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Updated February 25, 2019
U.S. Foreign Assistance
What Is U.S. Foreign Assistance?
“I think it’s a very simple choice that when we’re
Foreign assistance is an instrument of U.S. policy through
looking at helping those in need in our country, we
which the U.S. government provides resources to another
quit sending money to other countries.” Senator Rand
country’s government, civil society, or other private sector
Paul, Senate Floor Speech, 9/7/2017
entity on a grant or concessional loan basis. Most U.S.
foreign assistance is administered by the U.S. Agency for
How Much Is Spent on U.S. Foreign Assistance?
International Development (USAID); the Millennium
Challenge Corporation (MCC); the U.S. Departments of
In FY2017, the United States obligated an estimated $49.87
State, Agriculture, the Treasury, and Defense (DOD); or is
billion, about 1.2% of the total federal budget and 4.1% of
channeled through multilateral organizations.
discretionary budget authority, for foreign assistance from
all sources, as reported by the U.S. Foreign Assistance
U.S. foreign assistance can take many forms. On average,
Explorer database (https://explorer.usaid.gov/). This
about 2% of aid is provided as direct budget support (cash)
included aid pursuant to the State, Foreign Operations and
to foreign governments. More often, aid is provided through
Related Agencies (SFOPS) appropriations as well as aid
projects implemented by U.S. and international agencies,
from the Department of Agriculture, DOD, Centers for
contractors, or nongovernmental organizations. It takes the
Disease Control and Prevention, and other agency
form of expert technical advice, training, equipment, and
appropriations.
construction in a wide range of sectors (see Figure 1), and
can support vaccines and malaria nets, textbooks, food,
Figure 1. Foreign Aid as a Portion of Federal Budget
roads and other infrastructure, educational exchanges,
Authority and by Sector, FY2017 (net obligations)
microcredit, applied research, and military weaponry.
“...Strategic development assistance is not charity—it
is an essential modern tool of U.S. national security.”
Joint Testimony of 16 Retired Generals and Flag Officers to
Senate Armed Services Committee, 6/13/2017
Why Provide U.S. Foreign Assistance?
There are three main overlapping rationales behind U.S.
foreign assistance:
(1) National Security. Aid may help build stability and
Source: Foreign Aid Explorer; CRS calculations.
counter international threats by promoting global prosperity
Note: FY2017 data are the most recent comprehensive data
and health, environmental protection, democracy and rule
available.
of law, and by bolstering the military readiness and security
of allied nations.
Excluding military assistance (for which comparable data is
not available), the United States ranked first in the world in
(2) Commercial Interests. Supporting economic growth in
developing countries may expand markets for U.S. exports,
2017 among official donors of development and
creating economic opportunities here at home.
humanitarian assistance in dollar terms, followed by
Germany, the United Kingdom, Japan, and France. When
(3) Humanitarian Interests. Providing food, shelter, and
such aid is calculated as a percentage of gross national
other basic assistance to refugees and other victims of
income, however, the United Arab Emirates tops the list of
natural disasters and conflict is a reflection of U.S. values
major donors, while the United States ranks 25th (OECD
and global leadership.
2017). While some argue that the United States should
increase aid levels to address global needs, others assert that
Critics of foreign aid maintain that efforts to generate
U.S. contributions adequately reflect U.S. global interests
economic growth in developing countries, promote
or exceed an appropriate share.
democracy, and train and equip foreign militaries, among
other objectives, have often been ineffective and wasteful.
Who Receives U.S. Foreign Assistance?
Other critics argue that foreign aid funds would be better
More than 200 countries received some form of U.S.
used to address domestic priorities, or to reduce the federal
assistance in 2017, reflecting the broad use of aid as a
deficit.
diplomatic tool. Top U.S. bilateral aid recipients are
typically countries that are strategic allies in the Middle
East, important partners in counterterrorism efforts, or
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U.S. Foreign Assistance
global health focus countries. Top recipients also often
After the September 11, 2001, terrorist attacks, and the U.S.
include countries that face humanitarian crises brought on
invasion of Afghanistan and Iraq, foreign aid levels began
by natural disaster or conflict. In FY2017, the top 10
to rise sharply with enactment of the Iraq Relief and
recipient countries accounted for just over 40% of aid
Reconstruction Fund in FY2003-FY2004, new military
obligations (Figure 2).
assistance funds for Iraq and Afghanistan, as well as the
creation of the MCC and the President’s Emergency Plan
Figure 2. Top Recipients of U.S. Aid, FY2017
for AIDS Relief (PEPFAR). These increases elevated
(net obligations in $ mil ions)
concern within Congress about accountability and effective
oversight of aid programs, particularly in conflict zones.
The Obama Administration focused funding on three major
aid initiatives, starting in 2010: the Global Health Initiative
(GHI), which builds on PEPFAR; the Global Climate
Change Initiative; and the Food Security Initiative. Fiscal
constraints imposed by the Budget Control Act of 2011,
together with a scaled back U.S. military presence in Iraq
and Afghanistan, led to reduced aid funding in FY2013, but
assistance obligations have risen again in recent years,
reflecting the Syria refugee crisis, ISIS threat, and the Ebola
outbreak in west Africa, among other developments.
Source: Foreign Aid Explorer; CRS calculations.
To date, the Trump Administration has consistently
Note: FY2017 data are the most recent comprehensive data
proposed deep cuts to foreign assistance in the international
available.
affairs budget, but Congress has not enacted such cuts in
Historic Trends
appropriations legislation over the past few years.
In recent decades, foreign aid spending has varied
For more detailed information on foreign assistance, see
considerably depending on policy initiatives, international
CRS Report R40213, Foreign Aid: An Introduction to U.S.
crises, and budget constraints (Figure 3).
Programs and Policy, by Curt Tarnoff and Marian L.
Lawson, and CRS Report R45168, Department of State,
Aid spiked following the 1978 Camp David Accords, which
Foreign Operations and Related Programs: FY2019 Budget
formed the basis of modern aid flows to Egypt and Israel. In
and Appropriations, by Susan B. Epstein, Marian L.
the 1980s, military aid to Central America and the Middle
Lawson, and Cory R. Gill.
East drove aid to a peak in 1985. The end of the Cold War
and a deficit reduction law led to funding lows in the 1990s.
Figure 3. Foreign Aid Funding in Historic Context
(net aid obligations in bil ions of constant 2017 U.S. $)
Source: Foreign Aid Explorer, CRS calculations.
Notes: BCA = Budget Control Act of 2011, MCC = Mil ennium Chal enge Corporation; PEPFAR = President’s Emergency Plan for AIDS Relief
Marian L. Lawson,
Emily M. Morgenstern, Analyst in Foreign Assistance and
Foreign Policy
IF10183
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U.S. Foreign Assistance
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
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