Secretary of State Alexander M. Haig Jr., armed with a burst of protests from congressional leaders and America's principal allies, counterattacked yesterday against budget director David A. Stockman's plan to make the biggest cuts in the history of U.S. foreign aid.
Reliable sources said that a Cabinet-level White House meeting late yesterday, Haig successfully fought off efforts to force a quick decision on the aid-cutting proposals prepared this week by Stockman's Office of Management and Budget.
Instead, the sources said, further action was deferred until early next week to allow the State Department to prepare a detailed position on the OMB plan and how its various features would affect the conduct of foreign policy.
According to the sources, Haig went into the meeting with a hastily prepared memo outlining what department officials see as the potentially disastrous economic and strategic consequences of a plan that one of his senior aides described as tantamount to "a U.S. withdrawal from the world."
Buttressing Haig's arguments, the sources continued, was the fact that since details of the Stockman plan became known Thursday, protests have poured into the State Department from most of the other principal aid donors in the western world -- among them West Germany, France, Canada, Australia, Japan, the Netherlands and the European Economic Community.
The sources said that while most of these protests were phrased as cautionary requests for further information, some were outspokenly blunt. Australia, for example, was understood to have said that adoption of the policies outlined by Stockman would be tantamount to a breach of U.S. commitments.
Canada's minister for external affairs, Mark MacGuigan, who met here with Haig yesterday, said at a press conference later that he had cautioned against precipitate cuts that would work against U.S. interests. MacGuigan added that his government is especially concerned that Stockman's call for sharply curtailing U.S. contributions to the International Development Association, which is managed by the World Bank and makes low-interest loans to the world's poorest countries, could wreck the IDA.
Also weighing in Haig's favor, the sources said, was a sharply hostile reaction to the Stockman plan starting to build up on Capitol Hill. Senate Majority Leader Howard H. Baker Jr. (R-Tenn.) has said he believes the United States must maintain a level of aid "adequate" to sustain foreign policy goals, and the chairman of the House Foreign Affairs Committee, Rep. Clement J. Zablocki (D-Wis.), opened fire on Stockman in remarks printed in the Congressional Record yesterday.
"The proposed cuts are not merely the work of an overzealous budget-cutter who has been in office barely a week," Zablocki said, "they are irresponsible in terms of the U.S. national interest. They could have been conceived only by persons who do not comprehend the role and interests of the United States in world affairs and how they are served by U.S. assistance programs."
Zablocki's comments were echoed privately by State Department officials who said they had expected the "prudent budget" philosophy proclaimed by President Reagan to mean that there will be both cuts in foreign aid and a shift in emphasis to more country-to-country aid deals that will be used frankly in support of short-range U.S. policy goals.
But, department sources said, they had no warning that Stockman proposed to trim drastically every facet of nonmilitary aid: direct bilateral assistance, contributions to multilateral development banks and international organizations such as United Nations agencies, the Food for Peace program and the Peace Corps.
Specifically, the plan completed by OMB Tuesday 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 $5.4 billion.
Haig and his subordinates are understood to believe that Stockman was attempting to hit them with a fait accompli -- preparing his proposals just in advance of yesterday's meeting in hopes that they could be rammed through and locked into place before the State Department knew what was happening.
If so, hopes for a quick decision were scuttled effectively when copies of the OMB plan were leaked to the press. Publication of the details allowed time for the domestic and foreign protests to start and for the State Department to get a counteroffensive rolling.
Department officials noted that if Stockman's call for halving the pledge to the IDA prevails, other countries will no longer be bound to their commitments, and the IDA will be forced out of business.
As for the World Bank, the contribution cuts proposed by Stockman would not stop the bank from continuing operations. But they would bring the U.S. contribution below 20 percent and thereby cause the United States to lose its power to veto changes in the bank's charter.