The United States Agency for International Development (USAID) is at the centre of a political storm as the Trump administration moves to curtail its operations, citing widespread financial mismanagement.
The White House has accused the agency of wasteful spending, and USAID’s future is now uncertain, with plans to merge it into the State Department and significantly reduce its budget.
This move has sparked controversy. While critics of USAID argue that its expenditures are often poorly justified, defenders warn that gutting the agency could have profound global consequences, affecting humanitarian efforts, pandemic response, and US strategic influence.
USAID: A History of Controversy
Since its founding in 1961, USAID has been the primary vehicle for distributing American foreign aid, overseeing a budget that has, in recent years, exceeded $40 billion annually.
The agency funds projects ranging from food security initiatives to medical aid, economic development, and disaster relief. It also plays a strategic role in US foreign policy, often operating in regions where American diplomatic or military interests are at stake.
However, critics have long pointed to instances of financial mismanagement and politically motivated spending. The White House’s latest report lists a number of projects it deems unnecessary, including:
- $1.5 million to promote “diversity, equity, and inclusion” in Serbia’s workplaces.
- $70,000 for a DEI-themed musical in Ireland.
- $47,000 for a “transgender opera” in Colombia.
- $32,000 for a “transgender comic book” in Peru.
- $2 million for sex reassignment surgeries and LGBT activism in Guatemala.
- $6 million to promote tourism in Egypt.
- Hundreds of millions of dollars allegedly supporting opium farming in Afghanistan, indirectly benefiting the Taliban.
The administration has positioned these examples as proof that USAID has become an unaccountable bureaucracy, using taxpayer dollars to fund ideological projects rather than core humanitarian efforts.
Trump’s Push to Restructure or Close USAID
Donald Trump has long advocated for a reduction in foreign aid, arguing that it is a poor use of taxpayer money. He has frequently characterised USAID as a wasteful agency staffed by “radical lunatics.” His administration has moved quickly to freeze international spending, with a 90-day review effectively halting much of USAID’s operations.
Elon Musk, a key Trump ally, has been tasked with identifying federal spending cuts and has openly supported shutting USAID down. Over the weekend, tensions escalated when Musk’s team was reportedly denied access to USAID financial data, leading to the suspension of two senior security officials at the agency.
By Monday, Secretary of State Marco Rubio declared himself the “acting head” of USAID, calling its leadership “insubordinate” and stating that all future spending must align with US national interests.
The plan to merge USAID into the State Department reflects a shift in approach. Rather than operating as an independent entity, foreign aid would be brought under direct diplomatic control. This echoes the UK’s 2020 decision to merge its Department for International Development (DFID) into the Foreign Office— a move that was praised for streamlining spending but criticised for reducing expertise and weakening Britain’s international influence.
The Diplomatic and Humanitarian Fallout
If the restructuring or closure of USAID proceeds, the impact will be felt globally. The US is the world’s largest aid donor, spending nearly $70 billion annually on international development, with more than half of that allocated through USAID. The agency’s work spans multiple sectors, from providing prosthetic limbs to Ukrainian soldiers to supporting famine detection and pandemic response in Africa.
A sudden reduction in USAID funding could have significant geopolitical consequences. American aid often serves as a counterweight to Chinese and Russian influence in the developing world. With USAID weakened, rivals may step in to fill the gap, strengthening their economic and political foothold in key regions.
In the short term, USAID’s suspension of funding has already disrupted critical programmes. Aid workers have warned of immediate humanitarian consequences, with reports that prison guards in Syria, responsible for securing Islamic State detainees, nearly walked off the job when US support was cut. Meanwhile, pandemic prevention and food security initiatives have been put on hold, raising concerns about potential future crises.
Can Trump Legally Shut Down USAID?
Despite the White House’s aggressive moves, dismantling USAID entirely is legally complex. The agency was established through congressional legislation—the Foreign Assistance Act of 1961—which mandates the existence of a government body responsible for administering overseas aid. While Trump can cut funding and restructure operations, fully abolishing USAID would require congressional approval.
With Republicans holding narrow majorities in both chambers, passing legislation to shut down USAID would be challenging. Democrats have already signalled opposition, calling the move unconstitutional and a threat to US national security. Legal battles are expected if Trump proceeds unilaterally.
Reform or Political Theatre?
The debate over USAID reflects a broader divide in American politics regarding foreign aid. While there is public support for reducing international spending, the wholesale dismantling of USAID raises critical questions about America’s global role. Is this an effort to rein in wasteful spending, or is it a politically motivated attack on an agency perceived as out of step with Trump’s “America First” agenda?
The outcome will have lasting consequences, not only for the millions who rely on US aid but also for America’s influence on the world stage.
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