February 27th 2025.
The Trump administration recently announced their plans to drastically cut foreign aid contracts and overall assistance by USD 60 billion. This move, which encompasses more than 90% of the US Agency for International Development's (USAID) projects, is part of the administration's larger agenda to reduce the majority of the country's development and humanitarian efforts abroad.
The details of these cuts were outlined in an internal memo obtained by The Associated Press and in documents filed in a federal lawsuit. This decision has sparked ongoing court battles with advocates fighting to save the remaining USAID projects. The administration's plan to reduce foreign aid is now becoming clearer and is causing concern for the future of aid and development assistance overseas.
The memo stated that the administration is determined to eliminate what they see as a significant waste of resources resulting from years of institutional drift. They also plan to implement changes in the delivery of foreign assistance by USAID and the State Department in order to use taxpayer dollars more efficiently and in alignment with American interests.
President Trump and his supporter Elon Musk have made foreign aid one of their top targets in their efforts to reduce the size of the federal government. Both men believe that USAID projects promote a liberal agenda and are a waste of money. In January of this year, Trump ordered a 90-day review of all foreign assistance programs and put an immediate halt to all funding.
As a result of the funding freeze, thousands of US-funded programs have come to a standstill. The administration, along with Musk's Department of Government Efficiency teams, have forced the majority of USAID staff to take leave or have been terminated from their positions. This has led to the termination of numerous USAID contracts around the world, leaving many successful programs that have contained outbreaks of diseases and saved millions of lives in limbo.
In a federal court filing, nonprofit organizations that are owed money on USAID contracts describe the termination of these contracts as a strategy to bypass complying with the court's order to temporarily lift the funding freeze. This sentiment is shared by Democratic Senator Chris Murphy, who believes that the administration is trying to bypass Congress and the courts by quickly terminating thousands of aid programs.
The move to cut foreign aid has shocked a coalition representing major US and global businesses, NGOs, and former officials. The US Global Leadership Coalition has called for transparency in the decision-making process, as it will have a significant impact on counterterrorism efforts, global health, food security, and competition.
According to the State Department, Secretary of State Marco Rubio has reviewed and approved the contract terminations. The Trump administration has stated that they will be eliminating 5,800 out of 6,200 multiyear USAID contract awards, totaling USD 54 billion. In addition, 4,100 out of 9,100 State Department grants will also be eliminated, totaling USD 4.4 billion.
The State Department memo, which was first reported by the Washington Free Beacon, also mentioned the federal court order that required the administration to lift the funding freeze by the end of the day on Wednesday. In response, State and USAID moved quickly to terminate foreign aid programs in large numbers.
Despite warnings from the federal judge overseeing the case, the administration had not made any payments for over a month. However, they have now begun processing a few million dollars in back payments owed to US and international organizations and companies. The Supreme Court has temporarily blocked the court order, which would have required the administration to release billions of dollars in foreign aid by midnight on Wednesday.
The federal judge's decision to temporarily unfreeze the funds will remain on hold until the Supreme Court has a chance to review the case more closely. The administration has filed an emergency appeal to the Supreme Court in another case, arguing that a lower court was wrong to reinstate the head of a federal watchdog agency after Trump fired him. The plaintiffs in this case have until noon on Friday to respond.
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