Putting Foreign Aid Cuts in Context

March 22, 2017

The Trump administration’s FY2018 budget blueprint, released last week, proposed cuts of more than 31 percent, to the international affairs budget—known as the “150” account. Some observers have suggested the proposed cuts are simply a return to an earlier baseline following more than a decade of growth, but such analysis relies on an incomplete and selective view of the spending data. Put funding for the 150 account in context, and you better understand the broader trend and two crucial points: (1) the 150 Account is a tiny slice of the federal budget, so proposed cuts will contribute little toward shoring up much larger accounts like national defense; and (2) increases in foreign assistance over the past sixteen years have supported US development efforts in Iraq and Afghanistan, and helped deliver on a historic US commitment to fight global HIV/AIDS, particularly in Africa.   

How much goes to foreign assistance?

In FY2015, the international affairs budget, which includes programs ranging from traditional foreign aid to security assistance and diplomacy, amounted to only 1.3 percent of total government spending. And under 1 percent—0.65 percent—of that spending supported international development and humanitarian assistance. That same year, US defense spending comprised almost 16 percent of the budget.

It only takes a quick look at the numbers to see that if your chief goal is to bolster defense spending—as President Trump has suggested his is—even deep cuts to foreign aid programs will be of little help. Together, the cuts proposed to the State Department and USAID amount to less than 3 percent of the defense budget. And military officials have been among the strongest champions of US investment in development and diplomacy, arguing US efforts in these areas are critical companions to defense.


What drove increases in foreign aid spending?

Increases in foreign aid spending—including both military and economic assistance—are not merely a phenomenon of the past eight years. Foreign aid spending increased under the administrations of both Presidents George W. Bush and Barack Obama, largely due to increases in funding to Afghanistan and Iraq. Beyond these three areas, growth in foreign aid spending has been relatively modest. Under the Bush Administration, foreign assistance to Iraq grew from under $200 million in FY2001 to over $11 billion in FY2006. The Obama administration shifted significant assistance to Afghanistan, which peaked at $14.3 billion in 2011. Another contributing factor was the creation of the President’s Emergency Plan for AIDS Relief (PEPFAR)—initially proposed by President George W. Bush and regularly authorized by Congress. PEPFAR helped ensure a significant funding boost for global health programs in sub-Saharan Africa from 2003 onward. The Trump administration has already signaled plans to maintain commitments to PEPFAR and other areas of global health.


Past presidents and Congresses have recognized how robust foreign assistance can support high priority issues, like addressing HIV/AIDS and supporting development in Afghanistan and Iraq. Let’s hope, that when it comes to the FY2018 appropriations process, budget committee members and appropriators continue to appreciate the critical role foreign assistance can play in achieving our objectives.


CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.