Crafting a 21st-Century Foreign Assistance Act: Q&A with Sheila Herrling

January 15, 2010

Amid the growing calls to modernize U.S. foreign assistance, there is widespread agreement that the Foreign Assistance Act of 1961 is out of date and inadequate to tackle 21st-century challenges of poverty, inequality, conflict, disease, and climate change. CGD senior policy analyst Sheila Herrling takes a closer look at the opportunities and obstacles facing a Foreign Assistance Act rewrite in a new CGD Q&A. She says significant leadership and investment from the White House is needed to complement the efforts of congressional champions like House Foreign Affairs Committee Chairman Howard Berman, who has vowed to start rewriting the bill.

Q: What is the Foreign Assistance Act?

A: Put simply, the Foreign Assistance Act (FAA) is the legislation guiding the authorities, use, and allocation of U.S. foreign assistance. It was enacted in 1961 and has been reauthorized comprehensively only once, in 1985.

Q: Why does it need to be rewritten?

A: The current act is outdated, messy, cumbersome, and increasingly irrelevant for the challenges confronting the United States today. Hundreds of amendments have added multiple objectives and priorities that in some cases conflict with one another, rendering the FAA irrational from a policy perspective, administratively burdensome, and wholly lacking in strategic vision. Funding is doled out by a yearly appropriations bill that earmarks nearly every dollar—yielding an inflexible and sluggish system for spending money where and how it will have the most impact on development. The FAA is simply inadequate to guide U.S. foreign assistance objectives.

Q: What are the key issues a new FAA would need to address?

A: A new act should clearly outline the objectives and priorities of U.S. foreign assistance programs; consolidate decision making and implementation functions into a single independent institutional entity; specify the roles and responsibilities of other government agencies where appropriate; clarify the coordination of oversight responsibilities and functions; adjust regulatory requirements to fit the reality of implementing assistance programs; and discourage to the highest degree possible political and bureaucratic constraints (such as earmarks and presidential initiatives).

Q: What stands in the way of taking on this challenge?

A: Mainly, political will and competing priorities. Remember that two major attempts to rewrite the act in the past—the Hamilton-Gilman process of the late-1980s, early-90s and the Peace, Prosperity and Democracy Act of 1994—failed. To be successful, enacting a new FAA will require significant leadership and investment from the executive branch at a time when it will be consumed with managing the global financial crisis. I remain optimistic it can succeed this time. There are so many more voices calling for reform; President Obama’s campaign promises include a plethora of global development and foreign aid reform issues, Secretary of State Hillary Rodham Clinton made development a prominent theme in her confirmation hearing, and key leaders like House Foreign Affairs Committee Chairman Howard Berman are prioritizing a rewrite of the FAA. Hopefully the connections between investing smartly in global development and protecting U.S. national security, economic, and moral interests are more widely recognized.

Q: What should the executive branch do and what should Congress do?

A: Responsible and interested parties in both branches must own this process if it is to succeed, and in some ways the process itself may be the most important benefit. If done well, it could help forge a more positive and constructive relationship through which Congress will be more willing to extend greater flexibility to the executive branch, while receiving from it greater accountability and attention to Congressional priorities and better tools for exercising policy and program oversight. To guide the process, the executive branch should work with Congress and civil society to craft a National Strategy for Global Development that would include (but not be restricted to) U.S. priorities for foreign assistance.