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Silent Partner

Why deep budget cuts at the State Department may be an existential matter for Rex Tillerson.

Published on March 13, 2017

Rex Tillerson was an unorthodox choice for U.S. secretary of state, and it was understood well before Donald Trump’s inauguration that he would likely have a tough row to hoe. His background as the chief executive of ExxonMobil gave him considerable management experience and extensive high-level exposure to strategically important regions such as the Middle East and Eurasia. However, Tillerson also entered office lacking a relationship with a most mercurial president.

Questions are already being raised about his handling of the unique rough-and-tumble capital media microscope and his navigation of a particularly chaotic interagency process. What’s more, he is diplomat-in-chief in an administration whose contempt for conventional diplomacy, skepticism toward traditional alliances, and trade protectionism has cut sharply against the institutional inertia of the bureaucracy he now leads, and perhaps against his own instincts.

As the Trump administration began rolling out the broad contours of its 2018 federal budget, Tillerson’s task became only more difficult. The White House budget office floated proposed cuts to Tillerson’s State Department budget (which also includes the U.S. Agency for International Development) amounting to an astounding 37 percent, split between operational costs and the foreign assistance portfolio. These account for around one-third and two-thirds, respectively, of the department’s roughly $50 billion annual budget.

Anyone who has worked at the State Department understands there is scope for meaningful efficiency improvements and cost savings by reducing bureaucratic redundancies. However, this is a process that needs to be done with a scalpel, not a sledgehammer. A 37 percent budget reduction would surely result in an American diplomatic corps with a significantly reduced global footprint and less capacity to support American interests abroad.

To understand the depth of Tillerson’s woes, consider the magnitude of cutting $13 billion out of the roughly $36 billion annual foreign assistance budget. If we take the State Department’s actual fiscal year 2016 expenditures, we would see that the Trump administration could eliminate the Peace Corps ($410 million) and the Millennium Challenge Account ($900 million), and cut all civilian disaster relief ($2.8 billion), all development assistance ($2.8 billion), and all economic support ($4.3 billion) worldwide. This would massively undermine America’s soft power and global public diplomacy, jeopardize tens of thousands of lives and impact millions more. It would also cripple America’s capacity to respond to complex global crises such as the 2004 tsunami in Southeast Asia or the 2014 Ebola outbreak in West Africa. And it would still fall $2 billion short of the posited cuts by the Trump administration.

The reaction to the budget proposal from Capitol Hill was swift. Responses from key lawmakers varied from “dead on arrival” to “foreign aid … is critical to our national security.” And that’s just from the Republicans.

Rex Tillerson has not publicly responded. An internal State Department memo has reportedly stated that “[Tillerson] is deeply concerned about the timing and the size of the reductions and he will appeal to rationalize and reduce our size and structure in a matter that makes us leaner and more efficient.”

Another report suggested that Tillerson had “agreed in principle” to the budget cuts, but seeks to have them spread out over a three-year period, beginning with a 20 percent reduction in year one. Whatever is happening behind closed doors, there seems to be a growing sentiment among many of the rank-and-file at the State Department that their boss has been outflanked, or worse.

Tillerson has made no apparent effort to cultivate a public image—the State Department went 47 days before holding its first press briefing and the secretary has decided not to take the traveling press corps with him on his first trip to Asia. However, behind the scenes, Tillerson is said to be somewhat more active, working the phones and engaging, for example, in the administration’s nascent Syria and Yemen efforts. Foreign diplomats report that Tillerson has been well-prepared and has participated substantively in early meetings with visiting ministers.

Tillerson is apparently cautious by nature. He seems to want to ease into his role as secretary and avoid the costly public gaffes that can so easily bedevil senior officials in Washington, particularly given the intense scrutiny the Trump administration is facing. After the hyperactivity of his predecessor, there may be a logic to leaning back and making foreign diplomats come to him as a means of deploying American diplomatic leverage.

But this is not a moment for subtlety, and time is not Tillerson’s friend. His public silence on Trump’s draconian budget proposal hasn’t won him loyalty within the capable bureaucracy he commands. Nearly two months into his tenure, he has neither articulated a coherent worldview nor indicated his department’s diplomatic or institutional priorities.

Meanwhile, the White House is not waiting for the dust to settle. Clearly, Steve Bannon, Trump’s top strategic advisor, means what he says when he speaks of “deconstructing the administrative state.” The White House surely understands that the cuts to the State Department won’t be on a scale approaching 37 percent, amid bipartisan Congressional resistance. But the proposal has redefined the terms of the debate, placed supporters of American diplomacy on the defensive, and increased the likelihood that the Trump administration will leave behind a State Department that is significantly less capable than it is today. Even cuts of 10–15 percent would have a dramatic impact.

Texas oilmen are hardly known as pushovers, and now would be a good time at the State Department for some of the tenacity that Tillerson surely exhibited during his long rise at ExxonMobil. Engage with Syria or Russia desk officers, and word will quickly get around the State Department that Tillerson values their service. Let it be known that Tillerson is consulting with Senate appropriators, and it will be understood that he isn’t taking a 37 percent haircut lying down. Cultivate relations with fellow cabinet members and the press, and he can begin getting more sympathetic messages out amidst the radio silence from Foggy Bottom.

Three months ago, Tillerson was at the twilight of an extraordinarily successful and lucrative career as the chief executive of one of the world’s largest companies. He now risks becoming the man on whose watch one of America’s most important institutions was permanently damaged.

Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.