Published: Jul 12, 2011 4:59 PM EDT
Updated: Jul 12, 2011 3:59 PM EDT

WASHINGTON (AP) - American diplomacy abroad is critical to creating jobs and improving economic conditions at home, Secretary of State Hillary Rodham Clinton said Tuesday, urging Congress not to slash the Obama administration's foreign policy budget.

In a speech to the U.S. Global Leadership Coalition, Clinton said the administration's foreign affairs spending represents just a tiny fraction - 1 percent - of the federal budget and is not what is driving the government's massive debt. She said threatened cuts to foreign assistance and State Department operations will undermine efforts to develop markets for American businesses overseas and hurt diplomats' promotion of U.S. companies.

"The 1 percent of our budget we spend on all diplomacy and development is not what is driving our deficit," she told the group, which promotes U.S. international engagement. "Not only can we afford to maintain a strong civilian presence, we cannot afford not to."

President Barack Obama has requested $73.6 billion for the State Department in his $3.73 trillion budget for the next fiscal year that begins Oct. 1, a decrease of 0.7 percent from State's allocation in the 2011 budget year. When the proposal was submitted to Congress in February, Clinton said it already represented "a lean budget for lean times" that had been scrubbed for every penny of savings possible without damaging key national security interests.

Some lawmakers keen to make steep reductions in spending have zeroed in on the foreign operations budget, calling for cuts from 16 percent to 20 percent, moves that would affect foreign aid as well as State Department staffing in Washington and at embassies around the world. They say the U.S. must reduce its foreign spending at a time when the domestic economy is reeling and unemployment is still above 9 percent.

But Clinton warned that retreating from the international arena would jeopardize America's standing as a global leader, a position she said had to be continually earned with commitments of time, energy and resources. Withdrawing will cost American jobs by allowing other countries to get footholds in foreign markets where they can push their business interests without competition from the United States, she said.

"The simple truth is, if we don't seize the opportunities available today, other countries will," Clinton said. "Other countries will fight for their companies while ours fend for themselves. Other countries will promote their own models and serve their own interests instead of opening markets, reinforcing the rule of law and creating widespread, inclusive growth. Other countries will create the jobs that should be created here and even claim the mantle of global leadership."

The State Department now has more than 1,600 employees at its headquarters and overseas embassies who promote American businesses ranging from commercial giants like Boeing to small- and mid-size companies that specialize in construction, agriculture, manufacturing and mining. Their efforts have helped seal hundreds of millions of dollars in deals, creating thousands of jobs in America, Clinton said. "Old-fashioned door-to-door salesmanship still works in the twenty-first century," she said.

In addition to promoting U.S. companies overseas, those diplomats also encourage foreign investment in the United States, which is responsible for more than five million American jobs, including 2 million manufacturing jobs, she said. They also negotiate bilateral arrangements, such as Open Skies agreements, that open new aviation routes between the United States and its foreign partners. New routes between Memphis and Amsterdam and Dallas and Madrid have had a $220 million annual impact on local U.S. economies, she said.

Clinton also urged Congress to act quickly and approved three free-trade agreements - with South Korea, Colombia and Panama - before their summer recess. Combined, she said, they will add tens of billions of dollars in domestic economic growth each year.

"Passing these deals is critical to our economic recovery," she said. "It's time to put these trade deals to work on behalf of the American people.

(Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)