Comparing National Interest and Alternative Explanations for USAID Programming Before and After the 2025 Cuts

• In Event: Executive Branch Politics and Lobbying

Abstract

During the first quarter of 2025, the US Agency for International Development (USAID) experienced significant budgetary and programmatic reductions. The new US administration then began the process of merging the agency’s remaining foreign assistance portfolio into the US Department of State. The administration made cuts to USAID’s foreign assistance work in two forms– the termination of thousands of projects globally and staff reductions. USAID implemented its foreign assistance programming mainly through outsourced contracts, grants, and cooperative agreements (referred to subsequently as ‘contracts’). On March 26, 2025, the administration published data on which contracts were retained (totalling 898 USAID contracts) and which had been terminated (representing 5,341 USAID contracts). In April of 2025, an additional 42 USAID contracts were cancelled. This study explores changes in funding trends for US foreign assistance programming through USAID’s portfolio, drawing on the recently published contracts data as well as data from USASpending.gov and foreignassistance.gov. We outline the key arguments commonly offered in annual congressional budget justifications as rationales for spending US taxpayer dollars abroad, and assess their ability to explain the USAID foreign assistance portfolio both before and after the contract terminations. We further assess the explanatory potential of these more common rationales and alternative explanations for programmatic cuts. Alternative explanations are drawn from recent policy narratives and focus on factors such as the newly redefined scope of national interest under an America First foreign policy agenda, the type of implementing partner, the project sector, and the contracting structure, among other factors. Early descriptive findings suggest that the country and region of implementation, project sector/area or topic of work, contract value, and the percent of project funds obligated played a role in which contracts were kept and which were cancelled. Contracts that have been preserved, for example, have an average value more than twice those that were cancelled, and the proportion of contracts in the USAID portfolio exceeding $50 million increased from 6% to 15%. Taken together, these findings will help scholars and implementers alike understand the direction of foreign assistance policy and the priorities that are likely to characterize budgetary and programmatic decisions in the near future.

Authors

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

• Beth Marie Hartsog, University of Michigan
  Non-Presenting Co-Author

• Elizaveta Dorofeeva, University of Michigan Ann Arbor
  Non-Presenting Co-Author

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

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