Last week, the House of Representatives added a provision to a Pentagon funding bill that would restrict foreign aid to Pakistan based on detailed spending plans from the Obama administration. The adjustment to the “Pakistan Counterinsurgency Fund” requires President Barack Obama to explain his goals in Pakistan and outline how the money would be spent to advance those goals. In essence, Congress is acting like a parent who asks for a spending plan before handing over an allowance.
In some ways, this approach is wise. It doesn't sever aid completely to Pakistan — a course some lawmakers have demanded — and it gives Obama some discretion to use funds in a way that harmonizes military and diplomatic goals in the region, assuming he can explain these goals and their attainment in a way Congress finds appealing. On the other hand, this approach is also evasive, and its evasiveness may upset the U.S.'s delicate position in the region. Instead, Congress should take ownership of this issue by not waiting for Obama: It should set up the conditions for aid itself.
There are two reasons for Congress to do this, one economic and the other diplomatic.
Economically, it makes sense to set careful benchmarks for aid because of the way the incentives of the budget process are set up. If Obama is given X dollars to spend, then he is incentivized to spend all of it, because his administration gains nothing by using the money carefully so that some is left over. For example, pretend that Pakistan could be made to behave better if money were withheld and only disbursed after real progress was made on various reforms. Obama would not get to use any left-over money for any other purpose (its use is limited by Congress), making it hard for him to credibly commit to withhold it. Pakistani officials understand how things work; if they see Obama has been given a certain amount of money that can only go to them, they will expect that all of it will probably be dispersed even if they drag their feet on reforms.
It would be better if Congress set conditions for the disbursement of the money ahead of time because then the cost of disbursing money no matter what would be real. Any money saved due to actually carrying through on the threat of not handing over money would directly accrue to Congress who could use that money for something else. If Congress set the conditions on aid, it would feel the pain of wastefully spending money. Also, if Congress were smart, they could allocate money to Pakistan and some other high-profile anti-terror mission (like CIA funding) all at once, meaning that money not disbursed to encourage results in Pakistan would go to the CIA. This would show Pakistani policymakers that Congress actually could be expected to follow through on threats of not giving out aid if certain reforms are not achieved. After all, money saved could be trumpeted as boosting funding for other important priorities.
Also, it might be diplomatically more sensible to have Congress just dictate how money will be spent rather than force Obama's military and diplomatic representatives to show up to Congress and give voice to our goals and strategies for the region. Disclosing these things gives Pakistan more room to maneuver, make excuses, and to know our mind. It's better to keep that information in the heads of Obama and his agents (assuming Wikileaks doesn't reveal our diplomatic strategies anyway).
After ceding power to Obama on Libya and abandoning its war powers prerogatives, now would be a good time for Congress to show some foreign policy leadership that would make us all safer. The same approach could then be applied to Egypt and other places in order to help our money earn us the most effective foreign policy results.
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