Bethel Finances: The Budget and the Real Scandal of Foreign Aid

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In the mythology of our federal budget wars, no expenditure is as misunderstood as the “burden” of foreign aid. Not only does America’s foreign assistance budget represent a small slice of public outlays--less than 1 percent, compared with the two-thirds or so that is consumed by the Pentagon and entitlements--the nation is among the most miserly of donor countries. A mere 0.19 percent of gross national income is earmarked for humanitarian assistance, compared with the global average of 0.30 percent.
It is not the amount of money that Washington sends abroad that should make taxpayers seethe, but to whom it is distributed. The second largest recipient of U.S. aid is Afghanistan, with an annual dollop of $2.5 billion. At the current rate of exchange, that buys Washington marginal influence over an Afghan head of state whose administrative writ is confined to the municipal boundaries of Kabul, and even that was rolled over two years ago in a patently stolen election. The United States showers nearly $1.5 billion a year on Pakistan, despite a coarsening of relations between it and Islamabad that gets worse by the day. The rate of abuse by recipient countries of U.S. aid, particularly in Afghanistan but also in Iraq, rises inversely to the number of aid workers available to monitor them.

This is nothing, however, compared to the real foreign aid scandal: Washington’s annual outlays to Israel and Egypt as part of the 1978 Camp David peace accords, which accounts for one third of the total aid budget.

Every year for the last three decades, Congress cuts checks to Tel Aviv and Cairo in the amount of about $3 billion and $1.5 billion, respectively. (The exact sums vary from year to year.) The dividends from that investment are displayed vividly in Egypt, which is in political and economic disarray. Its military, which receives more than a billion dollars a year in U.S. aid--promoted by the Pentagon as a way to instill American “values” among Egyptian officers--is hugely corrupt and repressive, as revealed by the army’s increasingly violent response to popular demonstrations in Cairo. The country’s former dictator is being held amid allegations of crimes against humanity and its secular political parties are struggling to establish themselves after generations of U.S.-bankrolled autocracy.

Israel, meanwhile, is the world’s richest welfare state, a highly sophisticated economy on America’s dole. Years ago, when I covered Israel along with the rest of the Middle East for the Wall Street Journal, it was the only country on the beat worth the attention of investors back home. I wrote about Internet entrepreneurs in Nahariya, world-beating aerospace giants in Tel Aviv, and medical technology start-ups in Jerusalem. (My favorite enterprise was launched by a retired air force pilot and a former spy who used principles of artificial intelligence to develop robotic vacuum cleaners. They were test-driven on a putting green-sized stretch of astroturf and I had to step over them to get to the company’s main office in Haifa.)

Last year, Israel joined the Organization of Economic Co-operation and Development, a club for rich nations, and in so doing became the only member in the group that receives humanitarian assistance. Having evolved into a high-tech powerhouse, the country enjoys a per-capita income of $30,000, more than four times the global average. As one of the world’s leading arms exporters--it has been a critical source of weaponry for the Chinese military--Israel is more than capable of providing its own qualitative military edge over its neighbors. Should Israeli arms producers build weapons that might compete directly with their American counterparts--as they did with the Lavi fighter jet in the 1980s, until the U.S. defense lobby had it killed--so be it. After all, what could be more consistent with American values than the free market?

Washington should scrap its Camp David-era commitments to both Israel and Egypt and aggressively reform its other aid programs. It should restore the United States Agency for International Development as the nation’s lead foreign aid provider, which means returning its budget to levels before right-wing Sen.Jesse Helms plundered it in the late 1990s. USAID should be reinstated as an independent agency and its director should be made a cabinet-level appointment. Most importantly, USAID deserves a staff that is large and qualified enough to adequately monitor its aid programs.

Otherwise, Washington should dispense with the pretense of being a “donor” country and owe up to what it is: the generous patron to allies, many of them unsavory, for the sake of often dubious policy ends.