency Reserve Fund for rapid response to infectious disease outbreaks. Observers have expressed concern about the potential cessation of USAID's PREDICT-II pandemic preparedness program in March 2020. The Administration does not indicate in the budget request, nor has it specified in any public fora, whether PREDICT-II will be continued. However, the University of California, Davisâone of PREDICT-II's implementing organizationsâhas reportedly received additional funding from USAID to extend PREDICT-II and continue related work through the "One Health WorkforceâNext Generation" project.

Requested cuts to GHP subaccounts range from 8.0% for malaria programs to 100% for USAID's HIV/AIDS and vulnerable children subaccounts. The Administration asserts that despite its proposed reduction to HIV/AIDS funding, the requested level would be sufficient to maintain treatment for all current recipients. The proposal also reflects the Administration's effort to limit U.S. contributions to the Global Fundâan international financing mechanism for efforts to combat AIDS, tuberculosis, and malariaâto 25% of all donations, rather than the 33% limit that the United States has provided since the George W. Bush Administration.

As noted above, the Administration's FY2021 request does not include funds for COVID-19, because the request was prepared prior to the outbreak. Congress enacted, and the President signed into law, three supplemental appropriations acts for COVID-19 preparedness and response in March ( P.L. 116-123 , P.L. 116-127 , and P.L. 116-136 ). As of this report's publishing, the Administration has not submitted a request for additional FY2021 funds to combat the virus.

The FY2021 budget request for humanitarian assistance is nearly $6.27 billion, roughly equivalent to the FY2020 request but down 40.1% from the FY2020-enacted level of $10.46 billion. In successive years, the Administration has requested levels of humanitarian assistance far lower than those enacted the prior year, at times reflecting the fact that humanitarian assistance funds may be carried over from year to year and unobligated balances from prior years may still be available. On a bipartisan basis, for many years, Congress has consistently supported global humanitarian efforts through appropriation levels well above the budget request ( Figure 4 ).

In addition to the proposed $6.27 billion in new funding for humanitarian assistance, the Administration's request assumes $2.80 billion in carryover funding from past-year humanitarian assistance. The Administration asserts that the FY2021 request, combined with the estimated carryover, totals close to $9.00 billion, which would allow the United States "to program well above the second highest level ever, and is sufficient to address the needs for Syria, Yemen, and other crisis areas."

Proposed Humanitarian Account Consolidation

For FY2021, as in FY2020, the Trump Administration proposes to fund all humanitarian assistance through a single International Humanitarian Assistance (IHA) account managed through USAID's new Bureau for Humanitarian Assistance (BHA). The Administration has justified the restructuring as necessary "to optimize humanitarian assistance, prioritize funding, and use funding as effectively and efficiently as possible." The proposal would effectively move the administration of overseas refugee and migration assistance fundingâcurrently funded through the Migration and Refugee Assistance (MRA) and Emergency Refugee and Migration Assistance (ERMA) accountsâfrom the State Department to USAID. In FY2020, enacted funding for these accounts totaled $3.78 billion. The budget request would eliminate the ERMA account and significantly reduce funding to MRA, with none for overseas needs. Within USAID, the BHA is in the process of combining the functions of the Offices of U.S. Foreign Disaster Assistance and Food for Peace. The budget request would eliminate the International Disaster Assistance (IDA) account (FY2020-enacted funding totaled $4.95 billion), as well as Food for Peace Act, Title II emergency food assistance funding, the latter of which is currently appropriated through the agriculture appropriation but administered by USAID (FY2020-enacted funding totaled $1.73 billion). Funds previously requested in these accounts would be consolidated into the IHA account.

The Administration is requesting $7.73 billion in international security assistance for FY2021, an increase of 4.3% from the FY2020 request and 14.3% below the FY2020-enacted level. The greatest cuts to security assistance accounts would be to Peacekeeping Operations (PKO, -36.6%) and International Military Education and Training (IMET, -27.4%) ( Figure 5 ).

Consistent with prior year requests and appropriations, the majority of security assistance ($5.19 billion) would be for Foreign Military Financing (FMF) to the Middle East, including $3.30 billion in grants to Israel. As in the Trump Administration's past three budget proposals, the FY2021 request seeks flexibility to provide FMF assistance through a combination of grants and loans, including loan guarantees, rather than the current use of FMF on an almost exclusive grant basis. The Administration asserts that this authority would both "expand the tools available to the United States to help NATO and Major-Non NATO allies purchase more American-made defense equipment and related services" and "increase burden sharing by asking these partners to contribute more national funds to foreign military sales cases."

Development Assistance and Export Promotion

The remaining third of the FY2021 foreign operations request proposes to allocate funds to development sectors other than those related to global health, independent agencies, multilateral assistance, and export promotion agencies.

The FY2021 budget request would reduce funding from FY2020-enacted levels in a number of development sectors ( Table 7 ). Environment-focused aid, for example, would be cut by 86.3%, while funding for education and water and sanitation would fall by 61.2%. As with the FY2020 request, the FY2021 request includes a significant increase from prior year-enacted levels to programming that seeks to promote women in developing economies, largely due to a proposed $200.00 million for the Women's Global Development and Prosperity Initiative (W-GDP).

Proposed Economic Support and Development Fund

Under the FY2021 request, most development accountsâDevelopment Assistance (DA); Economic Support Fund (ESF); Assistance to Europe, Eurasia and Central Asia (AEECA); and the Democracy Fund (DF)âwould be combined into a single new Economic Support and Development Fund (ESDF). The Administration asserts that this consolidated account would streamline the deployment of resources, increasing efficiency in foreign assistance. Because the consolidated account would incorporate what are now both core and shared USAID accounts, it remains unclear what portion of the new account USAID would manage or implement. The Administration made a similar request in the FY2018, FY2019, and FY2020 budget requests, but Congress did not enact the proposals.

The FY2021 budget request nestles the Relief and Recovery Fund (RRF) and a proposed new Diplomatic Progress Fund (DPF)âboth previously requested as separate budget itemsâunder the proposed ESDF account. According to the justification, the DPF would "allow the State Department and USAID to respond to new opportunities arising from progress in diplomatic and peace efforts around the world." While Congress provided funds for the RRF in previous fiscal years, Congress has not accepted the Administration's proposal for the DPF.

The Administration's FY2021 request would reduce funding to the Peace Corps (-19.5%) and the Millennium Challenge Corporation (-11.6%). The request also proposes eliminating the Inter-American Foundation (IAF) and the U.S African Development Foundation (USADF), and incorporating staff and small grant activities of the two foundations into USAID's new Bureau for Development, Democracy, and Innovation. The Administration maintains that this consolidation would allow USAID to "capitalize on the existing expertise, capacity, relationships, and tools that USADF and IAF provide, including their regional and market segment emphases, in order to reinforce U.S. government bilateral development efforts." To implement the shuttering of the IAF and USADF, the Administration requests $3.85 million and $4.66 million, respectively.

SFOPS multilateral assistance accounts provide for U.S. payments to multilateral development banks and international organizations that pool funding from multiple donors to finance development activities. The Administration's FY2021 request would reduce these accounts by 28.9% from FY2020-enacted levels. As in the Trump Administration's three previous requests, the proposal would eliminate funding for the International Organizations and Programs (IO&P) account, which funds U.S. voluntary contributions to international organizations, primarily United Nations entities such as UNICEF. Congress appropriated $390.50 million for IO&P in FY2020. The Administration also proposes eliminating funds for the Global Environment Facility (GEF) and the International Fund for Agricultural Development (IFAD). For the GEF, the Administration asserts that carryover funds from FY2019 and FY2020 appropriations are sufficient to meet the U.S. pledge to the GEF's seventh replenishment.

The FY2021 request includes an increased investment in the U.S. Development Finance Corporation (DFC), established in 2019 to implement the BUILD Act. However, the Administration would eliminate funding for the U.S. Trade and Development Agencyâthe request includes $12.11 million for the agency's "orderly closeout"âand an 8.3% reduction from FY2020-enacted levels for the Export-Import Bank of the United States' Operations account. As in previous years, the Administration assumes that all export promotion expenditures would be offset by collections. In the FY2021 request, the Administration assumes $711.20 million and $496.00 million in offsetting collections from the Export-Import Bank and the DFC, respectively.

The Administration organizes much of its country and regional assistance into six thematic priorities ( Figure 6 ). These priorities are also meant to reflect the broader foreign operations goals outlined in " Foreign Operations Highlights ."

Top country recipients under the FY2021 request remain consistent with prior year funding allocations. Israel, Egypt, and Jordan would remain the top three recipients of foreign assistanceâthough Egypt would move ahead of Jordan when compared with FY2019 actual fundingâlargely due to the proposed levels of military aid for those three countries. Other countries that the Administration maintains are strategically significant, including Afghanistan and Ukraine, also remain top country recipients in the FY2021 request, as do several African countries that would receive high levels of global health and development aid ( Table 8 ).

Regionally, the Middle East and Africa would receive the largest shares of aid in the FY2021 requestâtogether comprising about 71.5% of total aid allocated by country or regionâconsistent with FY2019 year actuals ( Figure 7 ). Proposed funding for Europe and Eurasia and, separately, the Indo-Pacific, come to 3.9% and 9.2%, respectively. Notably, the distribution of assistance within regions vary significantly. For example, Africa receives a majority of GHP funding (58.1% in FY2019 and a proposed 66.7% for FY2021), but accounts for a small proportion of INCLE funding (5.2% in FY2019 and a proposed 4.1% for FY2021). In comparison, the Western Hemisphere region accounts for a small percentage of GHP (2.5% in FY2019 and a proposed 2.2% for FY2021) and a large proportion of INCLE funds (37.7% in FY2019 and a proposed 44.8% for FY2021).

Appendix B. International Affairs Budget

The International Affairs budget, or Function 150, includes funding that is not in the Department of State, Foreign Operations, and Related Programs (SFOPS) appropriation; in particular, international food assistance programs (Food for Peace Act (FFPA), Title II and McGovern-Dole International Food for Education and Child Nutrition programs) are in the Agriculture Appropriations, and the Foreign Claim Settlement Commission and the International Trade Commission are in the Commerce, Justice, Science appropriations. In addition, the Department of State, Foreign Operations, and Related Programs appropriation measure includes funding for certain international commissions that are not part of the International Affairs Function 150 account.