America's Greatest Foreign Policy Challenge?

Posted by Visiting Associate Professor and Ambassador Ron McMullen

Nuclear-armed Iran?  Aggressively nationalistic China?  A resurgent al-Qaida?  A malevolent Russia? A stagnating European Union?  These would all be plausibly good guesses, but Secretary of State-Designate John Kerry last week said “the greatest challenge to America’s foreign policy … is whether America at last puts is own fiscal house in order.”  In his January 24 confirmation statement, he went on to say, “More than ever, foreign policy is economic policy,” adding (rather ineloquently) “it is hard to tell the leadership of any number of countries they must get their economic issues resolved if we don't resolve our own.”

This echoes concerns raised by former Chairman of the Joint Chiefs Admiral Mike Mullen, who said in September, 2011, “I believe the single biggest threat to our national security is our debt.”

The White House and Congress backed us away from the fiscal cliff on January 2, but didn’t reach a compromise on fundamental differences about the role and scope of government.  Potential battles loom.  The deep budget cuts mandated by the Budget Control Act of 2011 (aka sequestration, which is Latin for liposuction with a hammer) are scheduled to commence March 1.  The government faces a potential shutdown March 27 when the current Continuing Resolution expires.  It seems likely that if Congress doesn’t pass a formal budget resolution by April 15, members of Congress will have their pay suspended.  (Good--but they should forfeit their pay.) The next debt ceiling confrontation is apt to take place May 19.   This is going to be ugly.  Greatest challenge?  Biggest threat? 

America’s current public debt is about $11 trillion (various parts of the government owe each other another $5 trillion).  China and Japan each hold about $1 trillion of our debt.  Last year Uncle Sam spent about $3.5 trillion and took in about $2.5 trillion.  In addition to last year’s outlays on Social Security ($773 billion) and Medicare ($478 billion), the Defense Department spent $553 billion.  Interest on the national debt totaled $359,796,008,919.00.  By contrast, the State Department’s budget last year was only $51 billion, which included USAID and most U.S. foreign assistance programs.   Thus, interest payments on the national debt cost SEVEN TIMES more than our diplomatic and development engagement with the world.  And it will only get worse as our debt grows by a trillion dollars a year.

If sequestration happens and the State Department is cut by 9%, what embassies should be closed?  Which physical security upgrades should be postponed?  How many Foreign Service Officers should be RIFTed? (The Defense Department already has more lawyers than the State Department has diplomats.) 

Last week a group of young Libyan journalists visited Iowa City as part of the State Department’s International Visitors Program, hosted locally by CIVIC.  Would programs like this be cut before embassies are closed?  Yes.  A mindless slashing of America’s diplomatic engagement with the world would reduce our ability to assert hard power (derived from coercion or payment) as well as our soft power (derived from attraction).  Let’s hope that the Libyan journalists here last week won’t be the last group of influential International Visitors who have the opportunity to travel to America’s heartland, exchange views with Iowans on important matters, and go home with a better understanding of and feeling toward the United States.

Are democracies too self-indulgent to rein in spending and pay off debt?  If you were a reform-minded policy maker in China, Russia, Burma, or some other authoritarian state, what would you make of the United States and European Union’s inability (or unwillingness?) to get their fiscal houses in order?