Foreign Assistance Act of 1961

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What was the purpose of the Foreign Assistance Act of 1961, and how has it affected long-term foreign policy in the United States?

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The United States Constitution specifies that Congress decides how funds will be spent.  The Constitution also mandates that, as the nation’s chief executive, the president has foreign affairs powers, which are independent, that is, not dependent on Congress. However, these two functions at times collide; such was the case in the period known as the first Cold War, 1947-1953.  During this six year period, the United States and the Soviet Union fought for influence around the world; this was especially true of the new states that came about as a result of decolonization.  President Harry S Truman had to wrestle with Congress over differences on how to manage and distribute foreign aid. As a result of these struggles, in 1961, the Foreign Assistance Act was passed.  The Foreign Assistance Act established guidelines for accommodating the desires of Congress and the vision of the president; it does so by establishing annual appropriations.  However, the act is not without its difficulties and detractors, as it allows Congress to effectively micromanage foreign policy making, as Congress can impose a variety of limits, conditions, and certification  requirements for countries to receive aid from the United States. Others argue that the FAA is useful as it imposes the types of “checks and balances” for maintaining the separation of powers that the framers of the Constitution envisioned. 

Before the FAA was enacted, the authority for distribution of  United States foreign aid was managed through a variety of statutes, especially the Mutual Security Act of 1954.  The reason that the FAA was created was to consolidate these statutes and to reconsider the already established programs in light of the new world circumstances that existed following World War II and the new era of the Cold War. The world had drastically changed; old European colonial empires crumbled and Third World countries had become a player in international politics. One of the things the FAA did was to provide non-military aid to countries. Section 102 of the FAA states that this type of aid was “to strengthen the forces of freedom by aiding peoples of less developed friendly countries of the world to develop their resources and improve their living standards, to realize their aspirations for justice, education, dignity, and respect as individual human beings, and to establish responsible governments."

There were other reasons to give funds to countries for non-military purposes by way of the FAA.  Part of the intention for those funds, as outlined in Section 502, was to foster “an improved climate of political independence and individual liberty, improving the ability of friendly countries and international organizations to deter or, if necessary, defeat Communist or Communist-supported aggression, facilitating arrangement for individual and collective security, assisting friendly countries to maintain internal security, and creating an environment of security and stability in the developing friendly countries essential to their more rapid, social, economic, and political progress."

What the FAA really boils down to is a turning away from the military interventions of the past and instead focusing on changing “the hearts and minds” in foreign lands, especially those of Third World countries; this can be seen especially in President John F. Kennedy’s  1961 “Alliance for Progress in Latin America.”  Kennedy conceived a ten-year plan that would triple the amount of aid to Latin

America; from 1961 to 1967, the United States gave $1.4 billion dollars per year to countries in Latin America. In a March 1961 speech outlining the plan, Kennedy explained his rationale:

“We propose to complete the revolution of the Americas, to build a hemisphere where all men can hope for a suitable standard of living and all can live out their lives in dignity and in freedom. To achieve this goal political freedom must accompany material progress...Let us once again transform the American Continent into a vast crucible of revolutionary ideas and efforts, a tribute to the power of the creative energies of free men and women, an example to all the world that liberty and progress walk hand in hand. Let us once again awaken our American revolution until it guides the struggles of people everywhere-not with an imperialism of force or fear but the rule of courage and freedom and hope for the future of man.”

All in all, the provisions enacted by the FAA were put in place largely to repel communism and to establish market democracies around the world.

Over the next fifty-plus years, foreign assistance has seen both the beginning and the end of the Cold War and also the ending of the Imperial Presidency.  It has permanently altered the degree and intensity of congressional supervision of the process of establishing foreign policy;

Source: Major Acts of Congress, ©2004 Gale Cengage. All Rights Reserved.

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Following the end of World War II, the United States found itself in a position it has never really imagined: it was the strongest country in the world.  One of two “superpowers” to emerge victorious from the war, the armed conflict that had waged across Europe was now replaced by the Cold War and the security structures, for example, the alliances the U.S. concluded with countries around the world, that would remain largely in place for the next 50 years.  While these security arrangements, most prominently the North Atlantic Alliance, represented formal, binding commitments, much of the U.S. Government structure for conducting foreign affairs remained uncoordinated, with aid, development and security assistance programs emerging on an ad hoc basis.  By the time Kennedy was elected to office, the world had already begun a massive transformation, with old empires, including those of the British and French, giving way to a proliferation of suddenly-independent nations and friendly governments threatened by Soviet-supported insurgencies. 

It was in this context that the administration of President John Kennedy sought to fundamentally restructure and institutionalize a foreign policy apparatus that would lend cohesiveness to U.S. activities abroad and better enable the U.S to confront the myriad challenges that were emerging.  The Kennedy Administration concluded that the existing bureaucratic structure was too fragmented and lacking in any kind of unified vision and effort.  The result was the Foreign Assistance Act of 1961.  When signing the legislation passed by Congress, with which the White House had coordinated its efforts, into law on September 4, 1961, President Kennedy noted the following:

 “With the signing into law of this bill, a Decade of Development begins. The long-term commitment of development funds, which the bill authorizes, will assist the under-developed countries of the world to take the critical steps essential to economic and social progress.”

The Foreign Assistance Act established the bureaucratic framework and established the mechanisms by which the United States allocates foreign assistance, including some forms of security assistance.  All subsequent legislation intended to restructure or reform the foreign policy apparatus refers to this initial Act and usually amends it, but the underlying structures remain intact.

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