Foreign aid has become a serious election and national security issue in the last few months. The President has recently asked for security assistance for Ukraine, Israel, and Taiwan. Congress has so far failed to deliver on the foreign aid request. As I read posts on social media and letters to the editor in many newspapers, I see quite a bit of misunderstanding concerning security foreign aid and foreign aid in general. So, who benefits from US foreign aid? Rather than address what is obvious to me, the strategic national security benefits that accrue to Ukraine, Israel, Taiwan, and the US because of foreign aid (that's another issue to be addressed later), I’d like to focus on specific domestic benefits. Who benefits in the US?
When foreign aid money is legislated it is important to note that the money never leaves the US, except on extremely rare occasions. The money is placed in a US bank account and used to pay for the aid. So, where is the money spent? Here are two current examples. One of the most important defense needs of Ukraine is ammunition, in particular, 155mm rounds of artillery shells. These are part of a previous US aid package. Where do we get these? They are made almost exclusively at the Scranton Army Ammunition Plant and its 300 employees in Pennsylvania. The plant has been working overtime to keep up with the demand from Ukraine. Where does the money come from that is paying the company and its workers to make these shells? It comes from the foreign aid account set up for Ukraine. Where do we get the Abrams tanks to send to Ukraine? They are both refurbished and built at a plant in Lima, Ohio operated by General Dynamics Land Systems. It is foreign aid to Ukraine that pays the company and its more than 800 employees. Thus, foreign aid is benefitting US companies and US workers. It is important to note that US military or national security aid can ONLY be purchased from US manufacturers. It represents what we call “tied” aid, tied to US manufacturers.
Guess who shows up every time Congress debates a national security foreign aid bill? US weapons manufacturers lobby in favor of it because they and their workers benefit. Needless to say that members of Congress from those districts also support the foreign aid package because it provides employment for people in their district and helps them get re-elected. For this reason, historically speaking, national security foreign aid has received bipartisan support.
Finally, I note that US foreign aid is less than one percent of the US budget and approximately two tenths of a percent of our GNP. While if measured in cash, the US provides more foreign aid than any state in the world, as a percentage of GNP, the UK, Norway, Sweden, Luxembourg, and Denmark all provide a higher percentage of their GNP to foreign aid.
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