Secretary of State Marco Rubio Announces OMB Director Russ Vought to Oversee USAID Closure
Washington, D.C. — Secretary of State and Acting National Security Adviser Marco Rubio announced late Friday that Office of Management and Budget (OMB) Director Russ Vought will lead the final shutdown of the U.S. Agency for International Development (USAID). The move marks the culmination of months-long restructuring and sweeping cuts to foreign aid and federal programming that began under President Donald Trump’s administration.
Rubio, describing the consolidation as the most significant reorganization of U.S. foreign aid since the Cold War, said in prepared remarks, “Since January, we’ve saved the taxpayers tens of billions of dollars. And with a small set of core programs moved over to the State Department, USAID is officially in close out mode. Russ is now at the helm to oversee the closeout of an agency that long ago went off the rails.”
Vought responded with brevity, stating, “Happy to help! Let’s go!”
The announcement underscores the administration’s intention to both streamline and centralize U.S. foreign assistance, channeling it through the State Department’s regional bureaus and U.S. embassies rather than sustaining an independent aid agency.
A Final Blow to USAID After Decades of Influence
Founded in 1961 under President John F. Kennedy, USAID was created at the height of the Cold War to centralize U.S. development efforts and project American influence abroad through humanitarian aid, disaster relief, and long-term development assistance. For decades, it played a pivotal role in global health initiatives, agricultural innovation, and disaster recovery in regions devastated by conflicts and natural disasters.
At its peak, USAID operated in more than 100 countries with a budget that typically exceeded $20 billion annually. The agency was instrumental in programs such as the President’s Emergency Plan for AIDS Relief (PEPFAR), famine relief in East Africa, earthquake recovery in Haiti, and large-scale vaccination campaigns.
But over the years, critics said USAID became bloated, bureaucratic, and prone to inefficiency. Rubio’s testimony before the Senate Foreign Relations Committee in May sharpened the administration’s critique, claiming that “only 12 cents of every dollar spent by USAID reached intended recipients,” while the rest was consumed by administrative costs, contractors, and what he described as a sprawling “foreign aid industrial complex.”
Legislative Action Sealed the Agency’s Fate
The closure of USAID comes weeks after Congress approved a $9 billion rescissions package in July. The legislation eliminated funding for USAID as well as public broadcasting organizations like Public Broadcasting Service (PBS) and National Public Radio (NPR). The measure passed narrowly in the House, 216-213, before clearing the Senate with a 51-48 vote.
While many observers had expected deep cuts to USAID’s programs, the outright elimination of its funding surprised even some allies of the administration. Critics warned that the move would weaken American influence abroad at a time when foreign competitors, especially China, have significantly increased their international aid and infrastructure initiatives.
Thousands of Employees Affected by March Reorganization
In March, the State Department absorbed USAID’s remaining core functions, resulting in the termination of thousands of employees. A small selection of programs—particularly those tied to counterterrorism, pandemic preparedness, and emergency disaster relief—were transferred to State Department bureaus or to specialized offices under the direct authority of the Secretary of State.
The decision was defended by administration officials as necessary to eliminate duplication. Previously, both USAID and the State Department managed overlapping projects in development and diplomacy, often producing conflicting strategies. By absorbing USAID into State, Rubio argued that U.S. foreign assistance would become leaner, more disciplined, and more strategically tied to America’s foreign policy priorities.
Historical Context: Previous Efforts to Reform USAID
Efforts to overhaul USAID are not new. Several presidents attempted to streamline foreign aid during their administrations, though none took steps as drastic as outright closure.
- Richard Nixon proposed merging USAID with the State Department in the early 1970s, but pushback from Congress and the foreign policy establishment derailed the effort.
- Ronald Reagan sought to refocus USAID on democracy-building and Cold War priorities, but the agency remained intact.
- Bill Clinton considered stripping USAID’s independence in the 1990s but ultimately preserved it after bipartisan opposition.
- George W. Bush elevated foreign aid with PEPFAR and Millennium Challenge Corporation programs, allowing USAID to expand its global health and development reach.
The current dismantling, however, goes beyond reform: it represents a wholesale elimination of the organization as an independent entity.
Public Reaction in Washington and Abroad
The decision has stirred heated responses across Washington and international policy circles. Supporters of the move say the elimination of USAID prevents billions in waste and ensures tax dollars are more tightly tied to national security goals. They argue that the State Department, already responsible for directing U.S. foreign policy, should oversee all external assistance to guarantee coherence.
Critics, on the other hand, warn of long-term consequences for global health, education, and stability. Former diplomats and aid officials have said the withdrawal of American development expertise leaves vulnerable countries more likely to turn to international rivals for infrastructure and relief programs. At a policy forum in New York this week, one former ambassador described the closure as “an abdication of soft power at a time when the U.S. cannot afford to retreat from the world stage.”
Humanitarian groups added that the sudden termination of aid contracts and programs would leave large-scale projects unfinished, particularly in Africa and Southeast Asia, where U.S. aid had been critical in fighting poverty and disease.
Economic and Strategic Implications
The decision to shutter USAID carries major economic consequences, not only for aid recipients but also for U.S. contractors, NGOs, and academic institutions once reliant on foreign aid grants. Washington-based development firms, consulting agencies, and universities had long partnered with USAID for projects ranging from clean water infrastructure to agricultural research. Those partnerships are now in jeopardy.
From a geopolitical perspective, foreign policy experts say the U.S. is ceding ground to China’s Belt and Road Initiative and to Russia’s growing use of aid and investment in Africa and the Middle East as tools of political influence. Historically, U.S. assistance programs often functioned as a counterweight to rival economic and political systems. By stepping back, analysts fear Washington may leave strategic vacuums that competitors will eagerly fill.
The Controversies That Weakened USAID
USAID’s demise was accelerated by a series of controversies that came to light in recent years. Among the most prominent was a program that distributed thousands of virus samples, including coronaviruses, to the Wuhan Institute of Virology over a decade ago. While the project was initially conceived as a way to track emerging pathogens, it fueled criticism that U.S. taxpayer money indirectly supported foreign laboratories without adequate safeguards.
Other reports revealed instances where major aid contracts went to politically connected organizations, reinforcing criticism that foreign aid became more about domestic lobbying than overseas impact. These controversies crystallized arguments for closure, with Rubio and budget hawks portraying USAID as structurally compromised.
The State Department’s Largest Shift Since the Cold War
The transfer of USAID’s functions represents the State Department’s largest reorganization in decades. Officials describe the restructuring as an opportunity to bring coherence to foreign policy and make foreign assistance directly answerable to the chief diplomats shaping global strategy.
Going forward, foreign aid allocations will be decided within the State Department’s regional bureaus, coordinated by U.S. ambassadors on the ground. The logic, according to advocates, is that local embassies are better equipped to judge which aid strategies align with diplomatic priorities, rather than relying on a separate development bureaucracy.
Looking Ahead
With USAID now in formal shutdown mode under Russ Vought’s oversight, attention is shifting to how quickly the closure will proceed and how the State Department will manage the surge in operational responsibilities. Offices formerly under USAID are expected to wind down in phased stages through the end of the fiscal year.
The U.S. is entering uncharted territory, having dismantled a major international aid institution that for over 60 years symbolized American humanitarian outreach. Whether this signals a long-term retrenchment in U.S. foreign assistance or a recalibration under the State Department will depend on how effectively the restructured system delivers results.
For now, the message from Washington is clear: a new era of leaner, tightly controlled foreign aid has begun—one that places diplomacy and security goals above expansive development ambitions.