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August 22, 2017

Draining the Foreign Aid Swamp


Well, this should brighten any fiscally responsible person’s day.
Politico reports, “Lawmakers and activists are preparing for the possibility that President Donald Trump's administration … will take the rare step of deliberately not spending all the money Congress gives it.”
According to the article, “concern is mainly focused on the State Department,” because Secretary of State Rex Tillerson has failed to spend $80 million dollars appropriated by Congress.  
Imagine, the president of a country that’s spending its way into bankruptcy not spending all the money Congress appropriates.
President Trump campaigned on reducing the amount of taxpayer money the U.S. hands out to other countries, especially those that don’t like us very much. And he doubled down on that threat in his Afghanistan speech by warning Pakistan to get control of its terrorists or lose its foreign aid.
IPI looked at U.S. foreign aid expenditures three years ago, in a widely reprinted piece, using 2012 numbers (the latest available at the time). Here is what the government said—before it apparently took down that site.

“The United States remained the world's largest bilateral donor, obligating approximately $48.4 billion—$31.2 billion in economic assistance and $17.2 billion in military assistance.” 

However, “obligated” funds are not the same as “dispersed.”  The U.S. only disbursed $33.2 billion—$19 billion in economic assistance to 184 countries and $14.2 billion in military assistance to 142 countries.
Last year, the Washington Post examined the 2017 federal budget and identified $42.7 billion aimed at “foreign assistance,” adding that was only about 1 percent of the federal budget—a disingenuous comment intended to squelch opposition to foreign aid.
Social Security and much of Medicare are paid for by dedicated taxes, and those programs make up 40 percent of federal spending. The left-wing Center for Budget and Policy Priorities says that 2016 non-defense discretionary spending only amounted to about $600 billion, or 16 percent, of federal spending—and $42.7 billion in aid is a big chunk of that number.
The Politico article also stresses all the hand-wringing from rent-seeking* organizations and countries that receive a share of those taxpayer funds. They’re making plans to lobby, and even sue, the administration to make it spend money it doesn’t have.
While Politico explains that there is federal legislation requiring the administration to spend the money Congress appropriates, it also stresses there is usually a lot of wiggle room.
Here’s hoping the Trump administration will wiggle as much as it can. While some financial and military support may be necessary, it should only go to strategic partners. Holding on to $80 million in State Department money isn’t much, but it’s a start that no other administration has been willing to take.
* Rent-seeking — Engaging in or involving the manipulation of public policy or economic conditions as a strategy for increasing profits.


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