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University Daily Kansan
Thursday, Oct. 24, 1963
Liberals Join Attack on Foreign Aid
Editor's Note:
President Kennedy's foreign aid program is in deep trouble in Congress after many years of bipartisan support. Much of it comes not from Conservative critics who have opposed foreign aid in the past but from Liberals who have supported it. Why? One of those Liberal supporters, Sen. Frank Church, D-Idaho, a member of the Senate Foreign Relations Committee, explains the "Liberal Revolt" in the following dispatch.
By Sen, Frank Church, D-Idaho
WASHINGTON — (UPI) — When Conservatives in Congress criticize foreign aid, it's hardly news. But when the Liberals begin to join the revolt, it is time to ask what's gone wrong.
Congressional resistance to this year's foreign aid authorization bill is at an all-time high. The House of Representatives has already struck a billion dollars from the President's request; the bill was mired down in the Senate Foreign Relations Committee for months before the committee approved it. By the time the appropriations process exacts its toll, President Kennedy will be lucky to come out with a $31½-billion program for the coming year, fully half a billion less than the least Eisenhower year.
Why should a Democratic Congress so threat a Democratic President, particularly one who has reorganized the whole program and placed it in the hands of David Bell, the ablest director yet?
WHY SHOULD THE REVOLT come on the heels of the most successful innovation in the aid program since Truman's famous "Point Four" inaugurated technical assistance? I refer, of course, to the Peace Corps, a Kennedy triumph, which seems really to be reaching through, on a people-to-people basis, to capture the enthusiasm of young nations and young Americans alike.
Why, then, the revolt?
As one Liberal who is taking part in it, I think the reasons are several in number and cumulative in character. To begin with, Congress has finally lost patience with the apparent inability of the administrators to ever bring aid programs to an end. By 1962, the list of recipient countries had grown to 107! This left only eight countries in the whole on the free world which were not
getting some form of American subsidy! Even the rich, fully-recoveries of Western Europe and Japan were still receiving sizeable grants of our military equipment and supplies. It is preposterous that spigots, once opened on the American foreign aid barrel, should continue to drip indefinitely.
A SECOND REASON for the Liberal Revolt is the frustration we have suffered in our long-time efforts to shift foreign aid from gifts to loans. Had we loaned, instead of given, most of the money under the Marshall Plan to the countries of Western Europe, we would not have so serious a problem with our balance-of-payments today, for we would now be in a position to call back from the presently prosperous European countries, without hardship to them, the money we should have loaned them in the postwar years.
Drawing on this experience, we established, some years ago, a development loan fund (DLF), for the underdeveloped countries, confident that it would serve to place aid for economic development of these regions on a genuine loan, rather than grant, basis. Now we are discovering that the flexibility provided by the DLF has resulted in virtually all "loans" being made on 40-year repayment schedules, with generous grace periods during which no repayment of principal occurs, and with interest rates as low as $3/4 of one per cent. In short, instead of giving away money and calling it a gift, we are now giving away money and calling it a loan! Even the Soviet Union, while denouncing the "Wall Street money-changers," never gets less than two per cent on long-term credits.
A THIRD CAUSE for the spreading Liberal Revolt is the sheer size of the continuing aid program. We have voted for it because we believe our national purposes are served by extending help to others, but we have observed that, outside of industrial Europe, our most conspicuous successes have been achieved through the least costly parts of the program—the Peace Corps, technical assistance, and surplus food. There is a growing feeling that the need for huge project investments in any given country should be met through the greater use of international lending institutions like the World Bank.
These institutions can impose requirements necessary for sound investment management which often cannot be demanded by one sovereign nation of another. Moreover, the investment capital of such institutions is contributed by all the rich, industrial countries, so that the burden is shared, as it should be, rather than borne entirely by the United States.
To meet these defects in foreign aid, Liberal members of the Senate Foreign Relations Committee have this year given both direction and support to efforts to modify the program. I myself have secured the committee's approval of an amendment which would prohibit all further grants of aid to fully self-sufficient countries, which, as late as 1962, still amounted to nearly $400-million dollars.
Another amendment, offered by Sen. Frank Lausche, D-Ohio, and having significant Liberal support, would set a minimum $ _{3/4} $ per cent interest rate for the first five years and a minimum of two per cent for the next 30 years with a maximum 35-year repayment period.
As a first thrust against mammoth projects, the committee has adopted an amendment by Sen. Albert Gore, D-Tenn., placing a $100-million ceiling on American contributions to any given project abroad, unless specific Congressional approval is asked for and obtained.
EVEN WITH THESE improvements and others it is by no means certain that the Liberal disaffection with foreign aid can be remedied. There are fundamental changes which must occur, if strong, sustained support for foreign aid is ever to be regained.
Many Liberals are agreed that military aid ought not to have been commenced in Africa, or continued in Latin America—areas which are remote from either Russia or Red China, where the thin resources are desperately needed for public health, education, and economic development.
And what about the quarter billion we plunge into Formosa each year? Is this to be a permanent expenditure, just to indulge an old man's dreams—to sustain an army twice as big as necessary to defend his island and not a tenth big enough to menace the mainland?
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THESE ARE THE QUESTIONS Liberals are asking. We understand that Kennedy inherited these excesses, and we don't blame him for them. But it is now within his power to come to grips with them.
Wherever he has taken a new initiative, we have given him ardent support. We have applauded the alliance for progress in the hope that it might help free Latin America from feudalism and dictatorship, the seedbeds of communism. We approve the way he has broken off relations with the junta governments in the Dominican Republic and Honduras, and suspended the aid program to both countries as a lever toward the return of constitutional government.
The basic reforms in foreign aid are still to be accomplished. They can't come all at once, but progress toward them must become more evident. Liberals who have supported foreign aid in the past, at considerable political risk, have a right to be heeded now, as they seek to reshape the program to better serve the interest of the American people.
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