US Foreign Aid Budget Faces Further Decline in FY2012

U.S. Agency for International Development Administrator Rajiv Shah visits a USAID-sponsored sustainable development rural center in Haiti. Foreign aid cuts could undermine U.S. international programs like the Feed the Future. Photo by: Kendra Helmer / USAID

Overall U.S. international affairs spending for fiscal 2011, which ended Sept. 30, declined to $49 billion from $55 billion in fiscal 2010 and is expected to be reduced further in fiscal 2012. Congress is proposing deep cuts in its spending bills and a special committee created by recent U.S. debt reduction legislation is reportedly considering significant deductions from the foreign aid budget.

“We’re going to have to do more with less — or less with less, depending on how you look at it,” said Thomas Nides, U.S. deputy secretary of state for budget and operations, according to The New York Times.

The 2012 State and foreign operations spending bill approved by the House appropriations committee allocates $39.6 billion in discretionary funding for the U.S. State Department and U.S. Agency for International Development, while the Senate appropriations committee’s version provides $44.64 billion.

The proposed cuts come as administration officials and foreign aid advocates warn of the U.S.’ diminishing international influence because of its reduced foreign spending. The reductions are expected to deal a blow to U.S. President Barack Obama’s plans to prioritize development alongside diplomacy and defense.

The cuts, aid advocates and officials have noted, could also undermine U.S. international programs such as the Millennium Challenge Corp., Feed the Future and the Global Health Initiative.

Proponents of plans to trim U.S. international affairs spending — mostly House Republicans — have argued that the proposed aid cuts are needed to help find savings in the federal budget. They have also called for “a fundamental change” in how the U.S. spends aid, considering the fiscal and related problems it is facing at home.

But U.S. and international aid agency officials alike have pointed out that slashing billions of dollars off the U.S. foreign aid account, which represents 1 percent of the federal budget, is not the solution to the country’s fiscal woes.

“The amount of money the U.S. has or doesn’t have doesn’t really rise or fall on the foreign aid budget,” said Jeremy Konyndyk, Mercy Corps’ director of policy and advocacy, according to the New York Times. “The budget impact is negligible. The impact around the world is enormous.”

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About the author

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    Ivy Mungcal

    As former senior staff writer, Ivy Mungcal contributed to several Devex publications. Her focus is on breaking news, and in particular on global aid reform and trends in the United States, Europe, the Caribbean, and the Americas. Before joining Devex in 2009, Ivy produced specialized content for U.S. and U.K.-based business websites.