Household Debt Among Older Americans, 1989-2016

Summary: In the past three decades, debt has grown substantially among older Americans. The increase in debt among older Americans has raised concerns about financial security for people near or during retirement, not only because Americans aged 65 and older represent a large and growing proportion of the U.S. population, but also because increases in household debt might require retirees to devote a larger share of their fixed income from Social Security, pensions, or government subsidies toward paying debt. Older people also tend to have limited ability to adjust their labor supply to offset higher monthly debt obligations. Excessive debt payments may put more seniors, especially those living on limited incomes, at greater risk of financial insecurity.

Summary: According to the Survey of Consumer Finances (SCF), the percentage of elderly households (i.e., those headed by individuals aged 65 and older) who held any debt increased from 37.8% in 1989 to 61.1% in 2016. During the same time, the median debt among elderly households with debt increased from $7,463 to $31,050 (in 2016 dollars), and the real average debt increased from $29,918 to $86,797 (in 2016 dollars). The median debt lies at the middle of the debt distribution, and the average debt is generally higher than the median debt because a relatively small percentage of people have very high debt.

Summary: Between 1989 and 2016, growth in average household debt among elderly households with any debt largely resulted from mortgages, including growth in average debt secured by a residence (from $12,970 to $57,943 in 2016 dollars) and average debt for other residential properties (from $2,970 to $11,446 in 2016 dollars). Some researchers speculate that much of the growth in debt among elderly households through 2007 might have resulted from the increased availability of mortgage credit, whereas others argue that tightening underwriting standards on mortgage debt in the wake of the financial crisis have slowed mortgage originations among young borrowers, which consequently resulted in a shift of new mortgage originations toward older borrowers. Residential loans are usually considered to be long-term wealth builders, as the residence's market value may increase over time, and some researchers find that they are much less stressful to older people than other debt, such as credit card debt. However, some others also argue that households headed by individuals aged 65 and older held historically high levels of housing debt in 2016, which might expose them to greater vulnerability to housing market shocks than elderly households in previous cohorts.

Summary: The change in debt among elderly households from 1989 to 2016 varied by age groups and asset levels. For example, the largest growth in the share of elderly households who have any debt was for those headed by individuals aged 75 and older. In terms of asset levels, households in the middle of the total asset distribution had the largest growth in the holding of any debt.

Summary: Much of the change in debt among elderly households on average was well balanced by their assets. To measure the extent to which a household is burdened by debt, researchers and policymakers usually refer to the debt payments-to-income ratio and the total debt-to-asset ratio. Among elderly households with debt, the debt payment-to-income ratio increased from 8.7% in 1989 to 12.4% in 2016, and the debt-to-asset ratio increased from 5.1% to 9.0% during the same time. Both ratios peaked in 2010, the year after the recent economic recession, and then decreased from 2010 to 2016. The debt burden increased more rapidly for certain types of elderly households between 1989 and 2016. The debt-to-asset ratio among households headed by individuals aged 80 and older increased by 5 percentage points during this time. Likewise, the ratio among elderly households in the middle of the total asset distribution increased by more than 10 percentage points during the same time.

Household debt among older Americansâincluding mainly residential debt, auto loans, student loans, and credit cardsâhas grown substantially from 1989 to 2016. The proportion of households headed by individuals aged 65 and older (hereinafter referred to as elderly households ) who held any debt increased from 37.8% to 61.1%, and the real median household debt among elderly households with debt increased from $7,463 to $31,050 (in 2016 dollars).

The increase in debt among older Americans has raised concerns about financial security for people near or during retirement for several reasons. First, Americans aged 65 and older represent a large and growing proportion of the U.S. population. Over the next 20 years, the share of the U.S. population aged 65 and older is expected to increase from about 17% to 22%. The increase in debt, together with the aging population, suggests that a large group of older Americans are not retiring debt free. Second, many older Americans, especially low-income people, rely on Social Security or other government-sponsored income transfers as their major sources of income. Increases in household debt might require retirees to devote a larger share of their fixed income and savings toward paying debt. Excessive debt payments may put more seniors, especially those living on limited incomes, at greater risk of financial insecurity. Third, researchers have shown that higher levels of debt may increase psychological stress and decrease physical health. These effects may be exacerbated for older people, as they usually have fixed income and limited ability to offset higher monthly debt obligations by working more.

This report presents evidence of the increase in debt from 1989 to 2016 among households headed by those aged 65 and older, using Survey of Consumer Finances (SCF) data. The discussion focuses on changes in the percentage of households holding debt; in median and average household debts; in selected types of debt; and in relative measures, such as the debt payments-to-income ratio and the total debt-to-asset ratio. This report also analyzes how household debt among older Americans varies across different age groups and asset distributions, and it explores various groups of elderly households with the largest debt burdens. Major types of debt discussed in this report mainly include residential debt, auto loans, student loans, and credit card balances. Nonloan debtâsuch as medical debt, past-due utility and other bills, and government-assessed fines and feesâis not covered in this report, because the population with those debts tends to be underrepresented in the SCF.

Traditional life-cycle theories predict that people tend to borrow in young adulthood when incomes are low but some costs such as education and housing are high, continue to borrow but at a slower pace during middle age as income and expenses converge, and then slowly deleverage through old age as they pay down debt. The SCF data show that Americans' debt experiences have generally conformed to life-cycle theories' predictions. During 1989 to 2016, the share of households who held any debt and the median and average level of household debts were highest among those headed by Americans aged 35 to 54 and lower among younger and older ages.

In the past three decades, debt among households headed by individuals aged 65 and older grew faster than that among households headed by those aged 64 and younger. In 2016, average household debt increased from $59,134 in 1989 to $110,204 (in 2016 dollars) for households whose head was between the ages of 20 and 64, an increase of 86%, whereas the average household debt grew from $11,278 to $53,269 (in 2016 dollars) for households headed by those aged 65 and older, an increase of 3 72%. The average household debt nearly doubled for households in age groups younger than age 60, but it increased by about 4 times for the age groups 60-64, 65-69, and 70-74; by about 7 times for the age group 75-79; and by more than 10 times for the age group 80 and older (see Figure 1 ).

Trends in Household Debt Among Older Americans

From 1989 to 2016, debt increased among households whose head was aged 65 and older. Both the share of elderly households with any debt and the median and average levels of debt have increased. Household debt includes mortgages, auto loans, student loans, and credit cards, as well as other debt products.

Share of Elderly Households Holding Debt and Median and Average Debt

From 1989 to 2016, the share of households headed by individuals aged 65 and older who held debt increased, as did median and average household debt among elderly households with debt (see Figure 2 ). In 1989, about 37.8% of elderly households held debt, whereas in 2016 the share increased to 61.1%. The median debt of those elderly households with debt increased from $7,463 to $31,050 (in 2016 dollars) during the same time, and the real average debt increased from $29,918 to $86,797. The median debt lies at the middle of the debt distribution, and the average debt is generally higher than the median debt because a relatively small percentage of people have very high debt.

The share of elderly households holding any debt has generally trended upward from 1989 to 2016. However, median and average debt peaked in 2010, the year after the 2007-2009 economic recession, and declined from 2010 to 2016. In 2016, the median amount of debt was about the same as in 2007, before the economic recession, and the average amount of debt was at about the midpoint of the averages in 2004 and 2007.

The financial crisis might have had a profound effect on the older population for several reasons. First, older people are likely to have been affected by employment instability. Research suggests that when the elderly lose jobs, it takes them significantly longer to find new ones, and their new jobs, if any, typically pay less than their previous jobs. Second, defined contribution (DC) retirement plans have replaced defined benefit (DB) plans, and they have become an important source of income for older Americans. Unlike DB plans, which provide a steady stream of income during retirement, DC plans fluctuate in value with the financial market, and their value depends in part on employees' investment skills. Employees generally bear the risk in DC plans. A recent study indicates that individuals' retirement account mismanagement and the large drop in the stock market during the financial crisis reduced potential retirement income for many older Americans during the past decade.

The growth in average household debt between 1989 and 2016 largely came from mortgages (see Figure 3 ), including both debt secured by a primary residence (from $12,970 to $57,943 in 2016 dollars) and debt for other residential properties (from $2,970 to $11,446 in 2016 dollars). In addition, the increase in auto loans (from $2,437 to $5,262) may explain part of the growth in household debt among elderly households. In 2016, primary residential mortgages accounted for 66.8% of overall elderly household debt on average, other residential debt for 13.2%, auto loans for 6.1%, student loans for 1.5%, credit card balances for 3.5%, and other debts for 8.9%.

Residential loans are usually considered long-term wealth builders, as the residence's market value may increase over time, which is generally not true for auto loans or credit card debt. Researchers have found that both residential and nonresidential debt may contribute to debt-related stress for older households, but residential debt is much less stressful than other debt, such as credit card debt.

The share of elderly households who held certain selected types of debt, such as debt on a primary and other residences, auto loans, student loans, and credit card balances, increased from 1989 to 2016. The median amounts of those types of debt have also increased among elderly households with those debts.

Debt Secured by Residential Properties19

The share of elderly households who held debt secured by a primary residence increased from 15.4% in 1989 to 33.4% in 2016 (see Table 1 ). During the same time, the median primary residential debt among those households with residential debt increased from $16,793 to $72,000 in real 2016 dollars (see Table 2 ). Studies suggest that much of the growth through 2007 might have resulted from the increased availability of mortgage credit during the build-up to the financial crisis. Some research indicates that millions of older Americans are carrying more mortgage debt than ever before, and recent cohorts have taken on more mortgage debt mostly because they purchased more expensive homes with smaller down payments. Since 2010, some scholars argue that tightening mortgage underwriting standards have made it more difficult for young borrowers to qualify for mortgages. Consequently, this trend has resulted in a shift of new mortgage originations toward older borrowers and an increase in the ages of borrowers with existing debt.

A small proportion of elderly households held debt secured by other residential properties, such as a second house or a vacation property. The share of elderly households who held other residential debt slightly increased from 2.7% to 4.4% between 1989 and 2016, and the median debt on other residences increased from $23,323 to $98,000. Those types of debt were primarily concentrated among relatively higher-income elderly households.

Auto loans also increased among households headed by individuals aged 65 and older from 1989 to 2016. The share of elderly households who held any auto loan increased from 10.3% to 21.2%, and the median auto loan grew from $7,463 to $11,000 (in 2016 dollars) for those households with auto debt. Rising auto loan debt among elderly households may have partly resulted from rising vehicle costs and longer auto loan maturities.

A small share of elderly households held student loans, but the proportion increased over time. About 0.5% of elderly households held some student loans in 1989, and this share increased to 2.4% in 2016. Among those elderly households who held student loans, the median amount in 2016 dollars was $7,463 in 1989, which increased to $12,000 in 2016. Although the number of student loan borrowers aged 65 and older is much smaller than the younger population, elderly borrowers are more likely to default than their nonelderly counterparts. Student loan debt can be especially problematic for older Americans because, in the event of default on federal student loans, a portion of the borrower's Social Security benefits can be claimed to pay off the loans. The number of individuals aged 65 and older whose Social Security benefits were offset to pay student loans increased from about 6,000 in FY2002 to 38,000 in FY2015. Most of these federal student loans were incurred primarily for older Americans' own education rather than for their dependents' education.

Credit card balances among elderly households increased from 1989 to 2016, and they were the most common type of debt for elderly households in 2016. From 1989 to 2016, the share of elderly households who held some credit card debt increased from 10.0% to 35.1%, and the median credit card balance increased from $952 to $2,400 (in 2016 dollars) among those with credit card debt. Studies suggest that credit card and other noncollateralized debt tends to carry higher interest rates than other types of credit, so with rising credit card debt, older Americans may need to dedicate more of their income to servicing their debt. Credit card debt is a leading reason for bankruptcy filings among older consumers. One study shows that elderly debtors in bankruptcy carried 50% more credit card debt than younger debtors, and the elderly cited credit card interest and fees as the main reason for filing bankruptcy.

Measures of outstanding household debt say little about how much of a burden the debt is or how much risk it poses to the population's financial health. The debt payment-to-income ratio and the debt-to-asset ratio are relative measures commonly used to address the degree of debt burden on households.

One measure of debt burden is calculated by comparing required debt payments to the income available to make those paymentsâthe debt payment-to-income ratio. The ratio can measure the effects of interest rate changes and loan sizes on a household's liquidity. The debt payment-to-income ratio among elderly households who had some debt increased from 8.7% in 1989 to 16.7% in 2010, and then it declined to 12.4% in 2016 (see Figure 4 ). This ratio among elderly households was much lower than that for nonelderly households in 1989 (8.7% for elderly households compared with 16.1% for nonelderly households), but the difference in the ratio between elderly households and nonelderly households decreased over time. In 2016, the debt payment-to-income ratio for nonelderly households was 13.8%, compared with 12.4% for elderly households.

Delinquency on loan payments (e.g., the percentage of debtors with debt payment past due 60 days or more) can also suggest trouble meeting debt obligations. About 3.9% of households headed by individuals aged 65 and older with any debt had some payments past due 60 days or more in 2016 (see Figure 4 ). The share fluctuated between 1% and 5% from 1989 to 2016, and it did not show an increasing trend over time for older Americans. The share is generally higher for young households (around 10% for households headed by those aged between 18 and 34) and decreases as the head of household ages. These data suggest that although the debt payment-to-income ratio for elderly households is rising, this pattern might not indicate trouble meeting debt obligations.

Another measure of debt burden is the debt-to-asset ratio. In addition to income, households can use assets to guard against financial risks. In general, the more assets a household has, the less likely it is to default on its debt.

As predicted by the life-cycle model, the debt-to-asset ratio is generally lower for elderly households than for nonelderly households, but from 1989 to 2016, the ratio grew more quickly for elderly households than for nonelderly households. According to the SCF, the debt-to-asset ratio increased from 5.1% in 1989 to 9.0% in 2016 for elderly households with debt (see Figure 5 ), whereas the ratio remained relatively stable for nonelderly households, at around 20%, during the same time. Among all debt types, the residential debt-to-asset ratio, which increased from 2.7% in 1989 to 7.4% in 2016, contributed to a large proportion of the growth in the debt-to-asset ratio for elderly households. The debt-to-asset ratio reached 11.7% in 2010, including a residential debt-to-asset ratio of 10.0%, which might have resulted from the increased availability of mortgage credit through 2007. In addition to the rise in the debt-to-asset ratio, the proportion of elderly households whose debt-to-asset ratio was greater than 50% increased from 7.4% in 1989 to 11.2% in 2016.

In addition to the increase in the debt-to-asset ratio, researchers have found a rise in the percentage of older Americans filing for relief under the bankruptcy code. Individuals may file for bankruptcy when they cannot meet their debt obligations. Scholars find that the proportion of bankruptcy filers aged 65 and older increased from 2.1% in 1991 to 12.2% in 2013-2016 (approximately 97,600 households), and the elderly cohort is the fastest-growing age demographic even after adjusting for the aging of the population. Those studies also suggest that although both younger (under age 65) and older (age 65 and older) bankruptcy debtors are financially struggling, older filers overall are in worse financial shape than younger filers in terms of secured and unsecured debt, income, assets, and the debt-to-income ratio.

Bankruptcy can be even more problematic for older debtors than younger debtors because it is generally harder for them to accumulate assets postbankruptcy. For example, compared with younger debtors, elderly debtors are less likely to find well-paying jobs because of perceptions of decreasing productivity and are less likely to build retirement savings because they have less time to accumulate wealth. Scholars argue that if the debtors filed bankruptcy as a result of chronic illness, bankruptcy does not improve their health or access to affordable healthcare or prescriptions. For this and other reasons, research suggests that older bankruptcy filers are significantly more likely to continue to struggle financially than younger filers.

Increased Debt Among Elderly Households by Age Groups

Although household debt rose over the past three decades for elderly households overall and on average, the oldest Americans experienced the largest increase in debt. Among all elderly households, those headed by people aged 80 and older saw the fastest growth in the share of households with any debt, the median household debt, and the debt-to-asset ratio.

Share of Elderly Households Holding Debt and Median Debt

Figure 6 displays the share of elderly households who held any debt among four age groups from 1989 to 2016. In general, the proportion of elderly households with any debt declined with age for most survey years. For example, in 2016, about 70% of households headed by individuals aged 65-74 held debt, but the proportion was 61% for households in the 75-79 age group and 42% for those in the age group 80 and older. Over time, the proportion of elderly households with any debt increased for all age groups. In 2016, the share of households headed by those aged 65-69 with debt increased from 54.0% in 1989 to 69.8%, from 44.6% to 70.7% for the age group 70-74, from 27.6% to 60.7% for the age group 75-79, and from 12.5% to 41.5% for the age group 80 and older. Among all age groups, the largest growth was for the oldest age groups, aged 75-79 and aged 80 and older.

Figure 7 shows median household debt among elderly households who had some debt by age groups from 1989 to 2016. Median household debt generally increased over time for each age group and peaked around the financial crisis. For households headed by those aged 80 and older, real median debt (in 2016 dollars) was $933 in 1989 and increased to $20,000 in 2016, almost 20 times greater.

On average, elderly households in all age groups hold more debt today than did similar households three decades ago in real dollars (see Table 3 ). Among all types of debt, primary residential debt experienced the largest growth, increasing by between 315% and 536% within the four elderly age groups. Following primary residential debt, elderly households experienced growth in other residential debt, auto loans, credit card balances, and student loans. Elderly households held almost no student loans in 1989, but the average amount in 2016 increased to more than $2,000 for households headed by those aged 65 to 69 and more than $1,000 for households headed by those aged 70 to 79.

The debt-to-asset ratio increased for all age groups among elderly households from 1989 to 2016, and the ratio increased the most among households headed by people aged 80 and older (see Figure 8 ). The debt-to-asset ratio among elderly households with any debt increased from 4.0% to 9.9% for households headed by those aged 65 to 69, from 7.1% to 9.8% for the age group 70-74, from 5.3% to 8.2% for the age group 75-79, and from 2.4% to 7.2% for the age group 80 and older. Residential debt explains the majority of the growth in total debt for every elderly household age group.

Increased Debt Among Elderly Households by Quintile of Total Assets

This section discusses changes in debt from 1989 to 2016 for elderly households with different asset levels. It is important to analyze changes in debt across the household asset distribution for several reasons. First, a small group of wealthy households hold high levels of assets and debt; thus, average measures may not accurately reflect less wealthy households' financial situations. Second, elderly households are more likely than their nonelderly counterparts to draw down existing assets, such as withdrawing from retirement savings accounts and other investment accounts. Asset measurement may provide an important view of an elderly household's ability to afford debt obligations.

The change in household debt among elderly households from 1989 to 2016 varies widely across the household asset distribution. During this time period, elderly households in the middle of the asset distribution had a relatively larger growth in the probability of holding any debt, and those in the middle and the top of the asset distribution had the largest growth in median and average household debt. Elderly households in the bottom of the asset distribution usually held the least debt, but had the largest debt burden as reflected in the debt-to-asset ratio, whereas elderly households in the top of the asset distribution held the most debt, but had the smallest debt-to-asset ratio.

Table 4 presents data on household debt by quintile of the total asset distribution among the elderly household population. Each quintile represents 20% of the elderly household population. The first quintile depicts the 20% of the elderly household population with the least assets, and the fifth quintile depicts the 20% of elderly households with the most assets.

The share of elderly households that held some debt generally increased from 1989 to 2016 for all asset quintiles. Elderly households in the first asset quintile were generally least likely to hold debt, and the share of those households who held any debt increased from 36.2% to 49.5%. Elderly households in the second, third, and fourth quintiles of total assets had the largest growth in the probability of holding any debt, with an increase of about 30 percentage points. The share of elderly households in the highest 20% of the asset distribution that held debt also increased from 37.3% in 1989 to 54.9% in 2016, but the increase was not as large as that among households in the middle of the asset distribution.

Table 5 presents median debt among elderly households with any debt by quintile of total assets from 1989 to 2016. Median debt generally increased for elderly households in all asset quintiles, with a larger percentage increase for elderly households in the middle of the asset distribution. Real median debt (in 2016 dollars) increased by about three times for elderly households in the first and the fifth asset quintiles, and it increased by about four times or more for elderly households in the second, third, and fourth quintiles.

Average debt generally increased from 1989 to 2016 for elderly households across the asset distribution, but the magnitude of growth differed among asset quintiles (see Table 6 ). Real average debt (in 2016 dollars) for elderly households in the lowest asset quintile was approximately twice as much in 2016 compared to 1989, whereas average debt for elderly households in the second through the fourth asset quintiles was generally three times as much in 2016 as in 1989. Average debt for households in the highest asset quintile also doubled, with the largest real increase of about $135,000.

For households in the lowest asset quintile, the growth in average debt mainly resulted from growth in primary residential debt, credit card debt, and auto loans. From 1989 to 2016, the increase in average primary residential debt contributed to 54% of the growth in average debt. The increase in average credit card debt explained about 30% of the growth in average debt among elderly households in the bottom asset quintile, and the increase in average auto loans explained almost 20% of the growth in average debt among those households.

The growth in debt among middle- and high-asset elderly households also mainly resulted from growth in residential debt. For higher-asset households, mortgage debt for second homes was also a part of this increase in debt. For households in the second through the fourth quintiles of total assets, growth in debt secured by primary residences generally accounted for about 80% of the growth in average debt. For households in the top asset quintile, growth in primary residential debt explained almost 70% of the growth in average debt, and the remaining 30% came mostly from other residential debt.

In addition, elderly households in the bottom asset quintile were more likely to have a higher proportion of debt held in other debt, including lines of credit, installment loans, loans against pensions or life insurance, margin loans, and miscellaneous, but the proportion decreased from 1989 to 2016. Elderly households in the first asset quintile on average held about 45% of their debt in other debt in 1989, and this proportion has declined to 20% in 2016.

Figure 9 displays the debt-to-asset ratio among elderly households with debt by total asset quintiles in 1989 and 2016, decomposed into residential and nonresidential debt-to-asset ratios. The debt-to-asset ratios for households in the lowest asset quintile decreased during this time, although the residential debt-to-asset ratio slightly increased. In 2016, however, elderly households in the bottom 20% of the asset distribution still had a 43% debt-to-asset ratio, and most of the debt was based on nonresidential loans, such as credit card debt, auto loans, and student loans, which are usually considered as less effective long-term wealth builders than residential loans.

Among households in the second through the fourth asset quintiles, the debt-to-asset ratio generally increased by around 10 percentage points from 1989 to 2016, with most of the increase in the residential debt-to-asset ratio. The debt-to-asset ratio increased slightly for elderly households in the top asset quintile, primarily because of growth in the residential debt-to-asset ratio, including debt on both the primary residence and other residences.

Debt among households headed by individuals aged 65 and older has increased substantially over the past 30 years. The share of elderly households who held any debt almost doubled, and median debt among households with debt increased by about four times.

Much of the rise in debt among older Americans is not necessarily associated with financial insecurity in retirement. Much of the change in debt among elderly households, across some age groups and through most of the asset distribution, is well balanced by their assets. As shown earlier, from 1989 to 2016, the debt-to-asset ratio among elderly households with debt increased from 5.1% to 9.0%. Individuals may also adjust behavior to meet their debt obligations. For instance, one study finds that both the presence and the level of debt increase the likelihood that older adults work and reduce the likelihood that they are retired. Data from the SCF also show that the percentage of elderly households with either the head of the household or a spouse working increased from 19.8% in 1989 to 29.7% in 2016.

Rising debt among certain elderly households, however, has shown signs of an increase in debt burden. For example, the debt-to-asset ratio among households headed by individuals aged 80 and older increased by 5 percentage points between 1989 and 2016, and the ratio among elderly households with middle asset levels increased by more than 10 percentage points during the same time. Rising debt might be more problematic for persons aged 80 and older because they might be more vulnerable to income risks, as they are more likely to have lower or no earnings (as they phase out of the labor force), exhaust existing retirement resources, have reduced purchasing power in certain defined benefit pensions, and incur higher medical expenses. In addition, older Americans now hold historically high levels of housing debt, which might make them more vulnerable to housing market swings than previous cohorts of retirees. Therefore, in addition to retirement income and saving adequacy, debt management may also be an important determinant of retirement security.


Department of State, Foreign Operations, and Related Programs: FY2020 Budget and Appropriations

Summary: Each year, Congress considers 12 distinct appropriations measures, including one for the Department of State, Foreign Operations, and Related Programs (SFOPS), which includes funding for U.S. diplomatic activities, cultural exchanges, development and security assistance, and U.S. participation in multilateral organizations, among other international activities. On March 11, 2019, the Trump Administration submitted to Congress its SFOPS budget proposal for FY2020, which totaled $42.72 billion in discretionary funds ($42.88 billion when $158.9 million in mandatory retirement funds are included), reflecting adherence to discretionary funding caps, as determined by the Budget Control Act of 2011 (BCA; P.L. 112-25 ).

Summary: The initial FY2020 request would have represented a 2.5% increase in SFOPS when compared to the FY2019 request but a 21% decrease in SFOPS funding when compared to the FY2019 enacted funding levels. Within these totals, Department of State and Related Agency funding would have been reduced by 15.7%, with the greatest cuts to the Educational and Cultural Exchange Programs (56%), International Organizations (26%), and the U.S. Agency for Global Media (22%) accounts. The Foreign Operations accounts would have seen a reduction of 23.5%, with the greatest cuts to the non-health development assistance (39%), humanitarian assistance (34%), and global health (28%) sectors.

Summary: On May 16, 2019 the House Appropriations Committee agreed to its SFOPS measure ( H.R. 2839 ) that would have provided $56.54 billion in total spending ($56.39 billion in discretionary spending). The bill included either level or increased funding in nearly all accounts compared to FY2019. It did not include the President's proposal to consolidate spending into the proposed Economic Support and Development Fund (ESDF) and International Humanitarian Assistance (IHA) accounts, and moved the Economic Support Fund (ESF) account from Title III (Bilateral Economic Assistance) into Title IV (International Security Assistance) to make clear the committee's desire to keep ESF distinct from the Development Assistance (DA) account. Finally, the bill would have provided funds to make operational the new U.S. International Development Finance Corporation (pursuant to the BUILD Act of 2018; P.L. 115-254 ). On June 19, 2019, the House passed the FY2020 SFOPS legislation in a "minibus" measure that included three other appropriations billsâLabor, Health and Human Services, Education; Defense; and Energy and Water Development ( H.R. 2740 ). While the topline funding level remained the same, some monies were shifted among the various accounts due to adopted amendments.

Summary: On September 26, 2019, the Senate Appropriations Committee approved its SFOPS measure for FY2020, S. 2583 , which would have provided $55.16 billion in total new funding ($54.377 billion net, after proposed rescission of $316 million of prior-year funds). Much like the House measure, the bill included level or increased funding for most accounts compared to FY2019 and did not include the President's proposals to consolidate spending into the ESDF and IHA accounts. However, unlike the House bill, the Senate committee measure kept ESF in Title III (Bilateral Economic Assistance), consistent with prior year appropriations.

Summary: FY2020 began with all appropriations bills unfinished. Congress and the President approved two continuing resolutions to fund federal agencies through November 21, 2019 ( P.L. 116-59 ) and December 20, 2019 ( P.L. 116-69 ), respectively, at the FY2019 funding level. On December 20, 2019, Congress passed, and the President later signed, two consolidated appropriations bills ( P.L. 116-93 and P.L. 116-94 ). SFOPS funding was included as Division G of P.L. 116-94 , Further Consolidated Appropriations Act, 2020. The measure included $54.84 billion for SFOPS accounts in FY2020, a nearly 1% increase from the FY2019-enacted level and approximately 28% more than the Administration's request. Of that enacted total, $8.0 billion, or approximately 15% was designated as Overseas Contingency Operations (OCO).

Summary: In March 2020, in response to the global spread of a novel coronavirus, COVID-19, Congress enacted three supplemental appropriations acts: the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 ( P.L. 116-123 , signed into law March 6), the Family First Coronavirus Response Act ( P.L. 116-126 , signed into law March 18), and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, P.L. 116-136 , signed into law March 27). P.L. 116-123 included $1.25 billion in SFOPS accounts to prevent, prepare for, and respond to the virus, and the CARES Act added an additional $1.115 billion in SFOPS funds for this purpose. P.L. 116-127 did not include funds for SFOPS accounts. The Administration also amended its FY2020 budget request in a March 17 letter to Congress, requesting an additional $220 million in emergency SFOPS funds for COVID-19 response. With supplemental funds, total enacted SFOPS funding for FY2020 was $57.21 billion (after rescissions), a 5.2% increase over the FY2019-enacted level.

Summary: This report provides an account-by-account comparison of the FY2020 SFOPS request (including the supplemental request), House and Senate SFOPS legislation, and the final FY2020 SFOPS appropriation (including supplemental appropriations) to FY2019 funding in Appendix A . The International Affairs (function 150) budget in Appendix B provides a similar comparison.

Summary: This report will not be updated further unless there is renewed congressional activity on FY2020 appropriations.

On March 11, 2019, the Trump Administration proposed its FY2020 budget for the Department of State, Foreign Operations, and Related Programs (SFOPS) accounts, which fund U.S. diplomatic activities, cultural exchanges, development and security assistance, and U.S. participation in multilateral organizations, among other international activities. The SFOPS budget includes most international affairs (function 150) funding, as well as funding for international commissions in the function 300 budget. Additional emergency funds were requested by the Administration on March 17, 2020, to respond to Coronavirus Disease 2019 (COVID-19). The total request, including these emergency supplemental funds, was $42.94 billion in discretionary funds ($43.10 billion when $158.9 million in mandatory retirement funds are included), which was 3% higher than the FY2019 request but 21% below the FY2019 enacted SFOPS funding level (after rescissions). It was lower than any SFOPS funding level in the last decade ( Figure 1 ), and represented about 3% of the total discretionary budget authority (an estimated $1.313 trillion) requested for federal programs in FY2020.

The Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ), signed into law on December 20, 2019, included $54.84 billion for SFOPS accounts in FY2020, a nearly 1% increase from the FY2019-enacted level and approximately 28% more than the Administration's request. Supplemental funds to address the COVID-19 outbreak, requested and enacted in March 2020, added $2.37 billion to SFOPS accounts, bringing the FY2020 total to $57.21 billion. Of that enacted total, $8.0 billion was designated as Overseas Contingency Operations (OCO) and $2.37 billion (the COVID-19 funds) was designated as emergency funding.

In SFOPS, there is often disparity between requested and enacted appropriations. During the Obama Administration, Congress typically provided less SFOPS funding than was requested, though the gap narrowed over time. Thus far in the Trump Administration, Congress has enacted significantly more SFOPS funding than the amount requested, both because the requested amounts have represented large cuts and because enacted funding levels have been high relative to most recent years ( Table 1 ). The FY2020 budget request continued this pattern.

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 FY2011 (BCA; P.L. 112-25 ). Congress 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 caps are in effect.

In addition to raising the caps, another way that Congress has managed the constraints imposed by the BCA budget caps is through the use of Overseas Contingency Operations funding, which is excluded from the BCA discretionary budget caps. Congress began appropriating OCO in the SFOPS budget in FY2012, having previously provided OCO funds for the Department of Defense. Originally used to support shorter-term, temporary contingency-related programming in Afghanistan, Iraq, and Pakistan that was not part of the "base" or "core" budget, the use of OCO has expanded considerably over the years. In FY2019, OCO funds were used to support 11 different SFOPS accounts, from USAID operating expenses and the Office of Inspector General to International Disaster Assistance and Foreign Military Financing.

When Congress raised the BCA caps for FY2019, the Administration chose not to request OCO funding for FY2019 SFOPS. Congress nevertheless designated $8 billion of FY2019 SFOPS funding as OCO, a 33% reduction in OCO spending compared to FY2018 and the second year in a row that SFOPS OCO levels declined significantly.

While the FY2020 SFOPS request did not include OCO funding, the Administration's FY2020 defense budget request included an unprecedented amount of OCO funding, widely viewed as a means of increasing defense spending without amending the BCA's defense discretionary spending cap. Through BBA 2019, Congress established OCO funding targets for both defense and nondefense discretionary spending. For foreign affairs OCO, Congress designated $8 billion for FY2020 and FY2021, indicating its intent to continue to use OCO in SFOPS appropriation measures for the next two fiscal years. Congress adhered to that target, and remained consistent with FY2019 funding, in the final FY2020 SFOPS appropriation, providing $8 billion in OCO, representing nearly 14% of the total SFOPS funding ( Figure 2 ).

House SFOPS Legislation. On May 16, 2019, FY2020 SFOPS legislation ( H.R. 2839 , with accompanying report H.Rept. 116-78 ) was introduced and approved by the full House Appropriations Committee. The legislation included total SFOPS funding of $56.54 billion, 0.4% higher than FY2019 enacted funding and 32% more than requested. Of that total, $48.54 billion was base fundingâthe 302(b) allocation level approved by the House committeeâand $8 billion was designated as OCO. On June 19, 2019, the House passed the FY2020 SFOPS legislation in a "minibus" measure that included three other appropriations billsâLabor, Health and Human Services, Education; Defense; and Energy and Water Development ( H.R. 2740 ). While the topline funding level remained the same, some monies were shifted among the various accounts due to adopted amendments.

Senate SFOPS Legislation . On September 26, 2019, the Senate Appropriations Committee approved an SFOPS measure for FY2020, S. 2583 (with accompanying report S.Rept. 116-126 ), that would have provided $55.16 billion in total new funding. This represented an increase of 0.1% from FY2019-enacted funding and a 27% increase from the requested level. Of that total, $47.16 was base funding and $8 billion was designated as OCO. The measure did not reach the Senate floor for consideration.

Continuing Resolutio ns . On September 26, 2019, the Senate approved H.R. 4378 , the Continuing Appropriations Act, 2020 (approved by the House on September 19 th ), which continued funding for most federal agencies and accounts at the FY2019 funding level through November 21, 2019. The legislation was signed by the President on September 27. On November 21, 2019, the Senate approved a second continuing resolutionâ H.R. 3055 , the Further Continuing Appropriations Act, 2020, and Further Health Extenders Act of 2019 (approved by the House on November 19 th ). The legislation, which funded federal operations at the FY2019 funding level through December 20, 2019, was signed by the President on November 21, 2019.

Enacted Legislation. On December 20, 2019, the President signed into law P.L. 116-94 , a full-year appropriation that included $54.84 billion in total SFOPS funding (Division G). This enacted level represented a nearly 1% increase from the FY2019-enacted funding level and was approximately 28% more than the Administration's FY2020 request. Of that total, $16.72 billion was for State Department and related agencies operations, and $38.70 billion was for foreign operations accounts. Nearly 15%, or $8.0 billion of the total SFOPS appropriation was designated as OCO.

COVID- 19 Supplemental s . On March 17, the Trump Administration requested $220 million in supplemental SFOPS funds as part of a larger supplemental FY2020 appropriations request to address the COVID-19 pandemic. Also in March 2020, Congress enacted multiple supplemental appropriations, including the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 ( P.L. 116-123 , signed into law March 6) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act ( P.L. 116-136 , signed into law March 27). P.L. 116-123 included $1.25 billion for SFOPS accounts, including Diplomatic Programs ($264 million), USAID Inspector General ($1 million), Global Health Programs-USAID ($435 million), International Disaster Assistance ($300 million), and Economic Support Fund ($250 million). P.L. 116-136 included $1.115 billion for SFOPS accounts, including Diplomatic Programs ($324 million), USAID Operating Expenses ($95 million), International Disaster Assistance ($258 million), Migration and Refugee Assistance ($350 million), and the Peace Corps ($88 million).With these supplemental funds, enacted SFOPS funding for FY2020 totaled $57.208 billion, a 5.2% increase over the FY2019-enacted level and about 33% more than the Administration's request.

State Department Operations and Related AgencyÂ Highlights

For FY2020, the Administration sought to cut funding for the Department of State and Related Agency appropriations accounts from the $16.46 billion Congress enacted for FY2019 to $13.98 billion (including the supplemental request), a 15% reduction. The Administration's FY2020 request exceeded its FY2019 request for these accounts, which totaled $13.26 billion, by around 5.4%. The Administration's priorities to be funded through Department of State and Related Agency accounts included

sustaining the global diplomatic workforce and operations; protecting U.S. government personnel and overseas missions; and preserving strategic participation in international organizations to achieve outcomes favorable to the United States and its allies.

Conversely, the House bill and the Senate committee bill both sought to increase funding for these accounts. The House bill would have raised funding to $17.35 billion, or 5.4% above the FY2019 funding level. The Senate committee bill, if enacted, would have boosted funding to $16.53 billion, or 0.4% more than the FY2019 funding level.

The FY2020 initial enacted appropriation ( P.L. 116-94 ) provided $16.72 billion for the Department of State and Related Agency accounts, which is about 1.6% above the FY2019-enacted level. This funding level exceeded that of the Senate committee bill by 1.1% and was approximately 3.6% less than the amount included in the House bill. The Administration requested an additional $115 million in the Diplomatic Programs account for COVID-19 response activities in March 2020. P.L. 116-123 , the COVID-19 supplemental appropriation, provided an additional $264 million for the Diplomatic Programs account, and P.L. 116-136 provided an addition $324 million for Diplomatic Programs, bringing the total enacted funding for Department of State and Related Agency accounts to $17.31 billion, or 5.2% more than the FY2019 funding level.

Table 3 provides detailed information regarding the extent of the Administration's proposed cuts to these accounts, the House and Senate committee bill funding levels, and the appropriations provided in P.L. 116-94 and P.L. 116-123 .

The Worldwide Security Protection (WSP) sub-account within the Diplomatic Programs account has been used to fund programs that the State Department's Bureau of Diplomatic Security (DS) and other bureaus implement to protect the department's staff, property, and information. As part of its FY2020 request, the Administration asked Congress to create a new WSP standalone account and authorize the transfer of all unobligated WSP funds into this account by no later than the onset of FY2021 (October 1, 2020). The Administration maintained that creating this account would increase the transparency of WSP expenditures through more clearly indicating distinctions between funding for diplomatic programs and security-related activities. For its FY2021 budget request, the State Department reportedly intends to request WSP funding in this new account. To date, no legislation has been introduced in Congress that would create a new WSP account.

As in previous years, the majority of both the funding the Administration requested and the budget authority Congress provided for the Department of State and Related Agency appropriations accounts was for diplomatic programs, diplomatic security and embassy construction, and contributions to international organizations and international peacekeeping activities. For FY2020, such programs accounted for approximately 88% of the Administration's request and 84% of the funds Congress appropriated for these accounts. Some of the Administration's priorities within these areas, as identified by the Department of State in its Congressional Budget Justification and other materials provided to Congress, 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 domestic and overseas State Department personnel salaries; the operations of the department's strategic and managerial units, such as the Office of the Secretary and the Bureaus of Administration, Budget and Planning, Information Resource Management, and Legislative Affairs; and foreign policy programs administered by the Bureaus of African Affairs, Conflict and Stabilization Operations, and others.

The Administration's initial FY2020 request for Diplomatic Programs totaled $8.42 billion, an 8% reduction from the $9.17 billion Congress enacted for this account in FY2019. The House bill and Senate committee bill would have appropriated $9.25 billion and $8.89 billion, respectively, for this account. P.L. 116-94 , the FY2020-enacted appropriation, provided $9.13 billion for Diplomatic Programs, or 0.5% less than the FY2019 funding level and 8% more than the Administration's request

The Administration maintained that its request was consistent with past congressional guidance regarding appropriate State Department on-board personnel volumes and would sustain the Foreign Service and Civil Service workforces at their end-of-2017 levels. Both the House bill and Senate committee bill included oversight provisions pertaining to Foreign Service and Civil Service personnel levels. The enacted legislation provided funding for not less than 12,870 permanent Civil Service staff and 13,031 permanent Foreign Service Officers, which the joint explanatory statement accompanying the law maintained was consistent with the State Department's current hiring targets and would restore State Department personnel to pre-hiring-freeze levels in place during FY2016.

Among other priorities funded by the Diplomatic Programs account, the joint explanatory statement provided an additional $500,000 apiece to the Bureau of Democracy, Human Rights, and Labor and the Bureau of Economic and Business Affairs for implementation of the Global Magnitsky Human Rights Accountability Act (Subtitle F, Title XII, Division A of P.L. 114-328 ). The Senate committee report accompanying its bill, which also sought to provide this increased funding, stated that it was necessary for the hiring of additional staff to strengthen implementation of the law. The Senate committee report also expressed concern with what it characterized as the lack of information sharing between the Departments of State and the Treasury necessary for sanctioning foreign individuals for direct or indirect involvement in significant corruption or gross violations of human rights under this law. The committee report included a reporting requirement, which was made part of the enacted appropriations law, requiring the Secretary of State to submit a plan to Congress aimed at improving coordination with the Department of the Treasury on such efforts.

An additional $115 million was requested for Diplomatic Programs in March 2020 to help the State Department prevent, prepare for, and respond to the coronavirus epidemic, including maintaining consular operations, reimbursement of evacuation expenses, and emergency preparedness. Congress appropriated an additional $588 million in FY2020 supplemental Diplomatic Programs funds for this purpose, including $264 million in P.L. 116-123 and $324 million in P.L. 116-136 . These supplemental funds brought FY2020-enacted funding for this account to a total of $9.71 billion, or 5.9% above the FY2019-enacted level.

The Administration's FY2020 budget request sought to provide approximately $5.41 billion for the department's key diplomatic security accounts: $3.78 billion for the Worldwide Security Protection (WSP) allocation within the Diplomatic Programs account and $1.63 billion for the Embassy Security, Construction, and Maintenance (ESCM) account. The WSP allocation supports the Bureau of Diplomatic Security (DS), which is responsible for implementing security programs to protect U.S. embassies and other overseas posts, diplomatic residences, and domestic State Department offices. The ESCM account supports the Bureau of Overseas Buildings Operations (OBO); provides the State Department's share of costs involved with the planning, design, construction, and maintenance of U.S. overseas posts around the world; and funds "brick and mortar" security measures at these posts.

As illustrated in Table 4 , enactment of the Administration's request would have marked a decline of 8% for WSP and 18% for ESCM relative to the FY2019 enacted figures. Among the priorities the Administration sought to fund through its request were the construction of new embassy compounds in Qatar, Brazil, and Malawi and new U.S. consulates in Italy and Indonesia. Proposed cuts included a $50 million reduction in DS operations in Iraq due to the suspension of operations at the U.S. Consulate General in Basrah.

The enacted legislation, P.L. 116-94 , appropriated $4.10 billion for WSP and $1.98 billion for ESCM, for a total of approximately $6.08 billion in diplomatic security funding. This funding totals around 12% more than the Administration's request, 7% more than the Senate committee bill would have provided, and 0.2% less than the appropriated funds included in the House bill. The aggregate appropriation for diplomatic security is nearly identical to that provided in FY2019. However, P.L. 116-94 appropriated around $7.4 million more for Worldwide Security Upgrades, a sub-item within ESCM that includes the State Department's share of the costs to plan, design, and build new embassies and other facilities abroad, while providing an equivalent lesser amount for the operations and repair and construction programs funded through ESCM.

The enacted appropriations law also carried over notification requirements from previous years that Congress applies to conduct oversight of diplomatic construction projects abroad, including ongoing embassy construction projects in Lebanon, Indonesia, Mexico, and India. With respect to the U.S. Consulate General in Basrah, the law requires that any change to the status of operations there is subject to consultation with and notification to Congress.

Over the past several years, Congress provided no-year appropriations for both WSP and ESCM, thereby authorizing the State Department to indefinitely retain appropriated funds beyond the fiscal year for which they were appropriated. As a result, the department has carried over large balances of unexpired, unobligated WSP and ESCM funds each year that it is authorized to obligate for purposes including multiyear construction projects and unexpected security contingencies. For example, for FY2019, the State Department carried over more than $7.2 billion in previously appropriated funds for ESCM. In this context, P.L. 116-94 included a rescission of $242.5 million in unobligated ESCM funds previously appropriated pursuant to the Security Assistance Appropriations Act, 2017 (division B of P.L. 114-254 ) for embassy construction projects in high-threat countries that were subsequently postponed indefinitely.

Assessments to International Organizations and Peacekeeping Missions

Through the Contributions to International Organizations (CIO) account, the United States pays its assessed contributions (membership dues) to the United Nations (U.N.), the U.N. system of organizations (including, for example, the International Atomic Energy Agency), inter-American organizations such as the Organization of American States, and other international organizations. Additional funding is provided to international organizations through the various multilateral assistance accounts, as described in the Foreign Operations section of this report. Separately, the United States pays its assessed contributions to U.N. peacekeeping missions through the Contributions for International Peacekeeping Operations (CIPA) account. Recent funding levels for both accounts are detailed in Table 5 .

The Administration's CIO account request noted that it prioritized funding for international organizations "whose missions substantially advance U.S. foreign policy interests" while cutting contributions to organizations whose work either does not directly affect U.S. national security interests or renders unclear results. While the request sought to fund the North Atlantic Treaty Organization (NATO) and the International Atomic Energy Agency near recent levels, it looked to cut funding for the World Health Organization (WHO) and the Food and Agriculture Organization (FAO) by approximately 50% each. The Administration's request specifically noted that these cuts owed to "these entities' less direct linkages to U.S. national security and economic prosperity."

With regard to CIPA, the Administration's request assumed that the State Department would make progress in efforts to negotiate reductions in the overall budgets of peacekeeping missions or the closure of certain missions altogether. The U.S. assessment for U.N. peacekeeping (last negotiated in 2018) is 27.89%; however, Congress has capped the U.S. contribution at 25%. If the Administration's request was enacted, it would have provided 58% of total U.S. assessed dues owed for FY2020. The remainder of these dues would have been compounded into arrears. The State Department estimated that the United States accumulated about $725 million in peacekeeping arrears from FY2017 to FY2019 as a result of the U.S. cap.

The FY2020 appropriations law provided a combined total of $3 billion for CIO and CIPA, which marked an increase of 40% relative to the Administration's request, and was 17% and 2% less, respectively, than the House and Senate committee funding levels. The joint explanatory statement explicitly provided that not less than $67.4 million of the CIO appropriation was for the FY2020 U.S. contribution to NATO, which totaled approximately 9% more than the U.S. contribution to the alliance in FY2018. The joint explanatory statement further noted that no funds were included in the law to withdraw the United States from NATO. Information provided to Congress by the Department of State indicates that the department intends to fund the WHO and FAO through this account near recent-year levels.

With regard to CIPA, the joint explanatory statement maintained that sufficient funds were appropriated for the United States to continue providing contributions at the statutory level of 25% rather than the assessed rate of 27.89%. Both the House and Senate committee reports made note of compounding U.S. peacekeeping arrears. The House committee report recommended applying a share of the FY2020 CIPA appropriation for the payment of arrears accumulated in FY2017 and FY2018âhowever, this may not be possible as the final FY2020 CIPA appropriation provided in P.L. 116-94 was around $600 million less than the level included in the House bill. The Senate committee report encouraged the State Department to alleviate the issue of compounding arrears through reviewing peacekeeping missions for potential cost savings while ensuring mission effectiveness.

The foreign operations accounts in the SFOPS appropriation, together with the Food for Peace and McGovern-Dole food aid programs funded through the agriculture appropriation, comprise the foreign assistance component of the international affairs budget. The Administration's initial FY2020 foreign operations request totaled $29.01 billion, about 1.5% more than the Administration requested for these accounts for FY2019 and 23% less than Congress enacted for FY2019. Total foreign aid, including the food aid programs in the agriculture appropriation, would have been cut by 27%. The foreign aid request outlined four general priorities:

Supporting U.S. friends and allies Winning the great power competition Promoting a "journey to self-reliance" for developing countries Sharing the burden of international security and development with more partners

Under the President's proposal, assistance levels would have been cut across all aid types and sectors. The House legislation, H.R. 2740 , included $39.2 billion for foreign operations, a slight increase compared to FY2019, and about 34% more than the Administration requested. The Senate committee bill, S. 2583 , included $38.95 billion for foreign operations accounts, almost level with the House recommendation. The omnibus appropriation, P.L. 116-94 , included $38.70 billion for foreign operations accounts, a 1.2% increase over FY2019 funding and 33% more than requested.

In response to the COVID-19 pandemic, the Administration requested an additional $105 million in the USAID Operating Expenses and Peace Corps accounts for FY2020. Congress in turn enacted $1.777 billion in additional foreign operations funds in COVID-19 supplemental appropriations legislation, primarily in the Global Health Programs, International Disaster Assistance, Migration and Refugee Assistance, and Economic Support Fund accounts, bringing total enacted foreign operations funding to $40.48 billion ( Table 6 ).

Proposed Account Consolidations and Restructuring

In the FY2020 request, the Administration proposed to consolidate accounts in two areas:

Most non-health development assistance accountsâDevelopment Assistance; Economic Support Fund; Assistance to Europe, Eurasia and Central Asia; and the Democracy Fundâwould have been combined into a single new Economic Support and Development Fund (ESDF). The Administration made a similar request for both FY2018 and FY2019, but Congress did not enact the proposed account restructuring. For the first time, the Administration proposed to consolidate the four humanitarian assistance accountsâInternational Disaster Assistance (IDA), Migration and Refugee Assistance (MRA), Food for Peace, Title II and Emergency Refugee and Migration Assistance (ERMA)âinto a single International Humanitarian Assistance (IHA) account. Budget documents stated that the consolidated account would be managed by USAID under the policy authority of the State Department (see Humanitarian Assistance section below).

The Administration suggested that consolidation of these accounts would streamline management to allow more efficient deployment of resources.

The House passed legislation, H.R. 2740 , did not adopt the account structure proposed by the Administration. However, it did move the Economic Support Fund account from Title III (bilateral economic assistance) of the bill to Title IV (security assistance), making comparisons of the two titles to the request or to prior appropriations potentially misleading. The committee report notes that ESF funds "are provided to advance United States interests by helping countries meet political and security needs," and may be provided in countries that also receive Development Assistance funds, seemingly clarifying the purpose for distinct accounts rather than a combined ESDF.

The Senate committee bill did not adopt the account structure changes proposed by the Administration or the House bill. It did, however, add a "restructured debt" account line under the Treasury Programs heading, with $20 million in recommended funding, that was included in neither the Administration request nor the House bill.

P.L. 116-94 , like the Senate bill, maintained the development and humanitarian assistance account structure used in the FY2019 legislation, but added a $15 million line item for debt restructuring under Treasury Programs.

Under the original FY2020 request, funding for independent SFOPS agencies would have been reduced by 12% overall from FY2019 levels. Requested Peace Corps funding was $396.2 million (a 3.5% reduction from FY2019) and for the Millennium Challenge Corporation (MCC), $800 million (an 11.6% reduction). As in the FY2019 budget request, the FY2020 request proposed elimination of two independent development agenciesâthe Inter-American Foundation (IAF) and the U.S. Africa Development Foundation (USADF)âand incorporation of their staff and small grant activities into USAID's Western Hemisphere and Africa bureaus, respectively. The request specified that funding was included for 40 staff positions to enable this transition, as well as $20 million in ESDF to support small grants.

H.R. 2740 , as passed, would have maintained funding for the MCC and USADF at FY2019 levels while increasing funding for the Peace Corps (3.5% increase) and IAF (44%, with the increase to be used to support the Central America Strategy, the Caribbean Basin Strategy, and for programs in Colombia). The committee report made clear that the committee did not assume the proposed consolidation of IAF and USADF into USAID.

S. 2583 , the committee-passed bill, would have provided overall funding for independent agencies at much the same level recommended by the House bill, but would have maintained Peace Corps and MCC funding at the FY2019 level. USADF funding would have increased by 10% and IAF by 67% compared to FY2019, with the committee specifying that the funds were not for close-out costs.

The enacted legislation adopted the Senate funding levels for all the independent agencies, a 1.3% increase, in total, over FY2019 funding.

In March 2020, The Administration requested an additional $73 million for the Peace Corps to fund the emergency evacuation of volunteers during the COVID-19 pandemic. Congress enacted $88 million for this purpose in P.L. 116-136 . Including this funding, FY2020 appropriations for independent agencies to date total $1.474 billion.

The various multilateral assistance accounts, through which the United States contributes to multilateral development banks and international organizations that pool funding from multiple donors to finance development activities, would have been cut by about 18% from FY2019, to $1.52 billion, under the request. As in the FY2018 and FY2019 requests, the Administration included no funding in the FY2020 request 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 $339 million for IO&P in FY2019. The Administration also requested no funding for the Global Environment Facility (GEF), describing the FY2019 appropriation as sufficient to cover FY2019 and FY2020.

The House legislation, H.R. 2740 , would have increased total funding for international organizations by nearly 26%, to $2.34 billion. This included a 91% increase compared to FY2019 for the IO&P account, with report language allocating funds for core contributions to specific agencies, including $147.5 million for UNICEF and $55.5 million for the U.N. Population Fund. The IO&P allocation also included $170.5 million for the U.N. Relief and Work Agency (UNRWA, which works in Palestinian territories) and report language specified that $226.6 million of multilateral assistance should support humanitarian and development efforts in the West Bank and Gaza. The bill also included $139.6 million for the GEF and $30 million for the International Fund for Agricultural Development.

The Senate committee bill, S. 2583 , included $2.07 billion for multilateral aid accounts, an 11.5% increase over FY2019 funding. The increase was driven by a 12% IO&P funding increase and inclusion of $206.5 million in International Bank of Reconstruction and Development funding that was in the Administration request but not the House bill or the FY2019-enacted appropriation.

The enacted legislation included a total of $2.082 billion for multilateral assistance, a 12% increase over FY2019 funding. Within that total, IO&P funding was increased by 15% to $390.5 million, offset in part by the lack of a contribution to the African Development Bank ($32 million in FY2019). All other multilateral accounts were funded at the same level as FY2019.

Export Promotion Assistance/International Development Finance Corporation (IDFC)

Export promotion activities in FY2020, as in all recent years, are expected in total to return more to the Treasury through offsetting collections (such as fees and loan interest payments) of the Export-Import Bank and the Overseas Private Investment Corporation (OPIC) than is appropriated for these programs.

In 2019, OPIC was dissolved and replaced by the new U.S. International Development Finance Corporation (DFC), which also incorporates USAID's Development Credit Authority (DCA). The request included increased administrative funding to support this transition ($98 million, compared to $80 million for OPIC administration and $10 million for DCA administration in FY2019). The FY2020 request also included $200 million in program funds to support DFC credit subsidies, technical assistance and feasibility studies. As in FY2018 and FY2019, the Administration's export promotion request called for the elimination of the U.S. Trade and Development Agency (TDA), seeking $12.1 million for an orderly shutdown. Congress appropriated $79.5 million for TDA in both FY2018 and FY2019.

H.R. 2740 , as passed, did not include funding for OPIC, anticipating its termination under the BUILD Act, and instead provided funds for the DFC, including $164 million for the capital account (45% less than requested), to include $101 million for administrative expenses. It also set an $80 million limit on transfers to the DFC to support direct and guaranteed loans and included several reporting requirements for the new agency. The bill also included $75 million for TDA, a 5.7% cut from current year funding.

The Senate committee bill, S. 2583 , would have funded the DFC through several specific budget allocations: $98 million for administrative expenses, $150 million for an equity fund, $50 million (by transfer from the Development Assistance account) for a program accounts, and $2 million for the Inspector General. Like the House bill, the Senate committee bill anticipated offsetting collections to exceed DFC appropriations in FY2020. S. 2583 also included $79.5 million for TDA.

P.L. 116-94 provided $299 million for a DFC corporate capital account (including $119 million for administrative expenses, $150 million for equity investments, and $30 million for other programs), $80 million for the cost of direct and guaranteed loans through a program account, and $2 million for the Inspector General. Like the House and Senate bills, the enacted legislation assumes that offsetting collections will make appropriations for the DFC unnecessary. The bill also included $79.5 million for TDA.

As in previous years, the bulk of aid requested for FY2020 was for global health, humanitarian, and security assistance programs.

The total request for the Global Health Programs (GHP) account for FY2020 was $6.34 billion, a 28% cut from the FY2019 enacted funding level. Global health sub-accounts would have been cut across the board under the request, with reductions ranging from 11% for malaria programs to nearly 55% for family planning and reproductive health programs ( Table 7 ).

HIV/AIDS program funding would have been cut by nearly 30% from FY2019 funding levels, though the Administration asserted that the requested funding would be sufficient to maintain treatment for all current recipients. The Administration proposed limiting U.S. Global Fund contributions to 25% of all donations, rather than the 33% that the United States has provided since the George W. Bush Administration.

The House legislation, H.R. 2740 , included nearly $9.30 billion for GHP, which would have increased GHP funding by 5% over FY2019 levels and was 47% more than requested. Sub-sector allocations specified in the accompanying report would have maintained level funding or slight increases for most health subsectors compared to FY2019 levels, with the exception of family planning and reproductive health funding, which would have increased by 30%. The bill included $1.56 billion for the Global Fund, retaining the U.S. contribution limit at 33% of the total, and directed the Administration to fully obligate the funds for the first installment of the new replenishment round. In addition, the House committee bill included a provision that would have prohibited funds appropriated in the act, or prior SFOPS Acts, from being used to implement the Administration's expansion of the "Mexico City Policy," which prohibits all global health funding (expanded from family planning funding) to foreign NGOs engaged in voluntary abortion activities, even if such activities are conducted with non-U.S. funds.

S. 2583 would have provided $9.12 billion for GHP in total, about 3% more than the FY2019 funding, with slight increases in all health subsectors compared to the FY2019 subsector allocations, as specified in the accompanying report. Compared to the House bill, the Senate committee bill included significantly less funding for family planning and reproductive health programs (-22%) and more for malaria programs (+4.5%). The bill would have provided $1.56 billion for the Global Fund, the same as the House bill.

P.L. 116-94 included a total of $9.09 billion for GHP, 2.9% more than the FY2019 funding level and 43% more than the Administration's request. The increase over FY2019 funding was driven by modest increases across all global health subcategories, as detailed in the explanatory statement, with the exception of family planning and reproductive health, which was maintained at the FY2019 funding level. The biggest increases were to HIV/AIDS (+3.5%) and nutrition (+3.4%) activities. Like the House and Senate bills, the enacted appropriation allocated $1.56 billion for the Global Fund.

P.L. 116-123 , the first COVID-19 supplemental bill, included an additional $435 million for Global Health Programs, to be administered by USAID, "for necessary expenses to prevent, prepare for and respond to coronavirus." This funding brought the GHP total for FY2020 to $9.53 billion, or nearly 8% more than the FY2019-enacted funding.

The initial FY2020 budget request for humanitarian assistance was $5.97 billion, a 37% decrease from the FY2019 appropriation (including funds for Food for Peace in the Agriculture appropriation). The request continued a long-standing trend of humanitarian budget requests being significantly smaller than prior-year enacted funding levels, 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 ( Figure 3 ).

The Administration's budget justification asserted that "when combined with all available resources, average funding available for 2019 and 2020 roughly matches the highest-ever level of U.S. overseas humanitarian programming, and is sufficient to address needs for Syria, Yemen, and other crisis areas."

For FY2020, as noted earlier, the budget proposed to fund all humanitarian assistance through a new, single global International Humanitarian Assistance (IHA) account. IHA would have been managed by the newly consolidated Humanitarian Assistance Bureau at USAID, but with a "senior dual-hat leader" under the policy authority of the Secretary of State reporting to both the Secretary of State and the USAID Administrator. The proposal would have effectively moved the administration of refugee and migration assistance funding from State to USAID. The State Department would have retained approximately 10% of MRA funding to support refugee diplomacy and administrative expenses, costs associated with resettlement of refugees in the United States, and support for refugee resettlement in Israel.

Within USAID, the proposal would also have eliminated the Food for Peace Act, Title II funding currently appropriated through the agriculture appropriation but administered by USAID. The Administration previously proposed this in FY2018 and FY2019, citing inefficiency and the ability to provide food assistance through other accounts. Under the proposed plan, emergency food assistance would also have been funded through the IHA account.

H.R. 2740 , as passed, would have provided $7.97 billion in foreign operations humanitarian assistance, a 2% increase over FY2019 funding and about 26% more than requested. Funding was provided through the traditional accounts (IDA, MRA and ERMA) rather than the proposed IHA account. An additional $1.85 billion was included in the Senate committee-passed agriculture appropriation, H.R. 3164 , for Food for Peace.

S. 2583 included $7.82 billion for foreign operations through the traditional account structure. The Senate committee-passed agriculture appropriation, S. 2522 , included $1.716 billion for Food for Peace, for a humanitarian aid total of $9.53 billion, almost level with FY2019-enacted funding.

The enacted omnibus legislation maintained both the account structure and funding levels for humanitarian assistance. P.L. 116-94 included a total of $9.55 billion for humanitarian assistance in the SFOPS ($7.83 billion) and Agriculture ($1.725 billion) divisions, a 0.2% increase over FY2019 funding, with slight increases to the IDA and Food for Peace accounts.

COVID-19 supplemental appropriations enacted in March 2020 made additional humanitarian assistance available to prevent, prepare for and respond to the pandemic. P.L. 116-123 added $300 million to the IDA account and P.L. 116-136 added an additional $258 million for IDA and $350 million for MRA, bringing the enacted humanitarian assistance total to $10.46 billion ($8.74 billion in SFOPS), or about 10% more than the enacted FY2019 funding.

The FY2020 request for military and security assistance was $7.415 billion, a 19% cut from FY2019 enacted levels. Reductions were proposed for every account ( Figure 4 ). As is typical, the bulk of security assistance requested by the Administration (67%) would have been Foreign Military Financing (FMF) aid to Israel ($3.3 billion), Egypt ($1.3 billion), and Jordan ($350 million). As in FY2018 and FY2019, the Administration's FY2020 request sought authority 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 asserted that loan authority would enable partners to purchase more U.S.-made defense equipment and promote burden sharing in security cooperation activities.

FY2020 International Narcotics Control and Law Enforcement (INCLE) funding would have decreased by 37%, with a notable increase requested for Colombia ($209 million from $143 million in FY2018) and decrease for Afghanistan ($95 million, down from $160 million in FY2018).

The House legislation, H.R. 2740 , included $11.21 billion for security assistance, an almost 23% increase over the FY2019 funding level and a more than 50% increase over the Administration request. The difference was almost entirely due to the House bill including the Economic Support Fund account under security assistance rather than bilateral economic assistance. Excluding ESF funds, security assistance in the bill would have been reduced about 1% from FY2019 funding.

The Senate committee bill, S. 2483 , included the traditional accounts under the security assistance heading and provided a total of $9.11 billion, on par with FY2019 funding. However, within that total INCLE funding would have decreased by 9% and NADR funding would have increased by 11% compared to FY2019.

P.L. 116-96 provided $9.014 billion in security assistance accounts, a reduction of about 1.5% from FY2019 funding, keeping the FY2019 account structure. Funding was reduced from the FY2019 level for the INCLE, PKO and FMF accounts (-7.1%, -6.4%, and -0.6%, respectively), while NADR and IMET funding increased (+3.6% and +1.9%, respectively).

In addition to proposed cuts to global health and humanitarian assistance, the FY2020 budget request would have reduced funding from the previous year's enacted levels for almost all development sectors. Programs to counter trafficking in persons would have been cut the least, 25%, while activities related to environmental protection, microenterprise, water and sanitation, and education would have been cut by more than 60%. Democracy promotion and food security funding would have been reduced by about half. One exception to the proposed sector cuts was gender equality funding, which would have increased by about 80%, driven by the Women's Global Development and Prosperity Initiative (WGDP), rolled out by Ivanka Trump in February 2019, for which the budget request included $100 million ( Table 8 ).

The House legislation, H.R. 2740 , recommended development sector allocations similar to those enacted for FY2019, with the exception of environment programs, for which the allocation would have increased by 77%. In addition to the funding allocation, the environmental programs section also specified that funding may be used to support the U.N. Framework Convention on Climate Change (Paris Agreement) and that none of the funds in the act, or in prior SFOPS appropriations acts, may be used to withdraw from the Paris Agreement. The report accompanying the legislation ( H.Rept. 116-78 ) called for the USAID Administrator to provide a detailed implementation plan of the WGDP to Congress, including focus countries and planned metrics, within 90 days of enactment.

Sector allocations in the Senate committee bill, S. 2483 , would have increased funding for democracy and environment programs relative to the FY2019 funding (+17% and +90%) and the House bill (+17% and +7%, respectively), while providing fewer funds for education and gender equality programs than both the FY2019 legislation (-28% and -25%) and the House bill (-30% and -35%). Senate committee allocation in all sectors, with the exception of gender equality (-59%), would have been higher than the Administration requested for FY2020.

P.L. 116-94 included sector allocations more similar to the FY2019 legislation than to the Administration's request. As in the House and Senate bills, the enacted legislation significantly increased environment sector funding compared to FY2019 (+81%). Funding for education (+7.2%), water and sanitation (+3.4%) and gender equality (+53.5%) also increased compared to FY2019, though the gender equality funding total included "up to" $100 million for the WGDP, creating potential for a significantly lower allocation.

Top aid recipients under the request, consistent with recent years, would have been allies in the Near East who receive the bulk of military aid, including Israel and Egypt; strategically significant development partners such as Jordan and Afghanistan; and several global health focus countries in Africa ( Table 9 ). Notable reductions in aid were proposed for South Africa (-171%) and West Bank/Gaza (-43%).

The Near East and Africa would have continued to be the top regional aid recipients under the request, together comprising more than 75% of aid allocated by country or region ( Figure 5 ).The FY2020 request emphasized large increases for the Indo-Pacific and Europe and Eurasia regions relative to the FY2019 request, as part of the emphasis on countering Chinese and Russian influence. However, the requested funding for East Asia and the Pacific was 14% less, and the South and Central Asia request almost 17% less, than the FY2018 allocations for those regions (FY2019 country and regional allocations are not yet available). Aid to Europe and Eurasia would have been reduced by 54%, and aid to sub-Saharan Africa by 35%. Aid to the Western Hemisphere would decrease by 30%, though the FY2020 budget request sought authority to transfer $500 million in aid from unspecified accounts as necessary to meet needs related to the crisis in Venezuela. The MENA region would have seen the smallest proportionate cuts under the request, about 8%, and increased its share of regionally allocated aid from 36% to 44%.

These country and regional allocations do not include the nearly $6 billion requested for humanitarian assistance. Humanitarian assistance is not requested by country and could significantly change country and regional aid totals once allocated. Nor do they include nonhumanitarian supplemental funds appropriated for COVID-19 response, which were not appropriated by country or region.

The House legislation and report, H.R. 2740 / H.Rept. 116-78 , did not provide comprehensive country and regional allocations, but did specify aid levels for several countries and regions, including $3.305 billion for Israel, $1.403 billion for Egypt, $1.525 billion for Jordan, $457 million for Colombia, $160 million to support the Indo-Pacific Strategy, $541 million designated for Central America as a region, and $280 million for the Countering Russian Influence Fund.

S. 2583 / S. 126 also did not provide comprehensive allocations by country, but did specify many such aid levels, including $3.305 billion for Israel, $1.432 billion for Egypt, $1.650 billion for Jordan, $448 million for Ukraine, $403 million for Colombia, $322 million for Afghanistan, and $453.6 million for Iraq. The bill and report also included a total of $515 million for Central America as a region, $285 million for the Countering Russian Influence Fund, $375 million for a new Countering Chinese Influence Fund, and $200 million for the Relief and Recovery Fund to assist areas formerly controlled by ISIS.

P.L. 116-94 and the accompanying explanatory statement include detailed funding directives for many countries and regional programs. Among the largest allocations are $3.305 billion for Israel, $1.525 billion for Jordan, $1.432 billion for Egypt, $448 million each for Ukraine and Colombia, and $452 million for Iraq. Major allocations for regional activities include $1.482 billion to support the Indo-Pacific Strategy and the Asia Reassurance Initiative Act of 2018 ( P.L. 115-409 ), $300 million for the Countering Chinese Influence Fund, $520 million for Central America (and a directive that funds appropriated for Central America in FY2019 be made available), and $290 million to carry out the purposes of the Countering Russian Influence Fund.

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 appropriation: foreign food aid programs (P.L. 480 Title II Food for Peace 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.