	Introduction

Foreign assistance is one of the tools the United States has employed to advance U.S. interests in Latin America and the Caribbean, with the focus and funding levels of aid programs changing along with broader U.S. policy goals. U.S. assistance to the region spiked in the early 1960s following the introduction of President Kennedy's Alliance for Progress, an anti-poverty initiative that sought to counter Soviet and Cuban influence in the aftermath of Fidel Castro's 1959 seizure of power in Cuba. U.S. foreign assistance to Latin America and the Caribbean began to increase once again in the late 1990s and remained on a generally upward trajectory through the past decade. USAID manages ESF funds in conjunction with the State Department. As total aid levels to the region have declined in recent years, Congress and the Administration have gradually shifted the balance of the remaining assistance toward development and humanitarian assistance and away from security assistance (see Figure 3 below). FY2013 Request for Latin America and the Caribbean5

The Obama Administration's FY2013 foreign aid budget request would continue the recent downward trend in assistance to Latin America and the Caribbean. The Administration has requested approximately $1.7 billion for the region. U.S. assistance to the sub-region has declined in each decade since the 1980s. Assistance declined considerably during the 1990s as the Cold War and civil conflicts came to an end. Looking more recently at foreign aid appropriated for the State Department and USAID through the annual State Department and Foreign Operations appropriations measure, U.S. assistance to the Caribbean amounted to $572 million in current U.S. dollars in FY2011 and an estimated $522 million in FY2012. They include the Department of Defense, the Inter-American Foundation, the Millennium Challenge Corporation, and the Peace Corps. Potential Issues for Congressional Consideration

		Budget Priorities and Constraints

The Obama Administration maintains that its four priorities for U.S. policy toward Latin America and the Caribbean—promoting economic opportunity, ensuring citizen security, strengthening effective institutions for democratic governance, and securing a clean energy future —guide its foreign aid budget request for the region. As noted above (" Legislative Action on FY2013 Appropriations "), House and Senate Appropriations Committees have marked up their versions of the FY2013 State Department, Foreign Operations, and Related Programs appropriations measure that respectively would reduce worldwide foreign aid funding by 11.8% and 4.7% from the Administration's FY2013 request. The House Committee on Appropriations held a markup of its bill ( H.R. If enacted, total funding levels in FY2013 would have been 2.3% lower than the FY2012 estimate and 4.7% lower than the Administration's request. It was unclear how much foreign assistance each of the nations of Latin America and the Caribbean would receive under the two bills since, for the most part, appropriations levels for individual countries and programs were not specified in the legislation or accompanying reports. Nevertheless, both of the reports expressed concerns over conditions in the region and noted the committees' intentions to provide assistance levels above the Administration's request to at least some Latin American and Caribbean nations. The House report ( H.Rept. The Senate report ( S.Rept. 5857 or S. 3241 . It delayed floor consideration of FY2013 appropriations bills until after the start of the new fiscal year and the November 2012 elections, instead enacting a six-month continuing resolution that would expire in March 2013 ( P.L. 112-175 ). In March 2013, before the continuing resolution expired, Congress approved new legislation ( P.L. 113-6 ) funding federal programs through the end of FY2013. Under that measure, State Department and Foreign Operations accounts were funded at the same level as in FY2012 with some exceptions. Funding, however, was also subject to the budget sequestration cuts set forth in the Budget Control Act of 2011( P.L. 112-25 ) and the American Taxpayers Relief Act ( P.L. 112-240 ). While sequestration reduced State Department-Foreign Operations funding by about 5%, those reductions will be applied at the account level, and as a result, country-level allocations for FY2013 are not yet available.
Geographic proximity has forged strong linkages between the United States and the nations of Latin America and the Caribbean, with critical U.S. interests in the region encompassing economic, political, and security concerns. U.S. policymakers have emphasized different strategic interests in the region at different times, from combating Soviet influence during the Cold War to advancing democracy and open markets since the 1990s. Current U.S. policy toward the region is designed to promote economic and social opportunity, ensure citizen security, strengthen effective democratic institutions, and secure a clean energy future. As part of broader efforts to advance these priorities, the United States provides Latin American and Caribbean nations with substantial amounts of foreign assistance. In recent years, the State Department, Foreign Operations, and Related Programs appropriations measure has been the primary legislative vehicle through which Congress reviews U.S. assistance and influences executive branch policy toward the region.
Trends in Assistance
Since 1946, the United States has provided over $148 billion (constant 2010 dollars) in assistance to the region. Funding levels have fluctuated over time, however, according to regional trends and U.S. policy initiatives. U.S. assistance to the region spiked during the 1960s under President Kennedy's Alliance for Progress, and then declined in the 1970s before spiking again during the Central American conflicts of the 1980s. After another decline during the 1990s, assistance to the region remained on a generally upward trajectory through the first decade of this century, reaching its most recent peak in the aftermath of the 2010 earthquake in Haiti. Aid levels for the region have fallen in each of the past two fiscal years, however, as Congress has sought to trim the foreign aid budget.
FY2013 Obama Administration Request
The Obama Administration's FY2013 foreign aid budget request would have continued the recent downward trend in assistance to Latin America and the Caribbean. The Administration requested some $1.7 billion for the region to be provided through the State Department and the U.S. Agency for International Development (USAID). Beyond the assistance provided through the State Department and USAID, many Latin American and Caribbean nations will continue to receive additional aid from agencies such as the Department of Defense, the Inter-American Foundation, the Millennium Challenge Corporation, and the Peace Corps.
Congressional Action
In May 2012, the House and Senate Committees on Appropriations marked up their annual appropriations bills for the State Department, Foreign Operations, and Related Programs (H.R. 5857 and S. 3241). Funding in the FY2013 House bill was 11.8% lower than the Administration's request, and funding in the Senate bill was 4.7% lower than the Administration's request. It is unclear how much foreign assistance each of the nations of Latin America and the Caribbean would have received under the two bills, however, since appropriation levels for individual countries and programs are generally not specified in the legislation or accompanying reports.
Ultimately no action was taken on these measures. Congress delayed floor consideration of FY2013 appropriations bills until after the start of the new fiscal year and the November 2012 elections, instead enacting a six-month continuing resolution that would expire in March 2013 (P.L. 112-175). In March 2013, before the continuing resolution expired, Congress approved new legislation (P.L. 113-6) funding federal programs through the end of FY2013. Under that measure, State Department and Foreign Operations accounts were funded at the same level as in FY2012 with some exceptions. Funding, however, was also subject to the budget sequestration cuts set forth in the Budget Control Act of 2011 (P.L. 112-25) and the American Taxpayers Relief Act (P.L. 112-240). While sequestration reduced State Department-Foreign Operations funding by about 5%, those reductions will be applied at the account level, and as a result, country-level allocations for FY2013 are not yet available.
Note: The FY2013 foreign aid statistics cited in this report reflect the Administration FY2013 request for assistance to Latin America and the Caribbean. The discussion and analysis throughout this report reflect comparisons of the Administration's FY2013 request with FY2012 aid estimates. Discussion of FY2013 legislative action focuses on bills reported by the House and Senate Appropriations Committees, but never considered by Congress.