America’s Foreign Affairs Budget Faces Congressional Chopping Block

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It was a fancy evening of sparkling wines, shimmering glass globe centerpieces and sheer optimism. A buzz of high-level networking filled the candlelit air at the U.S. Global Leadership Coalition's annual tribute dinner.

The elegant soiree at the Ritz-Carlton on Feb. 2 honored former Secretary of State Madeleine Albright and former Department of Homeland Security Secretary Tom Ridge, who co-chair the group's "Putting Smart Power to Work" campaign. It also featured a motley crew of strange bedfellows, ranging from activists and philanthropists, to officials from the State Department and U.S. Agency for International Development (USAID), to members of Congress, the Pentagon and even representatives from Wal-Mart and Coca-Cola.

All 800 attendees had one thing in common: vigorous support for U.S. diplomacy and development aid — underpinned by a robust international affairs budget.

"Investing in the world's poorest people is the smartest way our government spends money," said keynote speaker Bill Gates, Microsoft chairman and co-chair of the Bill and Melinda Gates Foundation. The crowd exploded in applause. "It saves lives, it improves livelihoods, it promotes stability, and it stimulates economies."

Gates was preaching to the choir. A fierce devotion to foreign aid permeated the ballroom, filled with people from all walks of life whose jobs have all at one point entailed brainstorming about ways to make the world a better place.

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Photo: U.S. Embassy Canberra / Adam P. Wilson
From left, Secretary of Defense Robert Gates and Secretary of State Hillary Clinton (with Australian Foreign Affairs Minister Kevin Rudd and Australian Defense Minister Stephen Smith at the annual Australia-U.S. Ministerial Consultations in Melbourne) have frequently teamed up to promote diplomacy and development alongside defense, stressing that all three are integral to U.S. national security.

But behind the optimism, an air of trepidation lurked in the background — a nagging reminder of struggles to come. And when the evening ended, reality sunk in: These idealists would have to defend government aid programs not among themselves but on Capitol Hill and in American living rooms.

The sweeping nationwide demand for fiscal responsibility has put funding for all federal programs, including the international affairs budget, on the chopping block. Pressured to tighten the country's fiscal belt, Republican lawmakers are promising to gut tens of billions of dollars across the board, as is President Obama — which means proponents of diplomacy and humanitarian assistance will have to do some serious convincing to keep America's foreign affairs budget from getting axed.

Ironically, after years of trying to bolster the State Department and USAID to better align the so-called three Ds of U.S. foreign policy, so that diplomacy and development attain the level of prestige that defense enjoys — a move supported by both the Bush and Obama administrations, as well as the Pentagon — America's Foreign Service is finally coming into its own, just as it faces its biggest financial hurdle.

Not only has State finally released its long-awaited Quadrennial Diplomacy and Development Review to streamline U.S. foreign assistance and reassert diplomacy's primacy on the world stage, the department's push for "civilian power" is finally getting some teeth with the upcoming handoff of military responsibilities in Iraq to U.S. diplomats, a critical test of whether America's civilians can do the work of its soldiers. Moreover, maintaining a diplomatic presence and foreign aid in hotspots such as Pakistan, Afghanistan, Egypt and Yemen may be more important now than ever to preserve American leverage and ensure regional stability.

Smart power — the combination of hard and soft power — has been touted by experts for years. But what matters is not lip service — it's the purse strings. Advocates will have to persuade Americans and the penny-pinching keepers of the federal purse to weigh the price they pay for assistance now with the costs they might incur tomorrow if cuts to the international affairs budget inadvertently diminish American power and security abroad.

Idealists Clash With Fiscal Conservatives

Over the past decade, the Obama and Bush administrations, high-ranking military officers at the Pentagon and — of course — State and USAID officials have put an increasing emphasis on "soft power" in the form of strengthened diplomacy, civilian expertise, humanitarian aid and development initiatives.

Leaders agree the U.S. military, or "hard power," should not dominate the bulk of American's relations with other countries. Instead, civilians should lead with positive interactions of diplomatic engagement and development know-how, promoting business, education, health, infrastructure and other opportunities for cooperation.

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Programs such as the Millennium Challenge Corporation, the President's Emergency Plan for AIDS Relief (PEPFAR), and the Global Hunger and Food Security Initiative are some of the results of this philosophical sea change. So, too, is State's Diplomatic Readiness Initiative, which grew in-house personnel by 1,000 employees between 2002 and 2004, with diplomacy and development agencies continuing to push for more language-savvy officers to join the Foreign Service ranks.

In addition, U.S. National Security Strategies in 2006 and 2010 called for an increase in the international affairs budget, a necessary undertaking to fund new personnel and programs. Most recently, the first-ever State and USAID Quadrennial Diplomacy and Defense Review (QDDR) proposed a more powerful State Department and stronger USAID (see sidebar for details).

The worldwide stature of Secretary of State Hillary Clinton (as well as her predecessors Colin Powell and Condoleezza Rice) and Defense Secretary Robert Gates — who have teamed up to lobby for enhanced U.S. diplomacy — has also lent visible prestige to the effort.

The result has been a gradual but steady rise in civilian foreign operations over the past decade — but future growth is clashing with today's fiscal constraints, putting diplomacy and development funding, which must be approved by Congress, in serious jeopardy.

The ballooning deficit and weak economy have forced Americans and lawmakers to rethink every penny spent by the debt-strapped government. In response, fiscal conservatives — notably freshmen lawmakers who rode the Tea Party wave to office, along with incumbents pressured to the far right by angry constituents — have become scissor-happy. They're looking to snip — some say tear into shreds — the federal budget, and absolutely no government program is safe from cuts, except defense and security.

Diplomacy though is no exception.

In fact, the day Rep. Ileana Ros-Lehtinen (R-Fla.) seized the House Foreign Affairs Committee gavel in December, she declared herself ready to play "hardball" with President Obama's foreign policy priorities and promised to axe the State and international affairs budgets: "As chairman of this committee, I will work to restore fiscal discipline to foreign affairs, reform troubled programs and organizations, [and] exercise vigorous oversight to identify waste, fraud and abuse," she said in a statement.

But Ros-Lehtinen's warning was just the beginning. Republicans are determined to rein all non-security spending back to 2008 fiscal levels and cap them for the next decade. They're also taking aim at the federal deficit, which is approaching $1.5 trillion.

To that end, on Jan 20, a group of more than 160 Republican House lawmakers — known as the Republican Study Committee — issued a plan to save $2.5 trillion over the next decade. Along with slashing funds from more than 50 agencies and programs from Amtrak to PBS to the National Endowment for the Arts, the plan would strip $1.39 billion annually from USAID.

That's almost the entirety of the development agency's operating budget, which only came to $1.65 billion last year and about $1 billion in fiscal 2009.

The Department of Defense, in contrast, would receive a 2 percent increase under Republican plans. Likewise, Obama's budget proposal, although it tackles Pentagon waste, would mark the 14th straight year of increased defense spending. Incidentally, the Pentagon's budget surpassed $600 billion in 2010 (including spending for the wars and in Afghanistan and Iraq). The State Department averaged $50 billion. So much for diplomacy and development being put on a more even keel with defense.

The debate over diplomacy and development though is nothing new. U.S. aid to other nations is often tossed around as a political football, and many fiscal conservatives harbor deeply ingrained doubts about the effectiveness of foreign assistance, viewing it as a taxpayer handout from wealthy countries to poor ones — a kind of international welfare to ease national guilt — or, on the other hand, a bribe to increase U.S. influence in aid-reliant nations. The State Department bureaucracy, including USAID, also has a spotty track record at best when it comes to efficient, effective financial management, hence the impetus behind the QDDR.

Some fiscal hawks despise the concept of aid so much that they would do away with it altogether. Tea Party-backed Sen. Rand Paul (R-Ky.) has said he would cut $500 billion in spending this year alone if he could, wiping out all foreign assistance and pretty much eliminating the Department of Education as well. So will Foggy Bottom vanish? Is diplomacy dead? Not quite.

Crunching the Numbers

Cuts are coming, but how much is up for debate. President Obama's recently released 2012 budget itself calls for deep cuts to more than 200 federal programs to carve out $1.1 trillion in deficit-reducing savings over the next decade. Meanwhile, House Republicans will offer their own spending proposal for fiscal 2012, after attempting to push through sharp and immediate cuts for the remaining 2011 fiscal year, which ends Oct. 1. So the next few weeks and months will be marked by fierce negotiating and horse-trading among Republicans, Democrats and the administration to see which elements of the budget proposals are ultimately embraced or rejected.

If the two sides can't reconcile their different visions for the remaining 2011 fiscal year budget by March 4, when the current stopgap funding bill expires, the stage would be set for the first government shutdown since 1995 — throwing Americans into disarray, both at home and abroad. A series of temporary funding extensions would avert that kind of showdown and get the country through the next few months, but even then Obama will have to wrestle with fiscal conservatives over the 2012 budget.

The administration will also be engaging Republicans specifically to negotiate the $52.7 billion Obama is requesting for international affairs — including $27 billion for development — in his 2012 budget blueprint, which does not include roughly $9 billion in contingency funds for operations such as the transition in Iraq as U.S. troops pull out.

Although a reduction of several billion dollars from last year's budget request, the 2012 proposal does not radically depart from past funding levels. It will however force Secretary Clinton to juggle certain priorities. For instance, it would boost spending on food security and global health, while trimming foreign assistance to Europe, Eurasia and Central Asia by $115 million to shift funds to higher priority areas. That includes Israel, Pakistan, Yemen and "programs that are critical to containing transnational threats including terrorism and trafficking in narcotics, weapons, and persons," according to the budget.

The budget also reduces development assistance by more than half in 20 other countries. Another victim is the Centers for Disease Control and Prevention, whose State funds decrease from $6.5 billion in the 2011 budget to $5.9 billion, a 9.2 percent drop.

But Republicans are gearing up for much steeper cuts. Already, conservatives have indicated the State Department's remaining 2011 budget could be clipped by roughly a third — specifically targeting global health and childhood survival programs and funding for international financial institutions. State's budget amounted to nearly $55 billion for the 2010 fiscal year, with a request of $56.8 for fiscal 2011. According to Politico, Republicans are aiming to chip away about $16 billion of that amount.

Officials have warned that a 10 percent to 30 percent cut across the board could jeopardize "the development and diplomacy that allows the United States to pursue its interest over the long term and to have the kind of partners that we need to move forward," Deputy Secretary of State James Steinberg told the House in February.

When put in perspective, however, some of the more ambitious GOP budget proposals are tinged with a bit of wishful thinking. For all the hype, the more drastic elements won't likely pass muster in a Democrat-controlled Senate and White House.

"The president still has veto power," pointed out Daniel Glickman, former secretary of agriculture and House representative of 18 years who's now with the Bipartisan Policy Center. "The Senate is less prone to make some of the bigger cuts than the House might be willing to make, and that will protect against major cuts."

Moreover, Republican lawmakers seem divided over how far their fiscal restraint should go. Initially, their plan had called for $35 billion in cuts for the balance of 2011, saying that figure was equivalent to about $74 billion in cuts had they been applied to the full fiscal year, measured against the budget request made last year by the Obama administration.

But that nuanced explanation infuriated newcomers who argued that the party had to stick to its campaign pledge to roll back domestic spending by $100 billion this year, no exceptions. So the latest compromise has House Republicans on track to float a funding bill with $68 billion in discretionary spending cuts for 2011, but that measure won't get very far in the Democratic Senate, where lawmakers say it's overkill — warning it would pull police from the streets, for instance, and severely disrupt government services.

Similarly, critics of cutting the international affairs budget have whipped out the security trump card. "The message from our military leadership, this Congress, and even former President Bush is clear: U.S. civilian agencies must be fully resourced to prosecute the fight against terror effectively," Howard Berman, former head of the House Foreign Affairs Committee, told Josh Rogin of "The Cable" blog for Foreign Policy. "A cut to the budget harms U.S. national security and puts American lives at risk."

The security justification clearly has bipartisan traction. On Feb. 9, House Republicans — including Berman's vocal successor, Ros-Lehtinen — failed to garner enough votes to pass a bill requiring the United Nations to give back $179 million in payments. The measure was defeated 259-169 in the wake of criticism that the money had already been designated for the New York City police department to boost security around the United Nations headquarters, a prime terrorist target.

Indeed, not all Republicans are opposed to the concept of smart power as a useful foreign policy tool. Veering from the majority of GOP lawmakers, Rep. Leonard Lance (R-N.J.) joined Rep. Gerry Connolly (D-Va.) to implore freshman to invest in smart power in a recent Politico op-ed.

"In the current economic climate, these decisions are especially difficult," they wrote. "Strategic investment and efficacy are key.... Neglecting the diplomacy and development pillars can have costly consequences — in terms of unnecessary spending and, more importantly, American lives. As freshmen, you will face a dizzying array of difficult decisions, but foreign assistance shouldn't be one of them."

Lance and Connolly may have found an ally in Sen. Lindsey Graham (R-S.C.), who's expected to be named the ranking Republican on the Senate Appropriations subcommittee on State and foreign operations. "We need to be investing in improving people's lives before the terrorists try to take over," Graham recently told Foreign Policy's Rogin. "Stay ahead of them, not with 100,000 troops all the time, but by partnering with people who will live in peace with us."

Framing the Diplomacy Debate: Smart Power as Smart Investment

Whether it's vaccinating against malaria or improving agricultural output, U.S. assistance has saved millions of lives around the world. Yet arguments in support of American generosity abroad as "the right thing to do" will only tug at the heartstrings so much. Glickman of the Bipartisan Policy Center told The Diplomat that framing foreign aid and diplomacy funding in terms of U.S. national interest will be key to persuading Americans and conservatives on the Hill that increasing — or at least not cutting — the international affairs budget is a smart investment.

That sentiment was echoed by Paul Miller, writing in the conservative "Shadow Government" blog. Calling foreign aid a "strategic investment" that helps countries whose interests align with our own to increase their capacities, Miller cited the example of the Marshall Plan.

"The United States gave something like $25 billion [in today's dollars] per year to Western Europe after World War II. It was undoubtedly an act of charity," he wrote. "But it was also a strategic investment. Policymakers at the time worried about a return of the Great Depression following demobilization, and the Marshall Plan helped Europe become a strong trading partner for the United States. Most importantly, U.S. officials feared the rise of Soviet power and hoped the plan would bolster European governments' stability and prevent the spread of communism."

Today, similar parallels are being drawn by smart power advocates who span the political spectrum. Bipartisan and nonpartisan leaders from the White House, Foggy Bottom and the Pentagon all agree that international budget cuts would be a big mistake for a number of reasons.

For one, they could erode national security. The U.S. military, after all, cannot bear the brunt of protecting the entire world — and supporters of diplomacy and development caution against the growing trend of militarizing international aid. The Pentagon brass also doesn't want its soldiers ultimately building schools. A 2010 poll by the U.S. Global Leadership Coalition (USGLC) found that 83 percent of military leaders say that humanitarian efforts such as food assistance, health, education and economic development along with diplomacy are vital to national security.

Smart power is not only integral to national security — it's a cost-effective way to prevent conflicts and disasters from erupting in the first place, before billions upon billions are spent once bloodshed breaks out. "Development is a lot cheaper than sending soldiers," observed Defense Secretary Gates last September. Chairman of the Joint Chiefs of Staff Adm. Mike Mullen and International Security Assistance Force Commander Gen. David Petraeus also support boosting the foreign affairs budget as a modest investment that yields exponential benefits.

For her part, Secretary Clinton has long touted the cost-savings of civilian foreign-affairs interventions, especially as the military transfers duties in Iraq to diplomats. State officials note that as the military draws down there, the overall Pentagon savings for 2011 is $45 billion from 2010 levels, while the State Department's war-related expenses have risen by less than $4 billion. Clinton has pointed out that every business owner she knows would gladly invest $4 to save $41.

Added Deputy Secretary of State Steinberg: "Our military cannot protect our national interests alone.... It has to be a balanced effort, and our contribution, the part that goes to the State Department in assistance, is very small compared to defense, but it has a huge multiplier effect."

Indeed, the price of building friendships through aid and diplomacy costs a tiny fraction of what it takes to wage military operations. Annual appropriations for State and foreign operations have averaged around $55 billion. The Department of Defense recently requested a base budget of $553 billion for 2012, plus $118 billion for the wars, not to mention nearly $30 billion in "defense-related" programs — for a grand total of $700 billion — and that's with the Iraq war winding down.

But many Americans fail to realize just how little is spent on aid and diplomacy. Most vastly overestimate the bill. On average, Americans think a quarter of the federal budget goes to foreign assistance, according to a recent poll by the University of Maryland's Program on International Policy Attitudes.

They're in for sticker shock: Foreign assistance comprises less than 1 percent — not 25 percent — of the budget. The total international affairs budget comes in at about 1.5 percent.

When asked how much of the federal budget should go to foreign assistance, those who identified themselves as Democrats or Independents said 10 percent, while Republicans thought 5 percent was an appropriate amount. With 5 percent of the federal budget, State and USAID could implement almost any new project they could dream up.

Such misperceptions may explain the long-running impulse to pull funds from diplomacy and foreign relations when fiscal times get tough. An Economist/YouGov poll last year, for instance, found that a whopping 71 percent of Americans would cut foreign aid to balance the budget, followed by cuts in mass transit, housing, agriculture and the environment, even though together these programs barely comprise 3 percent of the federal budget. The bulk of government spending goes to defense and entitlements such as Medicaid and Social Security. The reality is that slicing a few billion dollars from State and USAID budgets — or even eliminating the agencies altogether — won't make a dent on the $1.5 trillion national deficit.

But in an increasingly globalized world, depriving the U.S. Foreign Service of one-third of its resources could have a very tangible impact.

"My goodness, Tunisia, Egypt, Lebanon, Libya, Iran, North Korea, China — to say now is the time to have less people understanding foreign languages, less embassies, less diplomats, to try to avert war and nuclear proliferation when it constitutes less than 1 percent of the budget already? That's going to solve our problems?" declared Rep. Steve Rothman (D-N.J.) on the House floor last month.

"You're not going to balance the fed budget on that 1 percent," USGLC's Parker argues. "Considering how much it helps national security, people get a lot for their buck."

Parker noted that USGLC officials have already met with two-thirds of the incoming freshman lawmakers in their lobbying efforts to spare the international affairs budget from the Hill's cutting frenzy. The group is part of the Modernizing Foreign Assistance Network, a coalition of international development and foreign policy practitioners, advocates and experts. The network's co-chairmen, Rev. David Beckmann, George Ingram and Jim Kolbe, hammered home the cost-benefit rationale of foreign aid in a recent op-ed in Politico. Denouncing the use of foreign assistance as "a budget piñata," they pointed out that although "a sliver of our overall budget, U.S. foreign assistance delivers a real return-on-investment," citing its indispensable role alongside the military in frontline states from Afghanistan to Yemen.

State officials have also been sounding the alarm that hacking its budget will threaten national security. "If we have to take a significant cut in foreign assistance, in some fashion, that is going to affect Iraq, Afghanistan, Pakistan and Yemen," warned State Department spokesman P.J. Crowley. "Those are countries where we have vital interests and vital security concerns."

But the security argument in part rings hollow its limits because funding for conflict zones like Iraq will most likely remain intact, while cuts drain other areas such as international climate spending and food aid grants. For instance, Obama's own proposal would take roughly $280 billion from the president's Food for Peace program at a time when soaring food prices are crippling developing nations — and sparking social unrest.

Yet helping nations solve their everyday problems, like being able to buy bread, can still help us with ours. "The truth is that we won't be able to rely on other countries to help fight the extraordinary dangers that most threaten us unless we help the global majority to fight the chronic problems that can frighten them each and every day," said former Secretary of State Madeleine Albright at the USGLC dinner.

And for more than half the world, those daily struggles include finding food and work, paying for education, and not dying of disease. "The world will be a safer place if there is enough food to go around. It will be a more stable place if children grow up with opportunities instead of frustrations," said Bill Gates.

Bush's former Secretary of Homeland Security Tom Ridge, also honored at the USGLC dinner, agreed. "If you bring in a clean-water system, a sanitation system, vaccinations, schools, technology — if you reach out to address real human needs, you certainly ... will make the ideology of extremism far less attractive," he said. "Particularly during these tough economic times when the deficits are real and tough decisions have to be made, we have to convince the men and women up on the Hill that if we're going to advance our interests around the globe, well, we certainly need a strong military but we can't rely simply on a military strategy. We need smart power."

Proponents say that in addition to security, smart power pays dividends on the economic front by creating American jobs and developing markets for U.S. goods overseas. As Albright pointed out: "Our struggling economy can grow only if our exports expand, which means that foreign populations must have the means to buy what we sell."

Half of U.S. exports currently go to developing countries, and Bill Gates noted that exports to these countries have grown six times faster than exports to major economies in the last decade. "Well-spent aid is uniquely effective among all the different kinds of spending our government does," he said. "Growth in poor economies will be an engine of our own economy, and our success is tied to the progress of those around us. The investments we make today in the developing world will help create the jobs of tomorrow here in America. Right now, the tough choice is to maintain foreign assistance, not to cut it."

Take for example the Chinese investing all around the world, Glickman said, asking: "Do you think they're doing it because it's the nice thing to do? No — they want to push their influence."

Glickman believes Republicans and fiscally conservative Americans will eventually see the wisdom of a sturdy international affairs budget once they realize how small the price is compared to how big the rewards are.

"Look, I know that we have a gigantic deficit and nobody can be totally immune from fiscal responsibility, but we need to look at foreign assistance, particularly to the developing world, in the same way we look at national defense," Glickman argued. "It protects us and is also the right thing to do. We build friendships, we build stronger economic partners, and countries are more likely to be politically stable — which keeps the U.S. safer. If we just disengage and the only thing we do are weapon systems, America's going to be a whole lot weaker."

About the Author

Rachael Bade is a contributing writer for The Washington Diplomat. Anna Gawel is managing editor of The Washington Diplomat.

Last Edited on June 24, 2014