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In a rare fit of frugality, the U.S. House of Representatives did the unthinkable the other day and voted to cut not just federal fat but bone and muscle.

We're referring to the misguided decision to drop the budget ax on what aptly has been called one "agency that would make Thomas Jefferson proud."This is the National Endowment for Democracy, a small bipartisan grant-giving organization that Ronald Reagan founded, Jimmy Carter praises and the Clinton administration seeks to expand. Even with the proposed large funding increase, NED's total budget would only reach $48 million - around half of what the House spends in a year on mail.

Yet this comparatively tiny agency is an exceptionally wise foreign investment. That's because the endowment tailors its grants to do what neither military might nor government-to-government diplomacy or aid can accomplish - namely, to foster independent institutions conducive to self-determination around the world.

Often mistakenly portrayed as an anti-communist relic, NED is instead a pioneer of the pro-democracy activism that emerged on every continent in the 1980s. As Scripps Howard News Service notes, the endowment "gives modest material assistance to struggling presses and voter-education groups, to human rights organizations and democratic think tanks and free trade unions and business federations - the infrastructure of civic self-government." How better for America to stand behind its values and work for a peaceful future in places such as South Africa and Romania, Vietnam and China, El Salvador, Bosnia, Iraq, Tibet, Zaire and Russia itself?

The charge, by the way, that NED enjoys no government oversight is simply false. It reports to four congressional subcommittees that hold annual hearings; its annual reports and records are available to the public; and its books are reviewed by the Office of Management and Budget, the General Accounting Office and independent auditors. It is fully accountable.

The Senate and the White House should insist on restoring the funds for this cost-effective force for democracy throughout the world.