U.S. Foreign Assistance

U.S. Foreign Assistance

October 22, 2014
U.S. Foreign Assistance
Others argue that foreign aid funds would be better used to
Overview
address domestic priorities, or to reduce the federal deficit.
What Is U.S. Foreign Assistance?
“I think a country that is $18 tril ion in debt should not be
borrowing money from China to send it to anyone.”
Foreign assistance is an instrument of U.S. policy through
- Senator Rand Paul, CNN, 10/10/2014
which the U.S. government provides resources to another
country’s government, civil society, or other private sector
entity on a grant or concessional loan basis. Most U.S.
How Much Is Spent on U.S. Foreign
foreign assistance is administered by the U.S. Agency for
Assistance?
International Development; the Millennium Challenge
Corporation; the U.S. Departments of State, Agriculture,
In FY2013, the United States spent $43.61 billion, about
Treasury, and Defense (DOD); and the Centers for Disease
1% of the total federal budget, on foreign assistance from
Control and Prevention (CDC).
all sources, as defined by the U.S. Foreign Assistance
Dashboard. This includes aid pursuant to the State, Foreign
U.S. foreign assistance can take many forms. On average,
Operations and Related Agencies appropriations as well as
about 2% of aid is provided as direct budget support (cash)
aid from DOD, CDC, and other agency appropriations.
to foreign governments. More often, aid is provided through
Figure 1. Foreign Aid as a Portion of the Federal
projects implemented by U.S. and international agencies,
Budget and by Sector, FY2013
contractors or non-governmental organizations. It takes the
form of expert technical advice, training, equipment, and
construction in a wide range of sectors (see Figure 1),
including vaccines and malaria nets, textbooks, food, roads
and other infrastructure, educational exchanges,
microcredit, applied research, and military weaponry.
“Foreign aid is not a giveaway. It’s not charity. It is an
investment in a strong America and a free world.”
- Secretary of State John Kerry, UVA 2/20/13

Why Provide U.S. Foreign Assistance?
Source: www.foreignassistance.gov; CRS calculations.
There are three main overlapping rationales behind U.S.
Excluding military assistance (for which comparable data is
foreign assistance:
not available), the United States ranks first in the world
among official donors of development and humanitarian
(1) National Security. Aid may help build stability and
assistance in dollar terms, followed by the United Kingdom,
counter international threats by promoting global prosperity
Germany, Japan, and France. When such aid is calculated
and health, environmental protection, democracy and rule
as a percentage of gross national income, however, Norway
of law, and by bolstering the military readiness and security
tops the list of major donors, while the United States ranks
of allied nations.
20th (OECD 2013). While some argue that the United States
should increase aid levels to address global needs, others
(2) Commercial Interests. Supporting economic growth in
assert that U.S. contributions adequately reflect U.S. global
developing countries may expand markets for U.S. exports,
interests or exceed an appropriate share.
creating economic opportunities here at home.
Who Recieves U.S. Foreign Assistance?
(3) Humanitarian Interests. Providing food, shelter, and
other basic assistance to refugees and other victims of
About 150 countries received some U.S. assistance in 2013,
natural disasters and conflict is a reflection of U.S. values
reflecting the use of aid as a diplomatic tool. Top U.S.
and global leadership.
bilateral aid recipients are typically countries that are
strategic allies in the Middle East, important partners in
Critics of foreign aid maintain that efforts to generate
counterterrorism efforts, or global health focus countries.
economic growth in developing countries, promote
Top recipients also often include countries that face major
democracy, and train and equip foreign militaries, among
disasters, such as Haiti after the 2009 earthquake. In 2013,
other objectives, have often been ineffective and wasteful.
the top 10 recipient countries accounted for about 33% of
aid allocations (Figure 2).
www.crs.gov | 7-5700

U.S. Foreign Assistance
Figure 2. Top Recipients of U.S. Aid, FY2013
After the September 11, 2001, terrorist attacks, and the U.S.
(billions of U.S. $)
invasion of Afghanistan and Iraq, foreign aid peaked (when
adjusted for inflation), with enactment of the Iraq Relief
and Reconstruction Fund in FY2003-FY2004, new military
assistance funds for Iraq and Afghanistan, and the creation
of the Millennium Challenge Corporation (MCC) and the
President’s Emergency Plan for AIDS Relief (PEPFAR).
These large and rapid increases have raised concern within
Congress about accountability and effective oversight of aid
programs, particularly in conflict zones.
The Obama Administration has focused funding on three
major aid initiatives since 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, have led to slightly reduced aid funding

in recent years.
Source: www.foreignassistance.gov.
For more detailed information on foreign assistance, see
Historic Trends
• CRS Report R40213, Foreign Aid: An Introduction to
U.S. Programs and Policies, by Curt Tarnoff and
In recent decades, foreign aid spending has varied
Marian Leonardo Lawson.
considerably depending on policy initiatives, international
• CRS Report R43569, State, Foreign Operations and
crises, and budget constraints (Figure 3). Aid spiked
Related Programs: FY2015 Budget and Appropriations,
following the 1978 Camp David Accords, which formed the
by Susan B. Epstein, Alex Tiersky and Marian Leonardo
basis of modern aid flows to Egypt and Israel. In the 1980s,
Lawson.
military aid to Central America and the Middle East drove
aid to a peak in 1985. The end of the Cold War and deficit
reduction legislation led to funding lows in the 1990s.
Figure 3. Foreign Aid Funding in Historic Context
(aid obligations in bil ions of constant 2012 U.S. $)

Source: U.S. Foreign Assistance Database, accessed October 7, 2014.
Note: BCA = Budget Control Act of 2011.

Marian L. Lawson, mlawson@crs.loc.gov, 7-4475
Curt Tarnoff, ctarnoff@crs.loc.gov, 7-7656

IF00054

www.crs.gov | 7-5700

Document Outline

Overview

Who Recieves U.S. Foreign Assistance?

Historic Trends