Find the money-pot: Interagency budgetpolitik and American foreign policy

By Jackson Webster


Gee, I wonder how much partner capacity we can build with the gold at the end of that rainbow!


In policymaking, as in politics, it’s usually wisest to ‘follow the money.’ This famous tagline of All the President’s Men was of course referring to corruption within the Nixon administration, but the key role played by money-matters in policymaking nonetheless finds its way into the conduct of American foreign policy.

The White House has three main tools at its disposal when dealing with the outside world: The Department of State (DoS), USAID, and the Department of Defense (DoD). Traditionally, State deals in diplomacy, USAID deals in development, and Defense deals in war, however these roles are becoming increasingly intertwined in today’s dynamic environment abroad.

Since the authorization of military assistance to Greece and Turkey in 1948, a process which has come to be known generally as ‘security cooperation’ has, through both accident and design become a mainstay of America’s presence abroad. This ‘security cooperation’ has been authorized by Congress on a piecemeal basis over the decades, and it currently consists of over 80 separate legal ‘authorities’ for delivering assistance to various parts of foreign countries’ security services. Each of these authorities has a separate pot of money from which it receives funding, and the amount of congressional control over each operation varies greatly. Over the past two administrations, this set of programmes has been included in a broader diplomatic initiative which has become a cornerstone of American foreign policy: ‘building partner capacity,’ or BPC. This process is intended to allow “like-minded regional partners” to share the burden of international security in an era of fiscal tightening in the United States.

What these trends amount to is a marked difference in the character of American foreign policy, particularly in terms of the agencies involved in its execution. Immediately following the Second World War, and well into the 1950s, the focus of American foreign policy outside of Korea was the reconstruction of Europe and the extension of Washington’s trade influence through strong Bretton Woods institutions (IMF, World Bank, etc.). Much of this was a ways-and-means issue. The Department of State had a great deal of money in its pockets due to the implementation of the Marshall Plan, as well as the burden of postwar diplomatic initiatives, and had a great degree of federal —especially congressional— attention paid to it as a result.

Since 9/11, the counterterrorism initiatives of the Bush and Obama administrations have caused funding to flow into the Department of Defense. State, on the other hand, has not received an authorization for its operations in 14 years, and thus its budget and responsibilities have remained relatively stagnant. The last time the purse strings for State were examined there was no Facebook, Saddam Hussein was still in power in Iraq, and Donald Trump was only a mediocre businessman without a reality TV show. Broadly speaking, this trend has caused significant mission creep away from the Pentagon’s traditional role and into what the armed forces call “military operations other than war.” The idea of the American arms industry being leveraged as a tool of diplomacy is nothing novel, however what has been a revolutionary change in our foreign policy is the centralization of a major part of our interaction with our allies overseas under the DOD rather than under the diplomatic bureaucracy at Foggy Bottom. While State was once America’s primary instrument abroad, this role has moved across the Potomac into the Pentagon, and DOD has now assumed much of the day-to-day work of maintaining our global network of alliances, in part due to its significantly larger piece of America’s budgetary pie.

The US Senate is currently entertaining a defense authorization bill, sponsored by Senator John McCain (R-AZ), to reform security cooperation and assistance programmes. The reforms contain a near-ludicrous 92 pages of legal jargon which, among other things, diverts a significant amount of money to the direct control of the Secretary of Defense for the purpose of ‘security cooperation’ with our allies. The current estimate is $10 billion for 2017, but during future appropriations and authorizations processes, that number will probably increase.

What this means in terms of US foreign policy is, as noted, an issue of ways-and-means. Should an administration wish to strengthen relations with a given country, solve a diplomatic problem, or confront an adversary, it will use the tool with the most resources at its disposal. In today’s budgetary climate, that’s the DOD, which means the military will continue to be America’s leading method of interaction with the outside world, not State and its civilian foreign service. This disconnect between what the military and its bureaucracy are designed to do and what they’ve recently been asked to accomplish both reinforces and is symptomatic of the funding prioritization of Defense over State. This effects all levels of Defense’s activities, from the Marine asked to “shoot with one hand and pass out aid with the other” to the 4-star combatant commanders asked to accomplish what were once considered diplomatic or development goals with the often blunt instrument of the military. Congress is giving the DOD a lot of money to execute a set of responsibilities of questionable effectiveness for which the military was not designed and which the military itself doesn’t necessarily want to do.

While debate continues inside the Beltway over the strengths and weaknesses of the Senate’s proposed reforms, the most important takeaway from describing this process is the key role played by the congressional appropriations and authorizations process in the conduct of foreign policy. After all, a programme or policy without a large pot of money attached, for all intents and purposes, does not exist. Regardless of whether President Obama chooses to veto this year’s authorization bill or not, the fierce nature of the debate and its eventual consequences for policy are telling of the impact of budgets and bureaucracy on America’s foreign relations. Every programme needs a pot of money, and the politics behind agencies getting their hands on these funds are worthy of study for those wishing to understand why and how the United States does what it does overseas.



Jackson Webster is a graduate of the Department of War Studies and is currently based in Paris where he is reading for a master’s degree in international security policy from SciencesPo.





1) All the Preseident’s Men, Alan J Pakula,1976.

2) Aftergood, Steven. “Assessing “Security Cooperation”, 2015.

3) “What is ‘Building Partner Capacity'”, 2015.

4) De Long, Bradford, and Barry Eichengreen. “The Marshall Plan: History’s Most Successful Structural Adjustment Program,” National Bureau of Economic Research, 1991.

5) Vinik, Danny. “The State Department Hasn’t Been Authorized in 13 Years.” Politico, Sept. 2015.

6) Graham, David. “The Many Scandals of Donald Trump: A Cheat Sheet.” The Atlantic, Jun. 2016.

7) The bill can be accessed here:

8) Schubert, Frank. Other Than War. NSC Joint History Office, Washington, DC, 2013.

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1 thought on “Find the money-pot: Interagency budgetpolitik and American foreign policy”

  1. Of course, the US military is seen as heroic, and spends lots of money in Congressional districts, while State is seen as “Washington Insiders” and spends its money abroad.

    It may be productive to compare the trends in the USA to Prussia, that “country in the service of an army” of the nineteenth century. There is something of the same quality of Military=Good, although it hasn’t yet become a question of /all/ politicians having to have served as Army officers.

    Another important difference is that Prussia had the good fortune in the late 19th and early 20th century to have a civilian economy that was growing rapidly due to industrialisation. But the USA is in a similar position now to that of the British Empire in 1900: its economic dominance is declining.

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