280. Memorandum From the Assistant Secretary of the Treasury for Legislative Affairs (Thomas) to Secretary of the Treasury Regan1
SUBJECT
- SIG–IEP on Foreign Assistance
As we have been involved in the legislative process on the foreign assistance request during the past 18 months, it has become clear that there is insufficient coordination between the departments [Page 697] which have pieces of the account at either the planning or legislative strategy level. Each department involved (State, AID, Agriculture (PL–480), Ex-Im Bank, OPIC, and Treasury) develops its own budget request, which goes through OMB, but there is no deliberate interagency review at the senior level to determine the appropriateness of the budget total or mix—either for the national interest or for legislative acceptance.
Thus, for example, the supplemental appropriations ran into serious difficulty in the House this year, because the request contained the security assistance funds which were denied in the hard-fought compromise on the foreign aid bill last year, while containing none of the development assistance funds which were dropped. Similarly, this year’s appropriation request for the foreign aid bill is an increase over last year’s, at a time when domestic programs with strong constituencies, are being cut back. In addition, the bill requests an increase in security assistance of $2 billion, while increasing economic and development assistance less than $500 million. The combination of these factors is turning the traditional Democrat supporters into bench sitters at best, and opponents at worst. At the same time, we continue to face traditional Republican opposition to foreign aid—particularly multilateral.
While Treasury has completed a comprehensive assessment of the MDBs, which has provided a rational base for our future role, there is apparently no similar effort for the other components of the foreign aid account. Even Treasury’s study did not address the issue of the appropriate budget mix between multilateral, bilateral, commercial, and security assistance.
The problems of the past will be complicated further by the introduction of the IMF quota increase and contingent fund requests, as well as by IDA VII replenishment negotiations in the next year.
In order to assure a fully coordinated Administration policy on foreign assistance and a coordinated legislative strategy to fulfill that policy, I strongly urge that this issue be considered by the SIG–IEP before the end of the year.2
- Source: Washington National Records Center, RG 56, Records of the Office of the Assistant Secretary for International Affairs, 1950–1985, Meeting and Policy Files, 1979–1992, 56–10–60, Box 1, Senior Interagency Group on International Economic Policy (SIG–IEP), Folder 1, 1982–1985. No classification marking. A typed notation at the top of the memorandum reads “Mr. Leland has seen” followed by the handwritten date “9/23/82.” Copies were sent to McNamar, Sprinkel, and Leland.↩
- No record of such a meeting has been found.↩