Trump Administration Plans @StateDept-@USAID Merger and Deep Program Cuts

Posted: 2:49 am ET
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The FP exclusive says that the Trump administration is planning to merge USAID into the State Department, and imposed deep cuts on USAID programs.  Apparently, senior USAID officials have “told staff that the agency is attempting to cope with the steep cuts by prioritizing its field offices abroad over its offices in Washington. Nonetheless, the agency still anticipates that the budget proposal will necessitate eliminating 30 to 35 of its field missions while cutting its regional bureaus by roughly 65 percent. USAID currently operates in about 100 countries.” Also this:

“That will end the technical expertise of USAID, and in my view, it will be an unmitigated disaster for the longer term,” said Andrew Natsios, the former USAID Administrator under President George W. Bush. “I predict we will pay the price. We will pay the price for the poorly thought out and ill-considered organization changes that we’re making, and cuts in spending as well.”

The article talks about reorganization but does not talk about a reduction in force, which we think is inevitable if this budget is approved.  If this administration slashes in half or eliminate entire USAID programs, what is there left to do for staffers?  In the 1990’s when State and USAID went through similar cuts, USAID lost about 2,000 jobs. By 1996, WaPo reported that USAID’s overall work force “has been reduced from 11,500 to 8,700 and is heading down to 8,000.” The number did not include a breakdown but we are presuming that this overall number included local employees overseas. See The Last Time @StateDept Had a 27% Budget Cut, Congress Killed ACDA and USIA.

A white paper submitted to the then Obama-Biden Transition in 2008 noted the staffing woes with USAID:

The number of employees at USAID has dropped from 4,300 in 1975, to 3,600 in 1985, to 3,000 in 1995. As of September 2007, USAID was staffed with 2,417 direct hire staff (1,324 foreign service officers and 1,093 civil servants) and 908 staff with limited appointments (628 personal services contractors and 280 Pasas, Rasas, and others). In addition, the agency employed 4,557 Foreign Service nationals at missions overseas. While staffing levels have declined, program responsibility has increased from approximately $8 billion in 1995 to approximately $13 billion in 2007 (in 2005 dollars). USAID has set a target of a contracting officer managing a range of $10-14 million per year, but the current level is at an average of $57 million.

There are inadequate numbers of experienced career officers; as a result, management oversight of programs is at risk. Fifty percent of Foreign Service officers were hired in the last 7 years. One hundred percent of Senior Foreign Service officers will be eligible to retire in 2009. Of 12 Career Ministers, six will reach the mandatory retirement age of 65 in 2010. Mid-career Foreign Service officers in their mid-40s have less than 12 years of service. Until 2007, 70-80 members of the Foreign Service would leave the service annually, 85% for retirement; that rate has fallen to 45-55%. Of 122 new hires in 2007, only 10% were experienced mid-career hires.
[…]
DOD maintains a 10% float (for training and placing staff in other agencies and organizations). AID has float of 1⁄2 of a percent, little training, and is unable to take opportunities for placing staff in other agencies and organizations.

In 2016, the USAID workforce composition is as follows:

[T]he Agency’s mission was supported by 3,893 U.S. direct hire employees, of which 1,896 are Foreign Service Officers and 253 are Foreign Service Limited, and 1,744 are in the Civil Service. Additional support came from 4,600 Foreign Service Nationals, and 1,104 other non-direct hire employees (not counting institutional support contractors). Of these employees, 3,163 are based in Washington, D.C., and 6,434 are deployed overseas. These totals include employees from the Office of Inspector General.*

Folding USAID into State would most likely require congressional approval, but the work to get there is most probably already underway.  When USIA was folded into State, a new PD cone was created; does this mean a Development cone will soon be added to the Foreign Service career tracks?  Will the USAID development professionals move to State or will they find they find their way elsewhere?  The already stressful transfer season this summer just got tons harder.

Also see Former Director of Foreign Disaster Assistance (USAID/OFDA) Jeremy Konyndyk Twitter thread below on why this is such a short-sighted idea.

FY18 Budget Control Levels via Adam Griffiths, Foreign Policy:

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No thaw in sight for @StateDept hiring freeze until reorganization plan is “fully developed”

Posted: 4:17 pm ET
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Via the Daily Press Briefing | April 13, 2017:

QUESTION: There is an internal memo that went around as well as something that was updated online that even though the OMB lifted the hiring freeze, the federal hiring freeze, that the Secretary Tillerson, that the State Department was going to maintain its hiring freeze. Do you know what led to that decision?

MR TONER: Sure. So OMB —

QUESTION: And what is it about?

MR TONER: Okay. So the OMB on Wednesday announced the lifting of the hiring freeze, as you noted, and provided also extensive further guidance to all the various federal agencies on the implementation of and requirements pursuant to the OMB memorandum which is called, I think, Comprehensive Plan for Reforming the Federal Government and Reducing the Federal Civilian Workforce, which is a mouthful. I apologize.

QUESTION: Yeah.

MR TONER: And this document, this memo, provides guidance on new requirements on the presidential memorandum that was initially issued on January 23rd.

QUESTION: Correct.

MR TONER: This was the one that issued the hiring freeze, as well as the executive order issued on March 13th that required a comprehensive plan to reorganize all the executive branch departments and agencies.

So as part of that process, the department and this Secretary are going to be undertaking a reorganization later in the year, and the decision was taken that the hiring freeze will continue until that plan is fully developed and agreement is reached on its implementation.

And this is just part of prudent planning. We can’t be onboarding people when we don’t know what our reorganization is ultimately going to look at – look like. But until then – and this is an important point – the Secretary does retain authority to waive the ruling – or the hiring freeze and will do so in instances where national security interests and the department’s core mission and responsibilities require. So he does —

QUESTION: So it doesn’t break any federal law that he’s done this?

MR TONER: It does not. It’s his decision to maintain this hiring freeze.

QUESTION: Even though that – even though the Congress has – the appropriations has approved money for it, or even if the Congress has said that that’s fine to lift it. So there is a law, a federal law, that if appropriations has moved on some kind of spending or whatever —

MR TONER: Right.

QUESTION: — and he says, “No, I’m not going to touch that,” isn’t that against a law?

MR TONER: My understanding is that he has the jurisdiction to – basically to keep this freeze in place as we go about this presidentially mandated reorganization.

QUESTION: Are we talking about Civil and Foreign Service officers, political appointees? What —

MR TONER: Across the board.

QUESTION: So he’s – wait a minute. So he’s not going to hire any political appointees —

MR TONER: I —

QUESTION: — before the reorg?

MR TONER: I believe it’s a hiring freeze across the board. I don’t know about political appointees. I’ll check on that.

QUESTION: Could you check on that? So what are you – yeah, I mean —

MR TONER: I can check on that.

QUESTION: That would – essentially, if that’s true, what you’re saying, that there’s a hiring freeze across the board, that you would not be hiring any assistant secretaries —

MR TONER: I will check on political appointments. I’m not sure about political appointments.

QUESTION: — under secretaries, a deputy secretary of state.

MR TONER: Yeah, I’m not sure about political appointments.

QUESTION: That can’t be right.

MR TONER: Yeah, I’ll check on that.

QUESTION: So effectively he’s put this on, the freeze, until he’s done the reorganization. Have those plans actually started? And how are they going to be fleshed out? Does —

MR TONER: I believe they have started. As to how they’re going to be fleshed out, I don’t have any more details.

QUESTION: I mean, it’s going to go on for the rest of the year?

MR TONER: I don’t know if there’s a time, date. I don’t have any kind of timeframe for you. If I get one, I’ll let you know.

QUESTION: And I gather that he would have got White House or congressional approval for this?

MR TONER: Yes, I would imagine he would.

QUESTION: I just want to point out something that —

MR TONER: On the political appointees, though, it’s a good question.

QUESTION: Yeah, no, because I mean Foreign Minister Lavrov even said yesterday that – I mean, we can consider the source, but other diplomats from other —

MR TONER: No, I’m not responding, I’m just —

QUESTION: I understand, but other diplomats from other countries have also said that the lack of staff at the State Department has become an impediment to having interlocutors to deal with, whether it’s long-term foreign policy cooperation, short-term foreign policy crises. So I mean, I would really like some clarification on that. Because if you’re saying that there’s a hiring freeze across the board, I really would say that suggests that that will continue to be a problem.

MR TONER: It’s a fair question.

QUESTION: Related to this, though, Mark, you said that he has the – he retains authority to waive it, right?

MR TONER: Yeah, authority. Thank you. Yes, he does. Yeah. In instances where national security interests and the department’s core mission —

QUESTION: Has he?

MR TONER: — responsibilities – I would assume that political appointees in high positions would fall under the department’s core mission responsibilities.

QUESTION: Do you think that would apply to the – do you think that would apply to the newly nominated deputy? You think he’d get away with it?

MR TONER: I would think that would apply.

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WH/OMB Releases FY2018 Budget Blueprint – @StateDept/@USAID Hit With 28% Funding Cuts

Posted: 2:14 am ET
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WaPo posted a copy of President Trump’s budget proposal for FY2018 which OMB calls “America First: A Budget Blueprint to Make America Great Again”. Important to note that this is a proposal and that Congress has ultimate control over government funding. We’ll have to wait and see what Congress will do with this request and which cabinet secretary will decline the funds if the Hill insists on the agency/agencies getting more money than the Trump request. We’ve extracted the 2-page relevant to the State Department below:

The Department of State, the U.S. Agency for International Development (USAID), and the Department of the Treasury’s International Programs help to advance the national security interests of the United States by building a more democratic, secure, and prosperous world. The Budget for the Department of State and USAID diplomatic and development activities is being refocused on priority strategic objectives and renewed attention is being placed on the appropriate U.S. share of international spending. In addition, the Budget seeks to reduce or end direct funding for international organizations whose missions do not substantially advance U.S. foreign policy interests, are duplicative, or are not well—managed. Additional steps will be taken to make the Department and USAID leaner, more efficient, and more effective. These steps to reduce foreign assistance free up funding for critical priorities here at home and put America first.

The President’s 2018 Budget requests $25.6 billion in base funding for the Department of State and USAID, a $10.1 billion or 28 percent reduction from the 2017 annualized CR level. The Budget also requests $12.0 billion as Overseas Contingency Operations funding for extraordinary costs, primarily in war areas like Syria, Iraq, and Afghanistan, for an agency total of $37.6 billion. The 2018 Budget also requests $1.5 billion for Treasury International Programs, an $803 million or 35 percent reduction from the 2017 annualized CR level.

The President’s 2018 Budget:

➡ Maintains robust funding levels for embassy security and other core diplomatic activities while implementing efficiencies. Consistent with the Benghazi Accountability Review Board recommendation, the Budget applies $2.2 billion toward new embassy construction and maintenance in 2018. Maintaining adequate embassy security levels requires the efficient and effective use of available resources to keep embassy employees safe.

➡ Provides $3.1 billion to meet the security assistance commitment to Israel, currently at an all-time high; ensuring that Israel has the ability to defend itself from threats and maintain its Qualitative Military Edge.

➡ Eliminates the Global Climate Change Initiative and fulfills the President’s pledge to cease payments to the United Nations’ (UN) climate change programs by eliminating U.S. funding related to the Green Climate Fund and its two precursor Climate Investment Funds.

➡ Provides sufficient resources on a path to fulfill the $1 billion U.S. pledge to Gavi, the Vaccine Alliance. This commitment helps support Gavi to vaccinate hundreds of millions of children in low-resource countries and save millions of lives.

➡ Provides sufficient resources to maintain current commitments and all current patient levels on HIV/AIDS treatment under the President’s Emergency Plan for AIDS Relief (PEPFAR) and maintains funding for malaria programs. The Budget also meets U.S. commitments to the Global Fund for AIDS, Tuberculosis, and Malaria by providing 33 percent of projected contributions from all donors, consistent with the limit currently in law.

➡ Shifts some foreign military assistance from grants to loans in order to reduce costs for the U.S. taxpayer, while potentially allowing recipients to purchase more American-made weaponry with U.S. assistance, but on a repayable basis.

➡ Reduces funding to the UN and affiliated agencies, including UN peacekeeping and other international organizations, by setting the expectation that these organizations rein in costs and that the funding burden be shared more fairly among members. The amount the U.S. would contribute to the UN budget would be reduced and the U.S. would not contribute more than 25 percent for UN peacekeeping costs.

➡ Refocuses economic and development assistance to countries of greatest strategic importance to the U.S. and ensures the effectiveness of U.S. taxpayer investments by rightsizing funding across countries and sectors.

➡ Allows for significant funding of humanitarian assistance, including food aid, disaster, and refugee program funding. This would focus funding on the highest priority areas while asking the rest of the world to pay their fair share. The Budget eliminates the Emergency Refugee and Migration Assistance account, a duplicative and stovepiped account, and challenges international and non-governmental relief organizations to become more efficient and effective.

➡Reduces funding for the Department of State’s Educational and Cultural Exchange (ECE) Programs. ECE resources would focus on sustaining the flagship Fulbright Program, which forges lasting connections between Americans and emerging leaders around the globe.

➡ Improves efficiency by eliminating overlapping peacekeeping and security capacity building efforts and duplicative contingency programs, such as the Complex Crises Fund. The Budget also eliminates direct appropriations to small organizations that receive funding from other sources and can continue to operate without direct Federal funds, such as the East-West Center.

➡ Recognizes the need for State and USAID to pursue greater efficiencies through reorganization and consolidation in order to enable effective diplomacy and development.

➡ Reduces funding for multilateral development banks, including the World Bank, by approximately $650 million over three years compared to commitments made by the previous administration. Even with the proposed decreases, the U.S. would retain its current status as a top donor while saving taxpayer dollars.

Read the document in full:

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“America First” Budget Targets @StateDept Funding ( Just 1% of Total Federal Budget)

Posted: 3:13 am  ET
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We recently posted about the Trump budget for FY2018 that will reportedly proposed funding cuts of up to 30% for the State Department (see  With @StateDept Facing a 30% Funding Cut, 121 Generals Urge Congress to Fully Fund Diplomacy and Foreign Aid@StateDept Budget Could Be Cut By As Much as 30% in Trump’s First Budget Proposal?@StateDeptbudge Special Envoy Positions Could Be in Trump’s Chopping Block — Which Ones?). We understand that this number could actually be closer to 40%, which is simply bananas, by the way.  It would be ‘must-see’ teevee if Secretary Tillerson appears before the House and Senate committees to justify the deep cuts in programs, foreign aid, diplomatic/consular posts, embassy security, staffing, training, or why we’re keeping just half the kitchen sink. Just a backgrounder, below is the budget request composition for FY2016:

fy2016-sfops-budget-request

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Previous posts on FS funding:

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On February 27, OMB Director Mick Mulvaney showed up at the WH Press Briefing to talk about President Trump’s budget.  Before you are all up in arms, he said that what we’re talking about right now is “not a full-blown budget” which apparently will not come until May.  So this “blueprint” does not include mandatory spending, entitlement reforms, tax policies, revenue projections, or the infrastructure plan and he called this a “topline number only.” Agencies are given 48 hours to respond to OMB (holy camarba!). Excerpt below from his talk at the James S. Brady Briefing Room:

As for what it is, these are the President’s policies, as reflected in topline discretionary spending.  To that end, it is a true America-first budget.  It will show the President is keeping his promises and doing exactly what he said he was going to do when he ran for office.  It prioritizes rebuilding the military, including restoring our nuclear capabilities; protecting the nation and securing the border; enforcing the laws currently on the books; taking care of vets; and increasing school choice.  And it does all of that without adding to the currently projected FY 2018 deficit.

The top line defense discretionary number is $603 billion.  That’s a $54-billion increase — it’s one of the largest increases in history.  It’s also the number that allows the President to keep his promise to undo the military sequester.  The topline nondefense number will be $462 billion.  That’s a $54-billion savings.  It’s the largest-proposed reduction since the early years of the Reagan administration.

The reductions in nondefense spending follow the same model — it’s the President keeping his promises and doing exactly what he said he was going to do.  It reduces money that we give to other nations, it reduces duplicative programs, and it eliminates programs that simply don’t work.

The bottom line is this:  The President is going to protect the country and do so in exactly the same way that every American family has had to do over the last couple years, and that’s prioritize spending.

The schedule from here — these numbers will go out to the agencies today in a process that we describe as passback.  Review from agencies are due back to OMB over the course of the next couple days, and we’ll spend the next week or so working on a final budget blueprint.  We expect to have that number to Congress by March 16th.  That puts us on schedule for a full budget — including all the things I mentioned, this one does not include — with all the larger policy issues in the first part of May.

[…]

Q    But we’re not talking about 2 or 3 percent — we’re talking about double-digit reductions, and that’s a lot.

DIRECTOR MULVANEY:  There’s going to be a lot of programs that — again, you can expect to see exactly what the President said he was going to do.  Foreign aid, for example — the President said we’re going to spend less money overseas and spend more of it here.  That’s going to be reflected in the number we send to the State Department.

Q    Thank you very much.  One quick follow on foreign aid.  That accounts for less than 1 percent of overall spending.  And I just spoke with an analyst who said even if you zero that out, it wouldn’t pay for one year of the budget increases that are being proposed right now.  So how do you square that amount?  So why not tackle entitlements, which are the biggest driver, especially when a lot of Republicans over the years have said that they need to be taxed?

DIRECTOR MULVANEY:  Sure.  On your foreign aid, it’s the same answer I just gave, which is, yes, it’s a fairly part of the discretionary budget, but it’s still consistent with what the President said.  When you see these reductions, you’ll be able to tie it back to a speech the President gave or something the President has said previously.  He’s simply going to — we are taking his words and turning them into policies and dollars.  So we will be spending less overseas and spending more back home.

 

See three separate threads on Twitter with some discussion of the proposed cuts.

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OMB/OPM Issues Additional Guidance For Federal Civilian Hiring Freeze, Jan 31.2017 (Read)

Posted: 2:43 am ET
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On January 31, Mark Sandy, Acting OMB Director, and Kathleen McGettigan, Acting OPM Director issued a joint memo which provides  additional guidance regarding the freeze on the hiring of Federal civilian employees. The hiring freeze  was directed by the President on January 23, 2017, via Presidential Memorandum entitled “Hiring Freeze.”

Item #3 lists the exemptions permitted under the Federal civilian hiring freeze. Take note of the following:

c.  Nomination and appointment of officials to positions requiring Presidential appointment, with or without Senate confirmation.

d.  Appointment of officials to non-career positions in the Senior Executive Service (SES) or to Schedule C appointments in the Excepted Service, or the appointment of any other officials who serve at the pleasure of the appointing authority (i.e., “appointed” positions of a political/non-career nature).

h.  Appointments made under the Pathways Internship and Presidential Management Fellows (PMF) Programs (this does not include the Recent Graduates Program).  Agencies should ensure that such hires understand the provisional nature of these appointments and that conversion is not guaranteed.

and

r.  The head of any agency may exempt any positions that it deems necessary to:

i.  Meet national security (including foreign relations) responsibilities, or

ii.  Meet public safety responsibilities (including essential activities to the extent that they protect life and property).  Agencies may refer to longstanding guidance, which provides examples of such activities in OMB Memorandum, Agency Operations in the Absence of Appropriations, dated 11/17/1981 [see examples 3(a) to 3(k)].

Note that the memo ends with the following:  The guidance in this memorandum is effective immediately.  Within 90 days of the publication of the PM issued on January 23, 2017, the Director of OMB, in consultation with the Director of OPM, shall recommend a long-term plan to reduce the size of the Federal Government’s workforce through attrition.  The hiring freeze will expire upon implementation of the OMB plan.

The original memo is here or read in full below (click on lower right hand corner arrow to maximize reading space).

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FASTC Hard Skills Training Center: “Who owes who favors?”

Posted: 12:19 am EDT
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On September 9, the House Oversight and Government Reform Committee (HOGR) held a hearing to examine the efforts to ensure the safety of U.S. personnel and assets in northern Mexico and along the U.S.-Mexican border (see HOGR Hearing: Violence on the Border, Keeping U.S. Personnel Safe).  There were questions about danger pay, security, local guard pay, planned facilities, hardship posts, staffing and yes, a congressman did suggest that we close our consulates in Mexico.

During the hearing, one congressman also showed up to beat up DS A/S Gregory Starr about the FASTC hard skills training center set to be built at Fort Pickett. The congressman from Georgia, Earl L. “Buddy” Carter (GA-1)wanted to know why the OMB has not released its report on this politically contentious project that has been going on for years.  Um… probably because it’s not Diplomatic Security’s report to release? What the congressman from Georgia probably really want to ask is why the heck is the State Department building a training facility  in Fort Pickett, VA, didn’t everybody know that FLETC in Glynco, GA is the best facility there is?  We did not see the representatives from the VA delegation, probably because this was a hearing related to border posts.  Not sure, the congressman was really interested in the answers to the questions he asked. He told Mr. Starr to “go back and compare the two sites.” We wonder how many times Diplomatic Security has to go back and compare these two sites. Until all the congressional delegates are happy with it?  Did he ask other questions about the border posts? Must have missed that.

The Skeptical Bureaucrat recently did a piece on the FASTC:

To review the situation, the administration wishes to construct a Foreign Affairs Security Training Center (FASTC) that would consolidate ‘hard skills’ training by the State Department and its partners at Fort Pickett in southside Virginia. Some members of Congress are trying to stop the project, ostensibly on grounds of economic efficiency, and would require the State Department to use the Federal Law Enforcement Training Center (FLETC) in Georgia for hard skills training. Both sides are currently awaiting the public release of a General Accountability Organization (GAO) report that evaluates the business case for building FASTC at Fort Pickett.

This week the Progress-Index, a local newspaper in the Fort Pickett area, interviewed and quoted a senior Diplomatic Security Service official for an article about the political impasse over FASTC. Well, hum, that’s interesting. I presume the senior official had gotten official clearance to make those remarks. I further presume that State gets to review the expected GAO report before it goes public. Putting 2 + 2 together, I wonder whether DS is signalling with the interview that it knows the GAO will support building FASTC at Fort Pickett?

Here’s the article, Report could speed up diplomatic training center at Fort Pickett:

State Department officials are hoping a soon-to-be released report will help end wrangling in Congress that has delayed construction on a diplomatic security training center at a National Guard base in Virginia.

Construction on the first phase of the facility at Fort Pickett, just over the Dinwiddie County border, was set to begin Aug. 1 with a completion date set for 2019. State Department officials have put that work on hold while they respond to Congressional requests for information.

The State Department stands by its selection of Fort Pickett, saying its proximity to Washington, D.C., and rural location would allow it to conduct around-the-clock military-style training. The site is also within driving distance of Marine bases in Virginia and North Carolina that State Department personnel train with, as well as Navy special warfare forces that are stationed in Virginia Beach.

Stephen Dietz, executive director of the State Department’s bureau of diplomatic security, said the Marines have told him that they can’t afford to travel to Georgia for State Department training. He said the cost estimates for the southeastern Georgia site [FLETC} only have to do with construction, and don’t include operation, maintenance or travel costs for State Department, military or intelligence agency personnel. 

Read TSB’s  Possible Tip-Off About FASTC Hard Skills Training Center at Fort Pickett?

The report cited by TSB also has a quotable quote from Mayor Billy Coleburn of Blackstone, Virginia who has been looking forward to as many as 10,000 people coming through for State Department training each year:

“If you’re banking your hopes on common sense and consensus in Washington, D.C., you stay up late at night worrying,” said Mayor Billy Coleburn. “Who owes who favors? Who gets browbeaten behind the scenes. Those are things we can only imagine — what happens in smoke-filled rooms in Washington, D.C?”

We can’t imagine those things. Nope.

What we’ve learned from this hearing is that Congress is really worried about the security of U.S. diplomatic personnel overseas. Until it’s not.

So far, it has not been able to get its act together on a project that’s the center of a long standing tug-of-war between politicians. For sure, there will be another hearing. And another. And another.

It certainly is interesting to watch these congressional hearings where our elected reps demonstrate their deep understanding of the issues bubbling with barely hidden agendas. Can we please start sending these folks to Crash and Bang training?  Also, Channel 9 has Survivor Matamoros Nuevo Laredo, all 9 square miles of the city you’re allowed to go  is also accessible on Channel 9, any volunteers?

Anybody out there know what’s happening to the GAO report?

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Shutdown News: State Department Stays Open and Operational. For Now.

— By Domani Spero

Shortly before midnight, OPM released a statement ordering federal agencies to execute plans for an orderly shutdown due to the absence of appropriations. During the DPB the day before the shutdown, the State Department spokesperson Jen Psaki stated that State/USAID operation can be “sustained” for a limited duration in the event of a shutdown:

[R]egardless of the challenges a shutdown would create, we will continue to operate to advance national interests and to protect health and safety of American citizens and those living abroad. 

If appropriations are not continued, so if the government shuts down, initially Department of State and USAID activities can be sustained on a limited basis for a short period of time. I don’t have the specific number of days because it’s dependent on our programs and spending, so I can’t give you the prediction of the number of days.

Ms. Psaki asked specifically about “any immediate kind of furloughs” said: “I will have to double-check and make sure that the answer is zero. But I can convey definitively that the vast, vast majority of staff will not be…”

So it looks like, at least, for now, the State Department will remain open and operational and no employees will be put on furloughs. (If you are with State/USAID and have received a furlough letter, give us a shout here).

How is this possible?

If there is no continuing resolution or new FY 2014 appropriations bill by October 1, 2013, certain Department of State and USAID operations can continue on a limited basis for a short period of time.  At least, that’s what will happen initially.  According to State, its FY 2013 appropriations were not enacted by Congress until late March causing uncertainty about the agency’s funding levels. The result was a reduction of agency spending for the first part of FY 2013.  So certain multi-year State Department and USAID accounts have residual funds that will be available after September 30, 2013.  These funds will allow the Department and USAID to continue to meet most payroll obligations for a short period of time.

How short a period of time, the spokesperson is unable to say.

In the 1995 shutdown, non-essential government workers were put on furlough and the government suspended non-essential services from November 14 through November 19, 1995 and from December 16, 1995 to January 6, 1996, for a total of 28 days. During that shutdown, 20,000-30,000 visa applications went unprocessed each day, as did 200,000 U.S. passport applications for the period.  There were no numbers but this reportedly deeply impacted the tourism and travel sectors of the economy.”

That’s not happening this time around.

The State Department spokesman said yesterday that “activities carry out by our – by the Bureau of Consular Affairs will continue domestically and abroad. So that means they will continue visa issuance as well as our passport operations.”

There’s another reason why State may be able to sustain its operation even in a shutdown, at least for a limited time. Its public services like visa and passport issuances are now fee-based.  When you apply for a passport or a visa, or obtain other consular services overseas, you pay a fee and that helps fund the programs. Processing fee for regular tourist and student visa is currently $160.00. Passport books and cards range in fee from $30 – $165.

In FY 2012, the State Department processed 10.3 million non-immigrant visa applications and issued 8.9 million visas, including 497,044 student and 313,424 exchange visitor visas.  These international students reportedly contributed over $22.7 billion to the U.S. economy in 2011. In FY 2012, the State Department also issued 13.1 million passports and passport cards.

The State Department’s passport and visa operations generated approximately $3.14 billion in consular fee revenue in FY2012.  It retained 78% or $2.45 billion of the total revenue.  The retained fees were shared among its regional and functional bureaus. See breakdown below.

Screen Shot 2013-08-12

Prior to 1994, the Department did not retain any of the consular fees collected. Subsequently, Congress authorized the Department to retain Machine Readable Visa (MRV) fees to help fund consular operations related to border security (I think the roll out of machine readable visas was not completed until the summer of 1996).

The Department is also authorized to collect and retain other fees to fund consular-related activities. It now retains a portion of the consular fees that it collects and remits the remaining portion to the U.S. Department of the Treasury.  In FY 2010, the Department collected approximately $2.62 billion in fee revenue and was allowed to retain about 70 percent of the fees (or approximately $1.8 billion).

Various embassies and consulates have been tweeting that they are open for business and that applicants should keep their interview appointments.

The State Department’s guidance on operations during a lapse in appropriation is available here.

(O_O)