USAID Freeze – February 2025

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USAID FREEZE: UPDATE & RECOMMENDATIONS

Published February 10, 2025

The last three weeks have seen an extreme restructuring of many parts of the federal government–perhaps none more so than the US Agency for International Development (USAID). At this time, the independent agency has been brought under the purview of the State Department, USAID’s more than 10,000 employees are in limbo as a federal judge decides whether orders putting them on administrative leave are legal. With a few exceptions, all of USAID-funded projects have been frozen, all under the mandate of a “90-day pause in United States foreign development assistance for assessment of programmatic efficiencies and consistency with United States foreign policy.”

Waivers have been issued for select USAID-funded projects (including some immediate life saving assistance), but they came days after the initial funding freeze, and a lack of clarity coming from the administration has led to mass confusion on who actually qualifies. Reports indicate that even now, projects that have received waivers cannot access their funding. 

Secretary of State and acting USAID administrator Marco Rubio said the following at a press conference on Tuesday, February 4th:

“I want to repeat what I’ve said: I have long supported foreign aid. I continue to support foreign aid. But foreign aid is not charity. It exists for the purpose of advancing the national interest of the United States.  Every dollar we will spend as long as I’m Secretary of State – and as long as President Trump is in the White House is going to be a dollar that’s advancing our national interests.”

What does this mean for the future of US foreign assistance and the international aid landscape at large? Our colleague Jake Johnston may have stated it best in his recent article examining USAID spending in Haiti and the impacts of the current freeze:

“There are many parts of the US foreign aid industry that can and should be stopped or significantly reformed. But that doesn’t mean that shutting down USAID, or making its assistance even more overtly political by placing it under the umbrella of the State Department, is going to be a good thing, either in the short or long term. The reality is that, where foreign assistance is least effective, it is largely because it is designed to promote US interests rather than address the needs of those ostensibly on the receiving end.” 

The US government’s investments abroad are critical to national interests and global security and has the potential to meaningfully transform the lives of millions of people around the world. US foreign aid must continue–and its full budget, as appropriated by congress, must be restored. 

Whether USAID is brought back under a different name, is dismantled and rebuilt from the ground up, or remains under the purview of the State Department, one thing is clear: it will not be the same entity it was on January 19th. At the very least, its priorities will be realigned around American “national interests” as defined by the current administration. 

Learn more:

OUR RECOMMENDATIONS

For a century, the international development sector has experimented with approaches to fight poverty, and in many cases, those approaches have failed. As we move forward, aid–whether funded by future iterations of USAID or non-governmental organizations–must be ‘as local as possible, and as international as necessary,’ as put forth by the Grand Bargain of 2016.

  1. Shift Funding to Local Organizations – Move project design and implementation powers from foreign actors to local organizations and increase the amount of aid directly reaching local NGOs and governments instead of large international contractors. 
  2. Avoid Dependency – Fund programs that rely on local resources and strengthen local institutions and skills to foster self-sufficiency rather than creating long-term reliance.
  3. Reduce Bureaucracy and Enhance Adaptability – Improve responsiveness and accessibility by increasing flexibility in programming, simplifying application and reporting requirements, and shifting from rigid project-based contracts to adaptive, multi-year funding models.
  4. Improve Communication & Accountability Mechanisms – Establish locally-informed mechanisms that enhance communication and transparency, build trust, and allow partners to hold each other more accountable, while also improving public reporting on fund allocation and impact.
  5. Prioritize long-term impact over short-term solutions – Shift away from programs that prioritize quick wins and instead invest in systemic change, measuring success based on sustainable outcomes rather than immediate outputs.
  6. Expand Partnerships & Collaboration – Support projects that include collaborations with local governments, civil society, and businesses for coordinated impact while leveraging private investment to complement development programs and create sustainable economic opportunities.
  7. Invest in “the aid nexus” – Recognize the interconnectedness of humanitarian, development, and peacebuilding aid by breaking down rigid funding silos and investing in holistic, sustainable solutions that allow a community to address its needs comprehensively.
TIMELINE OF EVENTS
  • January 20th: President Trump signs an executive order freezing all US foreign aid for 90 days pending review and another withdrawing from the World Health Organization.
  • January 24th: The State Department puts out a cable pausing all new foreign aid spending and issuing a stop-work order for all existing US-funded projects, with some exceptions for emergency food assistance and foreign military financing for Israel and Egypt.
  • January 27th: Several dozen senior USAID officials are put on administrative leave after they are accused of attempting to circumvent the executive order.
  • January 28th: The State Department issues temporary waivers for “life-saving humanitarian assistance,” allowing those programs to continue operating despite the stop-work order. However, many programs remained paused due to confusion, chaos, and uncertainty. 
  • February 1st: USAID website goes offline. A page appears on the State Department website, suggesting that the agency’s functions were being brought under the purview of the State Department. 
  • February 3rd: Elon Musk says in a livestream on X (Twitter) that President Trump has agreed that USAID should be “shut down.”
  • February 3rd: Secretary of State Marco Rubio tells reporters he is acting administrator of USAID, the day-to-day business of which would be handled by Pete Marocco, the department’s director of foreign assistance.
    • Mr. Rubio said that Mr. Marocco would “begin the review and potential reorganization of U.S.A.I.D.’s activities to maximize efficiency and align operations with the national interest.”
  • February 3rd: Congressional Democrats attend a protest outside of the USAID headquarters in Washington, DC, and call the moves to shut it down unconstitutional.
  • February 4th: A statement is posted on USAID’s website announcing that, just before midnight on February 7th, all USAID workers would be put on paid leave and those stationed abroad would be brought back to the US within 30 days. 
  • February 6th: Reporting suggests that USAID’s more than 10,000 staff will be reduced to less than 300. Two unions representing USAID employees filed lawsuits against the Trump administration. 
  • February 7th: President Trump directly calls for the shutdown of USAID in a Truth Social post. 
  • February 7th: A judge issued a pause on administrative leave for 2,200 USAID employees and the recall of those abroad and ordered the reinstatement of 500 already on leave. The pause stands through February 14th as he hears expedited arguments in a hearing on Wednesday, February 12th. 
WHAT DOES USAID DO? HOW DOES IT WORK? 
  • USAID is the US government’s mechanism for delivering foreign assistance in the form of disaster relief, health services, and development initiatives. USAID-funded work is extensive and covers nearly every sector and type of project. 
  • In FY2023, USAID managed about $40 billion, less than 1% of the federal budget, providing assistance to 130 countries. The top ten countries were: Ukraine, Ethiopia, Jordan, Congo, Somalia, Yemen, Afghanistan, Nigeria, South Sudan, and Syria.
    • Each year, Congress appropriates USAID’s budget as a part of the overall federal budgeting process and determines approximately how much funding should go to each sector (health, democracy, education, etc.). 
    • USAID is not the only entity that distributes US foreign aid–portions of the foreign aid budget also go to the State Department, Centers for Disease Control, U.S. Department of Agriculture, U.S. International Development Finance Corporation, and others. 
  • USAID then spends its money via grants and contracts–and often turns to the same organizations and companies for its awards.
    • When receiving contracts, organizations and companies (like the World Food Program, Chemonics International, DAI Global, and Deloitte) bid to implement a project for USAID. Those large prime contractors often then sub-contract the work out to other companies or organizations.
    • USAID grants work more traditionally, with USAID awarding funds to organizations who apply for funding for a project.
      • Requests for grant applications are no less competitive and restrictive than proposals for contracts, however. Only those organizations that meet all of USAID’s requirements and can provide the necessary documentation have a chance at receiving support. 
      • USAID may or may not be the only funder of a grant-supported project. 
      • Grantees receive less oversight in project implementation than contractors. 
WHAT IS USAID’S ROLE IN HAITI?
  • For FY2024, $368 million of USAID funding was allocated to Haiti for contracts and grants.
  • In Haiti, UN-affiliated agencies and organizations are some of the biggest recipients of USAID funding.
    • Of the $368 million allocated for Haiti, about 40 percent goes directly to the World Food Programme (WFP), UNICEF, the Pan-American Health Organization, the UN Development Program, the UN Population Fund, the International Organization for Migration (IOM), and the UN Office for the Coordination of Humanitarian Affairs.
  • To read more about the impact USAID assistance has on Haiti, read this article from Jake Johnston.
  • To read more about the new administration’s stance on the current multinational police mission in Haiti, read this article from Jacqueline Charles.
CAN USAID BE SHUT DOWN BY EXECUTIVE ORDER?  
WHAT ARE THE CONSEQUENCES OF THE FUNDING FREEZE AND USAID’S SHUTTING DOWN? 
  • About 10,000 people around the world work for USAID. Even more people–employees of NGOs and contractors–are dependent on USAID funding, and so their jobs have been furloughed or suspended, and the future of their careers filled with uncertainty. 
  • Projects that were providing immediate, life-saving care have shuttered or were paused for days. We do not know yet how many lives have been or will be lost due to the funding freeze, but it is far too many. 
  • The US government’s investments abroad are critical to national interests and global security.
    • Foreign aid is one of the ways the United States cultivates goodwill and strengthens alliances around the world.
    • Where US investments recede, foreign aid from China and Russia will take its place–weakening our place and influence on the global stage. 
    • $1.58 billion of USAID’s budget in FY2023 was spent on pro-democracy initiatives. Authoritarian leaders in nations like Russia, Hungary, and El Salvador have celebrated the end of USAID. 

Information compiled by Charlie Estes

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