Foreign assistance is one of the tools the United States employs to advance U.S. interests in Latin America and the Caribbean, and the focus and funding levels of aid programs change along with broader U.S. policy goals. Current aid programs reflect the diverse needs of the countries in the region (see Figure 1 for a map of Latin America and the Caribbean). Some countries receive the full range of U.S. assistance as they struggle with political, socioeconomic, and security challenges. Others have made major strides in democratic governance and economic and social development; these countries no longer receive traditional U.S. development assistance but continue to receive some support for security challenges, such as combating transnational organized crime. Although U.S. relations with the nations of Latin America and the Caribbean have become less defined by the provision of 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. 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. This report provides an overview of U.S. assistance to Latin America and the Caribbean. It analyzes historical and recent trends in aid to the region, the Obama Administration's FY2017 request for aid administered by the State Department and the U.S. Agency for International Development (USAID), and legislative developments on FY2017 foreign aid appropriations. It also examines policy issues Congress may opt to consider, including the benefits and drawbacks of conditioning aid, the role of the Department of Defense in providing security assistance, and the potential for trilateral cooperation in the region. The United States has long been a major contributor of foreign assistance to countries in Latin America and the Caribbean. Between 1946 and 2014, the United States provided the region with nearly $165 billion in constant 2014 dollars (or more than $79 billion in historical, non-inflation-adjusted dollars). U.S. assistance to the region spiked in the early 1960s following the introduction of President John F. Kennedy's Alliance for Progress, an antipoverty 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 Central American governments battling leftist insurgencies to prevent potential Soviet allies from establishing political or military footholds in the region. U.S. aid flows declined in the mid-1990s following the dissolution of the Soviet Union and the end of the Central American conflicts (see Figure 2 ). 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 in 2003 and the Millennium Challenge Corporation in 2004 provided a number of countries in the region with new sources of U.S. assistance. More recently, the United States provided significant assistance to Haiti in the aftermath of a massive January 2010 earthquake. Increased funding for counternarcotics and security programs also contributed to the rise in U.S. assistance through 2010. Beginning with President Bill 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 the country's long-running internal armed conflict, and foster development. Spending received another boost in FY2008 when President George W. 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, Congress and the Obama Administration split the Central American portion of the Mérida Initiative 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 began to decline in FY2011. This decline was partially the result of reductions in the overall U.S. foreign assistance budget. The Obama Administration and Congress sought to reduce budget deficits in the aftermath of the recent global financial crisis and U.S. recession, and they identified foreign assistance as a potential area for spending cuts. U.S. assistance to Latin America and the Caribbean decreased each year between FY2010 and FY2014. Although aid to the region increased slightly in FY2015 and FY2016, spending caps and across-the-board cuts included in the Budget Control Act of 2011 ( P.L. 112-25 ), as amended, could place downward pressure on the aid budget for the foreseeable future. The recent decline also reflects changes in the region. As a result of stronger economic growth and the implementation of more effective social policies, the percentage of people living in poverty in Latin America fell from 44% in 2002 to 28% in 2014. Likewise, electoral democracy has been consolidated in the region; every country except Cuba now has a democratically elected government (although some elections have been controversial). Some Latin American nations, such as Argentina, Brazil, Chile, Colombia, Mexico, and Uruguay, are now in a position to provide foreign aid to other countries. Other nations, such as Bolivia and Ecuador, have expelled U.S. personnel and opposed U.S. assistance projects, leading to the closure of USAID offices. These changes have allowed the U.S. government to concentrate its resources in fewer countries and sectors. For example, USAID closed its field office in Panama in 2012 following the country's graduation from foreign assistance, and the agency has largely transitioned out of providing support for family planning and elections administration, as many governments throughout the region have demonstrated their ability to finance and carry out such activities on their own. As a result of these developments in the region and competing U.S. foreign policy priorities elsewhere in the world, U.S. assistance to Latin America and the Caribbean as a proportion of total U.S. foreign assistance dropped from 9% in FY2005 to 6% in FY2015. According to the State Department, U.S. policy toward the Western Hemisphere during the Obama Administration sought "to advance durable institutions and democratic governance, defend human rights, improve citizen security, enhance social inclusion and economic prosperity, secure a clean energy future, and build resiliency to climate change." As part of its efforts to achieve those policy goals, the Obama Administration requested $1.7 billion in foreign assistance to be provided to Latin America and the Caribbean through the State Department and USAID in FY2017. The request for the region was 0.02% higher than the estimated FY2016 level (see Table 1 ). Although the overall amount of aid provided to the region would remain relatively flat compared to FY2016 under the Administration's request, the allocation of assistance within the region would change in several ways, as discussed below. More than $627.7 million (36%) of the Obama Administration's FY2017 foreign aid request for Latin America and the Caribbean would go toward development assistance programs (first four lines in Table 1 ). Development assistance 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 democracy promotion, economic reform, education, health, and environmental protection. This assistance is provided primarily through the Development Assistance (DA) and Global Health Programs (GHP) foreign aid accounts, which would receive $412 million and $210.8 million, respectively, under the Administration's proposal. The Administration also requested $5 million in development food assistance for the region through the Food for Peace (P.L. 480) account. Compared to the FY2016 estimate, DA funding would decline by $76 million, P.L. 480 funding would decline by $8 million, and GHP funding would increase by $7 million. The large decline in DA is partially due to cuts proposed for bilateral programs in Brazil and several of USAID's regional programs. It also reflects the Administration's intention to fund with Economic Support Fund (ESF) aid in FY2017 some programs that were funded with DA aid in FY2016. Another $513.4 million (30%) of the Obama Administration's request for the region would be provided through the ESF account, which has as its primary purpose the promotion of special U.S. political, economic, or security interests. In practice, ESF programs generally aim to promote political and economic stability and are often indistinguishable from programs funded through the regular development assistance accounts. Compared to the FY2016 estimate, the Administration's FY2017 budget request would increase ESF assistance for the region by $94.4 million. This increase is the result of additional ESF support proposed for Colombia and a few other nations. As noted above, the increase also reflects the Administration's intention to fund with ESF aid in FY2017 some programs that previously were funded with DA aid. The remaining $598.8 million (34%) of the Obama Administration's FY2017 request for Latin America and the Caribbean would support security assistance programs (final four lines in Table 1 ).