In a significant shakeup of U.S. foreign aid programs, Secretary of State Marco Rubio announced Monday a major restructuring that will eliminate over 80% of USAID’s existing programs. The sweeping reform, revealed through a statement on X, will see 5,200 contracts terminated while transferring oversight of the remaining initiatives to the State Department.
The dramatic overhaul comes after a comprehensive six-week review process that identified billions in questionable spending that Rubio claimed was either ineffective or actively counterproductive to American interests. Only about 1,000 programs, representing
approximately 18% of current operations, will continue under new State Department administration.
“These cancelled contracts were responsible for tens of billions in expenditures that failed to advance, and in some cases undermined, fundamental U.S. national interests,” Rubio explained in his announcement. The reform earned praise from Elon Musk’s Department of Government Efficiency, which Rubio specifically thanked for supporting what he termed a “historic reform.”
The move represents a severe blow to the agency that has faced mounting criticism over alleged inefficiencies, bureaucratic bloat, and accusations of funding progressive initiatives abroad that some viewed as contrary to American values. Recent investigations had highlighted several controversies, including missing billions in Haiti relief funds and secretive payments in Ukraine.
The restructuring signals a major shift in how U.S. foreign assistance will be managed moving forward. Under the new framework, aid allocation will be more directly tied to American strategic interests through State Department oversight, marking an end to what critics characterized as USAID’s autonomous operation funding various non-governmental organizations worldwide.
For Democrats and moderate Republicans, the development represents a significant political setback. USAID had long served as a crucial mechanism for implementing various international development initiatives, though detractors argued it had evolved into a funding pipeline for organizations promoting progressive agendas globally.
The agency’s transformation follows a series of revelations about questionable spending practices and management issues. Recent reports had documented instances of misappropriated funds, including lavish expenditures by foreign officials using USAID resources and
allegations of improper payments through unofficial channels.
This restructuring aligns with broader efforts to reform U.S. foreign assistance programs and ensure taxpayer dollars are spent more effectively. By consolidating oversight under the State Department, the administration aims to create stronger accountability measures and ensure aid programs directly support U.S. diplomatic objectives.
The remaining programs will focus on core national security interests and strategic partnerships, moving away from what critics saw as ideologically driven initiatives. This marks a fundamental shift in how American foreign aid will be administered, with an emphasis on measurable outcomes that benefit U.S. interests.
The announcement has triggered varied responses across Washington, with supporters praising it as a necessary step toward more efficient government spending and opponents warning about potential impacts on global development programs. The transition period is expected to begin immediately, with the State Department preparing to assume control of the continuing programs.
This reform represents one of the most significant changes to U.S. foreign aid administration in recent decades, effectively ending an era of semi-autonomous foreign assistance programming through USAID in favor of more direct diplomatic oversight and strategic alignment with State Department objectives.