	Recent Developments

Several actions occurred throughout the past year related to foreign aid reform, including:
On December 15, 2010, Secretary of State Hillary Clinton released the Obama Administration's Quadrennial Diplomacy and Development Review (QDDR), outlining the direction for foreign aid reform and elevating as well as integrating diplomacy and development to be more effective and more on par with defense as foreign policy tools. Historical Perspective

For years, many foreign aid experts have expressed concern about ongoing inefficiencies associated with the overall organization, effectiveness, and management of U.S. foreign aid. Specific problems most commonly cited include the lack of a national foreign assistance strategy; failure to elevate the importance and funding of foreign aid to be on par with diplomacy and defense as a foreign policy tool; lack of coordination among the large number of Cabinet-level departments and agencies involved in foreign aid, as well as fragmented foreign aid funding; a need to better leverage U.S. multilateral aid to influence country or program directions; and a lack of visibility at the Cabinet level for the U.S. Agency for International Development (USAID)—the primary administrator of aid programs. Another criticism is a perceived lack of progress in some countries that have been aid recipients for decades. And a growing concern, especially on the part of the nongovernmental organization (NGO) community, is the increasing involvement of the Department of Defense (DOD) in disbursing foreign aid, rising from 29% in 2001 to 60% in 2007 (including aid to Iraq and Afghanistan). The Foreign Assistance Act of 1961 (FAA), as amended (P.L. 87-195; 22 U.S.C. Several actions occurred in 2009 and 2010, including introduction of legislation to reform certain aspects of foreign aid, a State Department announcement of a quadrennial review, and a Presidential Study Directive (PSD) on U.S. Its mission statement said, "In the coming years, the principal aims of the Department of State and USAID are clear. Secretary of Defense Robert Gates has stated in the past that DOD personnel do not have expertise or the mission for delivering aid. During the 111 th Congress, Chairman Berman stated on the House Foreign Affairs Committee website that foreign aid reform was a priority; Senator Kerry (chair) and Senator Lugar (ranking member) of the Senate Committee on Foreign Relations, in a dear colleague letter, said: "In order for foreign aid to play its critical role, we must ensure that it is both effective and efficient." Legislators in 2009 and 2010 held differing views on what was needed to adequately reform U.S. foreign aid, but many generally agreed that reform was needed. Released on June 29, 2010, was a discussion draft, "Global Partnerships Act of 2010," that provided the preamble and Title I of a foreign aid reform bill. Legislation involving foreign aid reform provisions before the 111 th Congress included the following:
On June 10, 2009, the House passed the Foreign Relations Authorization Act, Fiscal Years 2010 and 2011 ( H.R. H.R. 2139 , Initiating Foreign Assistance Reform Act of 2009 , introduced by Representatives Berman and Kirk on April 28, 2009 and referred to the House Committee on Foreign Affairs, would have: required the President to develop and implement, on an interagency basis, a "National Strategy for Global Development;" developed a monitoring and evaluation system; and established a foreign assistance evaluation advisory council. 2387 , Strategy and Effectiveness of Foreign Policy and Assistance Act of 2009, introduced by Representative Ros-Lehtinen and others on May 13, 2009, and referred to the House Committee on Foreign Affairs, stated the sense of Congress that (1) the Secretary of State and the USAID Administrator should make funding decisions on the basis of a long-term strategy that addresses national security, diplomatic and foreign assistance objectives, and the needs of the United States; and (2) foreign affairs agencies' budget requests should be more effectively integrated with national security objectives, program evaluation, and management.
Several development proponents, nongovernmental organizations (NGOs), and policymakers have pressed Congress to reform U.S. foreign aid capabilities to better address 21st century development needs and national security challenges. Over the past 50 years, the legislative foundation for U.S. foreign aid has evolved largely by amending the Foreign Assistance Act of 1961 (P.L. 87-195), the primary statutory basis for U.S. foreign aid programs, and enacting separate freestanding laws to reflect specific U.S. foreign policy interests. Many describe U.S. aid programs as fragmented, cumbersome, and not finely tuned to address overseas needs or U.S. national security interests. Lack of a comprehensive congressional reauthorization of foreign aid for half of those 50 years compounds the perceived weakness of U.S. aid programs and statutes.
The structure of U.S. foreign aid entities, as well as implementation and follow-up monitoring of the effectiveness of aid programs, have come under increasing scrutiny in recent years. Criticisms include a lack of focus and coherence overall; too many agencies involved in delivering aid with inadequate coordination or leadership; lack of flexibility, responsiveness, and transparency of aid programs; and a perceived lack of progress in some countries that have been aid recipients for decades. Over the last decade a number of observers have expressed a growing concern about the increasing involvement of the Department of Defense in foreign aid activities. At issue, too, has been whether the U.S. Agency for International Development (USAID) or the Department of State should be designated as the lead agency in delivering, monitoring, and assessing aid, and what the relationship between the two should be.
The Obama Administration, led by Secretary of State Hillary Clinton, Secretary of Defense Robert M. Gates, and USAID Administrator Rajiv Shah, announced action to seek solutions to the problems associated with foreign aid and begin the process of reform. Secretary Clinton announced in July 2009 that the Department of State would conduct a Quadrennial Diplomacy and Development Review (QDDR) to address issues involving State Department and USAID capabilities and resources to meet 21st century demands. In September 2010, the President signed a Presidential Study Directive (PSD) on U.S. Global Development Policy to address overarching government department and agency issues regarding foreign aid activities and coordination. Secretary Clinton presented the QDDR report in December 2010.
Foreign aid reform was a key area of focus throughout the 111th Congress, although no comprehensive reform legislation was enacted. Representative Berman, then-chairman of the House Foreign Affairs Committee (HFAC) in the 111th Congress, stated on the committee website in 2009 and 2010 how foreign assistance reform was a top priority. In 2009, he introduced H.R. 2139, Initiating Foreign Assistance Reform Act of 2009. Between July 2009 and May 2010, Chairman Berman released several discussion papers on foreign aid reform, as well as a discussion draft of the first 55 pages of possible foreign aid reform legislation.
In the Senate, Senator Kerry, chairman of the Senate Foreign Relations Committee (SFRC), Senator Lugar, ranking minority member, and others introduced a reform bill, S. 1524, the Foreign Assistance Revitalization and Accountability Act of 2009. The Senate did not consider H.R. 2410, the House-passed Foreign Relations Authorization Act of 2010 and 2011 requiring a national strategy for development and a quadrennial review of diplomacy and development.
Foreign aid reform may continue to be a concern in the 112th Congress. This report addresses aid reform through early 2011 and will not be updated.