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Trump Administration Considers Folding USAID into State Department Amid Controversy

The Trump administration is reviewing plans to merge the United States Agency for International Development (USAID) into the State Department, a move that could significantly reduce its workforce and align its spending with the “America First” policy. President Donald Trump has assigned billionaire Elon Musk to oversee the restructuring.

On Sunday, Trump criticized USAID, calling it a “criminal organization” and accusing it of being run by radicals. However, he did not provide evidence to support his claims. Musk echoed these sentiments, stating that it was “time for it to die.”

What is USAID and How is it Funded?

Established in 1961 under President John F. Kennedy, USAID was designed to coordinate foreign assistance efforts, especially during the Cold War. The agency administers approximately 60% of U.S. foreign aid, distributing $43.79 billion in fiscal 2023. With a workforce of 10,000 employees—most of whom are stationed overseas—USAID operates in 130 countries.

Funding for the agency comes from Congress, based on budget proposals from the administration. The agency focuses on poverty alleviation, disease prevention, humanitarian aid, and strengthening U.S. economic and strategic interests abroad.

How Much Does the U.S. Spend on Foreign Aid?

In fiscal 2023, the U.S. allocated $72 billion to global aid, accounting for 42% of all humanitarian assistance tracked by the United Nations in 2024. The funds support a variety of initiatives, including:

  • Healthcare programs, such as HIV/AIDS treatment
  • Clean water access
  • Energy security
  • Anti-corruption measures

Historically, U.S. aid spending was around 0.33% of GDP, significantly lower than the 3% peak in the 1950s during the Marshall Plan. Although the U.S. contributes more aid than any other country, it ranks among the lowest in terms of foreign aid as a percentage of national income. In 2023, Norway topped the list at 1.09% of GNI, while the U.S. stood at 0.24%.

Is Foreign Aid a Bipartisan Issue?

Traditionally, Democratic administrations have been more supportive of foreign aid, while Republican leaders have pushed for reductions. Despite this, every post-war U.S. president—except Trump—has strongly backed foreign aid initiatives.

Trump’s previous attempts to slash USAID’s budget were blocked by Congress. In June 2024, 80% of House Republicans voted against an amendment to eliminate foreign aid from the fiscal 2025 budget, signaling continued bipartisan support.

USAID Leadership and Priorities

Under President Joe Biden, Samantha Power led USAID, prioritizing:

  • Climate change action
  • Countering authoritarianism
  • Promoting economic growth and equality

Power emphasized USAID’s role in enhancing U.S. soft power, arguing that Chinese and Russian propaganda campaigns had increased efforts to discredit the agency’s work worldwide.

Trump’s Executive Order and Its Global Impact

On January 20, Trump issued an executive order suspending most foreign aid for 90 days, arguing that aid programs were not aligned with American interests. His administration urged USAID employees to support the changes or face disciplinary action.

The move raised concerns among humanitarian organizations and UN agencies, as it could limit access to food, healthcare, and shelter in conflict zones such as Ukraine and refugee camps in Thailand.

A USAID insider noted that merging the agency with the State Department would be a major shift. Historically, USAID has provided humanitarian assistance to countries without diplomatic ties to the U.S., such as Iran and North Korea. This flexibility has occasionally helped build diplomatic bridges, an opportunity that could be lost if aid becomes entirely politically driven.

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