FPI Analysis: In Defense of America’s International Affairs Budget

February 24, 2012

“We are a global power, with global interests and global responsibilities.  We can ignore but we cannot escape this basic truth, and any retreat from our responsibilities endangers both our national ideals and our national interests.”  —President Ronald Reagan, October 21, 1987

If the United States is to remain a global power, then it must sustain investments in diplomacy and foreign aid commensurate to its national security and international interests.  While it is important for elected officials in Washington to place the country on a sustainable fiscal path, slashing America’s international affairs budget is not the solution.  Rather, to do so would be a mistake of epic proportions that would irreparably damage U.S strategic and economic interests abroad.  Instead, the President and Congress should focus on reforming the international affairs budget, especially to ensure that U.S. foreign aid is used more efficiently.
 
U.S. spending on international affairs has been a frequent target of budget-cutting lawmakers.  In December 2011, Congress approved legislation that reduced fiscal year (FY) 2012 base-level funding to the State Department, foreign aid, and related programs by 9.1 percent relative to FY 2011.  Some Republicans had called on Congress to implement even deeper cuts.  President Obama’s budget proposal for FY 2013, however, attempts to reverse the trend, funding America’s international affairs budget at $56.2 billion—an increase of roughly 2.4 percent above enacted FY 2012 levels.  Although this allocation will bolster U.S. diplomatic and strategic capabilities abroad, it will likely face opposition from lawmakers on Capitol Hill in the coming months. 
 
It is short-sighted and factually incorrect, however, to believe that drastically cutting—or even eliminating, as some have argued—America’s international affairs budget would fix Washington’s growing fiscal problems.  Contrary to prevailing wisdom, spending on international affairs comprises only a small fraction—less than 1 percent—of America’s $3.8 trillion federal budget. That’s why Senator Marco Rubio (R-FL) said at the Foreign Policy Initiative’s 2011 Forum in Washington, D.C.:

“… there’s this urban legend out there that somehow, if we just eliminated foreign aid, we’d have all the money we need to wipe out our debt.  Foreign aid is very small.  It’s a significant number of dollars, no doubt about it, and one dollar of waste is too much.  But if you wiped out all the foreign aid in the world, you wouldn’t notice it in terms of the debt conversation.”

Indeed, the Director of the Congressional Budget Office, Douglas Elmendorf, has stated that America’s fiscal problems cannot be addressed by simply tackling discretionary spending.  Mandatory entitlement programs, by themselves, constitute a growing share—nearly 60% today—of the total federal budget. 
 
The United States plays an active and critical role in international affairs, with economic and security interests that span the globe.  But in this increasingly interconnected world, threats to U.S. national security emanate not just from hostile regional powers, but also from failing states, international criminal groups, and global pandemics located thousands of miles away.  Indeed, the terrorist attacks of September 11, 2001, were planned and organized by al-Qaeda leaders in landlocked Afghanistan. 
 
In the wake of successful counterinsurgency operations in Afghanistan and Iraq, terrorist groups associated with al-Qaeda have sought sanctuary inside failing states like Somalia and Yemen, and lawless uncontrollable areas of Pakistan.  The United States maintains forward-deployed military bases and forces around the world to counter these threats and advance America’s values and interests.  Drone bases on the Arabian Peninsula conduct targeted aerial strikes to eliminate high-level al-Qaeda leaders; Navy bases in the Asia-Pacific ensure the free flow of maritime commerce across crucial sea lanes; and military bases around the world allow U.S. forces to quickly react to destabilizing events at a moment’s notice.  But practically—and financially—not all such threats can be dealt with militarily.
 
Both civilian and military leaders agree that foreign aid programs advance America’s national security and strategic interests around the world.  Earlier this year, then-General David Petraeus, who at the time was Commander of U.S. Forces-Afghanistan and the NATO-led International Security Assistance Force, warned that the hard-fought gains of American and NATO coalition troops in Afghanistan would be at risk without adequate funding of U.S. civilian counterparts in that country.  In testimony before the Senate Armed Services Committee, Petraeus said: “Inadequate resourcing of our civilian partners [operating in Afghanistan] could, in fact, jeopardize accomplishment of the overall mission.”
 
In many cases, properly targeted foreign assistance programs have proven cost effective in advancing America’s international interests.   In the Global War on Terrorism (GWOT), programs to bolster and expand local governance are critical to eliminating potential terrorist safe havens in once-lawless regions.  But beyond the GWOT, aid programs have played an important role in stabilizing nations, building democratic partners, and expanding economic markets.  As President Reagan said:

“[W]e should never forget that we aren’t buying friends; we’re helping friends.  We’re helping them open the roads of enterprise and opportunity for their own people, helping them build their own institutions of pluralism and democracy, and helping them defend themselves against externally sponsored pressures and subversion.”

Two such examples exemplify this line of thinking.  In 2001, the Colombian government, facing a serious threat from a powerful narco-insurgency, was on the verge of collapse.  Today, with the help of nearly $8.6 billion in U.S. economic and military aid, the threat from narco-terrorist groups has abated, and Colombia’s democracy now is thriving and its economy, flourishing.  As a result, U.S. trade in goods with Colombia has tripled since 2000 to $12 billion just last year.
 
Second, immediately after the end of the Korean War in 1953, the United States took an active financial role in bolstering Seoul’s economic, military, and political institutions.  Today, South Korea is America’s seventh largest trading partner, a critical security ally, and an important partner in global affairs.
 
America’s active engagement abroad serves our economic and strategic purposes, but it is also rooted in our nation’s values.  Under President George W. Bush’s leadership, the United States developed in 2003 the President’s Emergency Plan for AIDS Relief, also known as PEPFAR, to battle the spread of HIV in Africa.  Today, in conjunction with the Global Fund to Fight AIDS, Malaria and Tuberculosis, over 4.7 million people are receiving AIDS treatment, up from only 50,000 in 2003.  As the former President recently wrote in the Wall Street Journal:  “No nation can solve all the problems of the world.  But a nation that believes human dignity is universal—that affirms that all men and women are created equal—will do what it can.” 
 
Britain’s Conservative Party—led by Prime Minister David Cameron—has taken a similar approach.  Although London has overseen drastic government budget cuts, foreign assistance spending has actually increased.  Cameron’s government has taken strides to ensure aid is used more efficiently and effectively.  For example, London stopped direct aid to 16 countries, including Russia and China, to better focus attention on fragile and in conflict nations.  Rather than “walk away from aid altogether,” Cameron wrote in the Guardian in 2011, “[t]he answer is to do development differently:  to introduce proper transparency and accountability into how aid money is spent.  And without being hard-hearted, to be hard-headed about what aid can achieve, really focused on the things that are measurable, verifiable and results driven.”
 
In the United States, President Bush’s Millennium Challenge Corporation (MCC) may point to a way forward.  Established in 2004, the MCC was designed to give foreign assistance greater accountability and transparency, while achieving higher development goals.  The MCC posts all assessment reports, program expenditures, and selection criterions online in an effort to maximize public scrutiny and program understanding.  Although the MCC accounts for a small percentage of total U.S. foreign aid, a 2010 global development report by the Brookings Institution and the Center for Global Development noted “the MCC has been able to achieve much more freedom from the constraint of detailed congressional earmarking than has USAID.” 
 
Unfortunately, President Obama has decided to keep FY2013 funding for this vital and efficient program at the same level as last year.  This is the wrong approach.  The White House and Congress should not only expand efficient and effective programs like the MCC and PEPFAR, but also use these programs as models for reforming other foreign assistance programs.

Time and time again, America’s international affairs budget has worked independently, and in conjunction with the U.S. military, to advance U.S. values and interests abroad.  No doubt, lawmakers are right to demand greater accountability among all government programs, especially during times of economic uncertainty and rising deficits.  However, reducing America’s foreign affairs budget would drastically jeopardize U.S. interests.  It is time, once again, for the President and Congress to recommit to America’s international affairs budget.

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