The Fiscal Facts on Foreign Aid

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Since I’ve written on foreign aid funding in a number of different places, I frequently get emails from readers who challenge the facts undergirding my arguments. Many are genuinely astonished to hear that the USA only spends 1 percent of the federal budget on aid. These emails are unsurprising, since polls routinely show that Americans are wildly misinformed about the amount we commit to foreign aid each year. They usually estimate that we spend an average of 20-25% of the budget on aid, and they respond (on average) that we should spend only 10% of the budget on those programs.

Even though I shouldn’t be surprised, somehow I always am. There’s no shortage of available information to clear up most of the misunderstanding. How is it that foreign aid is always the public’s red-headed fiscal stepchild?

For example, a reader recently sent me this video:

While there’s some interesting stuff in there, the number of countries where we spend aid money is IRRELEVANT to fiscal discussions. If we’re talking about saving ourselves money, we have to talk about the number of dollars—and there aren’t relatively many of those in the aid budget (I’ve gone over this before in heavy detail).

It’s also worth noting that most of this funding isn’t going to fuzzy, liberal things like humanitarian assistance; large portions of what counts as “foreign aid” are marked for “Counterterrorism” or “Combating Weapons of Mass Destruction” or other national security objectives (take a look at the funding breakdown for Russia, or India, for example). This isn’t about building “welfare queen” nations…it’s about protecting our national security and building sustainable economic development. This is part of why we give aid to so many countries. If you’re a typical progressive, take heart that USAID (and other American agencies) are engaged in the global fights to eradicate hunger, polio, malaria, etc. If you’re a typical conservative, take heart that our foreign aid dollars are also spent on safeguarding our national security interest.

Still not persuaded? Heck, we just cut 11.4% from that budget anyway. That’s going to save us $6.5 billion from last year’s aid budget! Sound like a big move? It’s not. That’s a cut of less than two-tenths of a percent (0.2%) of the 2011 budget (~$3.82 trillion). This isn’t fiscal discipline. It’s fiscal “jazz hands” to distract voters. It doesn’t make a dent in our fiscal problems.

So with all that said, I’m going to post some resources for those of you who want to learn more about the foreign aid (and international affairs) budgets. Here are the best places to get the facts:

• The U.S. Global Leadership Coalition (USGLC). The guys with the facts. They always have the most recent data on the budget. Their “Budget Center” is the best place to get started.
• The USAID Foreign Aid Dashboard. More detailed facts, broken down country-by-country.
• The Modernizing Foreign Assistance Network (MFAN). A good source for non-intuitive defenses of foreign aid and how to improve it (e.g. “Why Conservatives Should Care About Foreign Assistance Reform“).
• Oxfam’s Aid Reform Division. Gregory Adams has some top-notch ideas for how to make foreign aid better (and why we should commit more resources to it).
• InterAction. This is an organization of aid and development NGOs with an interest in helping improve and maximize America’s foreign aid budget.