May 26th, 2011
12:02 PM ET

4 ways to save $2 billion while improving U.S. foreign aid

Editor's Note: Connie Veillette is Director of the Rethinking U.S. Foreign Assistance Program at the Center for Global Development. John Norris is Executive Director of the Sustainable Security and Peacebuilding Initiative at the Center for American Progress.

By Connie Veillette and John Norris – Special to CNN

If there is a silver lining to America’s current budget crunch, it is this: There has never been a better time for Washington to throw overboard some old programs and approaches that it knows simply do not work.

In a recent paper we outlined some obvious reforms that will not only save a great deal of money but make our international programs vastly more effective.

Politicians inside the beltway have known for years that the only reason these wasteful and uncompetitive practices are still in place is because of the influence of special interests lobbies that have managed to get their pieces of pork institutionalized.

Here are the most obvious places to make some long-overdue changes:

1. End Cargo Preference for U.S. Food Aid. Since 1954, U.S. law has required that U.S. food aid being sent to humanitarian disasters around the globe be shipped aboard U.S.-flagged vessels.

The law was originally designed to guarantee that these ships could serve as a reserve for the U.S. navy in case of emergency. The problem is that the Pentagon has said for years that the navy no longer needs these ships to serve as any sort of reserve.

So the U.S. taxpayer ends up paying more than $140 million in extra shipping costs for food aid every year while those most in need of life-saving supplies often face unneeded delays as relief agencies wade through extra layers of bureaucracy.

2. Eliminate Monetized Food Aid. The United States has long allowed some international food aid to be ‘monetized.’ Monetization is a convoluted process where the U.S. government donates U.S. crops to international relief organizations; this food aid is then shipped overseas and sold on local markets, and the relief organizations then use the proceeds for development and relief projects.

If all this sounds needlessly complicated, it is.

Monetized food aid is a hugely inefficient way to fund development. By simply giving the relief organizations cash instead of expensive-to-transport crops, the U.S. taxpayers could save between $120-200 million annually.

3.  Cut U.S. Agricultural Subsidies. At a cost of more than $15 billion annually, and of questionable value to America’s small farmers, U.S. domestic agricultural subsidies send the wrong message to countries around the globe.

As we publicly preach the benefits of free markets, agricultural subsidies discourage trade, soak the American taxpayer, and make it harder for the poorest of countries to emerge from poverty. Indeed, billions of dollars in agriculture subsidies have gone to individuals in the United States who do no farming at all. Even a modest reduction of subsidies by 10% would produce $1.5 billion in savings.

4. Allow Local and Regional Purchase of Food Aid. Current law requires that U.S. food aid be purchased in the United States rather than closer to where the emergency is occurring.

According to the Government Accountability Office, this increases costs by 25% and can delay aid reaching disaster victims by up to six months. It sounds like a small change, but by getting rid of this regulation the United States could save $228 million annually.

These recommendations would save money, ultimately help save lives, and strengthen rather than weaken how we engage with the rest of the world. Now Congress only needs to find the fortitude to do the right thing.

The views expressed in this article are solely those of John Norris and Connie Veillette.

Post by: ,
Topics: Aid • Development • United States

soundoff (16 Responses)
  1. J Lane

    GPS! .... No text with the post!

    May 26, 2011 at 12:47 pm | Reply
  2. amarcnn

    J Lane, what do you mean? I'm the editor of CNN.com/GPS.

    May 26, 2011 at 12:52 pm | Reply
  3. J Lane

    amarcnn,

    There isn't any text with the post. There is an empty space where the post should be. At least that's what I see. Although, I've read other posts perfectly fine on this site.

    Thanks for responding so quickly.

    J Lane

    May 26, 2011 at 2:00 pm | Reply
  4. G Cathey

    I'm not seeing any text either. I clicked on a link from the Center for American Progress to read their paper but get a blank post.

    May 26, 2011 at 5:52 pm | Reply
  5. j. von hettlingen

    One is gratified,if one gets help while in distress. Aid is always a positive gesture. Just make sure that it really gets to the people who desparately need it.

    May 26, 2011 at 6:14 pm | Reply
  6. Michelle G

    Agricultural subsidies definitely need to be addressed. They made sense when they were started, when the US had a substantial chunk of the population working small farms, but in today's world of corporate farms, subsidies are out-dated and inappropriate.

    May 26, 2011 at 9:08 pm | Reply
  7. Anonymous Citizen

    I see it. Nice to know who is on the other end even if no one else is. As for the point, some of this makes perfect sense but it only underscores a fundamental flaw in the two-party system. There simply aren't enough choices.

    May 27, 2011 at 1:41 am | Reply
  8. Anonymous Citizen

    NY-26: Big impact on deficit fights By David Gergen, CNN Senior Political AnalystMay 26, 2011 4:12 p.m. EDT
    STORY HIGHLIGHTS
    GOP's Christopher Lee resigned from Congress last year after shirtless picture e-mailed
    The special election to replace him is reframing deficit debate, says David Gergen
    Election complicates possible bargain on entitlements before 2012, he says
    RELATED TOPICS
    David Gergen
    Federal Budget
    Buffalo (New York)
    Editor's note: David Gergen is a senior political analyst for CNN and has been adviser to four presidents. He is professor of public service and director of the Center for Public Leadership at Harvard University's Kennedy School of Business.

    Cambridge, Massachusetts (CNN) - When a young GOP Congressman stripped off his shirt, took his picture and e-mailed it to a woman, he did more than end his career - he set off a political ripple that probably ends prospects for resolving the nation's growing debt crisis before next year's elections.

    The clumsy seduction attempt by Christopher Lee forced him to resign from Congress late last year, unexpectedly setting up a special election this week in NY-26, a district that runs between Buffalo and Rochester in New York state.

    In stepped Democrat Kathy Hochul with a hard-hitting campaign against Paul Ryan's plan to overhaul Medicare and easily grabbed one of the country's reliably Republican seats. Ordinarily, a special election for a single House seat wouldn't mean much - and this one has been over-interpreted - but by all appearances, it is quickly reshaping the landscape for deficit reductions.

    For both Republicans and Democrats, the message has been the same: Mess with Medicare at your peril.

    Republicans have been gambling that, with a deficit picture so bleak, a majority of Americans will be willing to reduce the benefits of Medicare and Social Security in order to save the programs. If Republicans come up with a better message, they may yet prevail in that argument, but clearly they haven't yet. In NY-26, "Medi-scare" won hands down.

    For Democrats, who paid at the polls last November for their own reductions in Medicare, the New York victory provides a sharp incentive to put the Ryan plan at the center of the 2012 campaign. They see blood in the water.

    In the short term, all this may be good for the country: It may make it easier to reach a bipartisan compromise that cuts deficits and raises the national debt ceiling before August 2 of this year.

    Republicans have been asking for large reductions in Medicare as a price for that debt extension. They are likely to lower their expectations now, and with that, Democrats could also lower their hopes - unrealistic - for a significant increase in taxes. The deficit reduction plan won't be anywhere near as big as we need, but if the parties work together, it could be respectable.

    The challenge that arises because of NY-26 is that it makes it much harder to reach a "grand bargain" on entitlements and taxes before the 2012 elections.

    Democrats clearly want to wave the Ryan plan at Republicans as a possible way to save the Senate and re-gain the House. Republicans will face a dilemma over the Ryan plan: Should they go into a fierce offense or should their presidential nominee come up with a different plan behind which the party can rally?

    Either way, major Medicare reform isn't going to happen before the elections, and that, in turn, means that Washington won't make the hard choices on spending, taxes and the like until 2013-2014 - if then.

    But politics-as-usual has become a highly dangerous game these days. Not many in Washington like to point this out, but only just over a month ago, Standard & Poor's warned that if the country does not adopt a serious, credible plan on deficits BEFORE the year 2013, there is a one-in-three chance that S&P will reduce the nation's AAA credit rating.

    We are playing with fire.

    The opinions expressed in this commentary are solely those of David Gergen.

    May 27, 2011 at 9:47 am | Reply
    • Anonymous Citizen

      Like I said, not enough choices in a 2-party system. And no, I don't belong to this Tea Party either. Don't know much about it though.

      May 27, 2011 at 9:49 am | Reply
  9. bill

    Just a thought, how about the government puts all the money back into medicare and social security that it has stolen from both programs, then the programs will be 100% funded and neither will need to be cut. Even the GAO has admitted that if the funds hadn't been plundered there would be more than enough revenue to pay out benefits for the foreseeable future.

    May 27, 2011 at 11:31 am | Reply
  10. Anonymous Citizen

    somewhat off topic, but still mildly related... here it is, it's public domain now!

    SUITS
    VERSION 00.03b

    2-4 players required.

    4 cards dealt to each player on the first round.
    2 jokers in play as wildcards.

    If turned in, a joker allows the player to replace it with any card in the discard pile only. After a joker is turned in, if no player has a full suit the next round begins immediately.
    Remaining cards to be dealt are added to the discard pile which is then shuffled. Each player gets two new cards and must discard one card or hold all cards until the next round.

    During the first round only, players may discard as many cards as they want on each turn.

    When only one player is still drawing from the deck and no other player is ready to begin the next round (all sitting out) that player may continue to draw from the undealt deck until it is empty or the player is ready to begin the next round. All players must be ready before a new round can begin, and anyone short a card is dealt one from the undealt deck before the cards are reshuffled, if possible.

    In tournament play, no trades can be made until all cards are dealt and the discard pile is too small to begin a new round.
    (With 4 players there will be 2 cards left in the discard pile.)
    During non-tournament play, cards may be traded on a 1-for-1 basis only at the beginning of a new round before any cards are dealt.

    A player may forfeit at any time. (first to forfeit finishes 4th, etc.) If a player forfeits, those cards go to the discard pile and a new round begins immediately unless a joker is turned in.

    If a player is dealt both jokers that player may turn them in immediately and recieve the highest available rank. That player's cards, including both jokers, are added to the discard pile. Any undealt cards are dealt to the remaining players until too few remain, then a new round begins immediately.

    Once all cards are dealt and the discard pile is too small to begin a new round, the discards are placed face up and player may in turn pick up a discard and replace it with another, also face up.

    If no one wants any of the discards, tournament trading begins. All trades must be one card for one card. A player shows one card to another player who may either refuse or show the first player the card they will trade. Both players must agree to the trade.

    The first player to complete and turn in an entire suit wins the highest available rank. Once a suit is turned in, all of that player's cards are put in the discard pile. If at least two players remain and no one turns in a joker to claim a card, a new round begins. If both jokers are turned in at the same time, the player with the black joker gets first pick and the player with the red joker must pick second. If one player has both jokers and wishes to turn them both in after someone turns in a suit, this is allowed.

    It is possible for one player to be holding both jokers and a full suit. In that case the player must turn in all cards to win first place, unseating any suit-only or jokers-only players. If that player does not turn in their cards and the other players forfeit or all turn in a full suit first, only the suit may be turned in and that player is ranked accordingly.

    If a trade results in a tie, spades are best, then clubs, then hearts, then diamonds. Otherwise the first suit turned in wins.

    If trading has concluded and a stalemate is reached, the player holding both jokers must turn in all cards and be ranked accordingly. If no one has both jokers, a single joker counts only as a card slot used. Each player's cards are turned in and ranked as follows:

    01. Double Royal Flush or better
    02. Royal + Straight Flush or better
    03. Double Straight Flush or better
    04. Quad Quads
    05. Royal Flush or better
    06. Straight Flush or better
    07. triple/double/single Quads
    08. Double Flush or better
    09. quad/triple trips
    10. most of each suit
    11. Flush or better
    12. All other hands are ranked based on the value of each card (Aces 15 points, Faces 10 points, Numbers n points.)

    Additional tournament rules available...
    HAVE FUN!!!

    May 27, 2011 at 6:44 pm | Reply
  11. Anonymous Citizen

    Getting back to the topic...
    Your first point regarding cargo preference looks like a good idea. I don't know enough about monetized food aid to comment on that at this time. Cutting agricultural subsidies sounds like a bad idea; it would be better to just make sure the subsidies go where they are supposed to go. Your final point also looks like a good idea, but again I don't know enough about it to say for sure.

    May 28, 2011 at 11:06 am | Reply

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