International Labor Affairs Bureau

ILAB: Comparison of FY 2001 and FY 2005 Actual Appropriations
(Current Dollars and Real Dollars) and FY 2006 Budget Request
(U.S. $ millions)

The International Labor Affairs Bureau (ILAB) is responsible for the U.S. Department of Labor's key overseas initiatives on such issues as protecting workers' rights abroad, HIV/AIDS and international labor. For FY 2006, the administration is proposing to fund ILAB at only $12 million, compared with $93.2 million appropriated for 2005. This translates into a reduction of more than $80 million, or a real dollar cut of 87 percent. It is a whopping 93 percent cut in real dollars from ILAB's FY 2001 appropriation.

The Bush FY 2006 budget would devastate ILAB, eliminating or drastically cutting vital programs, including:

The Bush administration has sought major cuts in ILAB funding in every budget it has submitted to Congress. In recognition of ILAB's central role in improving living standards for workers around the world, Congress routinely has funded ILAB at levels well above the president's requests, though still significantly below the funding levels ILAB had achieved before Bush took office. The administration's persistent efforts to gut the program have succeeded in netting a major reduction in funding (a 42.5 percent decrease in real terms between FY 2001 and FY 2005), and the requests send a powerful message about the White House's indifference to international workers' rights.

This year's ILAB defunding proposal is troubling particularly in the context of ongoing efforts by the administration to pass a new free trade agreement with Central America and the Dominican Republic. U.S. Trade Representative Robert Zoellick has assured members of Congress that the agreement's weak labor provisions and the egregious labor rights records of the countries in the region can be mitigated by aggressive bilateral labor rights assistance from the United States. But if overall labor assistance funding is gutted as severely as the administration proposes, it will be impossible to even maintain labor assistance to the region, much less increase funding to the levels promised by the free trade agreement's promoters.

International Humanitarian and Development Aid

International Development Aid: Comparison of FY 2004 and FY 2005
Actual Appropriation (Current and Real Dollars) and FY 2006 Budget Request
(U.S. $ billion)

* "Development Assistance" includes development assistance, child survival and disease programs; contributions to international organizations; and other development and humanitarian assistance. It does not include money for the reconstruction of Iraq or disaster relief. Each year, $1 billion or more of the funding in these programs goes toward bilateral assistance for HIV/AIDS, and it is included in the administration's total amount of overseas HIV/AIDS funding.

The administration's FY 2006 budget calls for increased funding to respond to the world's HIV/AIDS crisis and to boost international development assistance available to poor countries through the Millennium Challenge Account. While these increases are welcome, they fail to meet previous administration promises and they fall far short of what is needed to effectively combat HIV/AIDS and reduce poverty around the world.

As America's workers struggle to compete in a world with rising inequality and persistent poverty, they are forced in a desperate race to the bottom with workers in other countries who must accept poverty wages to produce for the world's wealthiest corporations. At the same time, poor countries trapped in debt are pressured to export more and more to the U.S. market to survive, even further undercutting American workers and firms. The U.S. government must see international development aid not just as a charitable contribution, but as a fundamental investment in the health of the global economy and the long-term sustainability of our own economy. As we help poor countries on to a path toward sustainable and equitable growth, we not only will fulfill our moral obligations as a nation—we also will enhance our own economic security and begin to level the playing field for America's workers.

Fighting Global HIV/AIDS
The administration's initiative to combat the international HIV/AIDS pandemic was announced in President Bush's State of the Union speech on Jan. 28, 2003. The president pledged to triple U.S. assistance on global HIV/AIDS to $15 billion over five years, making a dramatic commitment to U.S. leadership in this vital battle. Assistance to confront HIV/AIDS is urgently needed: the UN estimates that every day 6,000 people die from AIDS and 8,200 more people are infected. While the commitment of $15 billion was welcome, global HIV/AIDS activists estimate that three times this amount may be needed from the United States to make a real dent in the HIV/AIDS pandemic. Furthermore, directing a much larger portion of this funding to the UN's Global Fund to Fight AIDS, Tuberculosis and Malaria would greatly improve coordination and effectiveness of global assistance to combat the HIV/AIDS crisis.

The administration planned to backload the $10 billion in new funding for the global HIV/AIDS fight, and the first two years of funding for the initiative reflected that decision by falling short of the $3 billion a year needed to reach $15 billion in five years. This year's request for $3.2 billion is a welcome step in the right direction—but more can be done.

Unfortunately, very little of the new money is channeled through the Global Fund to Fight AIDS, Tuberculosis and Malaria. The fund can coordinate new AIDS spending among various donor countries, avoiding inefficient overlap in spending. It also can disburse funds more quickly than most bilateral aid programs and already is set up to distribute money broadly to the countries with the highest-quality projects to combat the disease. In 2005, it is estimated that the global fund will need $3.6 billion from all sources to continue its mission, with $1.2 billion coming from the United States. Yet less than a third of this amount, or $350 million, actually was approved for FY 2005. The administration's FY 2006 budget would cut back again from that amount, contributing only $300 million to the global fund in FY 2006. This is a 48 percent cut from the amount appropriated in 2004 in real terms.

Millennium Challenge Account
The administration proposed the Millennium Challenge Account (MCA) in 2002 to provide a framework for increasing U.S. spending on development aid by $5 billion a year (or 50 percent of 2002 levels) by 2006. While welcome, the proposed additional funding was only a partial step in the right direction. The UN has called on wealthy nations to give 0.7 percent of their Gross Domestic Product to international development assistance. The United States is farther from this goal than any other industrial nation, contributing only 0.15 percent of its GDP to overseas development assistance. Full funding of the MCA would bring us closer to meeting the UN target, though we still would be far behind other countries.

Unfortunately, the administration is failing to meet even its own modest goals for funding increases included in the original MCA proposal. In the 2004 and 2005 budgets, and again in the 2006 budget request, the administration consistently has underfunded its premiere development program. The 2006 request, though an increase over prior years on the surface, actually falls the farthest short of the administration's stated annual goals. The administration originally pledged to provide $5 billion to the MCA in 2004, but its budget only requests 60 percent of that, or $3 billion.

In addition, there are a number of concerns about the conditions that will be attached to this aid. While guarantees for human rights, safeguards against corruption and priorities for health and education spending are important criteria to consider in allocating aid, the administration is including other criteria in its MCA relating to free market economic policies that are tied less clearly to sound development strategies and may be harder for worthy countries to meet.

Other Development Accounts
Finally, and potentially most worrisome, is the drain that both the HIV/AIDS initiative and the MCA may be placing on traditional development accounts administered by the U.S. Agency for International Development, such as child survival and health programs. These programs, and others included in the "Development Assistance" category, are cut significantly in the president's FY 2006 budget. In real terms these accounts would receive 12 percent less than they did in FY 2005 and 26 percent less than they did in FY 2004. This cut violates the administration's pledges on both the HIV/AIDS and MCA initiatives, which were touted as new programs that would be funded on top of and in addition to existing aid programs. Instead, funding in traditional programs is falling and funding in the new programs is far less than promised.

The United States still is failing to meet its international commitments on development aid. With 3.7 billion people living on less than $2 a day, 300 million children living in hunger and tens of millions of women and children infected with HIV/ADS around the world, the United States cannot afford to skimp on aid that can save lives, end disease and reduce hunger and poverty