Trump Administration Announces Historic 90% Cut in USAID Foreign Aid Contracts: What It Means for Global Assistance

In a significant shift, the Trump administration announced plans to cut over 90% of the U.S. Agency for International Development’s (USAID) foreign aid contracts. This could mean a reduction of approximately $60 billion in overall U.S. assistance to countries around the globe. These cuts reflect a tectonic change in how the U.S. approaches foreign aid and development efforts, threatening the future of many ongoing projects.

The details emerged through an internal memo and federal court documents. They reveal the administration’s intention to shrink foreign aid dramatically, which has historically aimed to stabilize regions and foster global alliances. The memo criticized previous aid programs as ineffective and suggested these changes aim to make better use of taxpayer dollars while advancing American interests.

Both President Trump and Elon Musk have been vocal about their views on foreign aid, labeling it as a wasteful expenditure that promotes a liberal agenda. Following this sentiment, Trump ordered a review of foreign assistance programs shortly after taking office. This review process led to a freeze on many funding projects, halting assistance to thousands of initiatives that had previously operated successfully, such as programs addressing health crises like Ebola and AIDS in Africa.

Nonprofit organizations and contractors affected by these funding freezes are voicing their concerns. Reports indicate that contracts are being terminated rapidly, often without adequate review or notice, leaving many projects in limbo. Many of these organizations are owed significant sums due to the funding halt, and they are questioning the legality of the terminations as a means to bypass court orders for unfreezing funds.

Some lawmakers are also expressing alarm over the administration’s actions. Connecticut Senator Chris Murphy criticized the decision to speedily terminate aid programs without proper oversight. A coalition of businesses and nonprofits is calling for transparency about the potential consequences of these cuts on critical issues like global health and food security.

According to the administration’s announcements, they plan to eliminate about 5,800 out of 6,200 multi-year USAID contracts, cutting $54 billion, and around 4,100 out of 9,100 grants from the State Department, which would reduce funding by $4.4 billion. This sweeping action follows a federal court order that had demanded the administration lift the funding freeze, which has left many projects frozen for over a month.

While some payments are finally being processed, the Supreme Court has temporarily intervened, allowing time to review the administration’s appeal against the lower court’s orders. The implications of these decisions will be closely monitored as they unfold.

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