" America’s budget crisis at home is forcing the first significant cuts in overseas aid in nearly two decades, a retrenchment that officials and advocates say reflects the country’s diminishing ability to influence the world.
As lawmakers scramble to trim the swelling national debt, both the Republican-controlled House and the Democrat-controlled Senate have proposed slashing financing for the State Department and its related aid agencies at a time of desperate humanitarian crises and uncertain political developments. The proposals have raised the specter of deep cuts in food and medicine for Africa, in relief for disaster-affected places like Pakistan and Japan, in political and economic assistance for the new democracies of the Middle East, and even for the Peace Corps.
The financial crunch threatens to undermine a foreign policy described as “smart power” by President Obama and Secretary of State Hillary Rodham Clinton, one that emphasizes diplomacy and development as a complement to American military power. It also would begin to reverse the increase in foreign aid that President George W. Bush supported after the attacks of Sept. 11, 2001, as part of an effort to combat the roots of extremism and anti-American sentiment, especially in the most troubled countries.
Given the relatively small foreign aid budget — it accounts for 1 percent of federal spending over all — the effect of the cuts could be disproportional...
However, one of the largest portions of foreign aid — more than $3 billion for Israel — is left untouched in both the House and Senate versions, showing that, even in times of austerity, some spending is inviolable."
