Potential FY26 Government Funding Scenarios

Over the last few weeks, Congress has gotten over two major hurdles that have an influence on FY26 appropriations negotiations and possible legislation: the passage of the Big Beautiful Bill, the work on which was sucking the air out of everything else on Capitol Hill, and the $9 billion rescissions package for foreign assistance programs and the Corporation for Public Broadcasting. With these two markers in the rearview mirror, it’s a good time to game out some FY26 funding predictions. 

From the top, it’s important to make clear that there’s a high likelihood a short-term Continuing Resolution (CR) will be passed at the end of September. Neither party will have their full appropriations bills passed, or even written, and if nothing else, the chambers will need more time to find agreement.  

There are two major political dynamics that will play a major role in if and how the government is funded come October:  

• Whether Democrats make good on their threat to walk away from FY26 negotiations in response to rescissions (and the timing of that).   

• How long Republicans are willing to continue funding the government at “Biden-era levels” via a CR, or if this fall will be the moment they cut a deal. More on these dynamics later. 

Where things stand
This week, the House National Security, Department of State, and Other Programs (formerly SFOPS) released its FY26 appropriations bill, which was marked up on July 15 with little fanfare. The bill represents a 22% overall cut to the Department, and Democrats voted unanimously against it. 

Despite this concerning top-line number, the Alliance was pleased to see the Educational and Cultural Exchanges (ECE) line for ECA, which came in at $700.946 million; a far cry from the President’s requested $50 million for FY26.  

In addition to this robust ECA funding proposal, there is also language in the bill requiring OMB to apportion funds to ECA within a set period of 60 days after the bill’s passage. This signals that there is bipartisan awareness of the current hold OMB has on FY25 awards across the government, and they want to use the appropriations process to put in statute some guardrails. The Senate Appropriations Committee is still working on their bill, but the word is that they are pursuing similar funding levels and language to the House. 

Whether either of these bills make it out of committee and to the House or Senate floor remains a big question mark. But the House’s mark signals that there is still strong bipartisan support for ECA and its programs, which we can work with. 

The politics of it all
As mentioned above, there are two important political dynamics playing out that will have an outsized impact on if and how the government is funded in FY26. 

First, both Senate Minority Leader Chuck Schumer and Appropriations Vice Chair Patty Murray have said publicly that if the rescissions package passes, Democrats might walk away from FY26 negotiations. Now that rescissions have passed, it remains unclear if they are going to double down on that threat, or if they are going to wait and see what the Administration’s next move is.  

This is a big decision for Schumer, given the fiasco that was the CR fight in March that resulted in major backlash from the Democratic base. Does it make sense for Democrats to stop the appropriations process now, two months before the deadline, over this relatively small package, or should they hold their cards and wait for the Administration’s next play? 

Next week, Senator Thune is going to send up a test balloon by teeing up a vote on the Military Construction-Veterans Affairs (MilCon-VA) appropriations bill on the floor, which was voted out of committee with a large bipartisan margin. Between now and that vote, Minority Leader Schumer has to decide whether his caucus is going to hold strong on their threat to shut down the FY26 process. All of this comes as OMB Director Russ Vought said yesterday that appropriations should become less bipartisan, a sentiment that is strongly opposed in the Senate. If I were Senator Schumer, I’d allow my vulnerable members who need to vote against appropriations bills to vote against MilCon-VA next week, but I would make sure there are 7 votes to get it through the chamber. It doesn’t make sense for the Democrats to start their fight now; there are two months left until the funding deadline, and still a strong possibility that more rescissions packages are sent to the Hill. 

Second, there is frustration among Republicans in Congress that the government remains funded by a CR representing the previous Administration’s spending priorities and levels. The conundrum that they are faced with is that any attempt to break away from those levels require bipartisan agreement and 60 votes in the Senate. This would require negotiating with Democrats, which would buck the President’s desires for massive, across-the-board spending cuts. 

It seems very likely that any future rescissions package will be much larger than $9 billion, and very likely include FY25 funds from ECA. 

Consequences of a shutdown
Generally, shutdowns are bad for the government, its employees, and its critical day-to-day functions. The current climate on Capitol Hill makes it feel like – right now at least – there might be a real possibility of a shutdown in the fall. That chance only increases if the Administration sends the Hill more and larger rescissions requests, and it only increases further the later in the calendar those requests are made.  

Rescissions packages have a 45-day clock for passage once they go to the Hill, and if they don’t clear both chambers, the Administration is required to spend the funds as appropriated. The tactic OMB could take is sending huge rescissions packages to the Hill in mid-August – while Members of Congress are on recess – with a deadline pushing up against the end of the Fiscal Year (and expiration date of those funds). This would be a “pocket rescission,” and certainly add fuel to the fire of the Democrats’ threat to shut down FY26 talks. 

In this climate, however, a shutdown would be even more risky than in a typical year, a factor Democrats are surely considering. This Administration’s goal is to gut the federal workforce and agency programs, and a shutdown could give them carte blanche to do exactly that. In a government shutdown, the executive has broad authority to declare what is deemed “essential” and “non-essential” in government. A shutdown could provide this Administration with the opening it needs to run the parts of the government it wants to run without consideration for Congress or the courts. 

So what will happen?
With midterm elections approaching, it would be in Congress’ interest to work together on government funding for FY26 and reach an agreement between the chambers and bridge the cavernous differences between the parties.  

Longer term, the politics of a shutdown are bad, and the potential reality of a shutdown could be much worse. Many see the politics of ongoing government funding via CR as bad, but it would be less bad for ECA and its programs than a shutdown. While extremely unlikely, at least immediately at the start of the fiscal year, an omnibus or set of minibuses outlining new FY26 spending would send a strong message from the Hill to the Administration about Congress’ power of the purse, especially if whatever they agree upon looks like the House mark for ECA. Even with the Big Beautiful Bill and the first rescissions package behind us, there is still a lot that needs to happen before we can make better predictions about how the government will get funded in FY26. 

House National Security, Department of State, and Related Programs Subcommittee bill funds ECA at $700.95 million

The House National Security, Department of State, and Related Programs (formerly SFOPS) Subcommittee released its FY26 appropriations bill, and the proposed topline funding amount for the Bureau of Educational and Cultural Affairs (ECA) is $700,946,000. 

This amount is significantly higher than the 93% cut proposed in the President’s Budget Request and far more than what was anticipated from the House. This shows that in a political climate focused on sweeping cuts, support for ECA’s international exchange programs remains strong in Congress. 

The bill proposes a 22% cut to the Department of State budget as a whole, so it’s still damaging to U.S. diplomacy, and there are Members of Congress who will understandably be dissatisfied with it. You can read the bill, the respective statements and supplementary documents here: 

• A summary of the bill is available here. 

• Bill text is available here (ECA section on page 4). 

• HAC majority press release is attached here. 

• Democrats posted fact sheet here.  

• HAC Democrats press release is attached here. 

For ECA, though, here’s what this means: the conversation about FY26 is completely new. The President’s Budget Request can be thrown out the window. There is still much more to learn about this bill, including toplines for each program. The subcommittee markup for this bill is tomorrow, Tuesday, July 15 at 11:00am.  

Action Alert: Tell Congress to reject President’s budget proposal and support funding for international exchange programs

The Alliance for International Exchange, on behalf of its more than 90 U.S.-based members who implement international exchange programs is launching a campaign to urge Members of Congress to reject the President’s FY26 budget proposal and support funding for international exchange programs. 

On Friday, May 2, the Trump Administration released its FY26 “skinny” budget, which is a high-level overview of the president’s priorities for the upcoming fiscal year's budget process. The budget proposes to cut State Department international exchange programs by 93%. If Congress enacts this budget proposal, it would essentially eliminate the Bureau of Educational and Cultural Affairs (ECA) and leave exchange programs, the U.S. organizations that implement them, and the jobs of more than 8,000 exchange professionals around the country at risk. 

Exchange programs are a proven investment in America – an investment in the economy, in American communities, and in the U.S.’ foreign policy influence and interests. They are vital to making America safer, stronger, and more prosperous and should continue to be funded as such. 

We encourage all exchange champions to take action today and urge Congress to support thousands of Americans and communities by ensuring funding for international exchange programs.   

President’s FY26 budget proposes to essentially eliminate State Department exchange programs

We expected it, but it’s still deeply disappointing to see. The President’s FY26 budget proposal would essentially eliminate State Department international exchange programs.

Released earlier today, this FY26 “skinny” budget proposes to cut State Department international exchange programs by $691 million, or by 93%. This would decimate and essentially eliminate the Bureau of Educational and Cultural Affairs (ECA). Given the current budget is $741 million, this would leave only $50 million for all ECA programs and operations.

The proposal demonstrates a fundamental misunderstanding of exchange programs and would do the exact opposite of making America safer, stronger, and more prosperous.

International exchange programs are a proven investment in America – an investment in our economy, in our people, and in our foreign policy influence and interests. In order to expand America's global influence, it’s important to invest more in international exchanges, not less.

We should pause for a minute at this stage and remember that this President’s budget request (PBR) is a proposal – a “wish list” so to speak – and is not binding. Congress can take it, take portions of it, or take none of it. More often than not, Congress goes against the PBR during their appropriations process. The previous Trump Administration proposed to cut ECA for four consecutive years, anywhere from 55-75%. These proposals were all rejected by Congress. Check out my colleague Adrienne’s Jacobs’ excellent blog post on this topic for more.

But even so, we should be and are very concerned about this proposal, and we will push back. We’ll be working, as we always do, to make clear that exchange programs are a direct investment in our economy, our communities, and our people. Exchange programs may be international in nature, but they’re distinctly American in impact.

The budget request’s rationale for this proposed cut – that exchanges are inefficient and can’t be afforded, that opportunities are being taken away from Americans, and that there is “fraud” in their implementation – couldn’t be further from the truth.

Exchange programs are one of the best returns on investment in the federal governmentAccording to the State Department’s own talking points, 90%, or ~$660 million, of the Department of State exchange program budget is spent on Americans traveling abroad or by international participants while in America. This is one of the best returns on investment across the entire federal government.

Additionally, the exchanges appropriation leverages millions of additional dollars in private and international government contributions. For example:

• The Global Ties U.S. network of 90+ community-based nonprofits in all 50 states that implement the International Visitor Leadership Program (IVLP) sees an 11:1 return on federal investment – for every federal dollar spent on their programs conducted in the United States, these organizations generate $11 more.  

• The Fulbright Program is one of the most highly leveraged federal programs, as over 100 partner governments currently contribute over $100 million annually, with 30 foreign governments matching or exceeding the U.S. government’s annual contribution.

Exchange programs create opportunities for Americans and American communities.International exchanges equip American leaders for success on the world stage and strengthen American communities across the country.  

• 15,000 American participants travel abroad on State Department exchanges every year, gaining critical skills and experiences that set them up for success in the global marketplace. 

• Nearly 60% of the young Americans that receive a Benjamin A. Gilman International Scholarship to study abroad are from small towns or rural communities in the U.S. 

• 97% of U.S. Scholars who participated in the Fulbright Program found the experience professionally transformative. 

• The National Security and Language Initiative for Youth (NSLI-Y) and the Critical Language Scholarship (CLS) provide young Americans the opportunity to study languages critical to U.S. interest directly in the regions where these languages are spoken. 

• Four out of five Americans who participate in the International Visitor Leadership Program (IVLP) feel international exchange programs enhance the image of their community as a good place to live.  

• 31 million job openings require skills in communication, leadership, and problem-solving – all skills gained through exchange programs. 

• All 50 states host and benefit from exchange participants contributions to American businesses, communities, schools, and more.

Exchange programs are some of the most monitored and evaluated programs in the government.U.S. organizations that implement State Department exchange programs are strong and scrupulous partners who exhibit consistent quality and accountability.  

• Implementing partners of the Department of State must submit line-item budgets for every award, including notes that justify each expense. These budgets are critiqued by ECA’s grants officers who often follow up with questions to ensure the allowability of expenses and cost reasonableness. Funds cannot be distributed until grants officers sign off. 

• Financial reports are submitted by implementing partners to ECA on a regular basis (monthly or quarterly depending on the terms of their contract with the Department of State). This is done so ECA can monitor program spending in real time. 

• Every implementing partner who receives funds from ECA must be audited by an external firm annually to ensure there is no waste, fraud, or abuse. Each audit report is shared with the Department of State. 

• The last Inspector General report on ECA was done in 2021 and, contrary to the budget proposal’s allegation, no fraud of any kind was reported.  

The Department of State Memo That Leaked: Let’s Talk About the Budget Process

This week in Washington began abuzz, first with rumors and speculation about a damaging memo possibly coming from the Department of State, and then real alarm when The Washington Post published a piece about a memo that was leaked to them proposing to slash the agency’s funding by nearly half, including the elimination of the Bureau of Educational and Cultural Affairs (ECA). The coverage of this memo has been breathless and dire. We at the Alliance saw the full memo, and it is very concerning. 

What the press only mentions as a footnote, though, is this: the leaked memo is a step in the beginning of the very long process that exists to write, authorize, and appropriate the federal funding legislation. The memo in and of itself has no immediate or tangible impact on the Department of State, ECA, or Alliance members’ programs. Below is an overview of the long, arcane, and complex process that explains why this memo is nothing more than a memo right now.

“Regular Order”, a.k.a. the way things should be done and aren’t

The Congressional budget process was established under the Congressional Budget and Impoundment Control Act of 1974, and that process takes place after the President’s Budget Request (PBR) is submitted to Congress. Below is a chart that outlines what the “regular order” of the federal budget process should look like each year. 

On or before: Action to be completed:

October-December Federal agencies create budget requests and submit them to the White House Office of Management and Budget (OMB) OMB refers to the agencies’ requests as it develops the budget proposal for the president.

First Monday in February The president submits the budget request (PBR) to Congress.

February 15 Congressional Budget Office (CBO) submits report to House and Senate Budget Committees.

Within 6 weeks after the PBR is submitted Authorizing committees submit views and estimates to Budget Committees for each federal agency. House and Senate Budget Committees hold hearings on the PBR.

April 1 Senate Budget Committee reports concurrent resolution on the budget, which outlines targets for congressional committees to propose legislation directly appropriating funds or changing spending and tax laws. The budget resolution is not law and does not get signed by the President.

April 15 Congress completes action on the budget resolution, meaning the House and Senate agree on exact text language.

May – June House and Senate complete action on 12 appropriations bills guided by the targets outlined in the budget resolution. These bills do become law by going to the president for signature. Appropriations bills are the vehicle through which federal agencies receive funding.

October 1 Fiscal Year begins

Source: House Budget Committee: https://budget.house.gov/about/budget-framework/time-table-budget-process/; Center on Budget and Policy Priorities: https://www.cbpp.org/research/federal-budget/introduction-to-the-federal-budget-process  

Since the Congressional Budget Act of 1974 was passed, Congress was able to complete this process for the first 23 years, however since 1999, they have failed to complete it the majority of the time. As Congress become more polarized, agreement on any legislation, but especially appropriations, has become more difficult. In 42 of the last 45 years, Congress has failed to agree on and pass appropriations bills by the start of the fiscal years. [1] In these instances, Congress is forced to pass short-term stopgap funding in the form of a Continuing Resolution (CR), or they put all 12 appropriations bills into one giant omnibus legislation to fund the full government or risk a government shutdown (which has happened several times). As might be clear at this point: neither of these processes for funding the government that have become the norm are considered “regular order” per the Congressional Budget Act. 

What does the President’s Budget Request really mean?

What does all of this have to do with the leaked memo? The memo represents what seems like a draft for the first step in the above chart where federal agencies create budget requests to submit to OMB. However, there is a lot of uncertainty surrounding this memo, including whether it is in fact the Department of State’s actual budget request for FY26. Subsequent reporting has noted that the memo is not expected to “pass muster with either the department’s leadership or Congress”. [2]

The president’s budget request in any given year is simply an overview of an Administration’s priorities and values. Congress can take it, take portions of it, or take none of it as they work through their own process to appropriate and authorize the federal agencies and programs. More often than not, Congress goes against the PBR during their appropriations process. It’s important to remember that the previous Trump Administration’s proposed budgets for ECA were cuts of anywhere from 55-75%. These were all rejected by Congress and funding for exchanges ended up growing by 17% over those four years. While a funding increase for ECA is not expected, it’s important to take heart that Congress has the final say on funding the federal government. 

Because the appropriations process is so broken (often ending in an omnibus or Continuing Resolution), and the legislative filibuster still exists, bipartisan agreement, at least in the Senate, is required to pass any kind of legislation to fund the government. Additionally, the House ultimately has to agree with whatever the Senate passes for it to go to the president to become law. 

All of that is to say, bipartisan support continues to exist for the Department of State, for ECA, and for international exchange programs writ large. Terminating ECA and eliminating all exchange programs is very unlikely to get the bipartisan support required to become law.

 ______________________________________________________

[1] Center for Budget Policy and Priorities, https://www.cbpp.org/research/federal-budget/introduction-to-the-federal-budget-process

[2] PBS news, https://www.pbs.org/newshour/politics/watch-live-state-department-briefing-may-address-proposed-budget-cuts-el-salvador-deportations

Advocacy Update: Exchange Funding Begins to Flow After Pause

As of Friday, March 28, Alliance members have received over 85% of outstanding State Department payments that had been withheld due to the ongoing funding freeze. This is a major victory in an advocacy effort that began when on Thursday, February 13 when the State Department informed grantees that a temporary 15-day pause on federal funding for all current and future State Department FY25 grant disbursements had gone into effect as of Wednesday, February 12.

In response, the Alliance, along with NAFSA and The Forum on Education Abroad, launched an advocacy campaign urging Congress to restore funding to ECA program implementers. Exchange champions sent 25,000+ letters to more than 500 Congressional offices. 

Just days after the campaign launch, 160 Alliance members went to Capitol Hill to meet with over 140 Congressional offices on Advocacy Day, delivering the same urgent message.

These meetings led to a House sign on letter co-sponsored by Rep. Chellie Pingree (D-ME, 1) and Rep. Madeleine Dean (D-PA, 4) with 47 signatures urging Secretary of State Rubio to immediately stop the freeze.

We also generated strong media attention in major outlets like the New York Times, the Washington Post, and the Associated Press.  

Action Alert: Urge Congress to Restore Vital International Exchange Funding

The Alliance for International Exchange, on behalf of its more than 90 U.S.-based members who implement international exchange programs, and in conjunction with NAFSA and the Forum on Education Abroad, is launching a campaign to urge Members of Congress to demand that the U.S. Department of State lift the freeze on international exchange funding. 

The Department of State still has not lifted what was described as a 15-day temporary pause of all international exchange program funding that went into effect on Wednesday, February 12. This pause has paralyzed an array of time-honored exchange programs that enhance American safety, security, and prosperity.  

This action risks the health, safety, and future of the more than 12,500 American youth, students, and professionals who are currently abroad or who have plans to be abroad in the next six months. It also shuts off funding for U.S. programs now hosting more than 7,400 youth, students, and professionals in American communities from around the world. 

We encourage all exchange champions take action today and urge Congress to support thousands of American students and communities by contacting the U.S. Department of State to demand that funding be turned back on for international exchange programs. 

FY25 Appropriations: Lessons Learned and What’s Next

Members of Congress soon return to Washington and will then quickly run up to the end of Fiscal Year (FY) 2024 on September 30. The House has passed less than half of its twelve appropriations bills, while the Senate has passed none, creating yet again a scenario where it is highly unlikely that any bills will be finalized ahead of the funding deadline. Instead, legislators will most likely focus on enacting a Continuing Resolution (CR) extending funding until a later date (likely post-election or even into early in 2025), but even this may prove difficult in what has been called the most unproductive Congress in recent history.

Given that we have slightly more than a week until lawmakers are back in session and the next chapter in the efforts to finalize FY25 funding unfolds, now is a good time to reflect on our work on behalf of exchange programs so far this year and the key lessons learned:

1. Budget constraints are a primary consideration in FY25 strategy.

At the beginning of the year, we faced many unknowns with FY24 funding not yet complete. While we were concerned with questions over the educational and cultural exchange (ECE) account and its funding level, we also had to wrangle with whether the government was on the verge of a shutdown and how a shutdown would impact our work. With Advocacy Day approaching in early March, there was no time to waste as Congress hammered out their differences. What we knew was that this cycle was going to be a difficult budget environment, so we aimed to be more tactical with our funding request for ECE programs in FY25. Working with our Appropriations Steering Committee and Working Group, we developed a request of $808.6 million (approx. 4% above FY23 enacted). This achieved our two goals of being reasonable enough to pass “the laugh test,” while also continuing to push for increased funding. We made a preemptive effort to strengthen this request through a survey of our federally funded members to demonstrate statistics of unmet demand. We also consulted with other associations who were facing similar challenges and turned to our close contacts on Capitol Hill for their feedback.

2. Bipartisan support cannot be taken for granted.

The FY24 enacted level whereby exchanges were cut by 4.7% was a good reminder that even noncontroversial programs are often affected by headwinds within the greater political environment. As we saw with the funding levels during the Obama-era sequestration battles, exchange programs are not immune to downward pressure on spending, despite their history of bipartisan support. To better insulate the ECE account from this pressure in FY25, we endeavored to communicate the value of these programs to congressional offices through as many opportunities as possible, especially those on the State-Foreign Operations appropriations subcommittees. Those touchpoints included:

• 129 Advocacy Day meetings on Capitol Hill

• 81 written appropriations requests

• Bipartisan House sign-on letter with 110 Representatives

• Senate sign-on letter with 36 Senators

• Written testimony for the House and Senate record

• 10 meetings with SFOPS offices, and Appropriations Working Group members

This work contributed in no small part to the funding levels provided in the House and Senate bills. On the House side, the SFOPS bill funded exchange programs at $720.9 million, a $20 million increase compared to last year’s bill. The Senate bill proposed $761 million for ECE funding, which is $20 million more than the current enacted level. Given the political environment, both outcomes set us up in a strategic position for the conference negotiations to come.

3. Collective action is the most effective tool against programmatic threats.

Coming into this cycle, we knew that the threat of cutting amendments like the Biggs amendment we rallied against in FY24 was still present, and perhaps even more likely given the general push to reduce spending. However, we were met with not one House amendment targeting exchanges funding, but three that were approved by the Rules Committee for floor consideration. These amendments included:

• one aiming to eliminate funding (introduced by Rep. Brian Mast (R-FL, 21));

• one proposing to reduce funding to FY19 levels (introduced by Rep. Josh Brecheen (R-OK, 2)), and;

• one prohibiting funding for the ECA program (introduced by Rep. Paul Gosar (R-AZ, 9)).

In response, we swiftly mobilized our entire membership and the larger international exchange community to oppose these amendments. In less than 48 hours, our community did the following:

• Sent 2,456 grassroots letters to 391 Representatives

• Direct outreach to more than 260 House offices

• Engaged Alliance member networks around the country

• Collaborated with lobbyist partners to reinforce our message

We also gained vocal support from Members of Congress on behalf of these programs on the House floor. Ranking Member of the State-Foreign Operations subcommittee, Congresswoman Barbara Lee (D-CA, 12) reaffirmed the significant value of exchanges while opposing the amendments: “These programs foster mutual understanding between the people of the United States and of other countries and promote peace and understanding. Lord knows we need this. They allow us to promote our values of democracy, freedom of the press and civic participation as well as promote dialogue, collaboration and the sharing of diverse perspectives especially for the cultivation of the next generation of global leaders.”

Collectively, we were able to defeat these amendments with strong bipartisan support: the Mast amendment was withdrawn the night before floor votes; the Brecheen amendment was voted down 246-164 on the House floor; and the Gosar amendment was also voted down 254-156 on the House floor as well. This success continues to demonstrate how capable and strong our advocacy is when we work together.

We are grateful to all of you who have helped us in this work. Mark Rebstock, Vice President, Deputy Director of Meridian Center for Global Leadership at Meridian International Center and member of the Appropriations Steering Committee, reflected on his meetings with congressional staff as follows: “These moments always remind me that the power of exchange programs is felt by many and that the personal connections to exchange run deep.”

Our efforts over the past eight months put us in a strong position to tackle the new and ongoing funding challenges facing our community. As we approach the upcoming November elections, our team will provide more opportunities for you and your organizations to take action and communicate the value of exchange programs to your colleagues, leadership, partners, and broader networks.

FY25 Senate State-Foreign Operations Bill Provides Strong Response to Global Challenges

The Alliance for International Exchange thanks the Senate Appropriations Committee for demonstrating its bipartisan support of Department of State educational and cultural exchanges by allocating a 2.7% funding increase over the FY24 enacted level in its recently approved FY25 State-Foreign Operations (SFOPS) bill.

We believe that Congress’ continued robust investment in international exchange programs is critical in combatting rising global challenges. Exchanges are one of the most cost-effective uses of taxpayer dollars in the federal budget and have immeasurable benefits on our long-term national security and foreign policy goals by fostering people-to-people connections worldwide.

We recognize the constraints of this difficult budget climate, including current spending caps, and know that any increase at this time is no small feat. Especially in light of FY24’s 4.7% cut, we are grateful for this step forward and hope that it will be upheld in conference negotiations, along with the inclusion of the Department of State BridgeUSA program provision present in both the House and Senate bills.

We urge Congress to continue its longstanding bipartisan support by fully funding the educational and cultural exchange account in FY25. As the appropriations process progresses, we look forward to our continued engagement with policymakers on behalf of Department of State international exchange programs.

Action Alert: Write your House Representative TODAY to oppose amendments eliminating funding for exchanges

This is a call to action regarding a number of amendments to the House’s Department of State funding bill that eliminate funding for DOS educational and cultural exchange programs. Amendment 38 (#158) submitted by Rep. Mast (R-FL, 21) threatens to eliminate all funding for these DOS exchange programs, similar to last fall's proposed amendment from Rep. Andy Biggs. Amendment 1 (#83) and Amendment 13 (#15), introduced by Rep. Brecheen (R-OK, 2) and Rep. Gosar (R-AZ, 9), also seek to cut funding for DOS exchanges in various ways.

This issue is extremely urgent, as these amendments to the House’s DOS funding bill could be voted on the House floor as early as tomorrow, Wednesday, June 26. Ask your Representative to oppose these amendments by sending a letter RIGHT NOW!

Exchanges Funding Cut in House FY25 State-Foreign Operations Bill Hinders American Foreign Policy Goals

The Alliance and our members are very concerned about the proposed 2.7% cut to educational and cultural exchanges in the House bill advanced by the State-Foreign Operations Appropriations Subcommittee earlier this week. If enacted, this would further compound the constraints on programming as a result of the 4.7% cut in the enacted FY24 bill.

At a time when the United States is facing significant and increased global challenges, further reducing funding for these programs that foster strong people-to-people connections is detrimental to our foreign policy goals, both in the short and long-term.

We understand that House appropriators are facing a particularly tough budget environment that requires them to make difficult decisions. However, as other countries around the world are increasing their investment in people-to-people exchanges, we feel it would be a missed opportunity to decrease funding for Department of State programs that are critical to sharing American values worldwide.

The Alliance appreciates the continued inclusion of the Department of State BridgeUSA program provision in the House bill and urges Congress to extend that longstanding bipartisan support to fully funding the educational and cultural exchange account. We look forward to our ongoing bipartisan engagement in both chambers in support of a robust appropriation for these programs.

Same Number, Different Story: Takeaways from the President’s FY25 Budget Request

Fiscal Year (FY) 2024 is not yet finalized, but with the release of the President’s $7.3 trillion Budget Request (PBR) for FY 2025 on Monday, the Biden Administration officially kicked off this year’s appropriations cycle and the next battle over federal funding. For context, this request adheres to the bipartisan spending caps from Congress’ debt ceiling deal last summer. These constraints have a noticeable impact on many areas of the PBR, especially the International Affairs (IA) Budget.

The FY25 request includes a proposed 1% increase ($656 million) for the IA Budget from the FY23 adjusted enacted level, raising it to $64.4 billion. Within that funding, Educational and Cultural Exchange Program (ECE) funding has been allocated $777.5 million (DOS Budget Appendix, pg. 751-752), which is the same amount as the current FY23 enacted level. For a reminder of where funding currently stands, please see the chart below.

Current Enacted Level (FY23)

$777.5M

House FY24 SFOPS Bill

$700.95M

Senate FY24 SFOPS Bill

$779.5M

FY24 Enacted Level

?

President’s FY25 Budget Request

$777.5M

 ECE fared better than many with a level funding request, particularly when considering the uncertainty around FY24 numbers and the overall political pressure for spending cuts. Although, in reviewing the details in the Department of State’s Congressional Budget Justification (CBJ, pg. 60-64), there are a number of proposed changes for the funding allocation within the account, and as a result, a noticeable impact on the priorities of the Bureau of Educational and Cultural Affairs (ECA). Our main takeaways are below:

1. While the topline number is the same as FY23, the proposed ECE budget includes significant “realignments between bureau program activities.” (CBJ, pg. 61)

As with last year’s PBR, there are notable cuts to most of ECA’s flagship programming, including Fulbright (-$5.3 million), Gilman (-$1.1 million), and the International Visitor Leadership Program -($1.6 million), among others. Those funds are reshuffled to account for the increases to the Young Leaders Initiatives programs (+$11.3 million), specifically YALI and YSEALI, as well as Exchanges Support (+$4.6 million). This realignment mirrors the Administration’s FY24 request, but with the lower topline number, the impact is more significant. See below for a comparison between this year’s request, the President’s FY24 request, and the current enacted level.

FY25 Request: $777.5 M

FY24 Request: $783.7M

FY23 Enacted: $777.5M

Academic Programs

$378.8M*

$381.8M*

$373.6M

Professional and Cultural Exchanges

$224.8M

$222.5M

$227.5M

Special Initiatives

$66.8M

$66.8M

$55.5M

Program and Performance

$13.4M

$13.5M

$15.8M

Exchanges Support

$93.7M

$99.1M

$89.1M

* Includes American Spaces program (+$16M for FY25 and +$14.9M for FY24), which is not under Academic Programs in the enacted FY23 bill.

1. This request reaffirms the Biden Administration’s priorities of engagement with critical regions of Southeast Asia and the African continent.

The proposed increases to the Young Leaders Initiatives programs demonstrate the Biden Administration’s continued commitment to advancing people-to-people exchanges in Southeast Asia and Africa (CBJ, pg. 62), which was a major component of last year’s request as well. We agree that expansion of exchange programs in these critical regions will further bolster the United States’ foreign policy goals. However, when coupled with cuts to other key programming that could also reach those areas and reinforce the YLI efforts, the results won’t be as comprehensive as they have the potential to be.

1. Continued budget and political environment constraints will make FY25 an uphill battle for exchanges funding.

This request has little chance of becoming law with the current divided Congress and will likely to be the high funding watermark for the FY25 cycle. Our understanding is that the House and Senate funding numbers, and later the enacted FY25 appropriation, will more than likely be below this level. Given this probability, the PBR is an important reminder that the Alliance and the larger international exchange community needs to engage in robust collective advocacy on Capitol Hill on behalf of our request of $808.6 million and to protect exchanges from potential cuts. Our advocacy efforts to support strong exchanges funding in FY25 have already started. Notably, our funding request was discussed in more than 125 meetings with congressional offices during our annual Advocacy Day last week. With your help, we will continue to push this request forward throughout this spring and summer to share the importance and power of exchange programs with key policymakers. Stay tuned for ways to get involved! 

Meeting Unfulfilled Demand: $808.6 million for exchange programs in FY25

By Andrea BodineEvery February, Alliance staff and our Appropriations Working Group, consisting of members who implement Department of State funded exchange programs, formulate a funding request for the upcoming fiscal year. This ask is then used by Alliance members as a major talking point during our annual Advocacy Day with the Appropriations Committees, in addition to other touchpoints throughout the cycle. The Appropriations Working Group recently decided on an ask of $808.6 million for DOS educational and cultural exchanges (ECE) in FY25. Here’s how we arrived at that number.  Each year’s ask formulation comes with its own considerations and challenges, and FY25 has been no different. The 2024 presidential election is around the corner, rising costs continue to impact program administration, and funding for FY24 has yet to be finalized. On Capitol Hill, appropriators are struggling to agree on any spending bills and budgets across agencies and departments remain uncertain as the threat of a government shutdown looms.  

Where are we now? Department of State Exchange Program Funding
Current Enacted Level (FY23)	$777.5M
President’s FY24 Budget Request	$783.7M
House FY24 SFOPS Bill	$700.95
Senate FY24 SFOPS Bill	$779.5M
Final FY24 Enacted Level	?  (Current continuing resolution expires March 8)
President’s FY25 Budget Request	? (President’s budget expected to be released March 11)

To triangulate our FY25 ask, we considered several factors: First, we looked at the results of snapshot survey of our members intended to understand the “opportunity gap” – that is, the number of applications for programs vs. the number of spots available. The data showed clearly and compellingly that there is large unmet demand. The U.S. is engaging with only a fraction of highly qualified American and international exchange program candidates. More than 85% of demand for eight surveyed programs went unfilled in FY23, as funding was available for only 14% of applicants.   Second, rising costs and inflation have a significant impact on program implementation. We wanted to have a picture of what our funding level would look like if it at least kept pace with inflation. The Department of Labor Bureau of Labor Statistics’ inflation calculator shows that the current FY23 funding level of $777.5M, which was enacted in December 2022, one year later has the buying power of $803.6M, or a 3.4% increase. Third, we looked at the recent history of ECE funding, which has seen a 10.8% increase over the past 5 years: 

FY19-20	+4.9%
FY20-21	+0.6%
FY21-22	+3.1%
FY22-23	+1.9%
FY23-24	0.0% to +0.3% (assuming flat funding or the Senate’s proposed number)

The Working Group agreed that it’s reasonable to say that only in FY20 and FY22 have those increases (4.9% and 3.1%) allowed the programs to not lose ground and have some very modest growth. In other years, however, those small increases did not allow programs to keep pace with inflation and rising costs, let alone see growth. Given these factors, the group concluded, the Alliance will ask for $808.6 million for ECE programs in FY25, a 4% increase from the FY23 enacted level. This ask allows us to strongly advocate for exchange programs while acknowledging the tough budgetary and political environment we face. And a 4% funding increase would allow programs to keep pace, while also providing the opportunity to meet at least a small fraction of unmet demand for exchange programs. Increasing exchange funding would provide more opportunities for qualified Americans to participate in upskilling opportunities, as well as expand U.S. foreign policy effectiveness in critical regions. With more funding for exchange programs, the U.S. could: 

• Share exchange experiences with more qualified young Americans that help build their career skills and global abilities. 
• Take advantage of opportunities to engage more rising young leaders as Department of State exchange program alumni and citizen ambassadors, especially when other countries are expanding their investment in people-to-people exchanges. 

We look forward to delivering our ask to Congressional offices starting on March 7 with Advocacy Day and continuing into the spring as the FY25 “appropriations season” gets into full swing.  

FY24 Appropriations Recap and Outlook

With the end of the Fiscal Year quickly approaching on September 30, Congress is racing to finish its work on the FY24 appropriations bills before heading out on August recess next week.  

Both the House and Senate Appropriations Committees have completed their subcommittee and full committee markups of their respective State, Foreign Operations, and Related Programs (SFOPS) bills in recent weeks. Educational and cultural exchanges were funded at $700.95M (approx. 10% decrease) by the House bill and $779.5M (approx. 0.25% increase) by the Senate bill. See the chart below for more details and a comparison with the President’s budget request and current enacted level. 

Here are the key things you need to know: 

• We know from the details available that notable cuts in the House bill impact Professional and Cultural Exchanges, including the International Visitor Leadership Program. The bill also includes a slight decrease for Academic Programs, but outlines increases for Young Leaders Initiatives. 

• On the other hand, the Senate bill holds Professional and Cultural Exchanges steady, and provides increases to Exchanges Support and the American Spaces program. However, it also includes cuts to the Academic Programs topline.  

• The funding cuts in the House bill, while disappointing, are not unexpected given the change in majority, debt ceiling deal, and concessions made by Speaker McCarthy in his campaign for the role. We are heartened by the slight increase in the Senate bill, which is a win in this difficult climate.  

• There will be a challenging road ahead to find a compromise between these two bills. In the 11 legislative days after the upcoming August recess and before the end of the fiscal year, lawmakers must overcome not only the divide over funding in the bills, but also pressure from House Republicans for even more cuts and a desire to pass each of the twelve appropriations bills individually.  

These appropriations bills remind us of how important our collective advocacy was this cycle in avoiding severe cuts in this particularly tight funding environment. They also demonstrate the long journey to reach our funding goals and therefore, how we must keep up the pressure and not become complacent after the past number of years with steady increases.  

Resources: 

• House bill text (pg. 4 for ECE funding level), report (pg. 18 for detailed budget table), press release 

• Senate bill text (pg. 8 for ECE funding level), report (pg. 20 for detailed budget table), press release 

  FY23 Adjusted Enacted  FY24 Biden Administration Request  FY24 House Bill  FY24 Senate Bill  Total  777.5 M   783.7 M 700.95 M  779.5 M  Academic Programs  389,639  381,766  387,274  373,939  Fulbright Program  287,500  282,250  287,500  287,800  Madeleine K. Albright Young Women Leaders Program  1500  1,500    1,500  Global Academic Exchanges  63,981  62,702    63,981  Special Academic Exchanges  22,158  18,875  22,133  22,158  Benjamin Gilman International Scholarship Program  17,000  16,200  17,000  17,000  South Pacific Scholarships  1,000  1,000  1,000  1,000  Vietnam Education Foundation Act      2,500  2,500  Tibet Fund  675  700  675    Professional and Cultural Exchanges  227,500  222,515  185,759  227,500  International Visitor Program  105,000  102,627  100,151  105,000  Citizen Exchanges Program  115,000  113,388    115,000  Congress-Bundestag Exchange Program      4,125  4,125  Special Professional and Cultural Exchanges  7,000  6,500    7500  Ngwang Choephel Fellows  750  750  750  750  J. Christopher Stevens Virtual Exchange  6,000  5,000    6,000  Arctic Exchange Program  750  750  750  750  Special Initiatives    66,814  49,100  55,500  Young Leaders Initiatives  37,500  48,814  43,100  37,500  Countering State Disinformation and Pressure  12,000  12,000    12,000  Community Engagement Exchange Program  6,000  6,000    6,000  Pawel Adamowicz Exchange Program  1,000  1,000  1,000    Program and Performance  15,800  13,530    13,500  Exchanges Support  89,061  99,090    92,100  American Spaces  16,000  14,939    17,000 

Biden Administration’s FY24 Budget Request: Proposed Exchanges Funding Explained

The Fiscal Year 2024 (FY24) appropriations cycle is officially in full swing with the release of the Biden Administration’s proposed budget late last week. The President’s $6.8 trillion request, while unlikely to be enacted in the current divided Congress, presents a starting point for the negotiations to come.

The FY24 proposed budget includes $70.6 billion (an $8.9 billion increase compared to FY23) in discretionary non-emergency funding for the International Affairs Budget. As a portion of this larger international affairs funding, State Department Educational and Cultural Exchange (ECE) programs are budgeted at $783.7 million, a $6.2 million (0.8%) increase from the current FY23 enacted level of $777.5 million.

In reviewing the State Department’s Congressional Budget Justification (CBJ, pg. 57-61), there are three notable takeaways:

1. The proposed ECE budget has an overall increase, but the majority of flagship ECA programs include cuts.
   While this year’s topline request is approximately $6 million more than current funding, a closer look shows that it includes cuts across the board to key programs like Fulbright (-$2.25M), Gilman (-$800k), and IVLP (-$2.73M). See specific line items in the table below.

2. Majority of increased funding goes toward the Young Leaders Initiatives and Exchanges Support.
   The main areas of increased investment include the Young African Leader’s Initiative (+$5.1M), Young South-East Asian Leaders Initiative (+$6.2M), and Exchanges Support (+$10M). The CBJ notes that the additional funding for Exchanges Support is devoted to “the FY 2024 projected American Pay Raise, one new position to support YSEALI, IT modernization, and various working capital funds and other IT support charges.”

3. The language around programming focuses on competing with China and Russia, which is in line with the proposals for the International Affairs Budget as a whole.
   The justifications for both the Academic Programs and Professional and Cultural Exchanges requests highlight that funding in these areas is needed to help the U.S. compete with China and Russia in attracting international students, as well as presenting alternatives to their influence vis-à-vis sharing American values around the world. This emphasis fits into the larger picture of the Administration using the resources proposed in the International Affairs Budget as a means to counter Chinese global influence and support Eastern Europe against Russian authoritarianism, which is well outlined in USGLC’s budget analysis.

While an increased topline request for exchanges is positive, the proposed cuts to ECA’s flagship programs referenced above would hinder the ability of exchange programs to meet the goals set by the Administration.

As a result, the Administration's request reinforces the importance of our continued advocacy efforts during the FY24 cycle. In our advocacy activities over the coming weeks and months, we will continue to promote our community’s request for ECE funding at $855 million.