In his State of the Union address, President Obama outlined a new “National Export Initiative” discussed in a previous post. Scott Graves, Legislative Aide in Rep. Mike Conaway’s (R-TX) office, sent me a few figures out of the proposed budget relating to this issue. According to the budget document, a total of $534 million additional money is being budgeted to the International Trade Administration (a 20% increase), so it can “help launch the National Export Initiative.” The document goes on further to say:
ITA will strengthen its efforts to promote exports from small businesses, help enforce free trade agreements with other nations, fight to eliminate barriers to sales of U.S. products, and improve competitiveness of U.S. firms.
…whatever that means. Of course, the budget document is an outline that must be fleshed out over time. But, as I stated in my previous post, this issue deserve some hard questioning because of the very tenuous relationship between government action and increased exports.
More specifically, the USDA-Foreign Agricultural Service budget is more telling. Note the graphic to the right. Note that the base funding for 2011 is relatively flat (the blue and green bars).
The orange, red, and purple bars are new. The purple area (marked A) is a $10 million increase in the export promotion activities of FAS. The USDA budget (p. 52) says this increase is “to expand FAS exporter assistance and in-country promotion activities and to meet higher operating costs at FAS overseas posts. The last one makes some sense given the weakness of the U.S. dollar (higher costs in overseas currencies). The first two, however, are a bit nebulous. The orange section (marked B) represents a $34.5 million increase that is used solely to increase FAS salaries and expand expense accounts in the foreign market development program. The red section (marked C) is a $9 million increase in technical assistance for specialty crops program solely for salaries and expense accounts. So, of the $54 million increase for the “National Export Initiative” at USDA, 81% is purely to increase salaries and expense accounts for FAS personnel.
Now, don’t get me wrong. I know many good people at FAS, and FAS employees are notoriously underpaid (especially the foreign attaches in dangerous countries). But, one would be hard-pressed to see how salary increases can be called a new export initiative. I certainly do not mind increasing their salaries and adjusting overseas operating budgets to reflect a weaker dollar, but that should not be considered spending on a new initiative that will have little impact on U.S. exports.