Foreign Aid and the Trump Administration

During the 2016 US Presidential Campaign, candidate Donald Trump separated himself from the pack of Republican candidates by championing a more isolationist foreign policy. While more establishment Republican candidates like Marco Rubio and Jeb Bush advocated for more hawkish foreign policy positions with greater US activity around the world, Trump wanted to pull back from the world. This became a key cornerstone of his America First policy. Ostensibly, this pro-isolationist stance struck a chord with a segment of the American people. In part emotionally drained by over 15 years of US intervention in the Middle East, the American people appeared willing to support a dramatic isolationist foreign policy, the likes of which had not been seen since the years leading up to WWII. Against Secretary of State Hillary Clinton, Trump's America First policy stood in stark contrast to her pro-diplomacy and more pro-interventionist approach. Ultimately, the US electoral college chose President Trump and these isolationist foreign policy stances.

Upon arrival in office, President Trump quickly established his isolationist policies. In the FY2018 budget released in March 2017, Trump telegraphed the scaling back of US diplomacy and foreign aid for international development by making dramatic budgetary cuts. Despite this strong attack on conventional US foreign policy and aid disbursement, several evolving factors went on to challenge his American First foreign policy budget. Congressional pushback, government bureaucracy, and larger geopolitical trends have all constrained President Trump's attempts to dramatically make cuts to the State Department and USAID. Despite, all the president's bluster and promises to restrict foreign aid, conventional US foreign policy including the disbursement of foreign aid have undermined the America First tenets that Trump campaigned for. In fact, specific geopolitical factors have not only compelled the administration to keep diplomatic and aid budgets untouched, but great expansions have been made to aid disbursements.

Trump's Original Plan to Slash State and USAID Budget

After campaign promise after campaign promise focusing on Americans at home and not the international community, President Trump made good on his promise of slashing international aid when his FY2018 budget was first released. Crafted meticulously by the Office of Management and Budget (OMB) Director Mick Mulvaney, OMB took up Trump's mantle of putting America first again. This FY2018 budget quickly made it clear where the Trump Administration would focus its efforts on exacting its isolationist goals. In Mulvaney's first press conference as Director of OMB, he made it clear what message the cuts he proposed would communicate to the world, It is not a soft-power budget. This is a hard-power budget. And that was done intentionally. To the shock and general consternation of the US foreign policy and USAID community in Washington DC, Trump's budget proposed a dramatic 29% cut in funding from $38 billion to $27.1 billion. Only the Environment Protection Agency (EPA) was targeted with a more dramatic cut of 31%. Notably however, Trump's first budget did not seem to completely champion the isolationist sentiment that he had campaigned on. While the administration did specifically target diplomacy and aid, the Department of Defense (DOD) enjoyed a robust proposed budget increase of 10% to $632 billion. This further illustrates what Director Mulvaney meant when he said that his budget would be a hard-power budget.

This budgetary increase to DOD while coinciding with a dramatic proposed cut to State and USAID illustrates some of the early calculus of the Trump administration. Trump, surrounded by his collection of generals, sees the military as his tool of choice when it comes to foreign policy. The military, not diplomacy, would serve as his primary instrument of choice in dealing with potential conflicts and projecting the US's national security interests to the world. Trump saw the State Department as a bastion of the deep-state with bureaucrats who had served under Secretary of State Clinton. Distrusting State, he appointed Rex Tillerson to serve as secretary of state. Tillerson surrounded himself with his own hand-picked officials largely ignoring the career diplomats that secretaries and presidents often rely on. By choosing a secretary of state willing to reduce the role of the department and by elevating DOD through his budget focusing on hard-power, Trump introduced a far less globalist foreign policy than previous administrations enacted.

In Trump's first budget, entitled American First: A Budget Blueprint to Make American Great Again, the administration reveals its justification for slashing the budget for both State and USAID. The administration explains that none of the cuts made would impact the security for diplomatic forces around the world. Instead the cuts would primarily go to ending the funding of various international organizations that the administration deems as not being aligned with US foreign policy objectives. The United Nations (UN) was one of those international organizations that was threatened to be targeted. The goal of these cuts was to make both State and USAID leaner, more efficient, and more effective. Instead of the administration focusing its attentions on the revitalization of the State Department, it instead wished to free up some of its budgets to go to other governmental departments that they thought would be more worthwhile for the goals of putting America first.

Importantly, these proposed cuts made by Trump did not come to pass. Although, the administration tried again for FY2019 to dramatically slash the budget of State and USAID, the administration met similar pushback. In fact, State and USAID largely kept the budget that they had been operating under since the late Obama Administration. Despite the efforts of both Trump and Mulvaney to craft a budget slashing money for State and USAID, other more powerful factors kept the coffers of these departments largely untouched.
Trump Administration's Cuts to Diplomacy and Aid Find Legislative Push-back

Almost immediately after Trump's first budget was proposed to the American people, congress made it clear, on both sides of the aisle, that this budget would be dead upon arrival. Even legislators who are great champions of President Trump rejected this plan outright. In a Senate Committee on Foreign Relations hearing regarding the proposed budget, Senator Lindsey Graham, a powerful ally of President Trump in the Senate, carefully navigated his position when posing questions to then Secretary of State Rex Tillerson. While being complementary to Tillerson and the aspirations of Trump, Senator Graham made it clear that both the Senate Committee on Foreign Relations and the Senate at large would never accept such dramatic cuts to the budget for State and USAID. Sure enough, congress passed its own budget into law which ignored the nearly one-third cut to the State Department.

Trump's proposed cuts to aid failed in congress for a few reasons. Since 9/11, there has largely been a bipartisan consensus that various international affairs programs should be heavily invested in by the congress. There is substantial evidence supporting the fact that foreign aid has been incredibly important for rising standards of living around the world. Foreign aid has been met with rising levels of income and the decline in infant mortality. While these altruistic benefits to US aid certainly are important, foreign aid also plays a more pragmatic role in international politics. Congress has made the calculus that both US security and economic goals are at stake when it comes to international aid. If the US were to pull its aid from several regions, as Trump's budget proposed, congress might expect that US citizens might be negatively affected at home. Potentially, pandemics might spread in areas where the US pulls its health aid and even terrorism might take root when the US is no longer there to keep extremism at bay. These concerns on the behalf of congress also touch upon the greater geopolitical risks that less US aid might lead to which will be explored further in the next section.

Interestingly, congress was not the only part of government that categorically rejected these cuts to both State and USAID. While Mulvaney and Trump were prepared to make dramatic cuts to these departments, other members of Trump's cabinet rejected his cuts. Members of the broader Washington establishment like General Mattis expressed in the past his respect and reliance on the State Department famously saying that when State is not funded, he must buy more ammunition. Secretary of State Tillerson's successor Mike Pompeo also appears to be much more pro-State and USAID than both Trump and Mulvaney. Pompeo has regained some of the trust of the career diplomats at State that was eroded during Secretary of State Tillerson's tenure.

Trump and Mulvaney's plans to slash the budget of State and USAID have gone beyond both the FY2018 and FY2019 budgets. As recent as August 2018, OMB planned to cut as much as three to five billion dollars from State's budget via a rescission process. The rescission package would have restricted money going to various foreign aid campaigns via the United Nations (UN). But, like the budgets before it, congress pounced on this sneaky rescission package and ended any chance of its passage. After the immediate rebuke of this rescissions package made by both Democrats and Republicans, the Trump Administration began to reevaluate its approach to specifically slashing foreign aid.

How Geopolitical Trends Have Inhibited Trump's Attempts to Withhold Foreign Aid

Seemingly out of nowhere, the Trump administration's advocacy for dramatic budget cuts to foreign policy suddenly reversed. In October 2018, while Washington and the world watched the Kavanaugh Hearings dramatically unfold, quietly and without little fanfare a dramatic reorganization of US foreign aid was passed by congress and signed into law by President Trump. The BUILD Act championed bipartisanly by Senator Bob Corker, Senator Chris Coons, Congressman Ted Yoho, Congressman Adam Smith, and Congressman Ed Royce reaffirmed the US's commitment to international development and foreign aid. The BUILD Act consolidates Development Credit Authority (DCA) of USAID with the Overseas Private Investment Corporation (OPIC) into a new government entity entitled the US International Development Finance Corporation (USIDFC). Congress and Trump have awarded the USIDFC with the authority to provide $60 billion in loans and insurance to various private companies wishing to do business in developing nations. Congressman Ted Yoho, in particular helped sell this expansion in foreign aid to both congress and Mulvaney. In an interview after the passage of the BUILD Act, Yoho reveals how China and national security were the key reasons leading him to champion the act. Despite running for House on the platform of slashing foreign aid, rising national security threats were enough for Yoho to change his mind. He implored both his colleagues in congress and Mulvaney to recognize the growing national security threats that China had begun to impose through its foreign aid.

The key mechanism of USIDFC is the strong capitalist argument to invest in developing countries. Promoting an equity positions in investment, which involves investment made by a third party in a business in exchange for stock, USIDFC is meant to reduce the potential risk to American private companies in investing in the potentially risky environments of developing nations. USIDFC adopts many of the tenets that China and Europe currently have adopted to encourage more international development.

Trump was compelled to abandon his black and white America First approach to foreign policy and foreign aid by strong political arguments made on behalf of many Republican congressmen. Trump and the government bureaucracy of Washington at-large have uneasily watched as China continues to unveil new political and economic campaigns to display its burgeoning economic, political, and technological prowess. In an attempt to counter China, Trump is now focusing on expanding infrastructure aid to Asia, Africa, and the Americas. In October 2018, President Xi Jinping of China made a pledge to give annually $60 billion for the development of Africa. Considering the dramatic levels of aid that China today pledges to various developing countries, a fear persists throughout the government that those countries receiving Chinese aid will become beholden to China. Various Congressmen including Bob Corker reveal that most of our foreign policy budget is now focused on specifically countering China's nefarious activities.

Despite all the money that is now being dedicated towards foreign aid and countering Chinese aid, the US simply cannot compete with the amount of aid that China is providing. Current Chinese infrastructure plans in Kazakhstan and Kenya alone represent seven-times as much money as was spent by the US during the Marshall Plan. Instead of trying to compete with the sheer volume of money that China is pouring into developing countries, the US, as well as other key foreign aid contributors and US allies like France, UK, and Japan, should focus their aid on developing the financial sectors of these countries. The development of the financial sectors of these underdeveloped countries will make these jurisdictions more hospitable to further investment in the future. Instead of taking the short-term path of developing infrastructure like the Chinese, Western powers can create an environment more compatible for future development by targeting their financial sectors. This is a plan that even the once reticent to foreign aid President Trump can get behind.

What Happens If US Aid is Actually Cut

Despite the recent change in fortune for the State Department and USAID, international aid continues to be under threat. Career bureaucrats will hold their breath in anticipation to see what Trump's proposed FY2020 Budget will look like. While USIDFC does look like a concrete pledge by the president to continue to support international aid for the foreseeable future, there is still a concern that the Trump administration might continue to look for more ways to slash international aid where they perceive there being no threat to national security.

Several studies compiled by the global campaign for aid transparency website Publish What You Find explore what would happen if the US withdrew their aid from vulnerable communities including Senegal, Liberia, Cambodia, and Nicaragua. In all case studies, it was apparent that a sudden reduction of the US foreign assistance budget would undermine current programs and potentially reverse the progress made to date.

Looking at Liberia, the US has led aid campaigns over the past few years investing in democracy and governance power. If the US would pull out of Liberia, we would see their governance capacity become severely strained and it would also likely waste all the investments the US has made in the country. Likewise, in Senegal, the US has been allocating small but purposeful amounts of aid to the country for years mainly directing funds to the country's agricultural sector. This aid has gone so far as to make the country a reliably peaceful and democratic ally to the US. Currently, the US is helping to resolve a conflict in the Casamance region of the country. A withdrawal of any amount of money from the agricultural sector might be enough to not only render many of those living in the region as food insecure, but it could exacerbate the conflict in the country.

Liberia and Senegal illustrate how even small countries receiving small amounts of aid can be beneficially impacted by US foreign aid. Publish What You Find reveals that over the past two years, the mere threat of the withholding of USAID funds has been enough to completely shut down aid programs. They assert that even in these countries far away from the major loci of world power, China can pounce on any country that the US decides to cut international aid from and develop its own sphere of influence.

Conclusion

President Trump ran on a foreign policy plan of America First. A rejection of globalization, he wished to pull the US back from foreign entanglements and involvement. For the first two years of his presidency, he fought hard against the Washington establishment, including congress, State, USAID, and even some naysayers in his own cabinet. In the end however, the administration was forced to bow to the establishment and the geopolitical trends that do not align with his campaign promises. Despite the intention to cut aid and slash the budgets for State and USAID, Trump has been unable to do either. The budgets of State and USAID remain the same thanks largely in part to bipartisan efforts in congress. Aid has not been slashed but expanded through the promise of the USIDFC which promises to meet the challenge of countering the grower influence of China. A president who relishes in his rejection of the Washington establishment has been forced by the establishment and geopolitical trends to abandon, for the time being, a keystone of his American First platform.

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