Hard times in US tighten foreign-aid purse strings

With setbacks abroad and hard times at home, the United States is tightening its foreign-aid purse strings. The old international image of beneficent Uncle Sam -- bankroller of the post-World War II Marshall Plan for Western Europe and Point Four for the under-developed world -- is fast fading.

Taking its place is the harsher picture of an America made sullen by the Vietnam experience, the Middle East oil crisis, reversals in Iran, and a deepening domestic recession.

The US retrenchment on financial assistance to the rest of the world has been gathering force for years, and now shows signs of accelerating sharply:

* American foreign aid has shrunk by 25 percent over the past 20 years. The proportion of the gross national product devoted to the economic development of poorer countries has declined in the past 10 years from 0.4 percent to 0.3 percent.

That ranks the US 13th among the 17 major industrial powers -- below such less-affluent nations as Italy and Britain. And the US is about to be dropped into 14th place by Japan.

* Another substantial cut in foreign aid now is working its way through Congress. Symptomatic of the low esteem to which foreign aid has fallen, President Carter and lawmakers seemingly tried to outdo each other in slashing the bill.

The President proposed a cut of $57 million from the current year's legislation of $5.3 billion. The House of Representatives hacked an additional being hammered out by Senate-House negotiators, but may wind up as the lowest in three years.

* The US is about to renege, for the first time ever, on paying its full pledge to international lending institutions.

The victims are three regional development banks in Latin America, Africa, and Asia, whose previously committed American contributions were cut by Congress last month from $4 billion to $3.6 billion. The year-long legislative wrangle over the funds already has halted for six months all new projects financed by two of the multi-national banks.

Ironically, most of the sums "saved" by Congress are loan guarantees requiring no outlay of money.

The retreat of US foreign aid increasingly concerns those who oversee the country's relations with the rest of the world.

"American aid programs comprise less than 1.5 percent of our federal budget. They -- not rhetoric, not goodwill -- are what make the most difference . . . in addressing now the causes of later crises. Yet they are under constant assault in the Congress and elsewhere," former Secretary of State Cyrus Vance warned in his commencement address at Harvard University earlier this month.

"The result is -- I can think of no other word -- disgraceful."

But the foreign-aid trimmers on Capitol Hill and in the White House appear to be in step with the American public.

Asked recently by Louis Harris pollsters where they would suggest cutting the federal budget, respondents put at the top of the list foreign economic aid (by a margin of 82 percent to 14 percent) and foreign military aid (by 77 percent to 20 percent).

"The expedient political course for most of us in this election year, with the mood of the times," Rep. Arlen Erdahl (R) of Minnesota candidly concedes, "is to vote 'no' on all foreign-aid bills."

An increasing number of his colleagues routinely do just that, as the recognition grows that supporting foreign aid wins few votes back home.

Defenders of foreign aid argue, however, that it is an ivestment that repays dividends in world stability and US trade.

The $5 billion foreign-aid program is estimated to have directly generated nearly $2 billion worth of sales and contracts last year in this country, providing jobs for more than 200,000 Americans.