Function 150 - International Affairs
Reduce Funding for International Affairs Programs
CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.
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The budget for international affairs funds diplomatic and consular programs, global health initiatives, security assistance, and other programs. In 2017, those programs cost an estimated $51 billion, including $12 billion for international security assistance, $8 billion for diplomatic and consular programs, $8 billion for global health programs, and $3 billion for international disaster assistance. (Other activities that receive funding include migration and refugee assistance, development assistance, peacekeeping efforts, and narcotics control and law enforcement.) Most funding for international affairs is administered by the Department of State or the Agency for International Development. Several other agencies, such as the Departments of Defense, Agriculture, and the Treasury, also receive funding for overseas assistance programs. The costs of most programs are relatively small, but significant budgetary savings could be achieved with broad cuts to the entire international affairs budget.
This option would reduce the total international affairs budget by 25 percent beginning in 2020.
Effects on the Budget
In total, the reduction in funding for international affairs programs would save $116 billion through 2028, the Congressional Budget Office estimates, provided that federal appropriations were reduced accordingly. The eliminated appropriations would not immediately decrease outlays by the same amount because it typically takes about six years for most of the funds appropriated in one year to be spent. If funding was reduced by 25 percent in 2020, CBO expects that about one-third of the resulting savings would accrue in the same year, roughly one-fourth in the following year, and the remainder over the next four years. If funding was reduced by more than 25 percent, savings would be proportionally larger. Uncertainty about the budgetary effects of reducing spending on international affairs programs stems primarily from uncertainty about whether actual appropriations made by the Congress would match CBO's baseline projections in any given year.
An argument for this option is that reducing federal spending on international affairs could encourage the private sector to take a larger role in providing foreign assistance. Private organizations already provide significant resources for various international initiatives (such as HIV/AIDS research and financial development assistance), and further diversifying funding sources for international initiatives could increase their overall success. In addition, some of the U.S. government's foreign assistance may be ineffective at promoting growth and reducing poverty. Although some projects and programs are generally considered successful, the Congressional Research Service has concluded that "in most cases, clear evidence of the success or failure of U.S. assistance programs is lacking, both at the program level and in the aggregate."
The primary argument against this option is that reducing funding for international affairs programs could have far-reaching effects that might ultimately impede both the international and domestic policy agendas of the United States. Such programs, which encompass many activities in addition to foreign aid, are central to establishing and maintaining positive relations with other countries. Those relationships contribute to increased economic opportunities in the United States, better international cooperation, and enhanced national security. Significant reductions in federal funding for international affairs programs would hinder humanitarian, environmental, public health, economic, and national security efforts.