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Friday, July 6, 2012

U.S. Foreign Assistance to Latin America and the Caribbean: Recent Trends and FY2013 Appropriations

Peter J. Meyer
Analyst in Latin American Affairs

Mark P. Sullivan
Specialist in Latin American Affairs

Geographic proximity has forged strong linkages between the United States and the nations of Latin America and the Caribbean, with critical U.S. interests in the region encompassing economic, political, and security concerns. U.S. policymakers have emphasized different strategic interests in the region at different times, from combating Soviet influence during the Cold War to advancing democracy and open markets since the 1990s. Current U.S. policy toward the region is designed to promote economic and social opportunity; ensure citizen security; strengthen effective democratic institutions; and secure a clean energy future. As part of broader efforts to advance these priorities, the United States provides Latin American and Caribbean nations with substantial amounts of foreign assistance. Congress – which authorizes and appropriates aid for the region, and engages in oversight of assistance programs – is currently considering the President’s foreign aid request for FY2013. In recent years, the State Department, Foreign Operations, and Related Programs appropriations measure has been the primary legislative vehicle through which Congress reviews U.S. assistance and influences executive branch policy toward the region. 

Trends in Assistance 

Since 1946, the United States has provided over $148 billion (constant 2010 dollars) in assistance to the region. Funding levels have fluctuated over time, however, according to regional trends and U.S. policy initiatives. U.S. assistance to the region spiked during the 1960s under President Kennedy’s Alliance for Progress, then declined in the 1970s before spiking again during the Central American conflicts of the 1980s. After another decline during the 1990s, assistance to the region remained on a generally upward trajectory through the first decade of this century, reaching its most recent peak in the aftermath of the 2010 earthquake in Haiti. Aid levels for the region have fallen in each of the past two fiscal years, however, as Congress has sought to trim the foreign aid budget. 

FY2013 Obama Administration Request 

The Obama Administration’s FY2013 foreign aid budget request would continue the recent downward trend in assistance to Latin America and the Caribbean. The Administration has requested some $1.7 billion for the region to be provided through the State Department and the U.S. Agency for International Development (USAID). If Congress appropriates funding at the requested levels, Latin America and the Caribbean would receive nearly 9% less assistance than the region received in FY2012, and about 11% less than in FY2011. The proposed cuts are widespread, affecting nearly every foreign aid account. Colombia, Haiti, and Mexico would see some of the largest absolute dollar declines, but would remain the top three regional recipients, collectively accounting for some 55% of the aid to the region. Beyond the assistance provided through the State Department and USAID, many Latin American and Caribbean nations will continue to receive additional aid from agencies such as the Department of Defense, the Inter- American Foundation, the Millennium Challenge Corporation, and the Peace Corps. 

Congressional Action 

In May 2012, the House and Senate Committees on Appropriations marked up their annual appropriations bills for the State Department, Foreign Operations, and Related Programs (H.R. 5857 and S. 3241). Funding in the FY2013 House bill is 11.8% lower than the Administration’s
request, and funding in the Senate bill is 4.7% lower than the Administration’s request. It is unclear how much foreign assistance each of the nations of Latin America and the Caribbean would receive under the two bills, however, since appropriation levels for individual countries and programs are generally not specified in the legislation or accompanying reports. Nevertheless, both of the reports (H.Rept. 112-494 and S.Rept. 112-172) express concerns over conditions in the region and recommend assistance levels that are above the Administration’s request for certain Latin American and Caribbean countries. As the legislation moves forward, Congress may consider issues such as how best to reconcile assistance priorities with budget constraints, improve inter-agency and donor coordination, and ensure the sustainability of U.S. assistance efforts.

Date of Report: June 26, 2012
Number of Pages: 49
Order Number: R42582
Price: $29.95

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