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.