Tillerson Looks To Wring $10 Billion In Savings From State Department Restructuring

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Will Racke Immigration and Foreign Policy Reporter
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Secretary of State Rex Tillerson says his redesign of the Department of State will generate billions of dollars in cost savings, primarily through a realignment of U.S. foreign aid programs.

In an email sent Wednesday to State Department employees, Tillerson outlined the Department restructuring plan he intends to submit to the White House Office of Management and Budget this week.

The email, a copy of which was obtained by Politico, describes a variety of changes to State’s bureaucracy and internal programs, including updates of department IT systems, more flexible programs for families, and folding special envoys into permanent bureaus. But the most significant proposal calls for eliminating overlapping policies and programs at State and the U.S. Agency for International Development (USAID).

Though Tillerson stopped short of proposing a merger between State and USAID, he did suggest that doing away with redundancies between the two agencies would make them more cost-effective. Improved coordination between State and USAID can save up to $10 billion over five years, he said.

“Our redesign plan seeks to align State and USAID foreign assistance and policy strategies, capabilities, and resources to execute foreign policy priorities more effectively,” Tillerson wrote. “It includes several ambitious proposals with investments that will generate a minimum deliverable of 10 percent [$5B] in efficiencies relative to current [FY2017] spending over the next five years, with an aspirational general interest target of up to 20 percent [$10B].”

Although it is subject to foreign policy guidance from the secretary of state, USAID is an independent agency with its own congressional appropriations and statutory authority to administer foreign aid programs. By law, USAID is the government primary clearinghouse for civilian foreign aid, but its programs often mirror initiatives by State and other foreign affairs agencies.

Tillerson is reportedly considering a plan to bring USAID under the fold of the State Department, a move that would require approval from lawmakers already wary of the Trump administration’s plan to reduce spending on U.S. foreign affairs agencies by about a third. In a direct rebuke of the administration’s proposal, the Senate Appropriations Committee passed a bill last week that gave State and related agencies $51 billion for Fiscal Year 2018, which matched recent funding levels.

Tillerson has come under fire from lawmakers and foreign policy observers for agreeing to slash costs and close offices at State, moves they say diminish the Department and marginalize its diplomatic talent.

Still, parts of Tillerson’s restructuring plan have garnered praise from former diplomats, especially his effort to pare down the number of special envoys in the State Department.

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