USAID and Cutting International Aid

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February 24, 2025 by Katie Chandler

On his first day back in office, President Donald Trump signed an executive order that implemented a 90-day freeze on aid to other countries. Since then, the offices of the U.S. Agency for International Development (USAID) have closed, staff have been furloughed, and there have been more funding freezes. The formerly semi-autonomous agency is now under the leadership of Secretary of State Marco Rubio. Tech billionaire Elon Musk, who leads the new advisory body called the Department of Government Efficiency (DOGE), has targeted USAID and foreign aid when advocating for cutting the federal budget.

What is USAID?

USAID was founded by an act of Congress in 1961, when President John F. Kennedy wanted a more efficient way to expand U.S. influence in the developing world by providing money and other forms of assistance. This was during the Cold War when the United States was competing with the Soviet Union for power and influence across the globe. The Foreign Affairs Reform and Restructuring Act, passed in 1998, established USAID as its own agency and largely separated it from the State Department. It is an agency within the State Department, which manages the United States’ relations with other countries, including our embassies abroad.

USAID funds an array of humanitarian projects around the world, including those related to providing clean water, infrastructure, and health care. The State Department provides broad foreign policy goals to USAID, but the agency decides on the specific projects to achieve those goals. Generally, independent private contracting companies bid on the projects that USAID funds.

Congress appropriated $66.1 billion for foreign aid in fiscal year 2023. That works out to 1.2 percent of that year’s total federal expenditure, which was more than $6.1 trillion. USAID administers around 60 percent of foreign aid.

Why Does the United States Provide Assistance to Other Countries?

There are many reasons countries provide foreign aid to other nations beyond simply helping people living in poverty or conflict.

Foster positive relations with other countries. A country can leverage the foreign aid it gives, and that resulting relationship, to get preferential treatment later. For example, China has spent nearly $680 billion since 2013 on its Belt and Road Initiative, funding infrastructure projects in 150 different countries. The project is meant to increase Chinese trade and influence around the world.
Promote global stability. This was the primary goal of the Marshall Plan, when the United States gave Europe $13.3 billion to rebuild after World War II. A stable Europe was economically beneficial to the United States, and there was fear that the Soviet Union could further expand its sphere of influence from Eastern Europe if Western Europe remained fragile.
Prevent the global spread of disease. Treating and preventing diseases from spreading is another way to promote global stability, as diseases (such as COVID-19) can be destabilizing. The United States funds several initiatives to curb infectious diseases; one of the most successful has been the U.S. President’s Emergency Plan for AIDS Relief (PEPFAR). The United States has invested over $100 billion in PEPFAR since 2003, providing developing countries facing HIV epidemics with medicine, medical care, and preventative resources.

Why Has President Trump Decided to Cut Funding to USAID?

President Trump and Musk argue that USAID is full of fraud and waste. President Trump has also said that the projects that USAID funds are not in line with current U.S. foreign policy goals, and that the agency is being run by “radical lunatics.” On February 3, the White House published a list of USAID projects that it said were evidence of waste and abuse, including $1.5 million to “advance diversity, equity, and inclusion in Serbia’s workplaces and business communities”; $70,000 for a production of a “DEI musical” in Ireland; $2.5 million for electric vehicles for Vietnam; and millions of dollars to the EcoHealth Alliance, a U.S.-based nongovernmental organization which was allegedly involved in research at the Wuhan Institute of Virology.

Musk has made unsubstantiated claims about USAID’s role in the COVID-19 pandemic, and that it is a criminal organization led by the far left. The executive order that President Trump signed said that foreign aid “serves to destabilize world peace by promoting ideas in foreign countries that are directly inverse to harmonious and stable relations internal to and among countries.”

Secretary Rubio has argued that USAID has lost its focus and abandoned the “national interest,” citing complaints from U.S. officials and foreign leaders. “They have basically evolved into an agency that believes that they’re not even a U.S. government agency, that they are out—they’re a global charity, that they take the taxpayer money, and they spend it as a global charity irrespective of whether it is in the national interest or not in the national interest,” said Secretary Rubio. “One of the most common complaints you will get if you go to embassies around the world from State Department officials and ambassadors and the like is USAID is not only not cooperative—they undermine the work that we’re doing in that country, they are supporting programs that upset the host government for whom we’re trying to work with on a broader scale, and so forth.”

What Has the Response Been?

Republicans, who have typically pushed to give the State Department more control of its policy and funds, have been largely supportive of scrutinizing USAID spending. “I think the administration has every right to demand accountability and transparency in all these programs,” said Senate Majority Whip John Barrasso (R-Wyo.).

Democrats, who have typically promoted USAID autonomy and authority, say that USAID has been authorized by Congress, so President Trump cannot legally dissolve it or allow the State Department to take over. USAID workers and contracting companies have sued, saying Congress decides how the country spends money, so they say the president cannot legally refuse to spend money that Congress has directed the government to spend. Additionally, USAID workers stationed in the Democratic Republic of the Congo are suing the administration for money they spent when they were forced to evacuate and the agency had already stopped paying for employee travel.

Farmers are also concerned about funding cuts. American farms supply about 41 percent of the food aid distributed by USAID. Food worth $340 million, including rice, wheat, and soybeans, is left stranded in the United States.

Discussion Questions

Do you think foreign aid is an effective tool of foreign policy? Why or why not?
What are the best arguments for providing foreign aid?
What are the best arguments against providing foreign aid?
Do you agree or disagree with the decision to cut funding for USAID? Explain your reasoning.

More Resources

As always, we encourage you to join the discussion with your comments or questions below.

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Sources

Featured Image Credit: Kayla Bartkowski | Getty Images

https://apnews.com/article/usaid-foreign-aid-freeze-trump-peter-marocco-8253d7dda766df89e10390c1645e78aa

https://www.cfr.org/backgrounder/chinas-massive-belt-and-road-initiative#chapter-title-0-4

https://www.kff.org/policy-watch/the-status-of-president-trumps-pause-of-foreign-aid-and-implications-for-pepfar-and-other-global-health-programs/

https://crsreports.congress.gov/product/pdf/R/R48150#:~:text=Congress%20provided%20%2466.1%20billion%20in%20foreign%20assistance%20appropriations%20in%20FY2023

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