Budget-Cutting Process Reveals U.S. Overpaid UN by Millions for Its Share of Peacekeeping Expenses

EXCLUSIVE: The United States, by far the leading contributor to the United Nations, overpaid its share of the U.N. peacekeeping budget for 2010-2011, but budget-cutters in Congress did not learn about the full extent of the credits in the U.S.’s favor until February 2011, during the battle with the Obama administration over 2011 budget cuts, Fox News has learned.

“We didn’t know we had a lot of these credits until we asked about them,” said one congressional source, describing the budget cutting process. “At least we’ve taken away the ability of the administration and the U.N. to accumulate them.”

Peacekeeping savings, including the overpayments, amount to $286.7 million—more than three-quarters of $377 million in cuts to various U.N. payments that are included in the controversial $38 billion in 2011 budget reductions that Congress approved on Thursday.

The $377 million in U.N. cuts is a comparative drop in the bucket compared to the roughly $6.35 billion that the U.S. sent to the U.N. in 2009, according to the last comprehensive set of figures compiled by the Obama Administration.

The reduction is likely to be even smaller in comparison with overall 2010 figures on U.S. contributions to the U.N. after they are finally compiled by the White House. Last year, that happened in June.

Even so, supporters of congressional belt-tightening are hailing the U.N. spending reduction as an important first move in restraining the steep climb in U.S. spending to support the global organization, where the U.S. is far and away the biggest contributor—and also an important restraint on the Obama Administration’s open-handed generosity.

How generous? The U.N. savings figures offer an interesting example, especially in peacekeeping, where the U.S. already picks up $2.1 billion-- 27 percent of a tab that is expected to reach $7.8 billion-- in the 12 months ending in June, 2011.

About $156.8 million of the congressional cutbacks are actually the return of overpayments made to current peacekeeping accounts. Another $86 million is money due back to the U.S. from peacekeeping operations that have already gone out of business. The remainder of that sub-total comes from U.S. overpayments for U.N. peacekeeping stockpiles that are largely kept in Brindisi, Italy.

Overall, the reductions amount to a shrinkage of about 11 percent in U.S. peacekeeping contributions.

The peacekeeping surpluses are not the only wads of loose cash that the U.S. has allowed to accumulate in its U.N. accounts. The Obama Administration last summer was suddenly able to allow the use of $100 million, part of the surplus in another U.N. account, to upgrade security at the U.N. headquarters complex in New York City, currently under renovation.

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According to the same sources, the Administration will report monthly to Congress on the amounts being held in the peacekeeping accounts.

From the congressional point of view, the budget-cutters argue the new cuts are real, since the money was not only going to be spent, but would otherwise have been built into the baseline of future U.N. spending.

From the Administration’s point of view, however, the existence of the surpluses allowed it to agree to cuts without going into arrears on its binding commitments to pay 27 percent of peacekeeping costs and 22 per cent of the U.N. Secretariat’s “core” or “regular” budget, which amounts to about $5.2 billion for the 2010-2011 biennium.

That “regular” budget, however, is only the tip of a U.N. spending iceberg, since alongside the $5.2 billion, the U.N. also intends to use about $9.4 billion in “extra-budgetary” or voluntary spending—where the U.S. contribution is not fixed, and is much harder to determine.

But one thing is sure: the regular budget has been growing fast, right alongside the so-called “voluntary budget.”

So have the budgets of the growing array of other U.N. funds, agencies, and programs, where the U.S. is usually one of the biggest, if not the biggest, voluntary contributors. One example: the U.N. High Commissioner for Refugees, which grew its budget by about 90 percent between 2008 and 2010, to $3.3 billion.

The U.S. share in 2010: $712 million, bigger than the next eight contributors combined.

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Only $641.3 million for 2009 is included for UNHCR in the $6.347 billion figure for U.N. donations compiled last year by the Obama Administration. Meaning, for this item alone, the 2010 total will turn out to be $70.7 million higher.

In the bigger battles ahead over the 2012 U.S. budget, these and similar items may come under scrutiny. So, perhaps, will the relatively small amounts paid under U.N. mandatory assessments by some of the world’s fastest-growing economies.

China, for example, which held foreign exchange reserves of $2.62 trillion in December, 2010, contributes 4 percent to U.N. peacekeeping, vs. 27 percent for the U.S.

India, with a quarter-trillion in foreign exchange reserves, contributes 0.1 percent. Saudi Arabia contributes less than 0.5 percent—the same level as near bankrupt Ireland.

Click here to read the Peacekeeping Assessments document.

The same goes for the “regular” U.N. Secretariat budget, where China pays a little more than 3 percent, vs. the U.S. 22 percent, India pays 0.5 percent, Russia pays 1.6 percent, and Saudi Arabia 0.83 percent (this time, ahead of Ireland, which is just under 0.5 percent.)

Click here to read the Regular Budget Assessments document.

George Russell is executive editor of Fox News.