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Foreign Assistance and the US Budget

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What We Spend:

The international affairs budget enables a variety of programs worldwide that promote the security and values of the American people. This budget helps to ensure long-term stability, fosters economic growth around the world, and reinforces a humanitarian ethos both domestically and abroad. The international affairs budget currently achieves all of these objectives for slightly more than 1 percent of the US federal budget. In contrast, current defense spending comprises almost 15 percent of the US federal budget.

The majority of US foreign assistance is contained in the international affairs budget requested and allocated through the State, Foreign Operations, and Related Agencies appropriations bill. This is also referred to as Function 150 or the “150 account”, and contains spending on global economic, diplomatic and humanitarian programs by the State Department (DOS), the United States Agency for International Development (USAID) and the Millennium Challenge Corporation (MCC) among others. The US Global Leadership Coalition provides thorough updates on the status of 150 Account budget, including a summary of individual program, or “account,” allocations.

How We Decide:

The US budgetary process directly affects the monetary amounts allocated to US foreign assistance programs each year. Understanding the negotiations from the administration’s request for foreign assistance funding to the final appropriations for a given program is crucial to understanding many of the challenges and limitations of the US foreign assistance apparatus as it is currently constituted.

The main steps in the budget appropriations process are as follows:

The legislative branch plays a critical role in US foreign assistance, possessing the power both to authorize policy and appropriate funds. In response to the President's budget submission, the House and Senate Budget committees are the first to act, setting funding ceilings for various parts of the budget and guiding the work of both authorizing and appropriations committees. Each year, 11-12 appropriations bills, including the State, Foreign Operations, and Related Agencies bill, make their way through a long deliberative process in both the House and the Senate. The appropriations committees, in coordination with the authorizing committees, determine and allocate federal spending each year.  Oftentimes, the resulting appropriations bills and accompanying reports include numerous detailed directives on how funds should be spent by country and account. Learn more about Congress’s role in US foreign assistance and CGD’s efforts On the Hill.

What Would You Decide?

Would you have correctly guessed the percentage of the federal budget allocated to foreign assistance programs? Do you know how much money the US government allocates to programs that you care about? Test your knowledge of the budget and federal programming here.

How would you allocate the federal budget? Would you choose to run a deficit or to reallocate funds? Do you prefer to increase taxes or reduce spending outlays? How would you balance the equation to increase spending on foreign assistance programs?

1Compiled from data in the Historical Tables, Budget of the United States Government, Fiscal Year 2009.