Unpacking the 2025 USAID Cuts: Explaining Variation in Contract Terminations & the Role of National Interest Justifications

• In Event: Executive Branch Politics and Lobbying

Abstract

In early 2025, the US Agency for International Development (USAID) was dismantled, and the State Department issued formal cancellations for thousands of its foreign assistance contracts. The 14% of contracts that survived the cuts were transitioned to other agencies or departments. Competing narratives arose about which programming was maintained and why, with different stakeholders pointing to different theories. This study explores these changes in funding trends and the multiple narratives for which contracts were cancelled. We draw on recently published data on contract cancellations and data from foreignassistance.gov. We find that rather than structuring the post-cancellation portfolio of US foreign assistance around programming that promotes US national interest (following Secretary Rubio’s framing as programming that makes America safer, stronger and more prosperous), contracts that support short-term, emergent and life-saving assistance have been prioritized. These humanitarian-focused contracts do not explicitly advance the classic national interest arguments for foreign aid, and instead seem to be driven by more altruistic rationales. This shift likely reflects a combination of factors, including public pressure to avoid causing immediate catastrophic harm and death through contract cuts and a preference towards contracts that generate more tangible results that occur within shorter-term time horizons. The shift may also reflect a rejection of the long-standing role of development assistance and its importance as a tool of American soft power. Taken together, these findings will help scholars and implementers understand the current direction of foreign assistance policy and the priorities that may characterize future budgetary and programmatic decisions.

Authors

• Amy Beck Harris, University of Michigan Ann Arbor
  Non-Presenting Co-Author

• Beth Marie Hartsog, University of Michigan
  Presenting Author

• Elizaveta Dorofeeva, University of Michigan Ann Arbor
  Presenting Author

• Joanna Bascom, University of Michigan Ann Arbor
  Non-Presenting Co-Author

• Saima Rashid, University of Michigan Ann Arbor
  Non-Presenting Co-Author