Brett Schaefer: US just part of UN budget woes ?— here's the rest of the story

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Last week U.N. Secretary-General António Guterres warned the member states about a “financial crisis” in the organization’s regular budget. The budget crunch, he said, had forced him to take “extraordinary measures” to curb costs, including eliminating non-essential travel, canceling some meetings and limiting support of meetings outside of normal hours.

News articles were quick to blame the Trump administration for this predicament. The truth is more complicated.

About a third of all U.N. members are behind in their payments to the regular budget. While some of those in arrears are significant contributors, most are small contributors. For instance, Somalia has paid virtually nothing to the U.N. regular budget since 1989, but its 0.001 percent assessment of the regular budget for 2018 and 2019 is so small, less than $30,000, that Somalia’s annual failure to pay is barely noticed. Even taken together, the failure of these small contributors to pay is not a huge inconvenience for the U.N.

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By contrast, when a large contributor like the U.S., which is assessed 22 percent of the regular budget, is slow to pay, it forces the organization to adjust.  However, this situation is hardly new. The U.S. began paying its U.N. assessment in the last quarter of the year in 1985. In other words, the U.N. has known that the U.S. will not pay its dues until October or November — and has adjusted its budgeting practices accordingly — for over 30 years.

So what has changed? Several things.

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First, the U.S. payment will be later than usual this year. That’s because Congress has yet to pass a budget appropriation for fiscal year 2020. The U.S. is currently operating under a continuing resolution that expires on Nov. 21, so instead of having the U.S. assessment appropriated in its entirety, only the proportionate amount is available for payment. Making matters worse, the continuing resolution is of shorter duration than in previous years, which means less money is available.

In addition, U.S. law requires that the State Department withhold 15 percent of its U.N. regular budget funding until the secretary of State determines and reports that the organization has met specified accountability and whistleblower-protection standards. The State Department has not yet sent that report to Congress, so about $90 million owed from last year remains withheld. Similarly, the State Department will withhold about $100 million owed this year until the secretary of State reports his determination to Congress next year.

Adding to the stress is the fact that the U.N. increased its regular two-year budget by $415 million last December. A large chunk of the increase was to come from the U.S., whose assigned payments rose from $594 million in 2018 to $684 million in 2019. The U.N. has been spending at this higher rate — i.e., burning through funds faster — at the same time U.S. payments have been delayed.

The U.S. is?correct?to insist, as it has for decades, that no one nation should pay more than 25 percent of the U.N.?However, until the other member states agree to adjust?the peacekeeping scale of assessment, the financial strain will continue.??

Second, several other significant contributors are in arrears, including Brazil (2.948 percent of the budget), Mexico (1.292 percent), Argentina (0.915 percent), Venezuela (0.728 percent), Israel (0.490 percent), and Iran (0.398 percent). Their payment delays, combined with that of the U.S., have made the situation more acute than in past years.

Third, to bridge the gap until it receives late payments, the U.N. has in recent years dipped into a cash reserve from closed peacekeeping operations. However, this reserve also helps bridge peacekeeping costs that are underfunded due to U.S. law that limits U.S. payments for U.N. peacekeeping to 25 percent instead of the 27.8912 percent that the U.N. charges America.

The U.S. is correct to insist, as it has for decades, that no one nation should pay more than 25 percent of the U.N. However, until the other member states agree to adjust the peacekeeping scale of assessment, the financial strain will continue.

In short, the U.N. financial predicament is real, but the reasons are multiple as are the solutions.

First, although the Trump administration has done an admirable job of trimming fat from the U.N. peacekeeping budget, the organization’s regular budget continues to grow. This growth continues despite the secretary-general’s reform agenda, which promised savings and efficiency gains that have not materialized. Indeed, the proposed regular budget for 2020 is $2.94 billion, which is higher than the annualized budget approved last December.

Similarly, parts of the U.N. budget are profligate. For instance, the secretary-general announced eliminating non-essential travel during the current financial crunch, but exorbitant travel expenses have long characterized the U.N. Despite some changes, a number of U.N. employees and member-state officials still travel first class on the U.N. dime. That should change.

Second, in response to news articles about the U.N. financial crisis, President Trump tweeted, “So make all Member Countries pay, not just the United States!” Most other U.N. member states do pay their assessments to the U.N., but the president has a point that the payments differ greatly.

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The least assessed countries owe less than $37,000 per year for the U.N. regular and peacekeeping budgets, while the U.S. is charged over $2.5 billion. The U.S. should be engaging other nations right now to adjust the scale of assessments — particularly the peacekeeping scale of assessments — to distribute costs more equitably and to improve incentives for accountability and oversight by the member states.

Finally, Congress needs to focus on its fundamental responsibility to pass appropriation and authorization bills on time. Until the U.S. returns to a normal budgeting process, U.S. payments to the U.N. will face the same fiscal constraints that bedevil the rest of the U.S. government.

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