White House's foreign aid budget: long on guns, short on butter

President Reagan's new budget proposals for overseas aid appear to shift emphasis from economic to military aid. Congress, sympathetic to military assistance and lukewarm to development aid, for two years has not passed a foreign aid appropriations bill. Instead it has voted a continuing resolution that makes no allowance for inflation.

The mood has shifted since President Kennedy in 1962 called foreign aid "the best, the cheapest, the safest" way to preserve democracy.

The Marshall Plan in the early 1950s devoted 2.5 percent of America's gross national product (GNP) to rebuilding Europe after World War II -- one of the most generous and successful moves in history.

By 1978, foreign aid sank to only 0.23 percent of the GNP, and the United States ranked 13th among donor nations. In 1980, the US dropped to 15th place, with 0.18 percent of its GNP going to foreign aid. Its total aid, however, was quantitatively the highest among countries.

Reagan's budget slashes the Carter foreign aid request and simultaneously increases funds designated as military assistance to certain nations.

A suspicious Congress demands why dollars should go abroad when social programs are cut at home. President Reagan's programs are not yet precise enough, and there is enough policy "give" in the projections to make interested groups unsure of what lies ahead.

"The crucial question now is whether President Reagan and Secretary [ Alexander M.] Haig are sufficiently convinced of the importance of US participation in international development assistant efforts to resist congressional attempts to cut still more out of an already too-lean budget," declares John Sewell, president of the Overseas Development Council.

Budget Director David A. Stockman, asked here on the matter, also indicates it's now up to Congress.

But the Reagan budget gives major signals in the matter:

* Carter sought $5.6 billion for foreign aid in fiscal 1981 and would have required a billion or so more to accommodate to inflation. His fiscal 1982 budget proposed raising this to around $8 billion. Reagan's budget would hold to the earlier Carter level.

* Because the Reagan budget radically increases military spending while reducing civilian spending, the foreign aid program feels the gravitational pull of the process. Reagan would reduce nonmilitary, nonstrategic foreign aid by around 10 percent, saving an estimated $150 million in 1981 and $485 million in 1982. He also would cancel Carter's proposed increases.

* The administration prefers to channel aid to the third world through specifically targeted bilateral agreements (such as that between US and El Salvador) rather than through multilateral aid agencies such as the World Bank, the International Development Association, and others.

* The administration wants a discretionary $350 million "contingency fund" to be placed at its disposal for use during foreign policy emergencies.

* It wants to revive the Military Assistance Program, which Congress phased out last year. The program enables friendly third-world nations to buy US weapons.

* On March 10, the President asked Congress for a $6.9 billion military aid package consisting of weapons sales, cheap credit, and grants, including $900 million credits for Egypt, $400 million for Turkey, and $25 million in aid to El Salvado r.