Impact of the FY2008 Budget on the Fight Against Aids and Extreme Poverty

12.17.07

Congress has introduced a joint resolution for the FY2008 budget which includes a total of $19.67 billion for poverty-fighting assistance, a $2.4 billion net increase over FY2007¹. This increase is spread across the State/Foreign Operations bill as well as the Labor-HHS bill which holds some funding for global AIDS, TB and malaria. In addition, this increase was only achieved by adding an emergency spending bill to the FY2008 baseline budget. In February 2007, the President proposed a budget that would increase these accounts by $2 .5 billion. Both the Senate and House had proposed overall increases to the FY2007 budget of approximately $2.4 billion. When they reallocated their budgets, that increase fell to $1.6 billion. In the end, Congress added a $2.4 billion emergency spending bill of which $579 million would be directed to poverty-focused development assistance, thus boosting the total increase back to $2.38 billion. This analysis therefore evaluates the FY2008 baseline plus the emergency spending bill against a baseline FY2007 final bill. DATA has chosen to do so because the FY2008 emergency bill was passed alongside the FY2008 baseline and does not replace a forthcoming FY2008 supplemental spending bill.

HIV/AIDS, TB and Malaria
The President's Emergency Plan for AIDS Relief (PEPFAR) includes all U.S. spending on HIV/AIDS, whether it be through bilateral or multilateral programs. The largest share of PEPFAR funds is directed to 15 of the hardest hit countries, but the U.S. also provides significant annual contributions to the Global Fund to Fight AIDS, TB and Malaria. The U.S. began breaking out bilateral malaria funding separately once they instituted the President's Malaria Initiative (PMI).

In total, the U.S. appropriated $4.81 billion for these three diseases in FY2007. The President requested $5.78 billion in FY2008. The final spending proposal would reach $6.36 billion for the three diseases, a $1.55 billion increase over the previous year.

Bilateral Programs:

• Global AIDS Initiative focused on 15 countries-In FY2007, the U.S. spent approximately $2.85 billion in bilateral assistance for the 15 focus countries. The President requested a $1.3 billion increase in his FY2008 budget which the Administration noted would be required to stay on target for reaching the stated goals of treating 2 million, preventing 7 million from becoming infected and caring for 10 million. The final FY2008 budget will fully fund this requested increase by directing $4.09 billion towards the 15 country bilateral effort.
• Non-focus country bilateral HIV/AIDS and TB programs and research-In FY2007, the U.S. spent $983 million on bilateral AIDS programs in non-focus countries, bilateral TB programs and HIV/AIDS research through the National Institutes of Health (NIH) and the Centers for Disease Control and Prevention (CDC). Spending in FY2008 will increase slightly to a total of $1.07 billion.
• Bilateral malaria-In FY2007, the U.S. spent a total of approximately $257 million on bilateral malaria programs. This total included funds as required to scale up the President's Malaria Initiative. In FY2008, the President requested an additional $140 million to scale up this initiative and expand into four new focus countries. Congress ultimately approved a $99 million increase, reaching a total of $356 million.

Global Fund to Fight AIDS, TB and Malaria: In FY2007, the U.S. provided a total of $724 million to the Global Fund. The President requested $300 million in his budget request (this year all of the $300 million was requested in Labor-HHS) but as in years past, Congress added resources for the Global Fund. The FY2008 total of $840 million represents an increase of $116.4 million over FY2007 and $540 million over the President's request.

Millennium Challenge
The Millennium Challenge is designed to reward democratic countries dedicated to fighting corruption and poverty while at the same time creating an incentive for other countries to qualify in the future. When first announced, the Millennium Challenge was intended to reach $5b in new foreign assistance funding by FY2006 though it only reached $1.75 billion in that year. Due to slow scale up, the President again requested $3b in FY2008 (an increase of $1.25 billion over FY2007 level), but Congress chose to fund the MCA at $1.54 billion.

Other Key Accounts In addition to the accounts above, the State/Foreign Operations Bill provides funding for education, clean water, debt relief and child survival and health for the world's poorest people. In FY2007, the U.S. appropriated $10.71 billion for these accounts. In FY2008, the proposed Omnibus bill would spend will appropriate $11.77 billion-a $1.045 billion net increase. Major changes to the key accounts include:
Increases

• Child Survival and Health: $100 million increase to non-HIV/AIDS maternal and child health
• Refugee Assistance: Congress will appropriate an additional $177 million in FY2008 as compared to FY2007 for the Migration and Refugee Assistance account and the Emergency Refugee and Migration Assistance Fund, thanks to $200 million in emergency spending.
• Disaster Relief: A net increase of $68 million in FY2008, with the help of $110 million in emergency spending.

• Debt Cancellation: The FY2008 Omnibus provides $30 million for debt restructuring in FY2008 which will cover contributions to the Tropical Forest Conservation Act and to cover debt cancellation for Liberia. This is $34 million less than appropriated in FY2007 and $178 million less than requested by the President for FY2008.
• The World Bank's International Development Association (IDA): In FY2007, the U.S. provided $941 million to the International Development Assistance account at the World Bank (IDA) - which is the mechanism for the U.S. to deliver its G8 commitment to 100% debt cancellation. The President requested $1.06 billion to cover the U.S. contribution in FY2008 but Congress maintained the FY2007 appropriation at $942 million.
• Asian Development Bank: Congress will appropriate $75 million for the Asian Development Bank, a $24 million cut as compared to FY2007.

¹Poverty-fighting assistance is primarily located in the Foreign Operations appropriations bill, but some HIV/AIDS funding is also included in the Labor-HHS bill. Those funds are not included in this analysis. If Labor-HHS were included, the total increase for poverty-focused assistance would be $2.4b.