The Administration’s Budget for Global Poverty and HIV/ AIDS: How Do the Numbers Stack Up?

Lael Brainard
Lael Brainard National Economic Advisor - National Economic Council

February 24, 2003

Much is at stake as key players in the fight against global poverty scrutinize the Administration’s budget for fiscal year 2004. The President has promised major increases in funding for the fight against global poverty—through its Millennium Challenge Account—and HIV/AIDs. This short analysis examines how the Administration’s proposed funding compares with recent funding levels, using a range of possible “baselines.” It also examines how the Administration’s proposed funding levels for the Millennium Challenge Account and HIV/AIDS compare with the levels announced when the proposals were first put forward. The primary focus of this analysis is on the fiscal 2004 levels, but it also examines the levels proposed for future years.

In short, this analysis finds that while the Administration would provide significant budget increases for global poverty and HIV/AIDS, and deserves credit for its heightened responsiveness to these critical challenges, the budget proposals nonetheless fall short of the Administration’s promises. The proposed level of funding for the Millennium Challenge Account for 2004 is 20 percent below the Administration’s own illustrative level of last summer. (Further, in what OMB officials have indicated privately is an error, the budget proposes only $1.35 billion for fiscal 2006, about one-fourth of the $5 billion annual level the Administration promised).

With regard to HIV/AIDS, the Administration budget includes $450 million for its new Global AIDS Initiative in 2004 and $300 million for Mother to Child Transmission. These proposals are important and welcome. However, the Administration’s claims of a $1 billion increase in FY04 and a $10 billion cumulative increase are relative to an unrealistically low baseline. A more realistic baseline suggests the net increase for fiscal 2004 is closer to $576 million, and the cumulative 5-year increase would likewise be lower.