Lawmakers say it is an insult to the American people: The US is borrowing money from China only to give some of it right back as foreign aid. That, they say, is bolstering Chinese businesses that compete with US companies in hard economic times.
A US House of Representatives hearing on Tuesday provided a venue for Republicans to pounce on US President Barack Obama’s administration when wasteful spending, questionable foreign aid and US-China relations are all hot issues ahead of next year’s elections.
An administration official told lawmakers there was no money going to the Chinese government or Chinese companies. In fact, it helped US companies trying to do business in China. The idea for the aid? That actually came from US Congress when it was under Republican control.
Aid to China — US$275 million worth over 10 years — has been approved while control of both Congress and the White House has shifted between the parties.
With the US scrambling to reel in its US$14.8 trillion national debt, however, the foreign aid budget has become a first casualty. Republicans are demanding steeper cuts to the US$21 billion budget of the US Agency for International Development (USAID).
Assistance to China makes up only a tiny fraction of the foreign aid total. This year’s aid will be just US$12 million, half that of last year, but it is a prime target. China has the world’s second-largest economy, is the US’ main foreign creditor, and is blamed by both Democrats and Republicans for many of the US’ economic woes.
Tuesday’s hearing of the House Foreign Affairs Asia subcommittee on the aid program offered plenty of red meat to China critics.
All six lawmakers who spoke, five Republicans and a Democrat, expressed incredulity that the US was still providing aid to China, which they accused of persecuting its people and stealing intellectual property from US companies.
Democratic Representative Brad Sherman said US foreign policymakers were out of touch with taxpayers. He said it was “an insult to the American people” and that aid should only go to democracy organizations in the communist-controlled country.
Representative Dana Rohrabacher, a Republican, used even blunter terms. He called it “pouring US taxpayer dollars down the toilet.”
The US$12 million requested by the Obama administration this year would be spent largely on fighting HIV/AIDS and to help Tibet, whose exiled spiritual leader, the Dalai Lama, is widely respected in Washington.
The panel was focused on US$4 million of proposed funding for promoting clean energy, the rule of law, and to fight wildlife trafficking in China. The committee has put that aid, approved last year, on hold as it demands explanations from the USAID how the money would be used.
The panel’s Republican chairman, Donald Manzullo, said the clean energy program would boost the competitiveness of Chinese manufacturers at the expense of US manufacturers and jobs, and in a sector where the US has protested to the WTO over Chinese state subsidies.
He also derided USAID for supporting a multimedia campaign aimed at stopping the illegal trade in wildlife. The campaign is titled “Sex, Drugs, Rock and Roll — and Wildlife.”
“Can’t you see why Congress is worried by the way you are spending the money?” Manzullo asked a USAID official. “What’s sex got to do with it?”
USAID assistant administrator Nisha Biswal conceded that the title was perhaps “ill-advised,” but said it was intended to convey the links between trafficking in wildlife and trafficking in narcotics and humans.
She defended the disputed aid to China as supporting US values and interests, including for environmental protection. Almost one-third of California’s particulate pollution can be traced to China, while 30 percent of mercury found in North American lakes comes from emissions originating from Chinese coal-fired power plants, Biswal said.
She said since 2006 — during the presidency of George W. Bush, and when Congress was under Republican control — Congress had required USAID to maintain programs on rule of law and the environment in China.
“We have complied,” Biswal said, adding that none of the programs directly funded the Chinese government or involved the transfer of technology.
She said the aid is designed to improve China’s environmental law and regulatory system, and with support from US companies offers training to Chinese factories on international environmental and health standards.
Biswal said the program also offers an opening to Chinese markets for US businesses.
Participating companies include General Electric, Honeywell, Wal-Mart, Alcoa and Pfizer.
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