What Is USAID and Why Is It at Risk?

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The U.S. Agency for International Development (USAID) has led U.S. development and humanitarian efforts around the world since 1961. It has taken the lead in coordinating effective responses to a number of humanitarian emergencies and strengthened development efforts abroad that proponents say have underpinned U.S. national security and cultivated goodwill toward the United States. 

But the agency has come under increasing scrutiny in recent years. President Donald Trump, who in his first term sought to slash USAID’s funding, is again looking to make drastic changes to the agency as part of a sweeping review of all foreign aid. USAID has also been one of the most prominent targets of Elon Musk and the newly formed Department of Government Efficiency. Experts say the Trump administration’s recent decision to freeze most foreign aid for ninety days undermines U.S. leadership abroad and puts vulnerable communities and countries at risk.

Why does USAID matter?

For more than six decades, USAID has been a pillar of U.S. soft power and a source of foreign assistance for struggling countries, playing a leading role in coordinating the response to international emergencies such as the global food security crisis. In the late 1960s, for example, USAID helped global efforts to eradicate smallpox; decades later, the agency joined a global campaign to fight polio, then considered highly endemic. USAID is also a key implementation partner in the President’s Emergency Plan for AIDS Relief (PEPFAR)—created by Republican President George W. Bush in 2003—providing care, treatment, and prevention services for HIV/AIDS. Most recently, the agency helped distribute vaccines, offer humanitarian aid, and support health workers amid the COVID-19 pandemic.

USAID is an independent government agency and the principal U.S. organization responsible for administering tens of billions of dollars in humanitarian aid overseas each year. President John F. Kennedy created USAID via executive order at the height of the Cold War in 1961—based on authority provided in the 1961 Foreign Assistance Act—to counter Soviet influence abroad. In 1998, Congress formalized USAID’s role as an independent establishment [PDF] that operates both within the executive branch and “under the policy guidance of the Secretary of State,” per a decision made by the Bill Clinton administration. The agency is funded by Congress, which allocates money for it through the State, Foreign Operations, and Related Programs appropriations each fiscal year.

USAID makes up the development pillar of the United States’ “3 Ds” approach to international engagement: diplomacy, development, and defense. The agency’s range of activities is broad and it aims to, among other duties [PDF]:

• “provide assistance to strategically important countries and countries in conflict,
• lead U.S. efforts to alleviate poverty, disease, and humanitarian need, and
• assist U.S. commercial interests by supporting developing countries’ economic growth.”

How much does the United States spend on foreign aid?

The United States is by far the world’s largest donor of international aid, disbursing close to $72 billion—nearly 61 percent of which came from USAID—in foreign assistance worldwide in fiscal year 2023 (FY 2023), the most recent year for which complete data is available. In terms of official development assistance (ODA), a subset of foreign aid which specifically refers to government aid aimed at promoting economic development and welfare in developing countries, the United States consistently ranks as the largest single donor. Other major providers of ODA include Germany, Japan, the United Kingdom, and France, in that order.

However, as a share of the total federal budget, the United States ranks much lower, with foreign aid making up less than one percent of U.S. gross domestic product (GDP).

USAID implements the bulk of U.S. development and humanitarian assistance abroad. In FY 2023, the agency disbursed nearly $44 billion to 160 countries and regions. Nearly two-thirds of the aid was concentrated in Europe and Eurasia and sub-Saharan Africa. Ukraine was the top recipient, receiving almost 37 percent of funding during what has become Europe’s largest and deadliest land conflict since World War II. Other notable recipients included Afghanistan, Ethiopia, Jordan, and Somalia.

Why is the Trump administration targeting USAID?

On his first day in office, Trump issued an executive order announcing a ninety-day freeze in U.S. foreign development assistance and calling for a review of all foreign assistance programs. According to the order, the “United States foreign aid industry and bureaucracy are not aligned with American interests and in many cases antithetical to American values.” Some waivers have been given—including for life-saving humanitarian programs such as those relating to medical services and food, shelter, and subsistence assistance. However, because there has been no clarity provided on how to interpret the waivers, no money has actually moved, and the freeze has overall forced mass layoffs and furloughs. Nearly all of USAID’s more than ten-thousand-strong staff worldwide will reportedly be let go, with only a few hundred remaining.

Trump has been a long-time critic of overseas spending, having sought to slash USAID funding by nearly a third during his first term—though his efforts were ultimately rejected by Congress. Some experts say Trump’s latest moves with regard to USAID mimic plans laid out in a chapter on foreign assistance in the Project 2025 presidential transition project published by the conservative Heritage Foundation. The chapter describes the need to “scale back USAID’s global footprint” and “deradicalize USAID’s programs and structures.” 

In early February, the White House followed up with a list of projects overseen by USAID that it identified as “waste and abuse.” This includes millions of dollars given to the U.S.-based nongovernmental organization EcoHealth Alliance, which was allegedly involved in research at the laboratory in Wuhan, China, where the COVID-19 pandemic broke out. (Trump previously advanced the theory that the disease originated in a Chinese laboratory.)

Secretary of State Marco Rubio, who is currently serving as acting director of USAID, says the Trump administration’s aim is to conduct a review of the agency’s foreign assistance activities—which it has reportedly begun—and possibly reorganize it. Additionally, talk that USAID will be merged with the State Department has drawn criticism [PDF] from Democratic lawmakers. USAID’s status has often been a source of partisan division; traditionally, Republicans have sought to roll back the agency’s independence, while Democrats have tended to back it.

Trump’s actions reflect mounting concern about where USAID funding goes abroad and how it’s used. Critics say USAID’s programs are wasteful and that Trump is helping to strip federal agencies of excessive spending. In a 2024 public opinion survey by the Chicago Council on Global Affairs, half of Americans supported a reduction in the amount of U.S. economic and military aid sent abroad, and more than half supported further prioritizing domestic spending on issues including health care and education.

What’s at risk in the current review and reorganization process?

Experts say Trump’s recent decision to freeze most U.S. foreign aid for three months is not actually a freeze but rather an ending to programs. The move derails global efforts to combat the spread of disease, counter terrorism, and bolster public health—among other USAID priorities—and will likely intensify humanitarian crises worldwide, including in Haiti, the Democratic Republic of Congo, and Sudan, experts say. Others argue the pause contributes to the erosion of U.S. soft power and that the agency’s work is critical to strengthening partnerships abroad, as well as countering China, Russia, and other U.S. adversaries.

“The U.S. suspension of foreign aid now threatens to effectively leave the field wide open for China to expand its influence,” writes R. Michael Schiffer, former assistant administrator of the USAID Bureau for Asia. “Russia, too, may seek to exploit the vacuum created by the U.S. retreat from foreign assistance.”

Can the executive branch shut down USAID?

Legal experts say Trump’s efforts to unilaterally dismantle USAID are beyond his authority. According to the Congressional Research Service [PDF], “congressional authorization would be required to abolish, move, or consolidate USAID.” While the 1998 Foreign Affairs Reform and Restructuring Act—the act that established USAID as an independent entity—provided the president with the ability to reorganize the agency, this authority was temporary and expired in 1999.

Additionally, the FY 2024 appropriations bill states that a reorganization or redesign of USAID, including downsizing the agency, requires prior consultation and regular notification from Congress.

Hyojin Yoo and Will Merrow helped create the graphics for this article.