Last week's congressional freeze on fiscal 1980 spending has critically threatened priority administration foreign aid programs around the world, from politically volatile Central America to the refugee camps of Southeast Asia.
At the same time, the action means the United States will not be able to meet, in some cases even by half, its 1980 commitments to major multilateral lending institutions that finance development and increase U.S. influence in the Third World.
U.S. contributions to the World Bank -- normally about one quarter of the total received by the institution -- are expected to fall so low that the United States will lose its unique veto power and de facto dominance there.
The State Department's Office of Disaster Relief, which had promised $20 million to the hurricane-stricken Caribbean, and already has paid out $30 million for Cambodian refugees in Thailand, is now effectively broke. Its original budget was $20 million, and it had hoped to finance these "extras" through supplemental legislation now prohibited under the freeze.
A $75 million aid package for war-ravaged Nicaragua's leftist-leaning government that was billed as a major foreign policy initiative in U.S. ability to deal with revolutionary regimes and finally received congressional approval last week after four months of tortuous debate is now effectively scuttled.
Administration plans to provide funds for Indian Ocean military base access, deemed essential to counteract Soviet gains in the area, also will be severely hampered, officials said.
While the budget action had little to do with foreign policy itself, and was more a reflection of domestic economic concerns, the result is to increase congressional ability to influence and obstruct policymaking in an area theoretically reserved for the executive branch.
The freeze, mandated almost automatically when the Congressional Budget Office reported the government was $10 billion over budget, affects not only special emergency programs -- like the Nicaragua and disaster packages -- requested after the administration drew up its 1980 foreign aid bill, but the entire foreign aid bill itself.
For more than a year, the $8 billion bill has been held up in Congress and the subject of strenuous debate. Just two weeks ago, it was finally released from a House-Senate conference and deemed ready for floor vote.
That vote is now delayed indefinitely by the freeze on additional spending, leaving government development programs, bank contributions, programmed disaster assistance and even the travel budgets of foreign aid experts limited to 1979 levels that are close to being exhausted and in some cases already have been exceeded.
Perhaps even more troubling to the aid community over the long term is the administration's intention -- under strong domestic pressure -- to slash and balance the 1981 budget. Foreign aid officials have been sent scrambling throughout the world to find potential cuts in programs that will not conflict with foreign policy priorities.
"We're at a critical period in our relations with the Third World," Agency for International Development Director Douglas Bennett said. "I don't believe it's in our national interest" to cut aid programs.
But whatever case AID can make for increased funding in 1981, many officials consider the 1980 damage already done.
The only way to lift the spending freeze is for Congress to pass a resolution increasing the 1980 budget ceiling. This is not expected until at least mid-April. Even if the ceiling is raised, however, the administration does not expect the increase to be enough to cover its requested 1980 programs, particularly in the area of foreign aid, which most agree is a difficult expenditure to justify in an economically depressed and internationally confused election year.
Congressional failure to pass the annual foreign aid bill is not unprecedented. Since the bill's original submission early last year, the House and Senate had been unable to agree on a number of specific items, especially the level of U.S. contributions to the World Bank.
The bill was further delayed when crises in Iran and Afghanistan raised foreign policy questions Congress wanted resolved before it appropriated aid money.
In similar cases in the past, expenditures for foreign aid have been made under a continuing resolution allowing the government to spend up to levels authorized for the previous year. The difference, for programs deemed to have priority, normally is made up through special supplemental appropriations bills until the basic appropriation is passed.
Under the freeze, however, neither these additional spending bills nor the basic 1980 bill can be passed.
Among the specific programs that will be affected for fiscal 1980, the administration considers the multilateral bank contributions most serious. Its original request for World Bank funding was about $1 billion. The House-Senate conference cut that amount to $328 million.
The 1979 continuing resolution, however, authorizes $163 million for the World Bank. "The effect," said a Treasury Department official, "is that the United States obviously isn't going to be able to meet its commitment, and will probably lose its veto power."
Treasury officials expect the decreased U.S. payment to the World Bank and other institutions to have a ripple effect that will cause other countries to decrease their own contributions to the institutions.
"The contributors all agree to put in money, and make an initial payment," one official said. "The United States generally is last because it has to go through the appropriations process. If we can't come up with the money, then the others won't make their second round of contributions."
U.S. contributions to the African Development Fund will drop from a projected $41.7 million requested for 1980 back to the $25 million appropriated for 1979.
Officials view the complications within the Asian Development Bank as even more disastrous. The administration originally requested a $420 million contribution that was cut to $363 million by the conference committee. The 1979 limits, however, authorize $265 million.
Most of the requested Asian money was slated to go into a $221 million development loan to Pakistan, which for political reasons has had difficulty accepting a direct bilateral aid package from the United States. The Asian Development Bank was viewed as a multilateral avenue through which the United States could more palatably channel resources to Pakistan that would provide a counterbalance to the Soviet presence in neighboring Afghanistan. That avenue, according to one administration official involved in the program, is now effectively closed.
Without full funding of the 1980 foreign aid bill, assuming the freeze on passage eventually is lifted, AID will lost about $47 million in general requested development funds "that will have to be take out across the board" on the basis of foreign policy priorities, an agency official said.
AID operating expenses will have to be cut by about $7 million, meaning "a hiring freeze, severe reductions in travel and less contract funding." Operating expenses have been high this year, an official said, because of the large numbers of U.S. personnel that have had to be evacuated from embassies during political upheaval in the Mideast and Central America.
"The cuts will have to be obvious things," AID director Bennett said. "Stop traveling, and use your Xerox machine less."