Reductions in the international affairs budget have been deep, with constant dollar cuts of about 34 percent over the past decade, including a 14 percent cut in just the last two years. Defense expenditures have also fallen 34 percent since 1986. Expressed as a percentage of GNP, defense and international affairs spending together has dropped from 6.9 percent to 3.7 percent during this period. International affairs cuts have also been targeted at specific accounts. For example, the drop in international security assistance has been 74 percent over the decade, so deep that if aid to Israel, Egypt, and Turkey is excluded, the United States has basically given up security assistance as an instrument of foreign policy. Other areas particularly hard hit are the United Nations, information and exchange programs, and multilateral development aid.

Analysts disagree about the impact of the international affairs cuts. The Georgetown University Institute for the Study of Diplomacy concluded last year that resource problems are already harming the capacity of the United States to lead and that the national security capital built up during the Cold War is being depleted. The Heritage Foundation, on the other hand, has argued that some key accounts have increased and that no real harm has been done.

There is some truth to both sides of these apparently contradictory conclusions. Innovative U.S. approaches have masked the impact of reductions, especially in vital areas of the world. Passing the tin cup and designing ad hoc solutions have worked so far. In Central Europe, for example, the Partnership for Peace is a bargain at $100 million, while the United States intends to pay for less than 10 percent of the NATO enlargement bill. In Korea, U.S. creation of the Korean Peninsula Energy Development Organization helped halt North Korea's nuclear program, and Japan and South Korea are picking up more than 90 percent of the tab for it. In the former Soviet Union, Western disbursements of more than $20 billion since 1991 have been made primarily by international financial institutions. In the case of Mexico, the United States found an obscure account--the Exchange Stabilization Fund--to provide $20 billion in financing to deal with the 1994 financial crisis there. In the Zaire crisis, the United States promised to help the new leadership retrieve billions of Mobutu's stolen dollars as an incentive to stop the massacres--a skillful use of someone else's money. Only in the Middle East has the United States continued to pour aid funds in at pre-1990 levels. But when it came to Operations Desert Storm and Vigilant Warrior in the Persian Gulf, the United States again successfully turned to its allies to pay most of the bills.

According to a new book entitled Who Needs Embassies?, U.S. embassies in strategically significant countries have also managed, at least until now, to pursue critical U.S. interests successfully despite fraying caused by cutbacks. The book examines recent U.S. operations in five key countries--Germany, South Korea, South Africa, Israel, and Guatemala--and concludes that despite policy successes, demands on these embassies are increasing dramatically even as they are being pinched financially. In addition, the State Department reports that thirty-one new missions or embassies have been created since 1991, mostly in countries formerly part of the Soviet Union or Yugoslavia. And the National Defense University's Strategic Assessment 1996 shows that the number of U.S. personnel stationed in our embassies has actually increased from 15,000 to 19,000 during the past ten years.

But all this is misleading. What has been happening is that other U.S. agencies have stepped in overseas to help the often beleaguered State Department. Most of the increase in U.S. embassy personnel, for example, is from the military or from U.S. law enforcement agencies. In Mexico City, over thirty U.S. agencies are represented at the embassy, and seventeen work on counter-drug efforts. A Defense Department publication entitled "Foreign Military Interaction: Strategic Rationale" lists thirteen different defense engagement programs overseas, most of which have diplomatic purposes. The National Guard works closely with "sister states" in Central Europe, where it helps to implement the Partnership for Peace. And three new U.S.-run regional military education centers have been established for Europe, Asia, and Latin America.

Allied nations and other organizations are also filling some of the gaps left by the United States. In Bosnia, private voluntary organizations provide vital services that thirty years ago would have been performed by the U.S. government. In Haiti, Canadians and Pakistanis perform international policing functions that the United States left to them last summer. In North Korea, the International Atomic Energy Agency provides continuous on-site monitoring of nuclear material, and its teams include a substantial number of specialists from the U.S. Department of Energy. During the Cold War, of course, all treaty verification obligations were carried out directly by the United States, either through remote technical means, or, where agreed, treaty-specified U.S. on-site inspections. In El Salvador, our stabilizing influence has been partially replaced by the United Nations.

IF TIN CUP DIPLOMACY is working, why then the concern about budget cuts? Because while these activities may be useful, they cannot compensate fully and indefinitely for the shortfall in the core foreign affairs budget. In order to save key programs, State has had to sacrifice others. For example, Who Needs Embassies? notes that in order to support democratic transitions in countries such as Guatemala and South Africa, resources for other embassies in those regions have been sucked dry. To open the thirty-one new missions of the kind mentioned above, State had to close thirty-five other embassies and consulates. Some of the less important embassies that have stayed open suffer like our poorly constructed embassy in Guinea-Bissau. In what should become a classic cable, sent to Washington in February, the embassy sought guidance on pesticides to kill both the hundreds of rats that eat documents and the thousands of locusts that penetrate into the deepest security areas of the post. At the Agency for International Development (AID), planners will cut the number of overseas AID missions by more than half in order to save critical programs. And the U.S. Information Agency (USIA) is closing libraries by the dozen, giving rise to the concern that our friends see American librarians and development officers leaving just as Drug Enforcement Agency personnel arrive.

Behind the facade of success, then, our basic foreign affairs infrastructure is eroding. The State Department has cut two thousand employees and USIA has cut 2 5 percent of its work force during the past four years, many of them experienced regional experts that are needed to deal with today's complex world. Half of State's computers and three-quarters of its phone systems are obsolete. The archaic State Department Wang computer system cannot read e-mail documents prepared in a Windows program. Some of our embassies, such as those I visited recently in China and South Korea, are apparent firetraps. Departing overseas personnel routinely leave their posts three to four months before their replacements arrive, in order to save money but at the expense of continuity. In other embassies, biographic files on key local figures are no longer kept up to date, so valuable information is sacrificed. There are not enough funds to enable political officers to travel often outside the capital city, and consequently reporting suffers. We now run the risk of developing diplomatic Alzheimer's disease.

International affairs budget cuts are also beginning to affect our ability to influence events and to practice preventive diplomacy. It is only because an unrivaled military stands behind the diplomatic tin cup that the United States retains any influence at all. Our Economic Support Fund, designed in 1977 to provide influence-generating economic aid, is now focused almost exclusively on Israel and Egypt. In the multilateral banks, we are losing our ability to block loans of which we do not approve and direct other loans to projects we support. In Panama, we may lose access to military bases critical to the counter-narcotics fight because we cannot afford security assistance. In Africa, declining foreign aid resources coincide with a marked increase in civil conflict in failed states.

The negative impact of these budget cuts has reached the point where constructive actions are now being taken in the administration, on Capitol Hill, and in the private sector to regenerate our capabilities. Negative budget trends may have bottomed out. The administration has agreed with Congress to undertake an ambitious merger of the State Department, the Arms Control and Disarmament Agency (ACDA), USIA, and AID. ACDA and USIA would become one with State, while AID would remain separate but would report to the secretary of state rather than the president. This would eventually result in greater efficiency and possibly some savings, but more importantly it has created a smoother relationship between the two branches of government on the question of foreign affairs resources. That cooperation is also evident in the deal made with Senator Jesse Helms to repay over three years $819 million owed in arrears to the United Nations. In exchange for authorizing the funds, Senator Helms extracted various useful UN reforms, and he intends to shave future American contributions to UN operations from 25 to 20 percent of the total bill, in order to bring U.S. dues in line with new international realities.

Secretary of State Madeleine Albright has also given higher priority to fixing the resources problem. She has initiated a much needed effort to explain to the American people the benefits of engagement overseas. She has convinced the President and the director of the Office of Management and Budget to increase the fiscal year 1998 international affairs request to Congress by $1.2 billion over last year's appropriation of $18.2 billion. Albright's State Department has created a new strategic planning system that for the first time sets out specific budget-driven policy goals, designs a strategy to implement them, and establishes indicators to judge progress. Ambassador Max Kampelman took the lead in stimulating private sector initiatives such as the "Advocacy of U.S. Interests Abroad" project, which, under the guidance of the Stimson Center, seeks to create a clearer national consensus on foreign policy goals and means.

Both efforts attest to the recognition that the pendulum has swung too far and that the foreign affairs budget has been cut too deep. Now is the time to sustain the new cooperation between the administration and Congress so that the United States can indeed lead the world into the twenty-first century.

By Hans Binnendijk

Originally published in National Interest, Fall 97, Issue 49