Foreign Relations of the United States, 1981–1988, Volume XXXVIII, International Economic Development; International Debt; Foreign Assistance

342. Memorandum From the President’s Assistant for National Security Affairs (McFarlane) to Secretary of State Shultz and Secretary of Defense Weinberger¹

Washington, August 23, 1985

SUBJECT

• Foreign Assistance Initiative (U)

Recent Congressional action has created major problems for our foreign assistance programs, and will deeply cut into the funds available for key allies. I have discussed the issue with the President and he is firmly committed to a robust foreign assistance program as a vital element of national security and foreign policy. The President made this point publicly when he signed the Foreign Assistance Bill just before leaving Washington.² He has, therefore, directed that we commence initiatives on several fronts to rebuild and revitalize our foreign assistance. These will encompass the following: (S)

— A major interagency review of U.S. global security assistance policy. This study will examine our overall national security goals for security assistance, the effectiveness of our current programs, and the growing problem of FMS debt. The study will make recommendations which should form the basis for a more dynamic long-term redirection of our foreign assistance efforts. We should set forth a series of goals, e.g., expansion of IMET, coordinated foreign assistance commitments with other donors—such as Italy recently proposed for Somalia, and so on, which could be implemented as a phased approach over the next two years. The NSC will distribute the Terms of Reference of this study within the next two weeks.³ (S)

— Build public and Congressional support and consensus for a more robust foreign assistance program. We must identify specific cases where we have been unable to exploit developing opportunities or where U.S. foreign policy objectives have been damaged by inadequate funding levels and inflexible procedures. We must also identify areas where foreign assistance has averted crises and illustrate by facts and statistics benefits to the U.S. economy. This should be a very concrete presentation—based on intelligence and other supporting evidence—that we can use in private high-level consultations on the Hill. Ultimately, we must be able to show that, even in a period of deficit spending, foreign assistance is worth the price. We may want to consider better ways of presenting this point in a coordinated national security budget. (S)

— Assess effects of Congressionally imposed cuts. We must make an immediate damage assessment of what the authorization bill cuts will mean with specific examples of the impact for our important programs. (S)

— Seek a supplemental. In conjunction with this assessment, we must develop a near-term legislative strategy for seeking additional funds to meet the immediate needs of key strategic countries. We must also determine our approach for funding the FY–87 budget submission. (S)

— High-level supervision. Finally, a special Foreign Assistance Steering Group will be established under the aegis of the NSC⁴ to monitor the evolution of the broader phased program for rebuilding security assistance, as well as for ensuring the active coordination of our near-term legislative efforts to redress the existing imbalance. (S)

I know you share my concern over the reductions mandated by the latest Congressional action. I am convinced that the integrated approach outlined above combining immediate near-term actions with a longer term strategy for future expansion is the best way to achieve our goals. (S)

Robert C. McFarlane⁵

1. Source: Reagan Library, David Wigg Files, Unfoldered, Unfoldered Subject File, Foreign Assistance Allocations. Secret. An unknown hand wrote on the memorandum: “Received in S/S–I on 8/3[portion missing] at 1445. clw.”
2. Reagan signed into law the International Security and Development Cooperation Act of 1985 (P.L. 99–83) on August 8 at the White House. In his remarks, Reagan expressed disappointment in the reduction of security assistance support levels and recognized the “lack of enthusiasm for foreign aid” which made “the job more difficult.” He concluded by stating: “We have to make the people aware that these programs are the most effective instruments we have for a more secure international environment, and I hope that we can all work together in the months ahead to reinvigorate the program.” For the text of Reagan’s remarks at the signing ceremony, see Public Papers: Reagan, 1985, Book II, p. 982. For the text of Reagan’s statement on signing the International Security and Development Cooperation Act of 1985, see Public Papers: Reagan, 1985, Book II, pp. 983–984. According to the President’s Daily Diary, Reagan traveled to California on August 11. (Reagan Library)
3. Not found.
4. An unknown hand underlined the portion of the sentence beginning with “a special” and ending with “NSC.”
5. McFarlane signed “Bud” above his typed signature.