Absolutely Reorganize, But Don’t Break Foreign Assistance

President Trump’s election and Republican control of Congress created a mandate for change.  In the case of foreign affairs and foreign assistance, the challenge is to channel that mandate and the resulting political capital in ways that will make this country stronger and safer. Much attention has focused on the proposed 30 percent cut to the Foreign Operations’ budget; less noticed was an executive order issued by President Trump that announced a potential reorganization of federal agencies, including the State Department and USAID.

This presents an opportunity to review who is doing what and fix what is broken. There has been a historic proliferation of overseas activities to over 16 federal agencies with the acquiescence of Congress and successive presidential administrations. This has led to incoherence and a loss of focus in how the United States spends its limited foreign assistance budget.

Options that will likely be considered include:

1. Have a stand-alone cabinet agency for development (unlikely to happen):

2. Leave USAID as a stand-alone agency and “do nothing” (unlikely to happen);

3. Give the USAID administrator multiple hats: oversee the “F” process, coordinate other foreign assistance activities across the government, and hold a senior level title, preferably Deputy Secretary of State for Development (the best option);

4. Abolish USAID, ignore the other 16 domestic agencies “doing development” and create an undersecretary of State for development that oversees a “development cone” (the second worst option), or

5. Abolish USAID, ignore the other 16 agencies “doing development” and merge all USAID functions into State regional and functional bureaus (the absolute worst option).

Over the past 40 years, there have many attempts to reorganize our soft power, including partial restructuring, changes to the organizational chart in terms of hierarchy, and transfers of authorities. Yet, none of these have resulted in a completely satisfactory arrangement.

The best outcome would be that the top person has the authorities of USAID, control of the “F Bureau” at State and a title that gives him or her the coordinating authorities for all 18 agencies’ international soft power activities. The best title(s) would be Deputy Secretary of State for Development and Administrator of USAID, held at the same time.

The closest example of what I am describing is the development leadership provided by Henrietta Fore at the end of Bush 43.  She had worked at USAID, State, and Treasury in senior roles before taking the USAID Administrator role and Director of the Bureau of Foreign Assistance.  Some of it was her effective personality; some of it was her stature and experience.

This person’s role should be ultimately authorized by Congress so that the next President cannot fiddle with it without effort.  The Bush Administration moved partially in this direction and then the Obama Administration, with active support from Secretary Clinton, took soft power budget authority away from the USAID Administrator and gave it to a new “Deputy Secretary for Management.”

As part of this new reorganization, there should be a review of all non-USAID international programs (or just international assistance programs) across all agencies.  The smaller ones could be incorporated into this newly reconstituted USAID/Deputy Secretary structure and the large ones, specifically MCC, could remain independent but under the strategic and budgetary authority of the Deputy Secretary for Development.

Under this scenario, a number of state functions ought to be merged into USAID, including: the Bureau of Population, Refugees, and Migration (PRM), the Bureau of Conflict and Stability Operations (CSO), PEPFAR- the coordinator for USAID and HHS/CDC HIV/AIDS spending overseas. These changes would require actions and new authorities from the President, the OMB, and Congress.

Henrietta Fore
Henrietta Fore had unique authority and convening power as USAID Administrator because of her senior level experience across multiple key agencies, including the Department of State and Treasury. Credit: Wikimedia user BETSYFITZ, https://commons.wikimedia.org/wiki/File:HHF_Resized_Portrait.jpg

Several principles should help guide any reorganization:

First, titles and hierarchy matter so provide a real “Deputy Secretary of State” title to the person in charge of development. 

In the interagency, the USAID Administrator does not have convening power, but a Deputy Secretary does.  The new authorities for this individual would include crafting a U.S. government soft power strategy that would provide direction to all agencies engaged in foreign assistance. In addition, the Deputy Secretary of State for Development would have oversight over preparing budget requests for each of these domestic agencies seeking to do international development activities.

Second, recognize development and stabilization as a distinct profession on the same level as diplomacy and defense.

Development work is a recognized discipline separate from diplomacy or military science. There has been a proliferation of master’s programs in international development in the last 20 years.  This reflects a global recognition that there is a profession or craft related to development.

There is a significant field of development economics. There have been major attempts to capture the lessons learned from emergencies, stability and the transition from emergencies to development.  There are major fields of public health, and entire subfields for democracy promotion and human rights.  There are areas devoted fully to various aspects of development finance, private enterprise, public financial management, tax systems, and government capacity building.

If USAID is fully merged into the State Department and a “development cone” is created and if the development cone hires based on standard State Department Foreign Service “generalist” precepts, then the US foreign assistance and stabilization capacities would be diluted in the same way that public diplomacy was weakened by the merger of the US Information Agency (USIA) into the State Department.  In other words, if the State Department moves to a model whereby a new Foreign Service officer does a stint stamping visas as a consular office and then does a rotation “bolstering microfinance” or “strengthening public health” or “building capacity of Afghan bureaucrats”… then we are in very big trouble.

Third, development projects require longer time frames than political or diplomatic efforts and reorganization should reflect this reality.

During the Cold War, there was an acceptance that defeating Communism was important and that it would take decades. There needs to be an acceptance in the political process that defeating radical Islam or defeating drug cartels or ending Polio or bending the curve on HIV/AIDS will take decades.

The Green Revolution, which significantly decreased hunger in India in the 1960s and revolutionized agricultural productivity, took 25 years.  It is hard to imagine that our current political process would give the US soft power system 25 years to defeat radical Islam or fix the fixable problems in Central America which are driving people to migrate to the US.

One senior Obama Administration official rightly said that the United States under Presidents Bush and Obama had 15 one-year programs in Afghanistan instead of a single 15-year program. The problems are fixable in Afghanistan, but they are not fixable on diplomatic or political timetables.

Fourth, remember the breaking of our public diplomacy capacities with the death of USIA.  There has been recognition that the US has lost the capabilities to successfully engage in a war of ideas because the 1999 merger of USIA with State depleted public diplomacy capacities and capabilities. Our public diplomacy function was broken and diluted as a result of the merger.

At the time Republicans in Congress pushed to have USIA (and USAID for that matter) abolished and folded in the State Department as part of a “peace dividend.”  The Clinton Administration largely went along with the abolition of USIA so there is plenty of blame to go around.  USIA ceased to exist in 1999, just before the Long War began in 2001.

Since 2001 there has been a recognized need for increased public diplomacy capabilities to win the war of ideas against Al Qaeda, ISIS and the various other terrorist groups.  There has also been recognition that the US does not have the capabilities to successfully engage in a war of ideas because the merger of USIA with State depleted public diplomacy capacities and capabilities. If merged with State, our development capacities could easily be broken in the same way.

Fifth, the person who has the development job should control the development budget planning process known as the “F” process. 

As part of the reorganization, the Trump Administration could return to the Bush era “dual hat” system whereby the head of USAID is also head of the “F” process.  The “F” Process is largely a “bean counting” operation but it does not tell you how effectively that money is being spent or towards what ends.

As part of the “F” process, the USAID Policy and Budget Bureau was abolished; the subsequent impact was that there were neither budget analysts able to provide development arguments nor policy experts able to provide policy arguments to back up the effectiveness of how the money was used. In other words, USAID was lobotomized.

Under president Obama, there was a partial fix to this but USAID Administrators under Obama never had control over the new “F” bureau, something the last 2 Administrators under President Bush did have.

Sixth, include all 16 agencies “doing development” in this reorganization. Yes, including the MCC.

State and USAID only control around 70 percent of all soft power spending. If the Trump Administration is serious about consolidation, then it should review the other 16 agencies doing foreign assistance, including the MCC.

During the Bush Administration, the director of foreign assistance (“F” Process) only coordinated USAID and parts of the State Department.  And the “F” process excluded large pieces of State’s spending—including PEPFAR and other health programs. The (not completely believable) argument used at the time was that there was already a PEPFAR coordinator and therefore did not need to a part of the “F” process; in reality, it was likely that PEPFAR and its supporters did not want to be “coordinated.”

Other agencies engaged in development are not covered by the current “F” process. For example, the MCC, which is about 3 percent of all foreign assistance spending and may become a larger part of US foreign assistance spending given significant Republican support, is not covered.  The MCC should fall under this coordination if the Trump Administration is serious about reducing duplication. Other small specialized development agencies (i.e. USTDA and OPIC) are not currently covered nor are the activities of agencies such as the Department of Justice, the Department of the Treasury, the Department of Labor, EPA, and others; these agencies’ international activities should be.

Domestic agencies are particularly troublesome in the international development arena as they tend to “internationalize” what they do domestically i.e. if it works in Des Moines why won’t it work in New Delhi? Many times the result is that these agencies work at cross-purposes to the State Department and USAID and make U.S. development efforts look foolish. More importantly, they may not have the requisite international development expertise, leading to waste or, at best, inefficiency. Bringing greater coordination to these efforts is essential to improving U.S. foreign assistance.

Seventh, the Trump Administration should seek to change the mid-1990s OMB rule that gave free reign to independent agencies to freelance on international development with limited or no oversight by US embassies and by USAID.

Given the Trump Administration’s stated desire to consolidate, the international activities of HHS, Labor, EPA, CDC, USDA, The Treasury Department, the Department of Justice and others should require approval from the new Deputy Secretary level person for budgets, plans, and activities.

Eighth, any major reorganization will require Congressional cooperation across multiple committees. The Trump Administration should work with all of them. 

Serious reorganizations typically fail because they require major engagement with the Congress, including, possibly, legislation. But a serious reorganization should seek a final blessing from Congress to make the reorganization more permanent.

In the last 40 years, Republican Administrations have accomplished significant things and made significant changes to development assistance because they have seen the value of soft power as part of a foreign policy and national security strategy.  Republicans have control of both houses of Congress and the White House which presents a historic opportunity for real reform.  U.S. foreign policy and assistance should be streamlined and organized better, but the Trump Administration needs to be careful not to break our ability to exert influence around the globe in the process.

Article Published in Forbes.com on March 23, 2017.

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