In a letter last week to Minnesota Representative Betty McCollum, Peace Corps Director Ron Tschetter said the Peace Corps doesn't anticipate that its funding bill will pass during this session, so the agency is trying to work within its current budget. It is also facing an estimated $8.7 million loss in fiscal year 2008 from the weakening dollar, and the tight budget could decrease the number of volunteers worldwide by up to 5 percent, or 400 people.
"I would also like to take this opportunity to thank you again for your continuing support of the Peace Corps, particularly during the FY 2009 budget appropriations process. While I was certainly pleased to see the House Appropriations Subcommittee on State, Foreign Operations, and Related Programs provided the Peace Corps with the President's request ($343.5 million), it seems unlikely that many, if any, of the FY 2009 appropriations bills will be sent to the President before the end of this Congress. As such, the Peace Corps must prepare for a continuing resolution, which means the agency will likely be operating under its current FY 2008 budget of $330.8 million."
"Under a continuing resolution, the budgetary realities confronting the agency in FY 2009 appear especially daunting. Without full funding in FY 2009, we anticipate a significant impact on our capability to place more Volunteers overseas and to increase country programs. Furthermore, as the agency shared with Chairwoman Lowey's staff before the Subcommittee's consideration of the bill, the weakening of the dollar overseas in tandem with spiraling costs of basic commodities, both domestically and internationally, have materially reduced our available resources and spending power. We currently estimate foreign currency losses of almost $8.7 million for FY 2008. Tough budgetary decisions must be made now in order to ensure a financially healthy agency next fiscal year."
Tschetter sent the following message to senior domestic and overseas staff in June:
"Next year is going to be challenging financially, as well, and we have kept the FY 2009 budget in mind and taken steps to reduce Peace Corps' base operating budget in order to strengthen our position moving forward. We need to assume we will be operating under an extended continuing resolution at the level of our current appropriation well into the next fiscal year. This environment shapes the financial decisions I will be making as FY 2009 budget marks are determined in the next few weeks."
"As we prepare for FY 2009, it is important for us to remember that our core business is supporting the work of our Volunteers. The office budget marks will be lower than the FY2008 approved budgets, so we are all going to have to ask ourselves whether or not our financial decisions are in the best interest of our Volunteers. All of you should begin to streamline your operations in the last quarter of FY 2008 in preparation for FY 2009. I have dealt with many tight budgets in my career, and I know this is not easy. Each of you will have to work within a lower budget mark while maintaining mission-critical activities, such as postponing the filling of vacant positions, curbing travel for both you and your staff, and/or holding off on large expenditures."
"I want to encourage you to be creative in looking at ways to save money. Discuss ideas within your offices and talk with Peace Corps colleagues whom you support to determine how you can best meet their needs in a more cost-effective manner. We are all fortunate to be a part of a remarkable organization that has seen solid growth over the past six years. We continue to play an important role in spreading world peace and friendship around the world. And just as we ask our Volunteers to be flexible and creative in carrying out their work, now it is time for us to do the same. I believe the Peace Corps is one of the best values the American taxpayers receives, and we owe it to them to continue our operations with sound fiscal management and a firm commitment to supporting our Volunteers, so that the agency remains in a healthy financial position not only in FY 2009, but beyond."
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