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Treaty pledges make cuts in foreign aid difficult. Camp David pact alone commits US to spend big sums

When it comes to cutting the budget, most Americans, according to public opinion polls, think the nation's $16 billion foreign aid program is a good place to start. But setting Budget Director David A. Stockman loose on foreign aid, experts say, would hardly make a dent in the federal deficit.

One reason is that big prior commitments do not allow much room for savings. The big-ticket items are aid to Israel and Egypt, which stem partly from pledges made in the 1979 Camp David accords. Right now the two countries receive a combined total of $4.5 billion in military and economic assistance, just under a third of the total US aid budget. Hundreds of millions more are now committed to countries such as Spain and the Philippines, which provide base rights for US armed forces abroad.

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Another, more important, reason is that both liberals and conservatives agree -- although for different reasons -- that foreign aid is one of the US government's most important foreign policy tools.

To cut back on aid spending now, supporters say, would be to invite major security problems -- and major spending -- later. Foreign aid has become so important that even the budget-conscious Reagan administration has raised the aid budget by more than 50 percent during the last four years. If the administration has its way, the aid figures will rise by another $1 billion next year.

Thus, in Washington the question is not whether to cut foreign aid. The real controversy this year will be over the new emphasis that the Reagan administration is placing on military assistance -- at the expense, critics say, of more traditional economic aid to developing countries. One source close to the aid issue says that while there's unanimity on the need for more aid, divisions over the allocation of the aid budget run deeper than any time since the Vietnam war.

Just what constitutes ``foreign aid'' is not so easy to say, since there is no single line item in the budget with that designation. Instead, aid is comprised of a number of line items that fall into two general categories.

The first is economic aid or ``development assistance.'' This includes bilateral grants and loans for development projects such as health clinics and schools in third-world countries, plus direct contributions under the Food for Peace program. Multilateral economic aid is pooled with the contributions of other countries and channeled through international organizations such as the World Bank and the United Nations.

The second category is what specialists call ``security assistance.'' This includes grants and loans to foreign governments to provide military training and equipment. It also includes the Economic Support Fund, two-thirds of which goes to support the domestic economies -- often to provide balance-of-payments support -- of nations such as Israel, judged vital to American security.

A congeries of smaller line items, including the Peace Corps and the US refugee assistance program, round out the foreign aid budget.

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The last time Congress passed a foreign aid authorization bill was in 1981. Congressional sources say disagreement reflects a collapsing consensus -- hastened by recent administration aid policies -- on the proper role US aid should play in advancing US policy objectives abroad.

During the 1970s, US aid focused on long-term economic development designed to bring poorer countries into the economic mainstream. The accent was on humanitarian assistance. Proponents of development aid cite the ``green revolution,'' which made India nearly self-sufficient in agriculture, and declines in infant-mortality rates because of improved health care, as signal accomplishments of the period.

Reagan administration officials say that while such aid is desirable, it does not directly promote US security interests. The result has been a radical shift in program and country allocation away from development aid and toward security assistance -- and with fewer countries as recipients. Right now, just eight countries receive 90 percent of all US security assistance. The administration also demonstrates a strong preference for bilateral over multilateral aid, which Reagan spokesmen say gives the US more direct control over aid expenditures.

Administration officials say that harnessing US aid to specific foreign policy objectives abroad -- consonant with aid programs of the immediate post-World War II period -- is necessary to meet growing security threats in key areas such as the Middle East. They also describe such expenditures as cost effective.

``Without reasonably militarily competent allies, we would face great pressure to put American troops in strategically important areas at a much greater cost to US taxpayers,'' says one State Department official. He notes that the cost of supplying a Turkish soldier to help shore up NATO's key southern flank is about $5,000. Sending an American to do the same job would cost close to $100,000.

Critics of administration aid policy express concern that higher spending for short-term political gains can compromise the longer-term US economic and security interests abroad.

``The problem with the aid program,'' says John Sewell, president of the Overseas Development Council, ``is that it's trying to do too many things with too little money.'' Sewell and others say the emphasis on military spending may ignore more-basic threats posed internally by economic failure and social disruption.

``In the long run,'' says Cheryl Morden of Interfaith Action for Social Justice, a church-based development group in Washington, ``ignoring these root causes of insecurity could be costly for the US.''

Critics also complain that the administration's emphasis on key strategic areas -- like the current commitment to implement the recommendations of the Kissinger Commission calling for a five-year, $8 billion aid package to Central America -- has shortchanged other regions in great need. Critics note that aid to Central America is up 70 percent in this year, while aid to Africa, with 10 times the population, shows no real growth over last year.

Congressional sources say that growing dissatisfaction among liberals with the administration's new accent on security assistance could make this year's aid bill harder to pass than ever.

Says one, ``Recent cutbacks in multilateral aid, in particular, have weakened the incentives for liberals in Congress to vote for an administration aid package.''

Two years ago, for the first time, several pro-development groups joined in urging rejection of pending aid legislation, arguing that a bad bill was worse than no aid bill at all. Defections from liberal ranks again this year could complicate passage of the administration's 1986 proposal.

This year's aid package could also be complicated by what one former AID official calls the ``flashpoint'' issues, in particular, administration requests for additional funding to support the Nicaraguan contras. While funds for the contras movement would come out of the Central Intelligence Agency's budget, the issue could have what this official calls a ``spillover'' effect.

``If the debate over new aid to the contras goes bad,'' he notes, ``it could poison the whole debate when the aid package comes up this spring.''

But the main problem will be to increase foreign aid while the rest of the federal budget is being trimmed.

With the administration pushing for more security assistance, with congressional liberals pushing for more development aid, and with nearly everyone willing to provide at least some additional assistance to Israel and probably Egypt as well, something will have to give.

No matter how it's resolved, there's still the political problem of convincing the American public that foreign aid is a good place to spend scarce tax dollars.

``How does a congressman go to his constituents to announce that he's approved cuts in Amtrak and social security,'' asks an Agency for International Development official, and ``then say he's given more money to some country his constituents have never heard of?''

Squaring that particular circle maybe the hardest job of all. Chart: US foreign-aid appropriations (Millions of dollars)

FY 1981 FY 1984 Development assistance


Multilateral Development Banks 1,003.6 1,324.4

International Organizations 262.4 315.2


Development Assistance 1,711.6 2,011.5

Food for Peace (PL-480) 1,228.9 1,377.0

Total: 4,206.5 5,028.1

Security assistance

Economic Security Fund: 2,104.5 3,254.3

Military Aid: 3,184.8 6,479.8

Total: 5,289.3 9,733.1

GRAND TOTAL: 9,495.8 14,761.9

Source: US House Appropriations Committee US military assistance -- FY 1983 Top 20 major recipients

Percent Amount

total ($ millions) Israel 30.4 1,700.0 Egypt 23.7 1,326.9 Turkey 7.2 402.8 Spain 7.2 402.5 Greece 5.0 281.3 Pakistan 4.7 260.8 Republic of Korea 3.3 186.7 Portugal 2.0 111.2 Tunisia 1.8 102.0 Lebanon 1.8 101.7 Morocco 1.8 101.3 Thailand 1.7 96.2 El Salvador 1.5 81.3 Jordan 0.9 52.8 Philippines 0.9 51.4 Honduras 0.9 48.3 Sudan 0.8 44.3 Somalia 0.5 30.6 Oman 0.5 30.1 Indonesia 0.5 27.4 Total (20 countries) 97.2 5,439.5 Total (all countries) 5,599.0 Source: Agency for International Development -- 30 --


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