Restore and Improve the United States Agency for International Development (USAID)

Established by President John F. Kennedy at the height of the Cold War in 1961, the United States Agency for International Development (USAID) was the lead U.S. Government agency working to end extreme global poverty and enable resilient, democratic societies to realize their potential.  U.S. foreign assistance has always had the twofold purpose of furthering America's interests while improving lives in the developing world. USAID carried out U.S. foreign policy by promoting broad-scale human progress while also expanding stable, free societies, creating markets and trade partners for the United States, and fostering goodwill abroad.

Executive action taken by the current administration to effectively eliminate USAID ran contrary to the Foreign Assistance Act of 1961, which governed the creation and operations of USAID.  As Foreign Policy notes: “Because Congress established USAID by statute, the executive branch lacks the unilateral authority to abolish it or subsume it without a corresponding act of Congress. This is not a small or a limited issue: The separation of powers doctrine is central to U.S. constitutional government, and allowing the executive to reshape or eliminate an agency that Congress created and continues to fund would deeply weaken the legislature’s independence.” 

More importantly, eliminating USAID reduces America’s ability to project soft power (defined by the Council on Foreign Relations as “a country’s ability to influence others without resorting to coercive pressure” by “projecting their values, ideals, and culture across borders to foster goodwill and strengthen partnerships”), abandoning our partners and allies, and slashing our ability to solve global challenges. The United States is now less prosperous, more vulnerable, and less prepared to address future threats such as infectious diseases, extreme weather, uncontrolled migration, economic coercion, and misinformation.

On day one of a future administration, the President must rescind Executive Order 14169, known as "Reevaluating and Realigning United States Foreign Aid." This order, signed on January 20, 2025, initiated a process that led to the dismantling of USAID and, in turn, much of America’s foreign aid initiatives. All told, the current administration eliminated 83% of USAID's programs and moved them to the State Department. 

The immediate impacts caused delays and confusion in aid delivery, along with a significant disruption to global humanitarian efforts. Programs providing essential services such as food, medical care, and education to vulnerable populations were abruptly halted, leaving millions in dire need without support. Consequently, rescinding the order that enabled this pause is a necessary first step.

However, it is not enough to simply turn back the clock to December 2024. Initial executive action must be paired with a new executive order to re-establish a new and improved version of USAID. A renewed USAID must institute a better, reformed, focused, and more effective Agency. 

USAID re-establishment shall focus on four primary goals:

• Rebuild our leadership in global health and humanitarian assistance, while returning to USAID’s historic focus on sustainable and equitable economic growth.    

• Make America safer and more prosperous by rebuilding our soft power and re-establishing the primacy of the “3D’s” of defense, diplomacy, and development within the United States' foreign policy and national security toolkit.

• Bring order and improved coordination to the United States’ whole of government development and humanitarian assistance efforts.

• Implement needed reforms to make USAID more effective and efficient.    

New, immediate executive action must re-establish USAID as an independent agency under the foreign policy guidance of the Secretary of State and strategically coordinated through the National Security Council (NSC) to ensure development policy remains integrated with defense and diplomacy, with clear statutory-style delegations of authority. New executive action must:

(a) reaffirm USAID’s independent statutory mission and authority under the Foreign Assistance Act while recommending additional Congressional action to codify USAID’s existence and functions;

(b) restore programmatic authorities to USAID where appropriate;

(c) create temporary flexibility in hiring and contracting (as authorized by existing statutes) to re-staff high-priority humanitarian, development, and health programs;

(d) restore USAID’s role as an NSC Principal and (e) establish a 180-day modernization review with public reporting.

The Administration shall instruct the Office of Management and Budget (OMB) to immediately freeze all further transfers of USAID program funding to other agencies and to allow temporary reprogramming of USAID initiatives to cover urgent humanitarian continuity needs. The Secretary of State and USAID Acting Administrator shall reverse existing disruptions by listing all programs currently paused or transferred, with a timeline and criteria for immediate reactivation and/or congressional referral for new funding sources. To bridge the gap before congressional appropriations, the President shall authorize the temporary redirection of unobligated balances from State Department funds (consistent with Congressional appropriations), alongside any older funds that remain in USAID-related accounts, to immediately resume lifesaving humanitarian and stabilization programs.

Rebuild our leadership in global health and humanitarian assistance, while returning to USAID’s historic focus on sustainable, equitable economic growth.

Too often, the USAID of old was hamstrung in its efforts to channel American generosity and ingenuity to solve the world’s most pressing challenges. Earmarked programs ranging from cleaning up ocean plastics to providing prosthetic limbs to landmine victims meant that USAID was unable to focus on solving the core development challenges faced by our partner countries. In the past, largely due to excessive congressional earmarks and successive, layered White House initiatives, USAID was forced to try to do everything everywhere, which was not a formula for success.  

A future president must work closely with Congress to amend the Foreign Assistance Act to enable USAID leadership to focus on a manageable set of core priorities:

Restore our engagement in the global health community by:

• Pairing executive action to rejoin the World Health Organization (WHO) with the submission of a targeted supplemental appropriation request to Congress to reverse draconian cuts to highly successful global efforts, such as the Global Alliance for Vaccines and Immunization (GAVI). 
  

• At the same time, USAID should move away from its narrow focus on specific diseases to a broader approach of partnering with countries to strengthen their primary health care systems. This will allow our partners to develop the capacity to prevent and treat both chronic and infectious diseases without unending American assistance. Therefore, executive action must include an administrative directive requiring USAID to award grants that prioritize primary health systems over single-disease line items and permit rapid awards to local health ministries and community health non-governmental organizations (NGOs) under emergency contracting authorities.
  

• USAID and the Centers for Disease Control (CDC) must also revitalize our nation’s leadership in the realm of global health security. We have lost much of our ability to track and fight both existing and novel infectious diseases.   

Once again position the United States as the world's most effective and generous humanitarian donor, which is the ultimate expression of our values as a people, while advancing our soft power in the most visible way.

• Reestablish the Office of Foreign Disaster Assistance that was abolished under the previous administration by issuing an EO restoring the Office, while also authorizing it to enter into emergency agreements with United Nations (UN) agencies and vetted local partners to implement lifesaving operations without typical multi-month procurement delays.

Focus on pursuing a future where sustainable economic growth and poverty alleviation abroad result in a world where USAID’s functions are no longer needed.

• USAID’s most enduring successes have come by partnering with countries to focus on economic reforms needed to unlock sustainable growth and eliminate extreme poverty.  Former recipient countries such as South Korea, Taiwan, Chile, and the former Warsaw Pact countries of Central Europe are now all international donors in their own right, and are more than capable of providing their citizens with access to jobs, schooling, healthcare, etc., without any U.S. help.  
  

• However, due to excessive Congressional earmarks, USAID’s core economic growth programming all but disappeared by 2025.  The new USAID needs to make sustainable economic growth a top priority, not an afterthought.  Building off of innovative programs such as the Economic Resilience Initiative is a good place to start, but this needed change will only be possible with sustained congressional support and a willingness to give USAID more control over setting its own priorities. 
  

• Immediate executive action aimed at setting USAID priorities should include guidance that a minimum share of core economic growth funding be reserved for local support and small business-related programs, while placing limits on the share of funding that may be earmarked for large international contractors.  This is a strong point of bipartisan consensus.  USAID Administrators under the past three presidents all made localization a priority under the USAID Policy Framework (which was USAID’s highest-level policy document).  In fact, the New Partnership Initiative (see reform section below) was started under and continued under the past two presidents. However, USAID has consistently failed to live up to its localization targets of directly funding local organizations, so setting an aggressive funding allocation (rather than a target) off the top will make success much more likely.     

Work with international partners to take a common approach to solving global challenges

• In focusing on these three goals, it will be necessary to coordinate with other donors, leading multilateral organizations, and private/corporate philanthropy.  As USAID limits its focus to ensure impact in a narrower set of priorities, the Agency will have to partner with others and allow them to take the lead in areas such as agriculture and education so that crucial work continues, even without significant American funding.

Make America safer and more prosperous by rebuilding our soft power and re-establishing the primacy of the “3D’s” of defense, diplomacy, and development within the United States' foreign policy and national security toolkit.

It is no surprise that USAID was first established at the height of the Cold War, or that Congress dramatically increased USAID’s funding after 9/11 as part of the Global War on Terror. USAID best serves the American people when it is supporting our foreign policy and national security objectives. USAID is a key part of the toolkit that keeps America safe and prosperous, while allowing us to compete with our rivals and defeat our adversaries. For example, according to Brookings Institution research, as a direct result of American assistance after the devastating 2004 tsunami, support for Al Qaeda and terrorist attacks dropped by half in Indonesia, the world’s largest Muslim country. Even two years later, 6 in 10 Indonesians continued to state that American humanitarian aid made them favorable to the United States. Therefore, a renewed USAID must:

• Re-establish the Office of Transition Initiatives (OTI) by executive directive and authorize OTI to use rapid, flexible small grants for civic actors and community resilience programs in conflict and post-conflict zones, once again allowing USAID to directly support our allies in conflict zones and other complex environments. OTI was the global state of the art when it came to providing rapid and flexible assistance in some of the hardest places to work in the world.  Whether it was keeping the lights on in Ukraine, supporting peace activists in war-torn African countries, or helping communities be more resilient to the activities of drug cartels, OTI was an indispensable tool. 

• Mandate via executive action that USAID funding priorities support democratic reformers to reverse the alarming progress of authoritarianism across the globe. The United States will not be safe or secure in a world where authoritarians and undemocratic populists team up to oppose us. Therefore, the renewed USAID must become the partner of choice for democratic reformers inside governments and democratic activists who are fighting against authoritarian regimes. Building off of the nascent Democracy Delivers Initiative established during the Biden administration, USAID must ensure that democratic governments can deliver tangible improvements to their people, so they will no longer support undemocratic regimes.

• Address global crises such as pandemics and climate change that do not respect borders. The scale of these challenges is far beyond the ability of any one country to solve, even the United States.  However, the world still looks to us to lead, and we can use American innovation and ingenuity to build effective global coalitions that can make real progress against these serious threats to our way of life. As a first step, the executive order re-establishing USAID should restore USAID’s Global Climate Strategy, 2022-2030, and require an update through 2040 within 12 months of USAID’s re-establishment.  This strategy, among other things, aimed to leverage $150 billion in climate finance to help the world’s poorest and most vulnerable populations.    

• Support communities in Latin America to reduce irregular migration.  USAID needs to be part of a comprehensive international approach to securing our borders, reforming our migration laws, and partnering with others to solve this problem.  Targeted USAID community development, violence reduction, and job-creation programs in high-emigration foreign municipalities can reduce the push factors that drive unauthorized immigration flows toward the United States. These efforts must mirror the strategy described in Step 8: Improve Migration Safety and Border Processing of the Project 2029 “10 Steps to Immediately Reform U.S. Immigration Policy in 2029” policy brief, which outlined executive directives enabling the State Department to offer grants to NGOs expanding migrant shelters and services in Mexico. USAID shall model this approach to prioritize partnerships with trusted local NGOs, cooperatives, and municipal governments in Central America.

• USAID must also partner with U.S.-based migrant diaspora communities to channel remittances into local infrastructure, small business, and resilience projects. USAID must also integrate with the cross-agency Migration Impact Task Force (as proposed in Step 10: Create an Immigrant Bill of Rights) to ensure that all U.S. foreign policies undergo migration impact assessments so that they do not aggravate root causes of migration.

• As an element of this work, USAID should partner with like-minded donors, foundations, and multilateral organizations to launch a targeted initiative to build the capacity and resilience of priority migration “sending” countries to support and sustain their own populations, and therefore reduce the prevalence of irregular migration around the world.  

Bring order and improved coordination to the United States’ whole of government development and humanitarian assistance efforts.

The United States’ foreign assistance efforts are highly fragmented and oftentimes lack sufficient coordination to ensure that our tax dollars are well spent and that our key foreign policy objectives are being advanced in the most effective way possible.  Approximately two dozen departments and agencies manage congressionally appropriated foreign assistance programs.  Rebuilding and reforming USAID only makes sense if the next administration also makes a serious effort to improve our entire foreign assistance portfolio by taking the following steps:

• The next President should direct the Administrator of USAID and the Secretary of State to publish a National Development Strategy, analogous to the Department of Defense’s (DoD) National Defense Strategy, within 12 months of the inauguration.  This first-ever National Development Strategy would lay out U.S. government-wide goals and objectives, and clearly lay out a division of labor between the various departments and agencies, as well as explicit tools for coordination between them.  Ideally, the strategy would be an opportune moment to identify options for more substantial structural reforms to our development enterprise. 

• As part of a comprehensive amendment process to the Foreign Assistance Act, the next President should partner with Congress to craft the necessary laws to make those structural reforms permanent, rather than as a result of an Executive Order or similar Presidential finding.      

Implement needed reforms to make USAID more effective and efficient

For all of the good that USAID accomplished over its more than 60 years of work, it often accomplished these things despite internal processes and systems that were highly inefficient and overly risk-averse.  A new USAID must be a better USAID, not one that repeats the mistakes of the past. Instead, it must take into account:

There is widespread consensus, backed by experience and evidence, that development and humanitarian assistance are most equitable, effective, and sustainable when local actors set their own agendas, develop solutions, and bring their capacities to bear to achieve solutions.

• Therefore, USAID must double down on past bipartisan efforts to support local leadership and country ownership of their own development. Rather than giving money to large contractors as a default, the President must issue an executive order requiring immediate USAID procurement reform to support local systems directly, which is the key to making our work sustainable and putting USAID out of business as quickly as possible.  Particular care must be taken to set up new monitoring and reporting systems that are not overly burdensome to small local partners, while ensuring that tax dollars are not lost to corruption.  

• Partner with Congress to amend the Foreign Assistance Act to streamline the number of assistance accounts to two - the existing International Disaster Assistance Account (IDA), and a new Sustainable Development Account that will combine the existing Global Health, Economic Support Funds, and Development Assistance Accounts.  This will allow USAID and partner countries to develop and implement strategies that are designed to address each country’s root development challenges, rather than having to fit programs into bloated global accounts, each with its own set of rules and reporting requirements.  The amended Foreign Assistance Act should also create much clearer roles and division of labor between the revived USAID, the Departments of State and Defense, and the myriad of other federal departments and agencies that also provide foreign assistance funding.  A clearer division of labor will save significant tax dollars by avoiding duplication of effort and staff time needed to fight bureaucratic battles to justify funding for their specific agency.       

• USAID had an inconsistent history of supporting smart risks and innovative approaches.  Too often, the Agency kept doing the same things, the same way, but expecting better results. Instead, through executive action and accompanying legislation, USAID must reestablish the U.S. Global Development Lab (closed in the late 2010s) to permanently embed science, technology, and innovation as the guiding principles to its approach, with the necessary funding and staff to develop new ways to solve longstanding development challenges.

• Less than 10% of capital that flows to emerging economies comes from Official Development Assistance (the internationally agreed-upon measure of each country's foreign assistance budget).  Rather, it is remittances and foreign direct investment that make up the bulk of the funds being sent to developing economies. Therefore, numerous administrations have championed private sector and philanthropic partnerships with USAID. These partnerships ceased once USAID was effectively sidelined, stripping billions of non-taxpayer dollars that were committed to helping the United States implement its foreign policy goals and objectives. The new USAID must establish a Center of Excellence for Development and Humanitarian Partnership to catalyze these funds. 

• Revive the New Partnership Initiative to fund small businesses and faith-based organizations across America to enlist them in solving global challenges.