Foreign Aid: An Introductory Overview of U.S. Programs and Policy

Foreign assistance is a fundamental component of the international affairs budget and is viewed by many as an essential instrument of U.S. foreign policy. Since the end of the Cold War, many have proposed significant changes in the size, composition, and purpose of the program, several of which have been adopted. The focus of U.S. foreign aid policy has also been transformed since the terrorist attacks of September 11, 2001. This report provides an overview of the U.S. foreign aid program, by addressing a number of the more frequently asked questions regarding the subject. There are five major categories of foreign assistance bilateral development aid, economic assistance supporting U.S. political and security goals, humanitarian aid, multilateral economic contributions, and military aid. Due largely to the recent implementation two new foreign aid initiatives -- the Millennium Challenge Corporation and the Global AIDS Initiative -- bilateral development assistance has become the largest category of U.S. aid.