Originally published Major Overhaul of U.S. Foreign Aid Structure Proposed in State Department Memo on by https://www.hstoday.us/subject-matter-areas/federal-government/major-overhaul-of-u-s-foreign-aid-structure-proposed-in-state-department-memo/?utm_source=rss&utm_medium=rss&utm_campaign=major-overhaul-of-u-s-foreign-aid-structure-proposed-in-state-department-memo at Homeland Security
“The U.S. international assistance apparatus is inefficient and fragmented.” That’s the start of a recently circulated memo, “Designing a New U.S. International Assistance Architecture.”drafted by the Trump Administration detailing a comprehensive plan to restructure how the United States distributes billions of dollars in foreign aid. The proposal signals a shift toward a more narrowly focused approach that prioritizes U.S. geopolitical interests and aims to counter China’s global influence.
Sweeping Changes to USAID
Under the proposed plan, the U.S. Agency for International Development (USAID) would undergo a dramatic transformation, including:
- Renaming the agency to “U.S. Agency for International Humanitarian Assistance.”
- Severely limiting its mandate to focus primarily on humanitarian assistance, disaster response, global health, and food security.
- Embedding the restructured agency within the Department of State
- Eliminating nearly two dozen existing USAID bureaus (see image below).
These changes follow the Administration’s 90-day pause on all U.S. foreign aid ordered on President Trump’s first day in office, which has disrupted humanitarian relief efforts globally. According to the document, approximately 80 percent of USAID grants have already been terminated, with much of the agency’s staff placed on leave or let go.
Restructuring the Development Architecture
The memo outlines additional organizational changes to consolidate U.S. international development institutions:
- Placing the Millennium Challenge Corporation and the U.S. Trade and Development Agency under the U.S. International Development Finance Corporation.
- Creating a combined entity focused on promoting “American jobs and capital returns” to the U.S. through trade, investment, infrastructure, and “projecting America’s energy and technology dominance.”
- Consolidating and moving all “politically-oriented” programs of interest to the Administration – democracy promotion, religious freedom, conflict prevention/stabilization, women’s empowerment, and civil society – directly under State Department control.
The proposal describes this restructured system as a “powerful counterweight to China’s Belt and Road Initiative,” reflecting the administration’s stated goal of more effectively competing with Beijing’s global economic and diplomatic influence.
Strategic Refocusing
The plan argues that current U.S. aid architecture is “without strategic alignment,” and criticizes previous approaches creating overlap, chronic mission creep, and Congressional micromanagement with questionable results. Instead, the proposal advocates for:
- Focusing resources on “regions critical to U.S. interests;”
- Catalyzing economic opportunities that support American businesses;
- Implementing time-limited programs with clear metrics for success;
- Using blockchain technology – a decentralized ledger of transactions in a peer-to-peer network – to improve fund tracking and accountability; and
- Adopting a more transactional approach that expects recipient countries to offer something in return for U.S. assistance.
The document is particularly critical of U.S. investments in countries where leaders “are not committed enough to the progress of their own people” or which have become dependent on American aid.
Legal Challenges and Implementation Questions
While the proposal provides a roadmap for the administration’s vision, implementation faces potential obstacles. A federal judge recently blocked efforts by Elon Musk and the Department of Government Efficiency (DOGE) to shut down USAID, ruling that these actions likely violated the U.S. Constitution.
The memo acknowledges that some changes would require congressional authorization. It is not known whether the document has yet been reviewed by Secretary of State Marco Rubio.
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Originally published Major Overhaul of U.S. Foreign Aid Structure Proposed in State Department Memo on by https://www.hstoday.us/subject-matter-areas/federal-government/major-overhaul-of-u-s-foreign-aid-structure-proposed-in-state-department-memo/?utm_source=rss&utm_medium=rss&utm_campaign=major-overhaul-of-u-s-foreign-aid-structure-proposed-in-state-department-memo at Homeland Security
Originally published Homeland Security
