How can the President pledge money?

November 2, 2005 11:29 AM

What is the mechanism that allows the President to, say, pledge $50,000,000 for earthquake relief in Pakistan?

I'm familiar with the general appropriations process, and I know that there was a bill passed earlier this year to appropriate money for tsunami relief. The President pledged money to Pakistan, and this money is, apparently, already being spent, but there hasn't been legislation specifically appropriating funds for this purpose. Is there some sort of general foreign-aid "slush fund"?

This is something I feel like I should already know.

posted by MrMoonPie to law & government (7 comments total)

Discretionary spending.
posted by Thorzdad at 11:37 AM on November 2, 2005

Discretionary spending.

Discretionary spending just means money that is left over after subtracting government debt intrest and (I belive) entitlements. The congress still needs to authorize all spending.

My guess would be that a bill was quickly passed after the president anounced the aid.
posted by delmoi at 11:57 AM on November 2, 2005

As an addendum, I'm interested in the mechanisms by which this money is actually delivered. Just a few moments ago I was listening to NPR's segment on spending-gone-wrong in Iraq. One of the specific problems was due to the fact that almost all of the spending there is done with cash, rather than with bank transfers.

I mean, where does one actually obtain that much physical cash? Is it shipped with the military? In boxes? I'm baffled.
posted by odinsdream at 1:10 PM on November 2, 2005

Isn't aid typically given in services "valued at $X" rather than $X in cash? I think also a lot of it comes in a Line of Credit.
posted by mkultra at 1:12 PM on November 2, 2005

Slate covered this exact question in an article entitled, "Do Governments Take Checks? How the United States gives foreign aid."

To paraphrase:

...most U.S. humanitarian aid gets disbursed to independent contractors and consultants. Private, public, and international groups submit proposals to USAID, which then selects recipients for grants or contracts. The grant recipient uses this money to set up a project, hire staff, and purchase supplies.
posted by junesix at 1:29 PM on November 2, 2005

delmoi, there wasn't such a bill, not that I could find (and I'm, um, pretty good at searching for such things). Perhaps USAID had enough in reserve?
posted by MrMoonPie at 5:51 PM on November 2, 2005

I know that a good portion of the monies involved are things like future payments due to agencies like the World Food Program through UN membership. We send them cash, they buy rations. We fulfill a promise of aid to Pakistan, without actually increasing the budget -- just accelerating (or perhaps more accurately, catching up with) our payment balance.
posted by dhartung at 10:53 PM on November 2, 2005