Frozen Foreign Aid: Who Pays the Price

Updated February 19, 2025

Author: Mariam Malik, Senior Foreign Policy Associate

Introduction

On January 20, 2025, President Trump signed an executive order (EO) freezing all U.S. foreign aid for 90 days. Later, Secretary of State Marco Rubio sent a stop-work order to various offices at the State Department, clarifying that Foreign Military Financing to Egypt and Israel and emergency food assistance could continue. This EO mostly affected programs at the U.S. Agency for International Development (USAID).

This explainer breaks down what’s happened at USAID since that EO, impacts on the people USAID served, and what to watch next. 

U.S. Agency for International Development

USAID is a federal agency created in 1961 and tasked with providing humanitarian and developmental assistance around the world. It leads programs that address poverty, disease, human rights, women’s rights and freedoms, humanitarian assistance, and more. Currently, USAID’s budget is $40 billion, which is less than 1 percent of the entire federal budget.

Support for USAID has historically been bipartisan. As recently as June 28, 2024, the House voted on an amendment to defund USAID entirely. The measure was rejected overwhelmingly by both Democrats and Republicans. 

State of Play

After widespread criticism and backlash, Rubio issued a waiver stating that some “core lifesaving” humanitarian assistance—such as medicine distribution, healthcare, food, and shelter—could continue temporarily. However, State Department officials said programs for diversity, women’s reproductive needs, and climate resilience will be permanently cut. Furthermore, humanitarian workers were not given guidance on what constituted “lifesaving” care—such as, for example, whether preventative interventions like bed nets and insecticide to prevent malaria are permitted.

On February 3, 2025 Rubio announced that he would serve as the Acting Administrator for USAID. Immediately after, the Trump Administration took harmful actions that hinder USAID’s work, such as:

  • Directing all USAID staff not to report to work.

  • Denying Members of Congress access to USAID headquarters, hindering their oversight into federal agencies.

  • Dismissing senior USAID officials.

  • Taking down USAID’s website, which is no longer operational. The State Department’s website has a brief page on USAID.

In general, this funding freeze has spread chaos and confusion among healthcare providers, landmine removers, food distributors, and other humanitarian organizations, who have to decide to either err on the side of caution and stop their lifesaving work or continue their work and risk being cut off entirely if the Trump Administration decides their work should have ceased. Numerous organizations have said this uncertainty and lack of funding has led them to lay off or furlough employees, with job losses already in the thousands. 

Impacts of the Foreign Aid Freeze

Below are some examples of programs that are impacted by the Trump Administration’s foreign aid freeze and the effects on communities worldwide:

  • The President’s Emergency Plan for AIDS Relief (PEPFAR), which is credited with saving 25 million lives, stopped distributing lifesaving drugs. PEPFAR received a limited waiver on February 1 that allowed some care to resume, but excludes preventative medicines and care for orphans and vulnerable children. Created under President George W. Bush, PEPFAR historically received bipartisan support. Cutting off PEPFAR would endanger 20 million people, including 500,000 children. 

  • Global de-mining activities stopped, increasing the risk of unexploded bombs harming or killing people.

  • Distribution of tuberculosis (TB) drugs stopped. It is unclear how much has resumed under the waiver. USAID told providers treating TB not to continue work until they had written confirmation that the waiver applied to them. Failing to complete a TB drug regimen can lead to drug-resistant TB, which is more deadly and harder to treat. TB is already the number one infectious killer in the world.

  • The delivery of malaria tests and drugs has stopped entirely in Myanmar—where malaria cases have skyrocketed in recent years—due to uncertainty regarding the waiver’s limits. A physician who works to distribute malaria pills said, “if you have a child under 5, particularly under 2, who is infected with malaria and there are no drugs there, that kid’s gonna die.” 

  • Medical supplies produced for USAID projects are going to waste. For example, more than 2 million anti-malaria bed nets produced for communities in sub-Saharan Africa are sitting in factories unused.

  • Clinical trials have been frozen, meaning many people have trial drugs or devices in their bodies and have to abruptly stop trials mid-process. This could have harmful, unknown consequences for people’s health. 

While this freeze persists, President Trump also instructed Centers for Disease Control and Prevention (CDC) staff to immediately stop all communications with the World Health Organization. This means that U.S. health officials could lose access to information about emerging outbreaks—while simultaneously halting work to prevent such outbreaks. Per the New York Times regarding PEPFAR disruptions, “creating huge populations of immunocompromised people may mean that other pathogens have an opportunity to spread. For example, dangerous Covid variants, including Omicron, are thought to have evolved in immunocompromised people with H.I.V.”

Legislative Developments

House Foreign Affairs Committee (HFAC) Ranking Member Gregory Meeks (D-NY-05) led a letter signed by other HFAC Democrats to Rubio expressing concern and calling for a reversal of the foreign aid freeze. Sen. Jeanne Shaheen (D-NH), Ranking Member of the Senate Foreign Relations Committee (SFRC), led a similar letter signed by other SFRC Democrats.

On February 11, 2025, Sen. Michael Bennet (D-CO) and Sen. Tim Kaine (D-VA) introduced the Foreign Assistance Accountability and Oversight Act. It would give Congress more authority in decisions about foreign aid and expand its oversight role. It would also require the State Department and USAID to spend all funds appropriated by Congress for aid within 90 days. 

What Does the Foreign Aid Freeze Mean Long-Term?

Damaging Other Agencies that Protect Americans 

Beyond the immediate effects on people’s health and wellbeing worldwide, the foreign aid freeze poses an acute risk to Americans as well. If programs to track viruses and diseases can’t operate, it risks outbreaks that could spread globally, similar to the COVID-19 pandemic. 

Additionally, if the White House is able to unilaterally dismantle USAID, it may soon target other agencies that provide direct benefits to Americans. For example, President Trump fired Gwynne Wilcox, a member of the National Labor Relations Board (NLRB). This means the NLRB no longer has the minimum number of members required to perform its duties that protect U.S. workers, such as assisting with union elections, collective bargaining, and preventing unfair labor practices. This suggests that USAID is a test case for hampering—or destroying—agencies that Americans depend on to uphold their rights. 

Encouraging Corruption and Corporate-Friendly Policymaking

USAID’s destruction was spearheaded by Elon Musk, a billionaire whose companies benefit from diminished oversight and looser rules. For example, months before Musk shut down USAID, the agency told Congress that it was investigating its contracts with Starlink, one of Musk’s technology companies. 

Additionally, Musk is already a government contractor whose companies receive billions through federal contracts. Thus, his tremendous interest in federal funds’ allocation could stem from a desire to further enrich himself by steering more contracts to his companies. 

Musk’s actions could portend greater corporate power consolidation regarding foreign assistance decisions—a problem that already plagued USAID under Democratic and Republican administrations. For example, since the 2010 earthquake in Haiti, USAID has spent more than $2 billion on humanitarian and reconstruction assistance. However, only 3 percent of this went to Haitian organizations that provide  economic development and medical and housing assistance. The remaining funds went to organizations based in the Washington, DC area—supporting U.S.-based companies and, consequently, forgoing an opportunity to strengthen Haitian-led institutions. 

Local stakeholders and bipartisan U.S. officials have long criticized the disproportionate amount of USAID funding that goes to U.S.-based corporations and underscored the importance of working with local organizations who have unique expertise in their communities. These criticisms indicate a clear need for foreign aid reform. However, USAID’s wholesale demolition and sidelining of staff with local relationships does not make such reforms more likely. 

What Happens Next? 

Last month’s executive order claims the White House and State Department will determine whether to resume, modify, or end all frozen foreign aid programs in 90 days, based on undefined “programmatic efficiency and consistency with United States foreign policy.” In the meantime, the State Department has not indicated how organizations might get additional waivers to continue their work.

According to the Foreign Assistance Act of 1961 (FAA) and annual Department of State, Foreign Operations, and Related Programs (SFOPS) appropriations bill, if the Administration wants to use appropriated funds for a matter that Congress did not appropriate it for, the Administration must notify Congress. Members of Congress are within their right to investigate the Trump Administration’s compliance with this requirement. 

Additionally, if President Trump submits an annual budget to Congress for Fiscal Year (FY) 2026, associated public hearings create an opportunity for Members and Senators to question cabinet officials on the impacts of the foreign aid freeze, plans for work previously implemented through USAID, and more. Lastly, Congress has the opportunity to address executive actions through the annual appropriations process or National Defense Authorization Act, when they might specify new oversight measures or spending constraints.