Treasury Secretary Timothy Geithner asked a House Appropriations subcommittee on Wednesday to increase foreign aid -- or else face the risk of losing ground to China.
Perhaps hoping that Republicans fear China more than they fear spending increases, Geithner urged the Subcommittee on State, Foreign Operations, and Related Programs to increase foreign development lending to $3.4 billion (58 percent over 2010 levels).
Geithner’s testimony comes in the wake of the House-passed budget, which proposes cutting the 2011 commitments to institutions like the Asian Development Bank by about $1.9 billion.
If the United States fails to finance capital increases to foreign institutions (most notably multilateral development banks), Geithner said, we will “give China a substantial advantage in promoting its own commercial and security interests across numerous regions and sectors.”
But this case, along with Geithner’s statements that increased foreign lending is “vital to national security” and crucial to expanding American export opportunities, didn’t appear convincing to Subcommittee Chairwoman Kay Granger, R-Texas.
“Support for increases to the multilateral development banks was already in doubt before this budget was formulated,” she said. “I cannot support writing a blank check to these institutions.”
Granger said large capital increases to foreign aid will be “extremely difficult to justify without convincing evidence that taxpayer dollars will be used in a more effective and transparent manner than they have been in the past.”