Foreign Policy Tools: The Foreign Affairs Budget

By Edwards, Mickey; Solarz, Stephen J. | Brookings Review, Spring 1997 | Go to article overview

Foreign Policy Tools: The Foreign Affairs Budget

Edwards, Mickey, Solarz, Stephen J., Brookings Review

American spending on foreign assistance and diplomacy has fallen by more than 15 percent since the 1980s. Under current plans to balance the federal budget by 2002, the U.S. international affairs budget would fall again as much - if not more.

With the Cold War over, it is only natural that the United States focus more on domestic concerns. But domestic renewal must not blind us to the world's continuing dangers. Ethnic strife, regional instability, crime, narcotics, terrorism, famine, environmental degradation, fanaticism, and rogue regimes with mass destruction capabilities have taken the place of the global communist threat. Unless the United States is prepared to spend the money necessary to address these dangers, it cannot effectively protect its interests and provide world leadership in these important arenas.

Moreover, wise use of the foreign affairs account to strengthen friendly forces and calm and defuse potentially explosive situations can reduce demands on U.S. military forces, potentially saving much more money in the defense account.


What is our government now spending to meet its global challenges and opportunities? In 1997 Washington will spend a total of $19.6 billion - just a bit more than I percent of the overall federal budget - for its diplomatic missions, foreign assistance, and related activities like Export-Import Bank financing for U.S. businesses. International affairs spending is the only major category of the federal budget to have suffered real cuts since 1980, and one of only two (the Pentagon is the other) to have been cut since 1990.

And much worse may be in store. President Clinton's fiscal plan released last month anticipates that real funding for international affairs would fall to $16.8 billion by 2002 in constant 1997 dollars. But if Clinton agrees, as he is likely to do, to use the economic assumptions of the Congressional Budget Office in any long-term agreement with Congress to balance the budget by 2002, he will have to cut more.


The State Department and its 260-plus overseas posts constitute the basic and indispensable infrastructure on which all U.S. civilian - and many military - elements rely to protect and promote American interests around the world. Some 30 of these posts have been closed in the past three years for lack of operating funds. Many of the remaining posts are ill-equipped. All are handicapped by obsolete information technology. Staffing is highly uneven, the cadre of language and area specialists has declined, and resources for public diplomacy are fast disappearing even as demands on our missions continue to grow.

Recently Washington has been forced to make some rather arbitrary decisions about what it can and cannot do. To help stabilize Haiti, it had to cut economic support for Turkey, an ally critical to U.S. interests in the Middle East. To provide aid to the West Bank and Gaza, it had to use funds intended to help demobilize the armed forces of parties to a Central American peace agreement that had been years in the negotiating. To come up with the U.S. share of the financing package for Cambodia's first free election, Washington deferred for more than a year support for smaller initiatives in a dozen or so other countries. To respond to the refugee crisis in Rwanda, it had to take democratic institution-building funds from the rest of Africa at a moment when positive trends were emerging elsewhere on the continent. And when the State Department was unable to provide $2 million to monitor a cease-fire between Kurdish factions in northern Iraq, hostilities between the factions were renewed, affording Saddam Hussein a pretext for sending forces into Northern Iraq (a move that culminated in U.S. military action costing multiples of $2 million).

In addition, U.S. investment in economic development in poorer countries, either bilaterally or through international financial institutions like the World Bank, has fallen from an average of $12 billion during the early 1990s to $9 billion today - and is projected to fall more by 2002.

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Foreign Policy Tools: The Foreign Affairs Budget


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