Marshall Plan Would Be Next to Impossible for U.S. Today/europeans Need to Help Carry Load

Article excerpt

A few days before President Reagan took off for Venice this week, he spoke in the East Room of the White House in honor of the memory of George C. Marshall on the 40th anniversary of the Marshall Plan. On June 5, 1947, Marshall, then the Secretary of State, delivered the commencement address at Harvard University, offering American help for the reconstruction of war-scarred Europe. ``Our policy,'' he said, ``is not directed against any country or doctrine but against hunger, poverty, despotism and chaos.''

The American commitment to the European Recovery Program was enormous. As President Reagan said at the White House, in today's money - after allowing for inflation - it cost ``about $60 billion.'' But that figure greatly understates what a burden comparable to the Marshall Plan would be for the United States today. The real gross national product has roughly tripled since then, so an equivalent burden now would be about $180 billion.

Could and would the United States make such an effort today? Fiscally it would be next to impossible - without a drastic change in the use of American resources. The federal budget in the fiscal year 1986 showed a deficit of $221 billion; optimists expect the deficit this year to be about $180 billion.

And Gramm-Rudman constraints on the budget, aimed at producing a balanced budget by 1991, are severely squeezing foreign aid. The Reagan administration did increase foreign aid to a peak of $20.2 billion in 1985 from $9.6 billion in 1980.

But the Gramm-Rudman budget cuts have since driven foreign aid down to $12.9 billion. While that still represents a 26 percent increase since 1980, John W. Sewell and Christine E. Conzee note in Foreign Affairs magazine that all foreign aid growth since 1980 has been in the area of security and military assistance; economic aid has fallen.

As long as the budgetary pie was expanding, they note, it was possible to put together a coalition in Congress to support foreign aid. Now, however, with the drive on to chop the deficit as a major cause of America's international trade and growth problems, the foreign-aid coalition has broken down. Congress cut the administration's aid request last year by 23 percent, and resources for the next few years are not likely to be more plentiful.

At the Venice summit conference, therefore, the administration will be pressing its allies for greater help on both the economic and military fronts. In his own statement on the 40th anniversary of the Marshall Plan, Secretary of State George P. …