Monkey Cage | Analysis
May 12, 2017 at 9:00 AM
President Trump advocated massive cuts to foreign aid in his budget proposal for fiscal 2018, catering to supporters who think that foreign aid is wasteful, and provoking huge anxiety in the foreign aid community and among aid beneficiaries. If Trump gets his way, development aid would be cut by nearly one-third. This is a severe blow, but not surprising, given how slow the Trump team was to engage with USAID, the main government aid body, during the presidential transition and Trump's repeated election statements that he would "stop sending foreign aid to countries that hate us" and instead invest at home in schools and infrastructure. What does this mean in practice, and what is likely to happen?
Women's issues and the environment get the chop, while national security becomes a priority
People have known since early March that the administration was proposing about a 30 percent reduction in aid, but new details about the aid budget were leaked last week. Meanwhile, the USAID administrator has openly discussed the likely merger of USAID and the State Department.
Leaked documents to Foreign Policy magazine shed light on the Trump administration's plans for foreign aid. Trump's budget preserves some widely admired programs, such as the President's Emergency Plan for AIDS Relief (PEPFAR), the Bush-era HIV/AIDS initiative, but it tilts heavily against funding for women's issues and any assistance related to climate change. Under the proposed budget, Europe and Eurasia will lose nearly 58 percent of their funding, while East Asia and the Pacific and Latin America will be cut by around 40 percent.
The budget also shifts funding from the development assistance account to the Economic Support Fund (ESF), which focuses on providing assistance to fragile states with an implicit emphasis on keeping U.S. allies happy. This fund is more directed at meeting national security priorities than aiding development as such. It is also controlled by the State Department instead of USAID. Again, this is unsurprising — the administration has argued that aid — and taxpayer dollars — should center on U.S. national security interests above all else.
People disagree over the previous approach
Some independent aid agencies think this is the worst possible time for the world's leading aid donor to suddenly change tack. The global community is confronted with threats like the Islamic State, over 65 million displaced people, and imminent famine in West Africa and the Horn.
Still, other members of the aid community admit that reform is sorely needed. Some think that merging USAID and the State Department will help foreign aid do more with less, while perhaps cutting back on unnecessary bureaucracy. Optimists hope that the cuts will promote efficiency and help focus aid in the long run. Other states are also reevaluating their aid programs. The global level of aid assistance has declined slightly, while top donors have been concentrating aid on fewer recipient countries over recent years. USAID operates in more countries than any other donor agency — people argue over whether it should keep this approach or focus more on countries where it can really make a difference.
Some in Congress doesn't like the cuts
Many politicians and global actors have opposed the proposed cuts. More than 100 retired admirals and generals penned an open letter arguing that aid and diplomacy are essential to national security. Meanwhile, Sen. Lindsey O. Graham (R-S.C.) said the cuts were "dead on arrival" and other Republican senators spoke out against Trump's proposed aid budget. In fact, over the past 15 years, foreign aid has enjoyed fairly widespread bipartisan support. Proponents argue that foreign aid is cheap at less than 1 percent of the U.S. budget, prevents conflicts that the military might need to intervene in, and is an indispensable promoter of American interests and values.
The proposed budget needs congressional approval so the depth of cuts, and what programs end up on the final chopping block, is uncertain. The aid community is relieved by recent moves by Congress, including a supplemental budget deal that ignored Trump's proposed 2017 cuts, preserved the entire aid budget, and increased relief funds for the famine response. So far at least, Congress is signaling that it will stand up against the White House on foreign aid.
What we don't know — Trump's foreign aid philosophy
Even without immediate budget cuts, things may change. The administration is deeply skeptical of conventional aid, believing it often does not work, enriches bad actors and fuels corruption. The Trump administration's transition team sent questions to the State Department in January asking questions like, "With so much corruption in Africa, how much of our funding is stolen?" In his confirmation hearing, Secretary of State Rex Tillerson said the U.S. government needed to think about how to deliver aid in a way that avoids fueling corruption.
Congress votes on who gets money, but the administration still shapes how aid is delivered. It is at least possible that the Trump administration could experiment with new ideas like cash transfers — the direct payment of money to a beneficiary — an approach that is supposed to "bypass corrupt officials and crafty middlemen" and get money straight to individuals. Recent studies find that cash-based programs perform better than other kinds of aid. In Chris Blattman's recent description, "the poor make good use of whatever they are given — and the most versatile thing they can be given is cash." Cash transfers are quite controversial within the aid community. Critics claim that they are likely to generate new forms of waste or cause inflation if they are scaled up. Proponents claim that the skeptics are just worried that a shift to cash would leave aid experts without work to do. From the perspective of the Trump administration, that might be a feature, not a bug.
Trump's approach to foreign aid hangs in the balance. The administration wants deep foreign aid cuts, but Congress has just proved it is willing to go against the president's wishes on aid funding, so it remains to be seen whether Trump leaves a mark on the way the nation's aid business is run.