The U.S. government is under growing pressure to release nearly $2 billion in overdue funds to aid groups for work that has already been done. Funding shortfalls are paired with wholesale reductions in United States Agency for International Development (USAID) programs by President Donald Trump that reduced U.S. foreign aid activity by 83 percent and merged existing programs into the State Department.
While proponents of the move argue that it is required to trim operations and re-order aid expenditure based on national interests, others argue that the action can incur long-term strategic and human costs. At the center of debate is the reluctance of the administration to clear outstanding bills to aid contractors that has left it with credibility and reliability issues regarding how it is perceived as a global partner.
- Purging USAID: A Troika of Dramatic U. S. Foreign Policy
The reorganization of USAID is one of the largest reorganization ventures of U.S. foreign policy in decades. Secretary of State Marco Rubio made the move that cut more than 5,200 contracts and halted thousands of projects. Rubio has welcomed the move and asserted that the agency was inefficient and bloated and was paying for projects that were not representing U.S. strategic interests.
But speed and volume of cutting has taken alarm. Rubio claimed to personally read through all of the 13,000 USAID and State department contracts in a time frame of less than a month—a claim that is highly improbable to legal and foreign policy experts. Most think that contract cancellations were predetermined and based more on politics and ideologies rather than consideration of whether they were effective.
The absorption of USAID into the State department also heralds a shift in foreign aid delivery to make more room for politics to control. It is symptomatic of a larger pattern with this Trump administration of centralizing power in the executive and curtailing independent agencies’ autonomy to operate.
- Fight in Court for Forgotten Debts
The cutbacks resulted in financial ruin to numerous aid organizations that are still owed for previously accomplished work under signed contracts. Already, there has been a federal court ruling that found that the administration owes almost $2 billion to such agencies by recognizing the government legal obligation to honor contractual agreements.
In spite of the court decision, the government has taken its time to pay and has instead only settled part of what it owed. Critics argue that this is done on purpose and that it is meant to make it even more difficult for foreign aid to operate. One attorney in the case described the move as an intention to destroy aid organizations by making it impossible for them to remain open for business.
The aid organizations, already short of funds by reduced government contracts, are now forced to invest more in legal action to get the opportunity to get what is owed to them. There is no alternative left to organizations than to shut down operations or cut deeply into worthwhile humanitarian work left unfilled.
- Strategic and Humanitarian Considerations
The fate of USAID has repercussions that go far beyond bureaucratic restructuring. Strategically speaking, United States withdrawal will create power vacancies that Russia and China and other competitors will be able to fill.
Former USAID strategic adviser Kaush Arha warns that foreign aid has been a key tool for projecting U.S. power, particularly where there is expanding Chinese Belt and Road Initiative. “When we leave, it is used and occupied by China,” Arha told CQ in an interview. Southeast Asia and Pacific Islands are hotspots for competition for influence, he said.
The human toll is no less ominous. USAID has been a strong advocate for decades for emergency response to disasters, for global health programs, and for development in impoverished countries. Cuts are already cutting back on food security programs, education and medical treatment in war-torn areas.
In Gaza, for example, urgent humanitarians are languishing for promised USAID funds that are still on the way and are stalling important relief work. USAID-financed vaccination campaigns in sub-Saharan Africa are teetering on the brink of closure and are poised to let disease outbreaks happen. Decades in the future, it will be felt by communities that rely on U.S. aid and turn to other sources for help.
- political and diplomatic ramification
The stance taken by the administration on USAID has also harmed relations with U.S. partners and allies around the globe. European states and human rights organizations complained about U.S. withdrawal of global aid commitments. The move has also reconfirmed that U.S. is drifting away from multilateralism and toward a policy of isolationism.
Both congressional parties are decrying the cuts. While some budget conservatives do not mind cutting foreign aid expenditures, there are plenty of Republican legislators who are concerned that how quickly the reductions are made will hurt U.S. strategic interests. Both parties criticized the administration for what they said was an inhumane and irresponsible approach and argued that foreign aid is not only a moral imperative but also a recipe for stability and security.
- What is Next?
The court deadline looms and there is mounting pressure on the administration to obey the order and release its pending payment. There will be further legal action by the aid agencies if there is no payment from the government, and that would worsen the crisis.
Congress can act too to demand accountability, given that the political landscape is what it is there still is no bipartisan consensus on foreign aid policy. Some legislators are calling for legislation to preserve USAID from more budget cutting while others are saying that reorganization has to go even deeper. For now, aid agencies are left waiting and wondering whether they will get repaid what is owed to them or whether they will absorb the losses. As America steps back to relinquish a decades-long role as global aid leadership comes to fruition, the full long-term effects of this policy reversal are only just beginning to untangle. The fate of USAID and American foreign aid in general is probably going to be front and center during this election season. As crises on the global stage only continue to intensify, whether and how America acts on the world stage is far from certain.
