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, 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 increasingly 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. 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. This report provides an overview of U.S. assistance to Latin America and the Caribbean. It examines historical and recent trends in aid to the region as well as the Obama Administration's FY2015 request for State Department and U.S Agency for International Development (USAID)-administered assistance. It also examines congressional action on foreign aid appropriations for Latin America and the Caribbean in FY2015, and raises questions Congress may examine as it considers future foreign aid appropriations for the region. The United States has long been a major contributor of foreign assistance to countries in Latin America and the Caribbean, and has provided the region over $160 billion in constant 2012 dollars (or nearly $77 billion in historical, non-inflation-adjusted, dollars) since 1946. 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, and to Central American governments battling leftist insurgencies. 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 1 ). 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 United States provided significant amounts of assistance to Haiti in the aftermath of its 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 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 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 America 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 has again begun to decline. This is partially the result of reductions in the overall U.S. foreign assistance budget. The Administration and Congress have sought to reduce budget deficits in the aftermath of the recent global financial crisis and U.S. recession, and have identified foreign assistance as a potential area for spending cuts. U.S. aid to Latin America and the Caribbean has decreased each year since FY2010, and spending caps and across-the-board cuts that were 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 in U.S. assistance to Latin America and the Caribbean 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 2012. 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). These changes have allowed the U.S. government to concentrate its resources in fewer countries and sectors. For example, USAID closed its mission 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 governments throughout the region have demonstrated their ability to finance and carry out such activities on their own. Some Latin American nations, such as Brazil, Chile, Colombia, and Uruguay, have even begun providing foreign aid to other countries. The United States has partnered with these nations through so-called "trilateral cooperation" initiatives to jointly plan and fund development and security assistance efforts in third countries. Other countries, such as Bolivia and Ecuador, have demonstrated less interest in working with the United States, leading to significant reductions in U.S. assistance and the closure of USAID missions. 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 11.8% in FY2004 to 7.6% in FY2014. As the region has evolved and the U.S. government has sought to cut expenditures, the Obama Administration and Congress have dedicated fewer resources to Latin America and the Caribbean. U.S. assistance to the region has declined each year since FY2010, and would continue to decline under the Administration's foreign aid budget request for FY2015. The Administration requested $1.3 billion for the region, which is 10% ($149 million) below the FY2014 estimate and 27% lower than the amount provided in FY2012—the last year before budget sequestration took effect (see Table 1 ). The Administration's FY2015 foreign aid request for Latin America and the Caribbean would shift the emphasis of U.S. assistance efforts, as nearly 40% ($528 million) would go toward development and humanitarian assistance programs—up from 31% in 2014 (see Figure 2 ). 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, basic education, human health, and environmental protection. This assistance is provided primarily through the Development Assistance (DA) and Global Health Programs (GHP) accounts, which would receive $282 million and $233 million, respectively, under the Administration's FY2015 request. In terms of humanitarian assistance, the Administration requested $13 million through the Food for Peace (P.L. 480) account to address immediate food security needs. While funding provided through the GHP and P.L. 480 accounts would remain relatively stable, the FY2015 request includes nearly 28% ($63 million) more DA funding than the FY2014 estimate for the region. This is partially due to the Administration's decision to request funding through the DA account in FY2015 for some programs that were funded through the Economic Support Fund (ESF) account in FY2014. It also reflects increased development support for countries struggling with drug trafficking and violence, such as El Salvador, Guatemala, Honduras, and Peru. About 30% ($393 million) of the Administration's FY2015 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, the ESF account generally funds programs that are designed to promote political and economic stability, and are often indistinguishable from those funded through the regular development and humanitarian assistance accounts. The Administration's FY2015 ESF request for the region is 14% lower than the FY2014 estimate. As noted above, this change is partially the result of the Administration requesting funding for ongoing programs under the DA account instead of the ESF account. It also reflects declining aid for Colombia and Haiti, which had received elevated levels of assistance for several years. The remaining 30% ($405 million) of the Administration's FY2015 request for Latin America and the Caribbean would support security assistance programs. This includes $332 million under the International Narcotics Control and Law Enforcement (INCLE) account, which supports counternarcotics and civilian law enforcement efforts as well as projects designed to strengthen justice sector institutions.