Report: Countries holding U.S. debt also get foreign aid

“If countries can afford to buy our debt perhaps they can afford to fund assistance programs on their own,” Coburn said in a statement. “At the same time, when we borrow from countries we are supposedly helping to develop we put off hard budget choices here at home. The status quo creates co-dependency and financial risk at home and abroad.”

The CRS report comes as Vice President Joe Biden and top lawmakers are trying to reach a deal to rein in deficits that would allow the $14.3 trillion debt ceiling to be raised. 

Moody’s sounded an alarm on the progress of debt ceiling talks on Thursday, but a meeting between Treasury Secretary Timothy Geithner and House freshman on the issue had little to no progress.

{mosads}In all, the foreign governments holding U.S. debt also got well over $1 billion in aid in the 2010 fiscal year.

China, the top keeper of U.S. debt ($1.1 trillion), also received more than $27 million in U.S. aid in the 2010 fiscal year, CRS reported. 

Colombia, Mexico and Egypt all received at least $250 million of aid in 2010, and the Treasury Department says all three have at least $15 billion in American debt.