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Trump Proposes 21% Cut in U.S. Foreign Aid in 2021 Budget Proposal


- February 10th, 2020
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According to Reuters, “President Trump will propose cutting billions of dollars in U.S. foreign aid spending in his fiscal 2021 budget, while seeking to boost funding to counter developing economic threats from China and Russia.”

Trump’s latest budget proposal was released at 12:30 p.m. Eastern Time on Monday.

Last year, Trump sought in his budget proposal to slash foreign aid but faced steep resistance from Congress and did not prevail. This most recent budget is also expected to be dismissed quickly by the Democratic-controlled House of Representatives.

In the proposal, “Trump will seek to make a 21 percent cut in foreign aid which seeks $44.1 billion in the upcoming fiscal year compared with $55.7 billion enacted in fiscal year 2020,” an administration official said. Aid to Ukraine would remain at its 2020 levels under the new proposal.

The White House wants to boost funding for the U.S. International Development Finance Corporation (DFC) to $700 million compared to $150 million the previous year, said Russell Vought, the acting head of the Office of Management and Budget.

The DFC was formed in large part to counter China’s growing economic influence. It serves as a development bank that partners with the private sector to provide loans in developing countries. It also serves as an alternative financing option to what the United States sees as predatory practices from China.

U.S. officials want to counter the soft power China has wielded with such loans and help countries avoid what they consider Beijing’s “debt trap” diplomacy in which countries give up control of ports, roadways, or other major assets when they fund infrastructure projects with Chinese loans that they cannot pay back.

“Every country knows the drawbacks of working with autocratic governments,” said DFC CEO Adam Boehler in an interview, listing poor infrastructure as one consequence developing countries faced. “There are very few countries in this world that wouldn’t prefer the American private capital market . . . That’s what we represent.”

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