US Foreign Assistance as a Means of Soft Power | The American Spectator

The Marshall Plan to rebuild post-World War II Europe has been acclaimed as the most successful foreign assistance program in U.S. history.  The plan, officially known as the European Recovery Program (ERP), was created under the Economic Cooperation Act of 1948 (also known at the Foreign Assistance Act of 1948) signed into law by President Harry Truman on April 3, 1948.

The plan was named after George Marshall, its leading advocate and Truman’s Secretary of State at the time. It provided an aggregate total of $13.3 billion (equivalent to about $200 billion in 2025) in financial assistance to 16 European countries over a period of approximately four years from April 1948 to June 1952.  Both the Truman administration and large majorities in Congress viewed the Marshall Plan as essential in not only helping reconstruct a war-torn Europe and regenerate its economies, but also to prevent the westward expansion of communism across the European continent by the Soviet Union.

The impact of the plan on recipient countries show that it achieved its primary objectives.  From 1947 to the end of 1951, trade volume within Europe almost doubled, industrial production increased 55 percent, and average GNP rose by roughly 33 percent.  In addition, the Marshall Plan had geopolitical value for the United States that is not easily quantifiable beyond the economic benefits.  Many observers believe that the plan was critical in preventing the spread of communism in the assisted countries.

The Marshall Plan was considered so successful that some members of Congress called for similar financial assistance plans for other regions of the world in subsequent years.  This eventually led to enactment of a comprehensive foreign assistance bill under the urging of President John F. Kennedy on September 4, 1961, the Foreign Assistance Act of 1961.  The purpose of the Act was aspirational.  It stated:

[A] principal objective of the foreign policy of the United States is the encouragement and sustained support of the people of developing countries in their efforts to acquire the knowledge and resources essential to development and to build the economic, political, and social institutions which will improve the quality of their lives” [and] that development concerns be fully reflected in United States foreign policy and that United States development resources be effectively and efficiently utilized.

In order to effectively execute the objectives of the Foreign Assistance Act, President Kennedy created the United States Agency for International Development with Executive Order 10973 on November 3, 1961.  USAID was set up as a single foreign assistance agency within the U.S. State Department to consolidate several existing foreign assistance organizations and programs. Foreign assistance has continued to play a significant role in America’s foreign policy since then.

According to the U.S. State Department’s foreign assistance data site, ForeignAssistance.gov, the U.S. Government’s committed payments on non-military foreign assistance since World War II, from 1946 through 2024, amounted to about $2.6 trillion (in equivalent 2025 U.S. Dollars).  This amount averages to about $33 billion per year over that 79-year period.  However, the annual average has increased dramatically over the past 22 years, from 2003 through 2024, to about $46 billion (all dollar amounts referenced are inflation-adjusted to 2025 U.S. Dollars.)

This reveals that the U.S. Government spent almost as much on an annual basis over the previous 22 years (2003-2024) on non-military foreign assistance as it did during the approximate four years of the Marshall Plan (1948-1952).  Simply in terms of dollar amounts, the U.S. Government committed to funding the equivalent of five Marshall Plans (about $1.02 trillion) in non-military foreign assistance around the world from 2003 to 2024.

During the four years of the Biden administration, non-military foreign assistance spiked even higher. From 2021 to 2024, committed payments amounted to a whopping $242 billion for an annual average of about $61 billion — about 20 percent higher than the four years of the Marshall Plan.

U.S. Non-Military Foreign Assistance 1946-2024 (2025 US Dollars)

The above dollar amounts do not include any kind of military assistance, whether it be combat or non-combat related, or the cost of operating military bases in foreign countries.

Taking non-combat military foreign assistance alone, the U.S. Government has provided a total of about $1.3 trillion since World War II (1946-2024), or about $16 billion per year.  These amounts include items such as military education and training, peace and stability programs, and various technical assistance programs.  In 2024, non-combat military foreign assistance amounted to about $26 billion and non-military foreign assistance about $54 billion for total foreign assistance of about $80 billion, which was provided to about 175 foreign countries. Regarding foreign U.S. military bases, the Overseas Base Realignment and Closure Coalition estimated in August 2025 that the U.S. military operates 750 to 800 bases in 80 foreign countries at an annual cost of about $65 billion.

U.S. Foreign Assistance Turns Wasteful and Unaccountable

The Marshall Plan and U.S. foreign assistance in the decades following World War II generally had a positive effect on America’s national interest around the world, particularly during the Cold War years.  It was an effective use of soft power, i.e. American influence through economic, humanitarian, and other non-military assistance.  Every presidential administration since President Kennedy’s have valued and utilized foreign assistance as a means of soft power in the conduct of foreign policy.

Dean Rusk, Secretary of State under presidents Kennedy and Lyndon Johnson (1961-1969), wrote the following in a memo to President Johnson on January 31, 1966:

[A] properly directed foreign assistance program is a vital instrument of United States foreign policy. Economic and military aid remain far and away the most powerful means at our command to influence the massive forces at work in the less developed nations. They are our primary source of influence on the economic and military evolution of most of the countries of the non-Communist world.

George Shultz, President Reagan’s Secretary of State (1982-1989), was a strong proponent of foreign assistance as part of a broader soft power that complemented Reagan’s emphasis on hard power, such as military buildups, in advancing American interests globally. Shultz believed foreign assistance should be strategic and integrated with diplomacy and military strength.  He consistently advocated for increased budget appropriations for foreign assistance programs.  In his testimony before the House Appropriations Subcommittee on Foreign Operations on March 10, 1988, Shultz stated, “Foreign assistance is an essential tool of American foreign policy … It helps build a world safer for democracy and more open to American trade.”

Despite the achievements of U.S. foreign assistance since the Marshall Plan, however, the integrity and the mission of U.S. foreign assistance gradually deteriorated over time as it grew into another lucrative government contracting gravy train with diminishing transparency and accountability. President Dwight Eisenhower warned of a military-industrial complex in his farewell address to the nation on January 17, 1961.  A similar warning could have been issued about a growing foreign assistance-industrial complex after the collapse of the Soviet eastern-bloc empire in 1991, especially in the two decades after the terrorist attacks on September 11, 2001, when American foreign assistance expenditures rose sharply.

Just as the American military-industrial complex has its dedicated “go-to” contractors (Lockheed Martin, Northrup Grumman, General Dynamics, Raytheon, etc.), so does the foreign assistance sector (albeit on a much smaller financial scale).  Private firms such as Chemonics, DAI, and Abt Global — practically unknown outside of the foreign assistance world — have been dedicated U.S. Government foreign assistance contractors for decades and have prospered along with the growth in U.S. foreign assistance activities. There are dozens of small private firms that make their living exclusively from U.S. foreign assistance contracts and sub-contracts.

In the 1990s, a growing movement in Congress sought to scale back foreign assistance spending and even abolish USAID due to concerns over wasteful spending, mismanagement, and the questionable effectiveness of foreign assistance programs. Moreover, with the collapse of the Soviet Union and the end of the Cold War, some members of Congress argued that a focus on foreign assistance was outdated and that resources should be redirected to domestic issues.  This movement led to Congress passing the Foreign Affairs Reform and Restructuring Act of 1998 that provided for the reorganization of all U.S. foreign policy agencies and the consolidation of their functions within the U.S. State Department.

President Bill Clinton vetoed the bill on October 21, 1998, but agreed to some of its reforms by issuing Executive Order 13118 on March 31, 1999 as a response. The executive order basically made amendments to the Foreign Assistance Act of 1961 to implement some of the reforms in the 1998 bill passed by Congress. One of the provisions in Clinton’s executive order was to establish USAID as an independent agency separate from the U.S. State Department.  This proved to be contrary to Congress’s intent for implementing reforms in U.S. foreign assistance.

After USAID became its own stand-alone agency with reduced oversight, it led to a lack of coordination with the U.S. State Department and conflicting foreign policy views. It also created opportunities for waste, fraud, and abuse.

When President Donald Trump began his second term on January 20, 2025, his new Department of Government Efficiency (DOGE) led by Elon Musk immediately took aim at USAID.  Musk and his DOGE team quickly found a shocking level of waste, fraud, and abuse at the agency. During a live X Spaces discussion on February 3, 2025, Musk made the following comments about the DOGE team’s review of USAID:

As we dug into USAID, it became apparent that what we have here is not an apple with a worm in it, but we have actually just a ball of worms. If you have an apple with a worm in it, you can take the worm out. If you have a whole ball of worms, it’s hopeless. USAID is a ball of worms. There is no apple. And when there is no apple, you just need to get rid of the whole thing.

Senator Joni Ernst (R-IA) authored a scathing opinion piece in The Wall Street Journal on February 9, 2025, describing USAID as a “rogue agency” that has a history of stonewalling congressional requests for information about its activities. Excerpts from Senator Ernst’s piece:

After keeping its spending records hidden from Congress and taxpayers, USAID employees are now protesting the review of the agency’s records by President Trump’s Department of Government Efficiency. It’s no surprise that Washington insiders are more upset at DOGE for trying to stop wasteful spending than at USAID for misusing tax dollars. The question we should be asking isn’t why USAID’s grants are being scrutinized, but why it took so long.

Criticisms of USAID by Musk and Senator Ernst are backed up with detailed lists of waste, fraud, and abuse uncovered by the DOGE team and congressional committees. On February 4, 2025, the House Foreign Affairs Committee issued a press release listing numerous egregious examples of wasteful USAID spending, such as millions of dollars spent promoting DEI and LGBT activism in multiple countries around the world.

But revelations about USAID’s wasteful and fraudulent spending on foreign aid activities is only part of the story.  Even more disturbing are its activities beyond foreign aid into radical leftwing cultural and political activism.  According to Mike Benz, a former U.S. State Department official and the founder and executive director of the Foundation for Freedom Online, this has been exacerbated in recent years with USAID’s embrace of disinformation campaigns and censorship efforts in collaboration with the State Department and the CIA.

Benz provided a shocking report from USAID’s own internal documents on March 14, 2024 of a USAID censorship operation used domestically against Americans. Excerpts from the report:

USAID’s “Disinformation Primer” outlining its censorship promotion strategies is dated February 2021, the first month after the Biden administration took office after the 2020 election. It proposes censorship action items for virtually every governmental, non-governmental and private sector commercial actor across society.

 Reforming US Foreign Assistance

After DOGE exposed USAID’s extensive waste, fraud, and abuse over many years, the Trump administration closed USAID’s head office in Washington, DC on February 7, 2025 and subsequently terminated most of its approximate 10,000 employees.  Since then, the entire agency has been effectively shut down. Any USAID functions considered to be worth retaining by the Trump administration have been absorbed by the U.S. State Department.

Marco Rubio, confirmed as Secretary of State by the U.S. Senate with a 99-0 vote on January 20, 2025, has articulated his vision for an “America First” U.S. foreign assistance agenda on multiple occasions. On May 20, 2025, Secretary Rubio testified before both the Senate Foreign Relations Committee and the Senate Appropriations Committee. During these hearings, Secretary Rubio made the following points:

• The mission of U.S. foreign assistance should be based upon making the United States stronger, safer, and more prosperous.
• The U.S. foreign assistance function at the State Department should be rebuilt and should serve as an integral part of U.S. foreign policy.
• The best foreign assistance program is one that ultimately comes to an end, because it will mean that it has achieved its purpose.

Robert Gates, who served in senior national security positions under four presidents (Ronald Reagan, George H.W. Bush, George W. Bush, and Barack Obama), including as Secretary of Defense (2006-2011) and CIA Director (2002-2006), authored an opinion piece in The Wall Street Journal on June 13, 2025, ”The U.S. Can Rise to the Chinese Challenge,” calling for a revival of U.S. non-military soft power. In his article, Gates writes:

We usually fail when we publicly nag other governments about their internal policies. Yet for most of our history, and especially during the Cold War, America’s national interest and reputation have been enhanced by consistent advocacy for liberty, human rights, and individual dignity. America’s ideology matters in the contest with China. America First must not mean abandoning American values … To neglect our values as part of our foreign policy would make us just another transactional great power without the unique appeal we have enjoyed for nearly 250 years.

The Trump administration’s disruption of outdated institutions provides a great opportunity to strengthen America’s nonmilitary arsenal. Failing to do so would mean abandoning the field to the Chinese, who already are running rings around us. Above all, there must be an overarching national strategy developed by the president and secretary of state — in collaboration with Congress — for applying nonmilitary instruments of power to the contest with China.

Gates’ call for a restructured and refocused U.S. foreign assistance program is fundamentally in line with Secretary of State Rubio’s views.  The Trump administration’s clean-up of the waste, fraud, and abuse in U.S. foreign assistance — along with a fresh focus on foreign assistance as a means of soft power and less reliance on military hard power — should lead to a far more efficient and effective U.S. foreign policy.

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Steve Dewey is a fellow at the Ben Franklin Fellowship, founder of GeoFinancial Trends, LLC (www.geofinancialtrends.org) and writes on Substack (stevedewey.substack.com).  He can be reached at [email protected]