President Reagan's budget director, David A. Stockman, has proposed the biggest cutback of the U.S. foreign aid program since its inception in the aftermath of World War II. It would slice enormous chunks out of every phase of development assistance, tie it closely to American political interests and make it subsidiary to military aid.
A plan completed Tuesday by Stockman's Office of Management and Budget calls for slashing the $8 billion fiscal 1982 foreign aid proposal submitted to Congress by former president Carter by $2.6 billion to bring it down to $5.47 billion. A copy of the OMB proposal has been obtained by The Washington Post.
To accomplish the cuts, Stockman's plan calls for drastically trimming every facet of nonmilitary aid: direct bilateral assistance to Third World countries, contributions to multilateral development banks, international organizations such as U.N. agencies, the Food for Peace program and the Peace Corps.
If pursued by the Reagan administration, the Stockman proposals are certain to trigger an outburst of fierce opposition from foreign aid supporters in Congress and the traditional U.S. foreign policy establishment, which regards the program as one of the most important tools for influencing events.
In particular, some informed sources said yesterday, it is likely to provide the first test of strength between Secretary of State Alexander M. Haig Jr., who is surrounding himself with foreign policy moderates, and those on the far right side of the Reagan administration whose first emphasis is on draconian budget cutting and an unabashed "American First" approach to the conduct of foreign affairs.
Haig's reaction to the Stockman plan is not known. But, the sources noted, if he accepts it in anything resembling its present form, he will be beginning his stewardship of the administration's foreign policy effectively deprived of what all of his Republican and Democratic predecessors in the postwar period regarded as one of their most important policy tools.
Haig tentatively is scheduled to meet with Stockman and other senior administration officials tomorrow to discuss the aid question. at a news conference yesterday he paid obeisance to the need for budgetary austerity, but noted pointedly that foreign aid "can sometimes be a very cost-effective way" of ensuring the success of American policy goals.
Entitled "Foreign Aid Retrenchment," the OMB document sets out as its underlying assumptions that "every major program should take some reduction," that "bilateral aid has priority over multilateral aid programs" and that "security assistance has priority over development assistance."
It goes on to conclude, "The primary impact of this proposal would be to eliminate or reduce U.S. participation in a range of multilateral organizations which are not responsive to U.S. foreign policy concerns. . . . oThe reductions in aid would mainly affect the poorer countries to africa and the Asian subcontinent.
"Bilateral development aid," it continues, "could be concentrated on a small number of countries of key importance to the United States, perhaps at the loss of influence in countries of lesser importance."
The Stockman proposals specifically argue that the United States should curtail sharply its contributions to the International Development Association, which is managed by the World Bank and which makes low-interest loans to the world's poorest countries. Although the United States recently pledged $3.24 billion to the IDA for the 1981-83 period, the plan calls for Reagan to revoke the pledge and reduce the U.S. contribution by half.
In regard to other multilateral development banks, Stockman proposes that in 1981 the United States revoke its three-year pledge of funds to the African Development Bank, in 1982 stop replenishing funds of the International Fund for Agricultural Development and in ensuing years phase out its support for such other institutions as the Inter-American Development Bank and the Asian Development Bank.
The plan advocates big cutbacks of voluntary contributions to international organizations, and refusal to pay any unreasonable increased assessments. It specifically suggests U.S. withdrawal from the U.N. Education, Scientific and Cultural Organization (UNESCO) because of its "pro-Plo [Palestine Liberation Organization] policies and its support for measures limiting the free flow of information."
In respect to the Food for Peace program (PL 480), Stockman's proposal would eliminate U.S. loans to needy countries to cover food purchases from America. It would continue to put U.S. surplus food into the hands of voluntary organizations such as CARE and Catholic relief agencies. h
In addition to calling for cuts in bilateral assistance administered by the Agency for International Development ($686 million below the Carter-proposed budget for fiscal 1982), the plan says that the Peace Corps' volunteer levels should be cut by 25 percent, a move that would force it to reduce its activities sharply and eliminate service in some countries where it now is represented.
The program treated most leniently in the Stockman plan is the Economic Support Fund, which is intended to promote stability in areas where the United States has special security interests.
In addition to continuing special exemptions for Israel and Egypt, the plan would increase ESF funding for certain regions, but it would eliminate a $100 million contingency fund that the State Department argues is necessary to deal with unforeseen situations.