Budget Cuts Hit US Foreign Aid Programs

Tatiana Vorozhko
April 03,2013

The mandatory U.S. federal budget cuts that recently went into effect -- known as "sequestration" -- are affecting more than the government's domestic programs. The $85 billion across-the-board cuts are also taking their bite out of international aid and development efforts. Despite the challenges and the rhetoric, many feel the future of international aid is still optimistic.

Mandatory federal cuts

Like other federal agencies, the U. S. Agency for International Development has to cut its budget as a result of sequestration. The four-percent USAID must cut will reduce its foreign assistance, but many ongoing projects will not be affected immediately since USAID provides funding up to two years in advance.

Even if the budget cuts for USAID and other U.S. aid and development programs remain small, they will affect the health and the lives of real people, says George Ingram of the Brookings Institution.

"The area that will be impacted the most is health, and that because it is the biggest part of the development budget. And the cuts that will be taken on health are almost $400 million, which is a large amount of money,' Ingram explained. The second is humanitarian assistance, which will be cut by about $200 million. Both cases are very serious hits because in both of these accounts we are talking about life and death situations.

International programs dependent on US aid

Raj Kumar is President of Devex, an organization that researches and reports on international aid. He thinks that people with HIV-AIDS might suffer the most. "We are in a world with 30 million people living with HIV, for example. Many of them are dependent on US foreign assistance," he said.

One bright spot in the aid picture is the increasing role of private philanthropies, like the Bill and Melinda Gates Foundation.

And corporations are also becoming involved in development -- in communities where they do business and want people to be able to afford their products.

Still, these efforts can not close the entire gap in aid provided by the US government -- especially in the area of health and disaster assistance.

"The private sector is not going step in and provide the medical care, the food, the water that is required when you have humanitarian crisis," noted Ingram.

While many Americans criticize foreign aid, the public actually supports many of its goals.

"The American people are very strongly supportive of helping other countries with their health problems, with education, with microenterprise, with promoting democracy, with promoting economic growth. Americans don`t like foreign aid but they seem to support all of the elements of it," added Ingram.

"The people who are very supportive of national security, traditionally more conservative candidates, Republican candidates, have come on board with foreign assistance because they see it as a part of broader national security, antiterrorism strategy," said Kumar.

And while foreign aid is a popular punching bag in political debates, it actually accounts for no more than 1 percent of the entire US budget.