Foreign assistance is one of the tools the United States has employed to advance U.S. interests in Latin America and the Caribbean, with the focus and funding levels of aid programs changing along with broader U.S. policy goals. Current aid programs reflect the diversity of the countries in the region. Some countries receive the full range of U.S. assistance as they continue to struggle with political, socioeconomic, and security challenges. Others, which have made major strides in democratic governance and economic and social development, have largely outgrown U.S. assistance but continue to receive some support for new security challenges, such as strengthening citizen security and combating transnational organized crime. Although U.S. relations with the nations of Latin America and the Caribbean have increasingly become less defined by the provision of U.S. assistance as a result of this progress, foreign aid continues to play an important role in advancing U.S. policy in the region. Congress authorizes and appropriates foreign assistance to the region and conducts oversight of aid programs and the executive branch agencies charged with managing them. Current efforts to reduce budget deficits in the aftermath of the recent global financial crisis and U.S. recession have triggered closer examination of competing budget priorities. Congress has identified foreign assistance as a potential area for spending cuts, placing greater scrutiny on the efficiency and effectiveness of U.S. aid programs. Spending caps and across-the-board cuts that were included in the Budget Control Act of 2011 ( P.L. 112-25 ) could place downward pressure on the aid budget for the foreseeable future. This report is an overview of U.S. assistance to Latin America and the Caribbean. It briefly examines historical and recent trends in aid to the region. It then provides a detailed look at the Obama Administration's FY2013 request for State Department and USAID-related assistance to Latin America and the Caribbean, and describes support provided by other U.S. agencies in order to draw a more complete picture of U.S. assistance to the region. It also examines key Latin America and Caribbean funding provisions in the FY2013 foreign aid appropriations bills and potential issues for congressional consideration. The United States has long been a major contributor of foreign assistance to countries in Latin America and the Caribbean. U.S. assistance to the region spiked in the early 1960s following the introduction of President Kennedy's Alliance for Progress, an anti-poverty initiative that sought to counter Soviet and Cuban influence in the aftermath of Fidel Castro's 1959 seizure of power in Cuba. After a period of decline, U.S. assistance to the region increased again following the 1979 assumption of power by the leftist Sandinistas in Nicaragua. Throughout the 1980s, the United States provided considerable support to the Contras , who sought to overthrow the Sandinista government, as well as to Central American governments battling leftist insurgencies. U.S. aid flows declined in the mid-1990s following the dissolution of the Soviet Union, the end of the Central American civil conflicts, and the spread of electoral democracy throughout the region. U.S. foreign assistance to Latin America and the Caribbean began to increase once again in the late 1990s and remained on a generally upward trajectory through the past decade. The higher levels of assistance were partially the result of increased spending on humanitarian and development assistance. In the aftermath of Hurricane Mitch in 1998, the United States provided extensive humanitarian and reconstruction aid to several countries in Central America. The establishment of the President's Emergency Plan for AIDS Relief (PEPFAR) in 2003 and the Millennium Challenge Corporation (MCC) in 2004 provided a number of countries in the region with new sources of U.S. assistance. More recently, the Obama Administration has placed greater emphasis on fostering broad-based economic growth in the region and (initially) requested higher levels of aid for development efforts. The United States also provided significant amounts of assistance to Haiti in the aftermath of its massive January 2010 earthquake (see Figure 1 ). Nevertheless, the vast majority of the increase in U.S. aid though 2010 was directed toward counternarcotics and security programs. Beginning with President Clinton and the 106 th Congress in FY2000, successive Administrations and Congresses have provided substantial amounts of foreign aid to Colombia and its Andean neighbors in support of "Plan Colombia"—a Colombian government initiative to combat drug trafficking, end its long-running internal armed conflict, and foster development. Spending on counternarcotics and security assistance received another boost in FY2008 when President Bush joined with his Mexican counterpart to announce the Mérida Initiative, a package of U.S. counterdrug and anticrime assistance for Mexico and Central America. In FY2010, the Obama Administration split the Central America portion of Mérida into a separate Central America Regional Security Initiative (CARSI) and created a similar program for the countries of the Caribbean known as the Caribbean Basin Security Initiative (CBSI). After more than a decade of generally increasing aid levels, U.S. assistance to Latin America and the Caribbean has again begun to decline. U.S. aid to the region has decreased each year since FY2010, and would continue to do so under the Obama Administration's FY2013 request. As the absolute level of U.S. assistance to the countries of Latin America and the Caribbean has begun to decline, so too has the proportion of U.S. aid going to the region. Between FY2008 and FY2012, U.S. assistance to Latin America and the Caribbean fell from $2.1 billion to an estimated $1.9 billion, a 10% decrease. U.S. aid to East Asia and the Pacific and Europe and Eurasia also declined substantially; however, aid to South and Central Asia increased 46%, aid to the Middle East increased 27%, and aid to Africa increased by a little over 1% during the same time period. These variations reflect changes in the world and shifting priorities in U.S. foreign policy. As economic growth and democratic governance have improved in many Latin American and former Soviet states in Eastern Europe, the United States has shifted its resources toward development efforts in Africa and countries of strategic importance to U.S. anti-terrorism operations, such as Afghanistan and Pakistan. As a result of these trends, U.S. assistance to Latin America and the Caribbean as a proportion of total U.S. foreign assistance dropped from 10% in FY2008 to under 8% in FY2012 (see Figure 2 ). U.S. foreign assistance to countries in Latin America and the Caribbean serves a variety of purposes. Since taking office, the Obama Administration has dedicated a greater proportion of aid to the region to development and humanitarian assistance programs. Development assistance, provided primarily through the Development Assistance (DA) and Global Health Programs (GHP) accounts, seeks to foster sustainable broad-based economic progress and social stability in developing nations. Such funding is often used for long-term projects in the areas of economic reform, democracy promotion, basic education, human health, and environmental protection. Humanitarian assistance is devoted largely to the immediate alleviation of humanitarian emergencies. This includes most food assistance provided through the Food for Peace (P.L. 480) account and assistance for refugees and internally displaced persons funded through the Migration and Refugee Assistance (MRA) account. USAID manages most development and humanitarian assistance programs; however, the State Department administers the MRA account and manages a portion of the global health account that mainly addresses HIV/AIDS (under the PEPFAR program). Another significant portion of U.S. assistance to the region is provided through the Economic Support Fund (ESF) account. The primary purpose of ESF is promotion of special U.S. economic, political, or security interests. The account generally funds programs that are designed to promote political and economic stability, and in practice, ESF-funded programs are often indistinguishable from those funded through the development and humanitarian assistance accounts mentioned above. USAID manages ESF funds in conjunction with the State Department. In addition to its support for economic, social, and political development efforts, the United States funds a number of security assistance programs in the region designed to address security concerns. Funding provided through the International Narcotics Control and Law Enforcement (INCLE) account supports counternarcotics and civilian law enforcement efforts as well as projects designed to strengthen judicial institutions. U.S. assistance designed to counter global threats such as terrorism and proliferation of weapons of mass destruction is provided through the Nonproliferation, Anti-terrorism, De-mining, and Related programs (NADR) account. The United States also supports Latin American and Caribbean militaries by providing equipment and personnel training through the Foreign Military Financing (FMF) and International Military Education and Training (IMET) accounts. The State Department manages the INCLE and NADR accounts. It also administers the FMF and IMET accounts, which are implemented by the Department of Defense. As total aid levels to the region have declined in recent years, Congress and the Administration have gradually shifted the balance of the remaining assistance toward development and humanitarian assistance and away from security assistance (see Figure 3 below). In FY2012, over $730 million in U.S. aid to the countries of Latin America and the Caribbean was provided through aid accounts (DA, GHCS, MRA, and P.L. 480) designed to support development and humanitarian assistance programs. This represents nearly 39% of total U.S. bilateral assistance to the region, up from 33% in FY2008. Another $466 million, or almost 25% of total assistance, was provided to the region through the ESF account to support U.S. strategic interests. As a proportion of aid, ESF remains roughly unchanged from 2008. The United States also provided nearly $700 million in FY2012 through aid accounts (INCLE, NADR, FMF, and IMET) designed to support security efforts in Latin American and Caribbean countries.