The Foreign Assistance Act, an annual funding bill by the Foreign Relations Committee, specifies that, if they’re funded with tax dollars, grants can be made only for the foreign and domestic policies and operations of the recipient, with a specific limit of five years. This also protects the rights of non-American workers and officials.
The Foreign Affairs Committee’s policy has been to oppose funding for foreign government projects. However, the budget came with a contingency provision that foreign government funds could be obtained if there is a need for foreign government research and development funding. The provision required a policy vote by the full committee of the Foreign Affairs Committee.
Chairman Ed Royce (R-Calif.) and the committee rejected the policy exception, claiming that granting a foreign government research and development exception would “open the door” to foreign funding for domestic activities like corporate mergers, or to foreign military activities. In particular, the proposal was criticized because there was no limit on how much could be received, unlike for domestic research and development funding.
Research and Development Assistance
During his tenure as chairman, Senator Jeff Sessions (R-Ala.) introduced an amendment to prohibit research and development funding to foreign governments. The amendment was approved unanimously by committee members in 2016. In 2015, Senator Ben Cardin (D-Md.) added an amendment that would prohibit foreign government funding of research, testing, development, production, and manufacturing of land and water-related goods and technologies, like aircraft, aircraft carriers, or any military hardware. This amendment, in particular, was highly controversial, as there was no provision for domestic research and development funding.
The three foreign government exceptions are the most controversial provisions in the budget. At this time, there is no change to the domestic research and development program.
While there is no confirmation of whether the foreign government exceptions will remain in the 2017 budget, there are more than 600 foreign government projects listed on the Overseas Contingency Operations budget.
While there is no change to the domestic research and development program, it is clear that the foreign policy and foreign assistance offices in the government have different objectives in addressing the specific areas of research and development. Although the policy debate is generally held at the policy and policy direction levels in government, the personal and ideological agendas of members of the Foreign Affairs Committee often come to the forefront of the policy discussion.
Senator Sessions, in particular, has been highly critical of the Department of Defense for an alleged failure to provide enough funding for military research.
For example, Sessions suggested in 2015 that the Pentagon was not spending enough of its research budget on defense-related research and development. Sessions argued that there were many research and development challenges, including space exploration, ocean research, advanced materials, environmental monitoring, and weather prediction. Sessions, however, did not offer any specific policy proposals for how to address the underlying problems.
In some way or other, cross-border funding occurs all the time. Any online casino PayPal supports constitutes foreign investment in some way, for instance, because it’s facilitating the flow of funds and handling of payments for a foreign-based entity.