In an announcement made Wednesday, the Trump administration disclosed its decision to significantly scale back the U.S. Agency for International Development’s (USAID) foreign aid contracts, cutting more than 90% and reducing the overall U.S. assistance by $60 billion. This move marks a considerable shift from longstanding U.S. foreign aid policies designed to promote stability and alliances across the globe. The decision was part of the administration’s broader initiative to overhaul and retract the nation’s involvement in global humanitarian efforts.
Details of this significant reduction were outlined both in an internal memo and court submissions amidst ongoing legal disputes with advocacy groups striving to salvage what remains of USAID projects. The Supreme Court intervened late on Wednesday, issuing a temporary block against a court order mandating the release of billions in foreign aid by the evening deadline.
The disclosed plans highlight the administration’s retreat from foreign assistance, citing a need to eliminate what it termed as “institutional drift.” A memo revealed that further changes in the delivery mechanisms of foreign assistance by USAID and the State Department are forthcoming.
Both President Donald Trump and business magnate Elon Musk have criticized foreign aid, targeting it as part of their efforts to curb federal government size. Both have argued that USAID initiatives often support a liberal agenda and represent financial inefficiency. On January 20, Trump initiated a review process to assess the viability of ongoing foreign aid programs, simultaneously halting all such funding. This abrupt freeze has impeded numerous U.S.-backed endeavors and led to a reduction of USAID personnel through mass layoffs and forced leaves.
In court filings revealed Wednesday, nonprofits with outstanding USAID contracts described how Trump appointees and Musk’s teams rapidly terminated contracts worldwide without substantive reviews. An internal email circulated within USAID forewarned staff of impending contract terminations.
This abrupt termination of contracts has left multiple nonprofit organizations, collectively owed billions due to the freeze, contending that the administration’s tactics circumvent the temporary lift of the funding freeze decreed by a court order. Echoing this sentiment, Senator Chris Murphy criticized the administration for effectively bypassing Congress and the judiciary to abruptly end international aid programs.
The administration announced plans to cut 5,800 out of 6,200 multi-year USAID contracts resulting in a $54 billion decrease, and at the State Department, a reduction of 4,100 out of 9,100 grants equating to $4.4 billion. This initiative appeared to respond to a federal directive demanding the cessation of the recently imposed foreign aid freeze.
Despite previous judicial cautions, Trump administration officials stated they have begun to process overdue payments after a month-long halt on spending. Yet, the contentious issue surrounding the freeze remains unresolved pending a Supreme Court examination as stated in the brief order by Chief Justice John Roberts. The inquiry into temporarily lifting Judge Ali’s order remains till further court deliberations.
The administration continues to contest in courts, with another urgent appeal pending before the Supreme Court challenging a lower court’s decision to reinstate a federal watchdog leader dismissed by President Trump.
