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December 11, 2006

MCA Reauthorization Bill Killed

A long, hard-fought battle by the House International Relations Committee to pass a compromise bill to reauthorize the Millennium Challenge Account came to an abrupt halt on Friday when it could not garner the required support of the Senate Foreign Relations Committee. A mixed message on why, but here's some of the buzz I heard:

1. The MCA didn't technically need to be reauthorized to continue operations and, what with all the more pressing issues.... A credible argument -- in fact, the MCA was never purely authorized, rather it has been authorized through appropriations bills -- but unfortunate. There were some very important amendments in the reauthorization bill that made good development effectiveness sense, which I'll cover below.
2. There was a concerted effort to stop the bad practice of last minute tag-ons to other pressing, and often contentious, bills. (Given the heavy docket, the HIRC had contemplated adding the bill onto either the India conference bill or the State Department Authorization bill. ) Partially-credible; it would be great to see such discipline on the Hill, but c'mon, this has been standard operating procedure for years.
3. Members opposed the bill language changing the purpose of the MCA assistance from promoting "economic growth and the elimination of extreme poverty" to "the reduction of poverty through sustainable, broad-based economic growth." I think we have a winner! This language had been the source of much partisan debate about the proposed amendment.

Why should we care about this bill's failure to proceed if the MCA didn't require it to continue it's operations? In my view, there were two reasons to care:
1. The bill contained language that would allow for concurrent and longer-term compacts, currently prohibited by the MCA Act of 2003. Concurrent compacts would allow countries to better sequence short-term and medium-term reforms and measure progress accordingly. Longer-term compacts allow countries to sequence short-term and longer-term activities (e.g. building roads vs. graduating kids) and measure progress accordingly. Without the ability to have concurrent and longer-term compacts, I fear we will see trends toward "go-for-it-all-while-you-can" compacts.
2. The intent underlying the changed purpose language came from a sense that, based on experience to date, the MCA was not evaluating the poverty reduction impact of its investments to the same degree it was evaluating their economic rate of return. The focus of the MCA should continue to be economic growth as the key driver of development, however, better diagnostics on the distribution of that growth should feature more prominently in country compact and MCA funding decisions.

All is not entirely lost, although it doesn't look good either. As in past years, amendments can be made through the annual Appropriations Bill. The complication this year is that it looks like we're headed toward a Continiuing Resolution which, for the MCA, likely means low-level funding and no amendments.

What do you know? What do you think? Join in the discussion.

Posted by Sheila Herrling at December 11, 2006 01:23 PM

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MCC is a fiasco. However, concept is good. Bush managed to mess it up from the get go. by trying to hook in all the busuiess interests and business cronies he could. The first management team almost killed it. But they turned around a bit and started to get their act together but I still have my doubts that if it will be far enough along now that the Republicans are turned out of Congress to show success or any real sustainability - it is yet to be entrenched. The democrats made it clear that they wanted to shut it down ... and the only hope was that it would have enough momentum and success that they couldn't do that.

Posted by: Margarita Sarishvili at December 13, 2006 03:52 AM

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