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Updated May 6, 2020
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
country’s
quit sending money to other countries.” Senator Rand
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
International Development (USAID); the Millennium
How Much Is Spent on U.S. Foreign Assistance?
Challenge Corporation (MCC); the U.S. Departments of
In FY2018, the United States obligated an estimated $46.89
State, Agriculture (USDA), the Treasury, and Defense
billion, about 1% of the total federal budget and 3.3% of
(DOD); or is 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. Most aid is
Explorer database (https://explorer.usaid.gov/). This
provided through projects implemented by U.S. and
included aid pursuant to the Department of State, Foreign
international agencies, contractors, or nongovernmental
Operations and Related Agencies (SFOPS) appropriations
organizations. It takes the form of expert technical advice,
as well as aid from USDA, DOD, Centers for Disease
training, equipment, and construction in a wide range of
Control and Prevention, and other agency appropriations.
sectors (see Figure 1), and can support vaccines and
malaria nets, textbooks, roads and other infrastructure,
Figure 1. Foreign Aid as a Portion of Federal Budget
food, educational exchanges, microcredit, and military
Authority and by Sector, FY2018 (net obligations)
weaponry. On average, about 2% of aid is provided as
direct budget support (cash) to foreign governments.
“...U.S. foreign assistance is not charity but a strategic
investment in our own security that saves lives and
keeps us safe.” Joint Statement from Admiral James
Stavridis (Ret.) and General Tony Zinni (Ret.), 2/10/2020
Why Provide U.S. Foreign Assistance?
There are three main overlapping rationales behind U.S.
foreign assistance:
Source: Foreign Aid Explorer; CRS calculations.
(1) National Security. Aid may help build stability and
Note: FY2018 data are the most recent comprehensive data
counter international threats by promoting global prosperity
available.
and health, environmental protection, democracy and rule
Excluding military assistance (for which comparable data
of law, and by bolstering the military readiness and security
are not available), the United States ranked first in the
of allied nations.
world in 2018 among official donors of development and
(2) Commercial Interests. Supporting economic growth
humanitarian assistance in dollar terms, followed by
and expanding trade capacity in developing countries may
Germany, the United Kingdom, France, and Japan. When
expand markets for U.S. exports, creating economic
such aid is calculated as a percentage of gross national
opportunities and jobs here at home.
income, however, the United Arab Emirates tops the list of
major donors, while the United States ranks at the bottom
(3) Humanitarian Interests. Providing food, shelter, and
(OECD 2018). While some argue that the United States
other basic assistance to displaced persons and other
should increase aid levels to address global needs, others
victims of natural disasters and conflict is a reflection of
assert that U.S. contributions adequately reflect U.S. global
U.S. values and global leadership.
interests or exceed an appropriate share.
Critics of foreign aid maintain that efforts to generate
Who Receives U.S. Foreign Assistance?
economic growth in developing countries, promote
democracy, and train and equip foreign militaries, among
More than 170 countries and territories received some form
other objectives, have often been ineffective and wasteful.
of U.S. assistance in FY2018, reflecting the broad use of
Other critics argue that foreign aid funds would be better
aid as a diplomatic tool. Top U.S. bilateral aid recipients are
used to address domestic priorities, or to reduce the federal
typically countries that are strategic allies in the Middle
deficit.
East, important partners in counterterrorism efforts, or
global health focus countries. Top recipients also often
include countries that face humanitarian crises brought on
by natural disaster or conflict. In FY2018, the top 10
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U.S. Foreign Assistance
recipient countries accounted for approximately 37% of aid
creation of the MCC and the President’s Emergency Plan
obligations (Figure 2).
for AIDS Relief (PEPFAR). These increases elevated
Figure 2. Top Recipients of U.S. Aid, FY2018
concern within Congress about accountability and effective
(net obligations in $ mil ions)
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 Feed the Future 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 rose in subsequent years, reflecting
the Syrian refugee crisis, ISIS threat, and the Ebola
outbreak in west Africa, among other developments.
The Trump Administration has consistently proposed deep
Source: Foreign Aid Explorer; CRS calculations.
cuts to foreign assistance in the international affairs budget,
Note: FY2018 data are the most recent comprehensive data
but Congress has not enacted such cuts in appropriations
available.
legislation. Instead, Congress has maintained level or
Historic Trends
increased funding for foreign aid programs, with a focus on
development finance (reflected in the creation in 2019 of
In recent decades, foreign aid spending has varied
the U.S. International Development Finance Corporation);
considerably depending on policy initiatives, international
numerous global heath and humanitarian crises, including
crises, and budget constraints (Figure 3).
the Coronavirus Disease 2019 (COVID-19) pandemic; and
Aid spiked following the 1978 Camp David Accords, which
the Administration’s stated goal of countering Iranian,
formed the basis of modern aid flows to Egypt and Israel. In
Chinese, and Russian global influence, among other
the 1980s, military aid to Central America and the Middle
priorities.
East drove aid to a peak in 1985. The end of the Cold War
For more detailed information on foreign assistance, see
and a deficit reduction law led to funding lows in the 1990s.
CRS Report R40213, Foreign Assistance: An Introduction
After the September 11, 2001, terrorist attacks, and the U.S.
to U.S. Programs and Policy, by Marian L. Lawson and
invasion of Afghanistan and Iraq, foreign aid levels began
Emily M. Morgenstern, and CRS Report R45763,
to rise sharply with enactment of the Iraq Relief and
Department of State, Foreign Operations, and Related
Reconstruction Fund in FY2003-FY2004, new military
Programs: FY2020 Budget and Appropriations, by Cory R.
assistance funds for Iraq and Afghanistan, as well as the
Gill, Marian L. Lawson, and Emily M. Morgenstern.
Figure 3. Foreign Aid Funding in Historic Context
(net aid obligations in bil ions of constant 2018 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.
Emily M. Morgenstern, Analyst in Foreign Assistance and
Foreign Policy
IF10183
Marian L. Lawson, Specialist in Foreign Assistance Policy
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U.S. Foreign Assistance
Disclaimer
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