Foreign Aid Spending A Flashpoint

The upcoming foreign aid bill working its way through Congress this fall will prompt a firestorm of debate about why the U.S. is being so generous with foreign countries while job losses mount back home, the deficit and debt climb, and businesses and families struggle to make ends meet.

There's a $48.8 billion foreign aid measure for fiscal 2010 that Congress will pass and the president will sign this fall. That it will pass is not a question. It won't be unanimous, but the votes will be there for what is considered vital aid to countries like Israel and Egypt.

That it is so large is another matter, and one that will flame protests in all likelihood. The bill is 33% higher than last year's foreign aid appropriation. Even at this high level, it is actually $3 billion below the Obama administration's request.

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

Among the highlights: $2.7 billion for non-military economic aid for Afghanistan entirely unrelated to the funding for the U.S. military operation and even as U.S. public support is dropping for the military operation, $1.5 billion for Pakistan and $483 million for Iraq.

Also included are $8.2 billion (a $1.2 billion increase) for diplomatic and embassy programs. Some of the funding will be used to hire over 1000 new foreign service officers. There's $1.39 billion for the U.S. Agency for International Development, $5.7 billion for international HIV/AIDS prevention, $1.2 billion to promote clean energy, environmental and climate change work as well as biodiversity and park and wildlife preservation.

These particulars are in addition to the traditional aid to countries such as Israel, Egypt and Jordan, and the support for ongoing UN international peacekeeping missions in places like Haiti, Liberia, Congo and Lebanon.

The annual foreign aid bill will be an easy target for opponents, especially in a weak domestic economy and with a $12 trillion national debt and an annual deficit this year that may be $1.7 trillion.

Rep. Walter P. Jones, R-NC, calls it ''tragically ironic that the U.S. is borrowing money from countries like China to pay for this generous foreign aid...while the country desperately needs more money for national priorities like securing our borders, safeguarding benefits for our veterans and investing in infrastructure.''

We'll be hearing more arguments like that this fall, even though the foreign aid bill is a small part of the budget (about 1%) and has enough support to pass. Many billions in aid will ultimately flow.

It could be a tough question, though, for lawmakers supporting the aid to answer at town halls this fall, even though foriegn aid complaints may give them a momentary break from answering a volley of more health care reform questions.