International Affairs Budget

The end of the Cold War has had a profound impact on U.S. international interests and priorities. The United States now confronts the challenge of expanding NATO, assisting the transition of former Communist countries, integrating China into the world economic system, reforming the United Nations and the World Bank, building a credible World Trade Organization, and attacking the menace of illegal drugs and AIDS. These issues demand a careful rethinking of the programs, approaches, and activities used by the United States to advance its interests. This testimony discusses the programs and activities funded by the international affairs budget--the "function 150" account of the federal budget. To date, no one has undertaken such a comprehensive review of 150 account activities. GAO (1) provides an overview of the six categories--security and peacekeeping operations, multilateral assistance, bilateral assistance, foreign affairs management, public diplomacy, and trade and investment--that GAO has divided the international affairs programs into; (2) outlines a framework for assessing these activities and their funding; and (3) discusses some of the critical issues and questions that should be considered in each of these six categories.

GAO noted that: (1) funding in the 150 account, which totalled $18.1 billion in fiscal year 1997, constitutes only 1 percent of the federal budget and just 3 to 4 percent of discretionary funding; (2) these expenditures fund activities that are designed to influence world political and economic agendas; (3) to support its interest in such agendas, the U.S. government maintains a worldwide infrastructure of embassies, missions, consulates, and trade offices, with an overseas staff of more than 35,000; (4) the 150 account funds a wide range of programs and activities; (5) a large percentage of the funds in the account is directed by Congress or the President for specific countries and purposes; (6) to facilitate the examination of 150 account funding, GAO grouped the various programs and activities into six categories: (a) security and peacekeeping operations; (b) bilateral assistance; (c) foreign affairs management; (d) public diplomacy; (e) multilateral assistance; and (f) trade and investment; and (7) GAO presented information on the funding levels and trends for activities in each of the six categories and also discussed the particular set of issues and questions that could be raised with respect to relevance, priority, and efficiency.