U.S. Businesses Dispute Trump's Plan To Slash International Budget
SAN FRANCISCO (CBS SF) -- Some of the largest, most powerful American companies are urging the Trump administration to rethink severe budget cuts expected to harm international diplomacy and development.
Over 200 business leaders -- representing companies as different as Walmart to General Electric to Intel to Coca-Cola -- signed on to a letter this week imploring U.S. Secretary of State Rex Tillerson not to slash the U.S. International Affairs Budget, which funds the U.S. Department of State and the U.S. Agency for International Development (USAID).
The business leaders said U.S. international affairs programs "boost our exports abroad and our jobs here at home."
The letter to Tillerson argues that "American companies depend on robust U.S. engagement overseas, especially in the fast-growing markets in the developing world. Our embassies and consulates around the world are essential partners for American businesses to ensure we can compete on a level playing field."
But Tillerson maintains that the budget "reflects a commitment to ensure every tax dollar spent is aligned with mission-critical objectives" and that "an optimally functioning State Department and USAID will deploy funding that restores the leadership the American people and allies depend on for stability, security, and prosperity."
The 2018 budget request for the State Department and USAID is $37.6 billion, which is 32 percent below 2017 spending. And even further below 2016 spending.
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Hari Sastry, director of the Office of U.S. Foreign Assistance Resources at the U.S. Department of State, described to reporters on Wednesday how the proposed cuts compare to 2016 spending saying, "So for humanitarian assistance, it's a $2.4 billion reduction, which is about 31 percent, and for global health, it is a $2.2 billion reduction, which is about 25 percent..."
Intel Corporation Senior Director of Global Policy Lisa Malloy was among those who signed onto the Tillerson letter.
Malloy told CBS San Francisco the Santa Clara tech giant was compelled to join other firms on the letter because Intel is a company that benefits from a robust International Affairs Budget.
"We realize the importance of U.S. investment in development and diplomacy around the world," Malloy explains. "We have partnered with USAID for more than a decade, focusing on girls and women empowerment, education and entrepreneurship, and expanding broadband and technology access. Given the increasing complexity of the local and global social challenges the world faces—public private partnerships are essential to creating both social and business value."
Malloy pointed to programs supported by the International Affairs Budget, such as USAID's U.S. Global Development Lab, which fosters science-and technology-based solutions to help end extreme poverty around the world.
"These programs channel the best that America has to offer in technological leadership to help families, communities and economies in developing countries," Malloy said.
Colin Powell, the U.S. Secretary of State under President George W. Bush from 2001 to 2005, wrote an op-ed in The New York Times Wednesday arguing that Trump's proposed budget would drastically reduce investment in international development and diplomacy, threatening not only American leadership abroad but also undermining the United States' economic and national security interests.
The Trump administration proposes zeroing out economic and development assistance in more than 35 countries, according to Powell.
The budget also proposes cutting contributions to U.N. peacekeeping by more than half, a $1.6 billion reduction.
Powell maintains that the proposed international budget cuts would be self-defeating and would undermine American businesses' ability to build new customer bases in the world's fastest-growing markets, such as Africa.
Powell argues that the administration's proposal to slash approximately 30 percent from the State Department and foreign assistance budget "signals an American retreat that would leaving a vacuum that would make us far less safe and prosperous."
"Indeed, we're strongest when the face of America isn't only a soldier carrying a gun but also a diplomat negotiating peace, a Peace Corps volunteer bringing clean water to a village or a relief worker stepping off a cargo plane as floodwaters rise," Powell writes.
By Hannah Albarazi - Follow her on Twitter: @hannahalbarazi.