The chaos at USAID, explained

The US Agency for International Development (USAID) has been immobilised in recent days as part of the Trump administration’s tumultuous effort to remake the federal government.

The Trump administration on Monday said it is merging USAID with the State Department, a move that came amid days of turmoil at the agency and statements by tech billionaire and close presidential advisor Elon Musk that the agency was being shut down completely.

Employees have been told to stay out of USAID’s headquarters in Washington, career staffers have been put on leave, contractors have been laid off, and international staffers across the globe have been ordered to return home.

USAID is the US government’s lead humanitarian and development agency, providing assistance to countries worldwide to help address poverty, disease, and other humanitarian crises as well as to promote democracy and other US interests.

Critics of the agency, including Musk and President Donald Trump, argue that it is rife with fraud and waste and that its expenditures don’t align with US interests. But experts warn that the administration is moving to dismantle an agency that provides essential aid to millions across the globe and serves as a critical source of US soft power, potentially opening the door for adversaries such as China and Russia to gain increased influence as Washington pulls back from the world.

Here’s what you need to know about what’s going on with the agency, why Trump and Musk want to dismantle it, and what’s at stake.

What’s going on at USAID?

A flurry of recent moves has sparked alarm and confusion at USAID, leaving the agency in limbo and with an uncertain future.

It all began with Trump signing an executive order on Inauguration Day, freezing all US foreign assistance for 90 days pending review. Secretary of State Marco Rubio followed that with a cable detailing how that order should be carried out, freezing nearly all foreign assistance, with a few carveouts for emergency food programmes and military aid to Egypt and Israel.

As the primary agency responsible for providing such assistance, USAID soon came into the administration’s crosshairs. The USAID website went dark on Saturday, the Trump administration closed the agency’s headquarters on Monday, and staffers were told to work from home. Close to 100 career USAID staffers have been placed on leave, and hundreds have reported being locked out of the agency’s computer systems.

Two top security officials at USAID were also placed on administrative leave after attempting to prevent Department of Government Efficiency (DOGE) representatives from gaining access to restricted parts of the agency.

USAID “has long strayed from its original mission of responsibly advancing American interests abroad, and it is now abundantly clear that significant portions of USAID funding are not aligned with the core national interests of the United States,” the State Department said in a post on X on Monday.

Going forward, Trump has tapped US Secretary of State Marco Rubio as the agency’s acting administrator, the statement said. Rubio’s messaging on the agency hasn’t been as absolute as Musk’s, and he’s said that his agenda is not “about ending the programmes that USAID does, per se.”

“There are things that USAID, that we do through USAID, that we should continue to do, and we will continue to do,” the top US diplomat told reporters in El Salvador.

In a letter to Congress, Rubio said that he had tapped Trump ally Peter Marocco to engage in a “review and potential reorganisation of USAID’s activities.” That could entail a “suspension or elimination of programmes, projects or activities; closing or suspending missions or post; closing, reorganising, downsizing, or renaming establishments, organisations, bureaus, centres, or offices; reducing the size of the workforce at such entities and contracting out or privatising functions or activities performed by federal employees,” he wrote.

However, on Tuesday, a notice was posted on the USAID website stating that as of 11:59 p.m. Friday, Feb. 7, “all USAID direct hire personnel will be placed on administrative leave globally, with the exception of designated personnel responsible for mission-critical functions, core leadership and specially designated programmes.” Direct hires have 30 days to return home, and contracts deemed nonessential will be terminated, the notice added.

As of now, USAID has effectively been shuttered, in practice, if not officially.

“What we’ve seen in the last two weeks is a stoppage of almost all foreign aid and US implementing organisations having to send their staff home,” said George Ingram, a senior fellow at the Brookings Institution’s Center for Sustainable Development. “This goes on for a few more weeks and a number of them are going to go belly up.”

Why do Trump and Musk want to dismantle USAID?

Critics say that the agency is wasteful and that its spending doesn’t align with US interests. As head of DOGE—which is not an official government agency—Musk has been one of USAID’s sharpest opponents. He has baselessly decried USAID as a “criminal” organisation and said it should “die.”

US foreign aid traditionally garners bipartisan support. Washington has been the world’s biggest foreign aid donor, even as that money represents a relatively tiny fraction of US spending. Foreign assistance—which includes development support, humanitarian assistance, and security funding—accounts for just 1% of the entire US federal budget. Around 60% of that money is administered by USAID.

USAID was initially established via an executive order signed by then-President John F. Kennedy in 1961 in concert with the Foreign Assistance Act of the same year. Legislation in 1998, the Foreign Affairs Reform and Restructuring Act, established USAID as its own agency—separate from the State Department.

But the agency has been a target of conservative critics for years. Lawmakers such as GOP Sen. Rand Paul of Kentucky have long characterised USAID and foreign aid more generally as wasteful and corrupt. “Abolish USAID and all foreign aid,” Paul said in a recent post on X.

A 2019 review by the USAID inspector general pointed to significant issues with programmes funded by the agency falling short of expectations. Along these lines, there are also proponents of US foreign aid, such as Walter Kerr, the executive director of Unlock Aid, who have criticised USAID’s effectiveness and called for reform. But Kerr said the “first priority” at the moment should be “to make sure that we can get life-saving assistance flowing again.”