White House Considering 2% Cut in Foreign Aid Voted by Congress

The Reagan Administration is debating whether to make controversial across-the-board cuts of up to 2% in foreign aid funds already earmarked by Congress for specific countries, Deputy Secretary of State John C. Whitehead said Tuesday.

Although no decision has been made by the State Department and the Pentagon on such an extraordinary step, Whitehead said, money from such cuts would be set aside to provide about $150 million for allocation to other countries as special needs arise.

$60 Million Less for Israel

“This is one of the options,” Whitehead said in a telephone interview. “We are working on this and examining it. We are trying to face up to it promptly.”

If put into effect, a 2% across-the-board reduction would, in the current fiscal year, result in about $60 million less for Israel and about $42 million less for Egypt, the two countries that get the largest amounts of such aid. There also would be smaller cuts for Pakistan, Greece, Turkey, the Philippines and other favored nations.

Spokesmen at the Israeli and the Egyptian embassies said they had not been informed of possible reductions in U.S. foreign aid to their countries.

Any such decision could be expected to stir strong opposition in Congress and, in the case of Israel, could trigger a political backlash among Jewish voters concerned about Israel’s security and economic well-being.

No President has ordered unilateral foreign-aid cuts in many years. However, Whitehead said the law allows the executive branch to make such reductions after consultations with Congress and that congressional approval is not required.

“Foreign-aid appropriations were very heavily earmarked,” Whitehead said. “More than 90% of the military and economic aid was earmarked, and the total was less than the Administration requested.

“So, we have only a small amount of non-earmarked funds to meet a large amount of needs,” he added, “and we are trying to cope.”

While the Administration could live with the situation, he said, an alternative would be to change the congressional earmarking of funds either on an individual or across-the-board basis.

If a decision is made by the White House in favor of a reduction, a uniform cut for every country receiving aid “might be the least inflammatory way to do it,” he said.

While Congress may be upset by such a decision in the waning days of the Administration, Whitehead suggested, the lawmakers “might be wrong by 1% or 2%” in their judgments on how much should be provided to certain countries.

Special Language

Congress, touchy about its prerogatives, put special language into the foreign aid appropriations bill this year to direct the executive branch to spend the funds exactly as they were allocated.

The Reagan Administration has strongly opposed earmarking of aid on grounds that it interferes with necessary flexibility in granting U.S. economic or military assistance. In the past, Congress often has earmarked less than 90% of the aid, allowing the executive branch more discretion in how the funds are spent.

On Capitol Hill, a Senate aide familiar with the controversy over earmarking confirmed there is a battle going on within the Administration over a possible across-the-board cut in foreign aid.

Although cutbacks can legally be made for emergency uses, the aide said, the Administration has made no case on why such a measure is justified in the final months of President Reagan’s second term.

“Some may want to do it, just to do it,” said the aide, who asked not to be identified.

Military Aid ‘Strained’

A senior Pentagon official said the amount of funds for military aid are “strained, hugely” in the latest foreign aid bill, prompting consideration of various alternatives, including an across-the-board cut in all earmarked funds, to create a pool of money that could be allocated more flexibly.

“Some programs were set in motion years ago, and the world changes,” said the official. He mentioned the crisis in the Persian Gulf as one example, without elaborating.

But he said that any such decision to cut the congressional allocations would require approval by the President, and he added: “Many ideas get shot in the head before they get through the executive branch process.”