The Beltway battle over the federal budget was temporarily interrupted by the real-life fighting in Libya and natural catastrophe in Japan, but the spending debate roared back to life in mid-April, consuming lawmakers on Capitol Hill as they scrambled to avoid a government shutdown, which would have been the first since 1995.

The game of chicken came down to the wire, but a shutdown was ultimately averted, although that was just round one of what’s set to be a drawn-out tug of war over America’s finances. Round two over the 2012 budget and round three, raising the country’s debt ceiling — which if left unchecked, could prove even more economically catastrophic than a shutdown — promise to be even more epic.

Photo: Larry Luxner

But it’s not just politicos in Washington and anxious Americans who are following the partisan showdown. The city’s diplomats have been intently watching the congressional sparring as well. After all, strengthening economic ties with the world’s largest economy is among every diplomat’s top priorities. Whether it’s development assistance or trade and investment, the state of the U.S. government checkbook matters not just to Americans, but to the world.

However, after a decade of tax cuts coupled with two wars, a housing boom and bust and an economic recession, America’s bloated and battered checkbook needs rebalancing. Both Republicans and Democrats agree that with a budget deficit of $1.5 trillion and climbing — along with a national debt of about $14.2 trillion — federal spending must be curbed. But by how much, from where and how fast, especially in the midst of a still fragile recovery and sagging unemployment, will be the talk of the town for months to come. Immediately after the dust settled over the budget for the 2011 fiscal year that ends Sept. 30, both sides set their sights on the 2012 numbers that will also decide the amount of money and manpower the United States releases across the globe.

Though the State Department and foreign operations budget represent a sliver of total spending, most peg it at about 1 percent of more than $3.5 trillion federal budget, money spent on diplomacy and development has become a convenient whipping post for voters and lawmakers searching for quick answers to the country’s financial mess, but also wary of the fallout from reforming the real drivers of federal spending — popular entitlement programs such as Social Security and Medicare, and spending on defense (also see “America’s Foreign Affairs Budget Faces Congressional Chopping Block” in the March 2011 issue of The Washington Diplomat).

Even if politicians are more willing to broach so-called third rail subjects like Medicare and Medicaid, the international affairs budget still faces the threat of significant cuts by lawmakers determined to show fiscal restraint across the board. A congressman would be hard pressed to take away grandmother’s Medicare and justify giving more assistance to rebel fighters in Libya, for instance, even if the two cases aren’t exactly correlated.

Explaining fiscal nuance is not an easy sell. Politically speaking, it’s simply easier for lawmakers to cut foreign aid than to go after programs that have a more noticeable effect on their constituents back in their home districts.

But like entitlement programs, the Pentagon is where the actual spending — and by extension potential savings — is. In general, the budget for international affairs has amounted to about $50 billion annually in recent years while the Defense Department racks up roughly $700 billion a year, including most war expenditures. Yet both parties have only flirted with the idea of touching the Defense budget, which has become a sacred cow among lawmakers of all stripes.

Public misperceptions also drive the political expediency. Americans think that 25 percent of the federal budget goes to foreign assistance, according to a recent poll by the University of Maryland’s Program on International Policy Attitudes. The real amount? The total international affairs budget comes in at under 1.5 percent.

But you can be sure both sides will be clawing over every scrap of that 1.5 percent. As it stands, the fiscal 2011 budget allocated $48.3 billion for State and foreign operations — an $8.4 billion reduction from the president’s requested amount though it was on par with 2010 levels. As part of the $38 billion of cuts in the 2011 budget, about $500 million was carved out of the State Department’s budget compared to last year, while U.S. payments to the United Nations will be decreased by $377 million. Pay for Foreign Service officers was also frozen, and USAID operating expenses were trimmed by $39 million.

But the GOP is eyeing far bigger cuts in foreign aid for 2012. President Obama has sounded the starting gun on next year’s spending battle by rolling out a $3.7 trillion request that included $47 billion for the State Department and USAID — roughly a 1 percent increase compared to 2010 levels. Combined with additional diplomacy and development efforts, including the Peace Corps and the Millennium Challenge Corp., the president is requesting $50.9 billion in foreign assistance. That’s $3.7 billion less than what was requested in fiscal 2011.

Obama is also requesting $8.7 billion in supplemental funding for the State Department and USAID in fiscal 2012 as they can take on additional responsibilities in Iraq, Afghanistan and Pakistan.

In general, most (though not all) Republicans have been highly critical of any increase to the international affairs budget in a time of fiscal austerity, arguing that America needs to get its own economic house in order before sending money abroad. Some conservatives also want better vetting of foreign aid programs to make certain they indeed strengthen national security and that federal money isn’t being funneled into countries with poor records of democracy and human rights. Others though have suggested the budget line should be zeroed out altogether, or severely gutted.

In response, Democrats have sounded the alarm, warning that cuts to foreign assistance don’t make a dent in deficit reduction and would be penny-wise but pound-foolish over the long haul. They’re backed by most of the military brass, which agrees that the country’s soldiers should not be doing the job of its diplomats.

USAID Administrator Rajiv Shah was far more blunt, telling Congress recently that the proposed 2011 cuts to foreign ops would directly lead to the death of 70,000 children who otherwise would have received immunizations, malaria and other health treatments.

It’s clear the budget battle goes beyond mere numbers. What ultimately gets axed will hinge in large part on what Democrats and Republicans find to be the most pressing national security challenges confronting the country, ranging from the drawdown of troops in Iraq and Afghanistan, to the volatile Arab revolutions in Libya, Yemen and Bahrain, to the level of certain U.S. foreign aid packages — a budget tightrope that also leaves many diplomats in suspense.

So here’s a guide to some of the up-and-coming players who’ll have a strong say over U.S. foreign policy for at least the next two years, including members of the Republican Party who are leading the charge in the budget-cutting frenzy.

Rep. Paul D. Ryan
Wisconsin Republican 

As the new chairman of the House Budget Committee, Paul Ryan has essentially become the architect of the spending debates, forcing lawmakers to fundamentally rethink the size and scope of the U.S. government, both at home and abroad.

In April, the Wisconsin Republican revealed his “Path to Prosperity” plan for the 2012 budget that would dramatically pare back future government spending, slashing $6 trillion over the next decade by redefining programs such as Medicare. The House adopted the plan on a strictly party-line vote, though it’s all but dead on arrival in the Democratic-controlled Senate.

Critics have charged that Ryan’s spending cuts would devastate average Americans, including the poor and elderly, and some have openly laughed at his blueprint’s “voodoo economics” that tax cuts (he proposes about $2.9 trillion over the next decade) would pay for themselves and virtually eliminate unemployment, as New York Times columnist Paul Krugman recently wrote. Others though have praised his willingness to tackle highly popular social programs whose unsustainable spending trajectory is putting the nation’s future at risk. As fellow New York Times columnist David Brooks put it: “If voters want taxes that amount to roughly 18 percent of G.D.P., then they are going to have to accept a government that looks roughly like what Ryan is describing.”

But beyond the domestic ramifications, Ryan’s proposals will help shape the role that the United States plays overseas by giving the House Appropriations Committee the financial parameters for the spending debate.

Ryan and GOP leaders in the House had offered a spending plan for the rest of fiscal 2011 that would have reduced State and foreign operations spending to $44.9 billion, trimming funds from global health programs, contributions to international organizations and disaster assistance.

As for 2012, Ryan has grander ambitions. His plan would slash international affairs and foreign assistance by 29 percent in 2012 and 44 percent by 2016 — while boosting the defense budget by 14 percent over the same time period.

Critics blasted the plan as draconian and potentially devastating to American power abroad. “Cuts of this magnitude would harm U.S. exports and kill American jobs, force the U.S. to abdicate our moral responsibility to help those most in need, and essentially cede the playing field to China in many parts of Asia, Africa and Latin America,” Howard Berman (D-Calif.), the ranking Democrat on the House Foreign Affairs Committee, said in a statement.

Others charge that Ryan’s cuts would eviscerate American diplomacy and development, leaving only the military as the face of U.S. engagement with the world.

Foreign Policy’s David Rothkopf, writing in the blog “Death Panels for Diplomacy,” argued that “at just the moment when aid is most critical on initiatives of vital national security from fighting terrorism to stabilizing the Middle East to winning support for the U.S. in regions where our rivals are spending furiously to tip the scales in their favor, Ryan would effectively shut off the lights in Foggy Bottom and say that America will now do less, be less engaged, be less influential — right up until the point at which any issue must be resolved with force.”

While Ryan’s decision making has been showered at times with criticism by many on the left, he’s also come under fire from some conservative members, many of then Tea Party backed, who have been even more skeptical of foreign aid, urging the House leadership to adopt a radically lower ceiling of foreign aid or eliminate it altogether.

To his credit, Ryan has pushed back against some of those critics and worked to undercut the false belief that getting rid of foreign aid will solve the country’s massive fiscal mess.

“They literally think you can just balance” the budget by cutting “waste, fraud and abuse, foreign aid and [National Public Radio],” the Wisconsin Republican said in an interview with the Associated Press. “And it doesn’t work like that.”

Ryan has not offered any details on how he’d eventually cut the foreign budget by 44 percent, which has been overshadowed by the domestic elements in his proposal. Although he’s focused more on explaining those cuts, Ryan has defended the overall plan as necessary to keep the country from going broke, which in turn would inevitably erode U.S. influence abroad. “America is facing a defining moment,” he stressed in a Wall Street Journal op-ed. “The threat posed by our monumental debt will damage our country in profound ways, unless we act.”

Rep. Eric Cantor
Virginia Republican

Shortly after the election, Eric Cantor’s GOP colleagues elected him to be the majority leader in the House, making the Virginian congressman the first Jewish House majority leader and putting him second in charge to House Speaker John Boehner, Ohio Republican.

From his perch atop the lower chamber, Cantor essentially serves as gatekeeper. He’s responsible for drawing up the chamber’s daily floor schedule and has a strong say in what bills come to the floor for action, including those dealing with spending and international matters.

That could be a problem for Democrats because Cantor has been vocal about the administration’s handling of Iran and Israel. He raised some eyebrows last year when, according to news reports, he told Israeli Prime Minister Benjamin Netanyahu that the new GOP majority will serve as “a check” to the policies of the Obama administration, which initially pushed for freezing Jewish settlements in the West Bank and East Jerusalem.

Asked about Cantor, one U.S.-Israel relations expert said, “Cantor is a status quo; Israel does no wrong [among] Republicans, plain and simple.”

The expert added: “He is an impediment to the president in that any major peace move will likely be denounced by him and Rep. Ileana Ros-Lehtinen [R-Fla.] as bad for Israel, and he will be solicited by Israeli leaders to back them in Congress, potentially against the president’s plans.”

In February, some news reports credited him with playing a role in convincing the administration to make the sole veto vote on a U.N. resolution that condemned Israel’s settlement activities in the Palestinian territories, including East Jerusalem, as illegal — despite the support of the 14 other Security Council member states.

Cantor has already floated the idea of separating financial assistance to Israel from the rest of the foreign operations budget in an attempt to safeguard it from members of his own caucus who are angling to slash aid. He’s also campaigned to end U.S. taxpayer support for the Palestinian Authority.

A supporter of using the power of America’s purse to demand change abroad, Cantor has said the House would work to defund nations if they don’t share U.S. strategic interests.

Rep. Kay Granger
Texas Republican

As the new head of the House State and Foreign Operations Subcommittee, Kay Granger oversees where foreign aid is spent, helping to draft funding bills for international affairs. She’s among the lawmakers who’ve questioned whether federal dollars are going to foreign governments with poor records of good governance, and has urged greater safeguards to ensure that civilian assistance isn’t diverted to corrupt actors in such places as Afghanistan — that includes closely scrutinizing the money channeled to Afghan President Hamid Karzai.

Since taking over the subcommittee, Granger has pushed back against the president’s budget requests, while praising the GOP’s spending proposals and calling for some assurance that foreign aid isn’t being used a pseudo-stimulus bill for foreign countries.

The Texas Republican provided a glimpse into her foreign policy vision in March in her opening remarks during a committee hearing where Secretary of State Hillary Clinton testified on her department’s fiscal 2012 budget request.

The United States, Granger said, must “achieve clear objectives and demonstrate results” in Afghanistan, Pakistan and Iraq, and address the cartels that continue to traffic drugs through South and Central America, “bringing violence to our backyard.”

Also, the country should support reform efforts under way in North Africa and the Middle East, while “continued investments in democracy promotion and military assistance will be critical to maintaining peace in a very difficult environment.”

But it must do so without breaking the bank, she added, warning that “justifying the total funding levels proposed in [the president’s] budget simply will not be possible.”

“Plans to increase State and USAID staff, support large multiyear commitments, and boost lending by international banks must be reconsidered,” she declared, arguing that “we cannot continue to spend like we have in the past.”

Rep. Ileana Ros-Lehtinen

Florida Republican

The new chairwoman of the House Foreign Affairs Committee, the outspoken Ileana Ros-Lehtinen wasted little time letting people know that she’ll take a more hard-line approach to America’s relations with the United Nations than her Democratic counterparts did when they ran the show in recent years.

The first committee hearing the Florida Republican held was titled “The United Nations: Urgent Problems That Need Congressional Action,” and she promised early on this year to tie U.S. payments to the United States directly to bureaucratic reform — a pledge that’s sure to dredge up the longstanding divide between Republicans and Democrats over the usefulness of the world body and whether the U.S. should pay its dues, about 22 percent of the U.N. budget, with no strings attached.

“The majority of our members are on board to reform the corrupt and mismanaged U.N. and get a much better return for our dollars,” the Florida Republican said in an interview with the Washington Times. “Cutting the budget is not enough, because you need to reform the monster, you need to reform the beast, and if you don’t get fundamental reform, you are still rewarding a corrupt, mismanaged agency.”

Democrats, though, have said that reviving the debate over U.N. dues — a cause célèbre of former President Bush’s combative U.N. envoy, John Bolton — is short sighted and could actually undermine the reform process already under way at the world body.

Ros-Lehtinen failed in her initial bid to force the United Nations to return $179 million in U.S. overpayments by a vote of 259 to 169, mostly in light of the fact that much of the money had already been designated for security measures aimed at protecting the international headquarters in New York.

Ros-Lehtinen has also set her sights on foreign assistance. Her predecessor on the committee, Howard Berman (D-Calif.), had drawn up a bill to reform the unwieldy foreign aid process, which is all but dead in the water given that Ros-Lehtinen isn’t likely to resurrect it.

Rather, she supports reducing the amount of money appropriated for State and foreign operations, saying that the substantial increase in USAID’s budget between 2008 and 2010 “is just not feasible in light of what is happening here at home.”

“Those who complain about diminished levels of U.S. aid funding need to ask themselves: How much less would an insolvent United States be able to do?”

Like Granger though, Ros-Lehtinen is generally in favor of military operations and doesn’t seem eager to target defense funding. To that end, news reports suggest that Ros-Lehtinen will express her concerns about the proposed U.S. troop drawdown later this year.

And like Cantor, Ros-Lehtinen is a staunch supporter of Israel, as well as an ardent critic of Venezuela’s Hugo Chávez. And true to her reputation as a fierce anti-Castro crusader, the Havana native and longtime member of the Cuban-American lobby will undoubtedly resist any easing of economic sanctions or travel restrictions on the communist island.

Sen. John McCain

Arizona Republican

Since losing the 2008 presidential election, political insiders generally agree that John McCain’s political persona as a moderate maverick has markedly shifted to the right, as he’s grown increasingly angry with the administration and Democrats. He’s railed against the campaign to allow openly gay men and women to serve in the military, as well as Democratic attempts to attach a proposal to the annual defense policy bill that would have provided a path to citizenship for some children of illegal immigrants.

Whatever one thinks about the McCain’s new attack dog approach, he continues to hold powerful sway as the ranking member of the Senate Armed Services Committee, which is responsible for all matters relating to defense policy in the United States, including oversight of the Pentagon and the nation’s armed forces.

It appears McCain is poised to push back against the White House’s decision to set timetables for the removal of troops from Iraq at the end of the year and Afghanistan in July. “We should not undercut our strategy in Afghanistan by holding to arbitrary timelines for withdrawal based on politics, rather than an honest assessment of conditions on the ground and the readiness of Afghan forces,” he has argued.

McCain also teamed up with Sen. Joseph Lieberman, Connecticut Independent, in urging the administration to aid the civilians revolting against Libya’s Muammar Qaddafi and was among the first leaders in Congress to vocally call for a no-fly zone over the North African country.

McCain also adamantly opposed the administration’s efforts to close Guantanamo Bay prison and has been a leading advocate for taking a tougher stance against Iran.

Sen. Richard Lugar

Indiana Republican

Richard Lugar, the ranking member of the Senate Foreign Relations Committee, is an elder statesman of the U.S. Senate and was a key ally in the administration’s successful push to ratify the new START nuclear treaty with Russia (he also worked with Obama on nonproliferation issues when the president was a freshman senator).

As one of the few moderate Republicans left in the Senate, his vote has become increasingly critical to the Obama administration’s overseas agenda. But Lugar — who is sure to face a Tea Party-backed challenge when he comes up for re-election — can also be a thorn in his former nuclear protégé’s side.

Elected in 1976, he could be the most important person in Congress when it comes to approving long-stalled free trade agreements with South Korea, Colombia and Panama. In March, Lugar said he could only support the Obama administration’s South Korea free trade agreement if the Colombia and Panama trade pacts signed by former President George W. Bush are also submitted to Congress for approval.

“Jobs are being lost in Indiana,” Lugar said. “Trade opportunities are being lost all because the Obama administration is bowing to interest group pressure.”

He has also cautioned against getting sucked into a conflict in Libya, saying the United States shouldn’t launch a military intervention, including a no-fly zone, in another Muslim country “without thinking long and hard about the consequences and implications.”

And, of course, there is the omnipresent budget back home.

“With roughly 145,000 American troops still in Iraq and Afghanistan and with a budget that, according to the president’s own proposal, will carry a deficit of approximately $1.5 trillion this year, we have to recognize that war spending is especially difficult to control,” Lugar warned.

Sen. John Kerry
Massachusetts Democrat

As much as the Republican takeover of the House seismically shifted the political landscape, it’s easy to forget that Democrats will retain control of the Senate for the next two years, and plenty of them will have a strong hand in guiding U.S. foreign policy and, specifically, President Obama’s agenda.

Perhaps the most consequential among them could be John Kerry, who won kudos late last year by helping Obama win passage of a landmark nuclear arms pact with Russia and who continues to be in a position of power as chairman of the Senate Foreign Relations Committee, which handles treaties and confirmations.

Rumors constantly swirl that Kerry could still one day be secretary of state — a position he was reportedly seeking when Obama won the presidency — but it looks like the one-time presidential candidate has hit his stride in the Senate as a quiet but influential foreign policy player (and occasional troubleshooter).

So far, Kerry has focused much of his attention on the Middle East, arguing that the way the United States responds to the uprisings in the Arab world will “shape our strategic position in the Middle East — and how Muslims around the world see us — for decades to come.”

In a speech at the Carnegie Endowment for International Peace, Kerry said he was working with Sens. McCain and Lieberman on legislation supporting the transition in Egypt and Tunisia “that will encourage movement toward democratic reform in the Middle East, and that will spur sustainable economic development throughout the region.”

The package, he said, will promote independent media and include financial assistance for small- and medium-size businesses in an attempt to draw additional private investment from outside the government and bolster both countries’ fledging economies.

“I know that we face a budget crisis in our own country, but democracy assistance is an investment, not a gift,” said Kerry, who also advocated early on for a no-fly zone to help the Libyan rebels. “We can either pay now to help brave people build a better future for themselves, or we will certainly pay later with increased threats to our own national security.”

Kerry has also been highly active in Sudan — visiting multiple times ahead of the historic independence referendum for Southern Sudan — as well as Pakistan, helping to craft a major development assistance package in a bid to shore up America’s shaky relations with Islamabad.

On that front, Kerry has stressed the importance of U.S.-Pakistani ties after a tensions mounted over a CIA contractor who shot two Pakistanis dead in an alleged botched robbery that caused a diplomatic uproar. Kerry has also criticized Republican proposals to cut USAID and State funding, while defending the roughly $60 billion requested in the president’s 2012 budget for international affairs as “a small investment for such a great return.”

“These cuts are not abstractions. These are people,” he said in a recent committee hearing. “Cutting these programs will do almost nothing to rein in our budget deficit, but it will cost thousands of lives. And by reducing our diplomatic capacity around the globe, we will increase the threats to our own country.”

About the Author

Seth McLaughlin is a contributing writer for The Washington Diplomat.