by Peter Burns and Isaac Six at RealClear Wire
For decades, the United States Agency for International Development (USAID) has been a pillar of global humanitarian assistance, channeling billions of dollars into development projects worldwide. But behind its noble mission of alleviating suffering and fostering stability lies a deeply flawed system – one riddled with pet political programs, excessive overhead, and a rejection of meaningful oversight. Now, as USAID faces drastic budget cuts and program suspensions, the consequences of these longstanding failures are being felt not just by contractors and implementers but by the very people the agency was meant to serve.
While some may view these reductions as an unfortunate casualty of shifting political priorities, they are, in many ways, the predictable outcome of an institution that has operated with a sense of entitlement for far too long. USAID’s unchecked hubris, its tendency to fund projects of questionable value, and its failure to ensure that taxpayer dollars are being spent advancing their interest have all contributed to the current crisis. If the United States is to maintain its leadership in international development, a fundamental reckoning with USAID’s practices is long overdue.
A System Transformed To Serve Itself
Despite its important mission and the efforts of well-intentioned staff, USAID had become notorious for inefficiencies and bloated bureaucracies. A significant portion of its $58.4 billion budget never reached those in need, instead getting caught in a web of administrative costs and layers of subcontractors.
Take, for example, Chemonics International, one of USAID’s largest implementing partners. While its contracts are often worth billions, much of that money never reaches the ground. Instead, it is eaten up by overhead costs and an expansive bureaucracy that has grown wealthy off U.S. foreign aid. For example, when the first Trump administration announced hundreds of millions in aid money to help rebuild religious minority communities devastated by ISIS genocide, hopes were high, but between Chemonics and years of USAID bureaucratic entanglement, little of the money was ever seen or felt by the communities for which it was meant.
At the heart of this problem is the way USAID structures its funding. Rather than directly administering aid, the agency too often relied on large implementing partners that, in turn, subcontracted work to other organizations. Each layer takes its share of the funding, leaving only a fraction of the original budget for actual aid delivery. This model has created an ecosystem in which a handful of firms secure massive contracts while local organizations – often better positioned to execute aid programs effectively – are historically sidelined.
Worse yet, USAID has a history of funding projects that, at best, have limited impact and, at worst, appear to be completely partisan nonsense. Taxpayer dollars have gone to fund a transgender-themed opera in Columbia, a DEI-themed musical event in Ireland, and an LGBTQ+ promoting comic book in Peru. In an era of growing global crisis, such spending choices raise serious questions about the agency’s priorities and how grant awards are being vetted. The plethora of absurd programs suggests more than a simple oversight within a massive bureaucracy.
Wealthy Contractors, Struggling Recipients
For those who have worked within USAID’s ecosystem, the disconnect between the agency’s stated mission and its actual operations is glaring. Many of its largest contractors have thrived financially even as the populations they were meant to assist saw limited benefit. A handful of development firms have built entire business ecosystems off USAID funding, securing contract after contract while delivering lackluster results.
Meanwhile, the human cost of these inefficiencies cannot be overstated. As USAID-funded programs are halted or downsized, jobs are being lost – not just in Washington, D.C., but across the developing world. Local employees who relied on USAID-funded jobs to support their families now find themselves without work, caught in the fallout of an aid system that prioritized contract value over sustainable impact.
The Path Forward
The current funding review comes at a pivotal moment. Recognizing the risks of an abrupt pullback, the administration has granted a waiver for existing life-saving humanitarian assistance programs, allowing them to continue while broader budgetary decisions are made.
For U.S. international aid to regain the American people’s trust and truly advance U.S. national interest abroad, systemic changes must be made. The process needs greater oversight in allocating funds and a renewed focus on delivering aid efficiently. This means reducing the reliance on massive contracts that siphon money away from recipients and instead empowering local organizations that can execute projects. On the ground, U.S. expertise and local faith communities that have existing trust and accountability can be used to balance the challenges of moving away from large international aid implementors. The idea of bringing foreign assistance back into the Department of State makes a lot of sense and reflects the structure many governments are moving toward, such as the UK’s restructuring in 2020.
There is no question that foreign aid remains a critical tool of U.S. diplomacy and global leadership. Reforms of this nature are painful and disruptive, much like a first trip back to the gym after the holidays, but the results can be worth the burn. This moment of reckoning presents an opportunity to rebuild a system that truly works – one that prioritizes U.S. interest, effectiveness, and the people it was meant to help. Anything less would be a disservice to American taxpayers and the millions who rely on U.S. aid for survival.