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U.S.: Diplomatic, Aid Spending Set to Rise Under Obama Budget

Jim Lobe*

WASHINGTON, Feb 27 2009 (IPS) - While most mainstream press reaction to President Barack Obama’s whopping 3.5-trillion-dollar 2010 budget has naturally focused on its far-reaching – even historic – implications for the U.S. domestic economy, experts here say it also marks at least the beginning of potentially important shifts in U.S. foreign policy.

The budget, which will now be taken up by Congress, suggests that Obama intends to follow through on his campaign pledge to achieve a better balance between the civilian and military institutions that are used to pursue U.S. foreign policy goals by increasing spending on diplomacy and aid while curbing the exploding growth in military spending under his predecessor, George W. Bush.

Indeed, the proposed budget, whose precise details will probably not be filled in for at least another month, calls for a nearly 10-percent increase in spending by the State Department and its various agencies, including the U.S. Agency for International Development (USAID) – from 47 billion dollars in the current fiscal year to nearly 52 billion dollars.

By comparison, Pentagon spending, including the costs of the ongoing wars in Iraq and Afghanistan, is set to increase by just 1.4 percent in real terms, to 663.7 billion dollars, still some 14 times greater than the State Department’s budget.

“While it’s not the kind of sweeping shift in priorities and resources that we have urged, it does show signs of a modest course correction,” said Miriam Pemberton, a research fellow at the Institute for Policy Studies (IPS) who co-authors an annual report by progressive defence experts that urges more spending on diplomacy and homeland security and sharp cuts in the Pentagon budget.

“A military budget of titanic proportions – larger than the next 14 countries put together, and 45 percent of the world’s total – can’t be turned around on a dime,” she added.

The budget also suggested key changes in U.S. nuclear weapons policy, consistent with Obama’s expressed interest in substantially reducing the U.S. nuclear arsenal as part of a broader effort to tighten the international non-proliferation regime and eventually eliminate all nuclear weapons.

Rejecting the explicit position of his own defence secretary, Robert Gates, Obama’s budget statement announced that development work on what is called the “reliable replacement warhead” – new, theoretically more precise, nuclear warheads to that would replace existing systems – “will cease.” And the flat line proposed for the Energy Department’s (DOE) budget next year also hinted at major cuts in nuclear weapons-related programmes.

“The administration is already committed to major increases in non-proliferation programmes and in clean-energy projects (in DOE’s budget),” said David Culp, a nuclear specialist at the Friends Committee on National Legislation (FCNL), a Quaker lobby group.

“Since the DOE budget request for FY (fiscal year) 2010 is the same as the FY 2009 budget without any inflation increase, I believe we will see big decreases in nuclear-weapons programmes when the details come out in April,” he said.

Reaction to the proposed 2010 budget, which, if approved, will take effect next Oct 1, has focused almost exclusively on its size and ambition, particularly in tackling the country’s exploding health care costs, its failing public education system, its economy’s persistent reliance on fossil fuels, and the steadily growing gap between the rich and both the middle class and the poor, not to mention the ongoing financial crisis – all at the same time.

“The budget that President Obama proposed on Thursday is nothing less than an attempt to end a three-decade era of economic policy dominated by the ideas of Ronald Reagan and his supporters,” wrote the ‘New York Times’ economics columnist, David Leonhardt, while William Galston, a widely respected public-policy analyst at the Brookings Institution compared Obama’s plans to those of Franklin Delano Roosevelt’s 1932 New Deal, Lyndon Johnson’s 1965 “Great Society”, and Ronald Reagan’s 1981 programme for limiting the size and power of government.

“Just as the Depression created the political and psychological conditions for Franklin Roosevelt’s transformation of America from laissez-faireism to the beginnings of the welfare state, the current crisis gives Obama the political space to move the still (relatively) modest American welfare state toward European-style social democracy,” wrote Charles Krauthammer, the neo-conservative columnist at the ‘Washington Post’ about both the proposed budget and the speech given by the president to Congress earlier in the week.

On the foreign policy and national security implications of Obama’s budget, analysts were considerably more restrained in their assessments, even as they saw suggestions of important changes in the U.S. approach to the rest of the world, beginning with a re-iteration of Obama’s campaign pledge to double foreign aid during his tenure and “significantly increase” the number of foreign service positions at both the State Department and USAID whose ranks have been badly depleted over the last two decades.

“The big increase for the international-affairs (State Department) budget signals a real commitment that, despite the economic problems they’re dealing with, this administration intends to engage a lot more constructively with the world,” said Steven Radelet, a senior fellow at the Centre for Global Development (CGD). “In some ways, the increase implies that we have to provide more support to developing countries because of the economic difficulties we face.”

He warned, however, that the specific details of how the administration proposes to spend the 52 billion dollars it has requested remain to be disclosed.

Of particular concern is the extent to which the additional aid will be concentrated on the three countries that top the Pentagon’s current agenda – Iraq, Afghanistan, and Pakistan – as opposed to other poor countries, particularly those which have qualified for help from the Millennium Challenge Corporation. The five-year-old agency provides enhanced aid and debt relief to countries that implement far-reaching economic and political reform – where the immediate geo-strategic stakes may not be as high, but the need is nonetheless compelling.

A brief budget statement released by the administration Thursday said it intended to increase spending on population programmes – that were disdained under Bush – and on other global health problems and to clear up Washington’s arrears to the United Nations and other multilateral agencies.

On military spending, analysts also said they were waiting for details to be released in April to see whether the new administration is prepared to cancel expensive weapons systems, such as the F-22 fighter jets, the V-22 Osprey aircraft, the Virginia Class submarines, and the Army’s hi-tech Future Combat Systems Programme, whose utility has come under question, even by Gates and other high-ranking Pentagon officials.

The budget statement said Obama remained committed to increasing the size of the Army and the Marine Corps by 65,000 and 27,000, respectively, as well as hiking pay to all service personnel by nearly three percent, so the relatively small increase in overall defence spending suggests that such systems may well be cut.

“The good news is that he didn’t buy into the entire Pentagon wish list which would have added another 40 or 50 billion dollars beyond what he’s requesting,” said William Hartung, an arms specialist at the New America Foundation (NAF). “That should mean that weapons systems will indeed be cut in the new budget, and that will hopefully set the stage for getting actual spending reductions in the next few years.”

Of the total 2010 Pentagon budget, 130 billion dollars will be earmarked for military operations in Iraq and Afghanistan.

*Jim Lobe’s blog on U.S. foreign policy can be read at

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