US budget ax poised over aid allocations

For the first time in its history, Congress may refuse to authorize funds for international development banks at levels already promised by American negotiators at multinational talks.

But such a refusal won't come without a fight from members of Congress who think it would seriously undercut United States credibility in world eyes.

The House of Representatives decides early this week whether to cut the $4.02 billion aid package that was to back up US promises to regional multilateral banks for the next four years.

Cuts were reluctantly approved by a House-Senate conference committee last week after it, and the Carter administration, decided that the full amount would not get enough votes in the House to pass.

It is a major concession for the administration, whose top foreign aid analysts have long been warning that cuts could have very adverse affects on the lives of millions of people in developing countries.

The cuts would reduce US funds for the Inter-American Development Bank by 10 percent, and the Asian Development Bank by 15 percent.

"With this precedent, no future president could negotiate on international financing with the confidence that he can deliver on his commitments," argues Rep. John Cavanaugh (D) of Nebraska, who is organizing opposition to the cuts among his House colleagues.

Mr. Cavanaugh is supported in this by an aid-conscious religious coalition, the Interreligious Task Force on US Food Policy, which says that US participation in global hunger alleviation is becoming "so uncertain, so low-profile, and so politicized" that the nation's historic leadership role is on the wane.

Despite such concern, however, sentiment in the House for cuts remains strong in this election year.

Delays in US budgeting for the banks have already kept the Inter-American Development Bank without funds for the past six months.

To ease this problem without any more delay, the Carter administration finally decided to support a compromise involving what it considers relatively modest cuts, says Fred Bergsten, assistant secretary of the Treasury for international affairs.