Foreign Aid Flap Reaches to Billy's Chili-Dog Stand

CONGRESS is on the verge of making deep cuts in foreign aid. Billy Lipuma is one reason why.

Mr. Lipuma runs a popular chili-dog parlor in this outlying Detroit suburb. On a good day he serves up a thousand or more dogs to admiring customers who, for 26 years now, have packed into his tiny eatery, adorned with photos of antique cars and a huge poster of Jesus.

The problem is that even with the good days he barely earns enough to pay his bills and taxes, which is one reason he wonders why the United States is spending so much money helping people abroad.

''I like to help everyone who needs help,'' Lipuma says. ''But the businessman is being strangled with taxes and we have to fight to make a profit. The government takes 30 percent of my money. I love to help, but there has to be a point where it stops.''

If opinion polls are correct, Lipuma is squarely in the American mainstream: sympathetic to poor nations but convinced that charity begins at home. Which is one reason why, when they sit down next week to authorize next year's foreign affairs budget, lawmakers are likely to cut foreign aid by as much as a third.

Billy Lipuma is typical in other respects. Like most Americans, he thinks 20 percent of the total federal budget is earmarked for foreign aid, an estimate 20 times the actual amount.

And like most Americans, when he thinks of foreign aid he thinks of the Vietnam War or of US troops stationed in foreign countries that, he says, ought to be defending themselves.

In fact, the $13.5 billion designated as foreign aid in the budget is devoted to other purposes. About $5 billion goes abroad for police training and loans and grants for the purchase of military equipment.

The rest -- the real focus of the foreign-aid debate -- is the US contribution to multilateral-development institutions, such as the World Bank, and the economic, humanitarian, and development assistance provided to poor nations through the US Agency for International Development (AID).

Clinton administration officials say that money spent abroad to build roads, limit population growth, or contain environmental damage can promote stability and economic growth in poor nations. Such expenditures, they say, are in the self-interest of the US.

But such arguments have fallen on deaf ears on Capitol Hill, where the perception abounds that foreign aid is wasted, has failed to redeem poor nations from poverty, or, by creating disincentives to reform, has actually been counterproductive.

Lawmakers are also miffed that countries that have received millions in US aid have been short on gratitude.

According to the conservative Heritage Foundation in Washington, 74 percent of countries receiving US aid voted against the US a majority of the time last year in the United Nations.

''It's like, I give you a present and you like me,'' Lipuma says. ''But in five years I come back and you say, 'Get out of here; I ain't got time.' ''

But if Lipuma is any gauge -- and opinion surveys suggest that he is -- the public and lawmakers are not entirely in sync on the subject of foreign aid.

Most Americans are opposed to concentrating US resources on Egypt and Israel -- the top two aid recipients, which, together, receive $5 billion in US aid each year. Their message: If money is to be spent abroad, it should be spent equitably.

Moreover, Americans are actually willing to spend more on foreign aid than their representatives in Washington are -- up to five times the 1 percent the US now spends, according to a recent poll conducted by the University of Maryland Center for International and Security Studies.

But polling results are small comfort for proponents of foreign aid.

The fact is that most Americans are not aware that the US aid budget is comparatively small or that most foreign aid comes home to create US jobs.

And because they aren't, US lawmakers are under enormous pressure to make deep cuts in an aid program that is already, as a percentage of gross national product, the smallest among the industrialized nations.

''We can't hold [foreign aid] harmless from cuts in the face of the need to move to a balanced budget in seven years,'' says a congressional source, referring to the target date set in the Republican Contract With America.

''The greatest threat to the international-affairs budget is the federal deficit,'' adds the source, who says foreign aid can't remain inviolate while school lunch programs, Medicare, and law-enforcement programs are being cut.

Congress is expected to slice by one-third the annual US contribution to the World Bank's development arm, which provides low- and no-cost loans to developing nations.

Direct US aid to most countries will be cut by even more.

''When you protect the Israel and Egypt accounts, it means you have to eliminate most US aid to Latin America, Asia, and Africa,'' says a US AID official.