Trump officials propose plan revamping US foreign aid, memo says

By Raphael Satter and Daphne Psaledakis

WASHINGTON (Reuters) -The Trump administration has prepared a proposal to overhaul the structure of how Washington distributes billions of dollars of foreign aid, according to an internal memo that calls for funding fewer areas that it views as better aligned with U.S. geopolitical interests.

The proposal, seen by Reuters, comes during an unprecedented push by President Donald Trump and billionaire Elon Musk to shrink the federal government, which they say misuses taxpayer money for causes that do not advance U.S. interests.

Trump ordered a 90-day pause on all U.S. foreign aid on his first day in office. That action, and ensuing stop-work orders halting many programs of the U.S. Agency for International Development worldwide, have jeopardized the delivery of life-saving food and medical aid, throwing into chaos global humanitarian relief efforts.

USAID itself has been largely dismantled, with much of its staff put on leave or let go and more than 80% of its grants terminated.

The memo argues the current U.S. foreign aid structure is too broad, too costly and has failed to reduce the dependency of some nations on U.S. assistance. It says funding should be allocated with a narrower, strategic focus.

"This blueprint proposes a re-imagined U.S. international assistance structure and set of operating principles that promises measurable returns to America while also projecting American soft power, enhancing our national security; and countering global competitors including China," the memo said.

The internal memo will be sent to U.S. Secretary of State Marco Rubio for review, a source familiar with the document said. The memo was first reported by Politico.

While it was not clear how much of the proposal would be adopted, it represents one of the most detailed examinations of how the Trump administration intends to transition USAID, an organization established in 1961 by Democratic President John F. Kennedy.

The proposal calls for the elimination of nearly two dozen USAID bureaus and for renaming the agency to U.S. Agency for International Humanitarian Assistance.

LIMITED MANDATE

The new "specialized" body would be embedded in the State Department and its mandate limited to humanitarian assistance, disaster response, global health and food security.

It also proposes that any "politically-oriented programs," such as democracy promotion, religious freedom and women's empowerment be moved to the State Department to handle directly.

"We are committed to implementing President Trump and Secretary Rubio’s foreign policy objectives by being as innovative, nimble, and focused as possible," a State Department spokesperson said when asked about the memo.

A federal judge on Tuesday blocked Musk and the Department of Government Efficiency from proceeding with shutting down USAID, saying their efforts to close the agency likely violated the U.S. Constitution.

It was not immediately clear how the ruling would affect USAID operations or whether it would lead to reinstating any of its staff. The agency's new leaders, some of whom were installed this week, laid out the next steps for the coming months in a separate internal USAID email sent on Wednesday.

One of the key priorities, they said in the email seen by Reuters, would be to administer the around 1,000 ongoing life-saving humanitarian aid programs.

"We are committed to ensuring ongoing programs remain functional and can service beneficiaries in need," it said.

The other priorities are to ensure the "safety, dignity and productivity" of USAID personnel during the transition and to work with Congress and Rubio to formulate a vision for how USAID is handed over to the State Department.

The memo was signed by Kenneth Jackson, who was appointed this week as chief financial officer of USAID and Jeremy Lewin, who was named as chief operating officer and is performing the duties of deputy administrator for policy. Lewin was named as a DOGE staffer this month by the COO of the Consumer Financial Protection Bureau.

(Reporting by Raphael Satter, Daphne Psaledakis and Humeyra PamukWriting by Humeyra PamukEditing by Rod Nickel)