Trump Administration Announces 90% Cut in USAID Foreign Aid Contracts
The Trump administration announced on Wednesday that it is eliminating more than 90% of the US Agency for International Development's (USAID) foreign aid contracts, amounting to $60 billion in cuts to US assistance worldwide.
Washington: The Trump administration announced on Wednesday that it is eliminating more than 90% of the US Agency for International Development’s (USAID) foreign aid contracts, amounting to $60 billion in cuts to US assistance worldwide.
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These reductions, detailed in an internal memo obtained by The Associated Press and federal court filings, significantly shrink USAID’s role in global development, leaving only a handful of projects for advocates to defend in ongoing legal battles.
Trump and Musk’s Push for Government Downsizing
President Donald Trump and his ally, Elon Musk, have aggressively targeted foreign aid as part of their broader agenda to reduce the federal government’s size. They argue that USAID programs promote a liberal agenda and constitute wasteful spending.
On January 20, Trump ordered a 90-day review of all foreign aid programs, halting funding almost immediately. The freeze has disrupted thousands of US-funded initiatives abroad, with Musk’s Department of Government Efficiency teams enforcing mass staff furloughs and terminations within USAID.
Legal Battles Over Aid Cuts
Court documents reveal that nonprofits with existing USAID contracts claim the administration is terminating agreements at an unprecedented speed, with no meaningful review.
An email from a USAID official to staff warned, “There are MANY more terminations coming, so please gear up!” Meanwhile, Secretary of State Marco Rubio has reportedly reviewed and approved the contract eliminations.
Scope of the Cuts
The administration’s figures indicate:
- 5,800 out of 6,200 USAID contracts are being eliminated, cutting $54 billion in funding.
- 4,100 out of 9,100 State Department grants are being cut, reducing $4.4 billion in foreign aid.
These cuts were prompted by a federal court order requiring officials to lift the monthlong freeze on foreign aid funding. In response, the State Department and USAID moved quickly to terminate contracts en masse.
Contractors Struggle as Payments Resume
Thousands of contractors and nonprofits, owed billions of dollars since the freeze began, argue that the contract terminations are a way to circumvent the court order requiring a temporary lift on funding restrictions.
Following multiple warnings from a federal judge, administration officials confirmed on Wednesday that USAID had finally resumed making payments, unlocking only a fraction of the billions owed.
