Secretary of State Marco Rubio’s April 22 announcement of his department’s ambitious reorganization aims to dissolve the U.S. Agency for International Development (USAID) by Sept. 30 and integrate its core functions into a newly configured foreign assistance architecture within the State Department. It’s an inflection point of what can be seen as a third phase of the administration’s foreign affairs restructuring, following the Jan. 20 Executive Order that “paused” all foreign assistance for review and the subsequent dismantlement of USAID. But let’s not mistake this for a fresh start. This reorganization follows three months of erratic dismemberment of key U.S. foreign policy tools by the Trump administration, chaos that has already hollowed out critical national security capacities and made America less safe — and all without either a compelling public justification or strategic clarity.
Still, in the rubble lies a critical opportunity: to repurpose, rebuild, and refocus U.S. foreign assistance as an instrument not just of valuable goodwill, but of 21st-century national security. The United States cannot afford to squander it.
To be clear, there’s nothing inherently wrong with reassessing U.S. foreign assistance institutions. Every administration since the end of the Cold War has tried to improve the alignment of the “three Ds” — diplomacy, development, and defense. And as strategic competition with the People’s Republic of China sharpens, better integrating these instruments of power is not optional. It’s imperative.
But the Trump administration has thus far approached the task more like a demolition crew than a design firm. Just weeks ago, a leaked memo from the White House’s Office of Management and Budget (OMB) suggested cutting the State Department budget in half and gutting USAID to fewer than 300 staff, with only trade, commerce, energy, and humanitarian assistance surviving the purge. And the Department of State is already acting on decisions made without real analysis. Yet, as messy and backwards as this process has been, there’s still time to ask the right questions –and maybe even get some of the right answers.
First, what’s the theory of the case? USAID is gone. The Millennium Challenge Corporation (MCC), established in 2004 by President George W. Bush, is on the chopping block. Now, Rubio has proposed a State Department reorganization plan that includes a 15 percent cut in domestic staff, reduces the number of bureaus and offices from 734 to 602 (including scaling back or eliminating a slate of human-rights focused offices, with the latest plan looking to have the Bureau of Democracy, Human Rights, and Labor radically downsized, with what’s left of it integrated with regional bureaus), and transfers 137 offices to other locations within the department.
Yet, other than the simple repetition that the intent is to assure the State Department is aligned with the president’s foreign policy priorities, the administration has yet to explain what national interests or values are being served by this reorganization and budget proposal. Is it a budget exercise, a power grab, or a strategic pivot?
If the goal is an “America First” realignment, where’s the evidence that dismantling development capabilities – the type of foreign aid hardest hit, even more than humanitarian aid and security assistance — enhances American leadership or counters China’s growing influence? The proposed reorganization also needs to come to terms with the reality that, at the end of the day, it has always been the case that the United States provides foreign assistance in service of its interests and values and to meet national security goals. That is the “why.” Development assistance, humanitarian assistance, global health and so forth are the “how.” If the rationale for “why” is still there, an approach that eviscerates the “how” runs the risk of disaster. Foreign assistance comprises less than 1 percent of the federal budget. Any savings must be weighed against the strategic return on investments in fragile States, global health, and climate resilience. The United States still needs a clear articulation of the Trump vision for foreign affairs and foreign assistance operations — or lack thereof — if it is to build anything fit for purpose.
Second, what capabilities should be preserved? Some of the proposed consolidation in Rubio’s State reorganization plan may make sense — no one who has worked at or with State will question the need to address bureau overlaps, eliminate redundancies and turf wars between offices, and streamline the policy approval process. But any merger must protect technical depth and the capacity needed to further U.S. foreign policy goals around the world. That’s a key lesson from the U.K.’s merger of its USAID counterpart, the Department for International Development (DFID), with its Foreign Office to create the Foreign, Commonwealth and Development Office (FCDO), which left that government struggling to maintain development expertise and country credibility, at strategic cost. Canada and Australia also faced similar learning curves. Their experiences teach that diplomacy and development are distinct skill sets — and that integration without intent can erode both. USAID’s humanitarian and health bureaus, for example, cannot simply be grafted onto another structure. The expertise and capability is not plug-and-play.
One important element of Rubio’s State reorganization proposal that merits additional scrutiny as the department moves to implementation is that it makes the regional bureaus the nexus of foreign assistance programming, supported with some functional capabilities. This appears to be similar to a model pursued by Australia’s Department of Foreign Affairs and Trade (DFAT) in its 2013 integration with Australia’s AusAID. While not without its challenges and bumps, the Australian experience provides guarded reason for optimism that it is an approach that can be successful in closely aligning interagency development tools — if, as DFAT learned, State is mindful of the need to preserve and enhance organizational capacities, both for personnel and for funding and programs. Australia’s experience also suggests that maintaining development capabilities is important to ensure that a new approach centered on regional bureaus includes the development professionals and the tools needed for success. Examples of critical development capabilities include but are not limited to the Transaction Advisory Fund (TAF), which provides financing for projects in strategic sectors, and other programs funded via the bilateral Economic Support Fund, which can cover everything from protecting human rights to anticorruption efforts to strengthening civil society to addressing human trafficking.
More critically, gutting USAID’s development arms while preserving only humanitarian functions risks ignoring the root causes of instability — weak governance, climate shocks, and unresolved conflict. Such neglect ensures that tomorrow’s crises are worse than today’s, and that an America less prepared to face them will be less safe. Without clarity on what capabilities are essential to furthering U.S. foreign policy, development, and national security interests, it is challenging to work through the final phase of the reorganization to ensure that those capabilities survive intact.
Third, let’s stop pretending this is a game of musical chairs. Human capital matters. You can’t flip a switch to reboot a development program after thousands of layoffs. The entire ecosystem — implementers, experts, and partners — is reeling. Institutional memory is bleeding out. Merging foreign assistance under the State Department without preserving development as a distinct discipline isn’t reform — it’s a retreat. As with the question of capability, a strategic and considered approach to human capital, rather than seemingly random axing on the basis of facetious internet memes criticizing USAID (which I won’t detail here), is essential to ensure that the State Department reorganization and absorption of USAID is effective. This applies at senior levels as well, where it is essential that development and humanitarian assistance programs are in a unit where the leader is sufficiently empowered to represent their interests and perspectives within the department and across the government. It’s far from clear if an unconfirmed office head, even as powerful an office as the Office of Foreign Assistance, can serve in that role when the music stops.
Fourth, culture clashes aren’t bugs — they’re features to manage. USAID’s culture of operational flexibility and field innovation is not an accident; it reflects its mandate and mission. While the State Department’s culture is centered on formal diplomacy, representing U.S. interests, and managing State-to-State relationships, USAID was driven by a practical, mission-focused approach to global development. It emphasized technological expertise, innovation, and partnerships, and focusing on sustainable, measurable results central to sustainable development. Diplomacy demands discretion and central control; development often thrives on public engagement and local empowerment. If the United States doesn’t design for these differences, it will repeat the mistakes of the late 1990s merger of the U.S. Information Agency into the State Department, which has left America less able to contest information warfare or deal with the public diplomacy challenges of the twenty-first century.
Fifth, process matters. Rushing this reorganization to meet an arbitrary deadline of the end of the fiscal year while continuing to bypass congressional consultation and public debate undermines the very principles the United States claims to value. A deliberative, bipartisan approach grounded in real budget planning, statutory structures, and engagement with Congress won’t just yield better policy. It will last longer. A fully considered process in partnership with Congress — one that provides the necessary statutory framework for the new organizational structure — is essential for long-term success.
Rubio now has a chance to steady the wheel. A reorganization done right — rooted in strategy, not spite — can still align U.S. foreign assistance with national security, development effectiveness, and public trust. Done wrong, it will cost the United States influence, waste resources, and deepen the very crises the administration claims it wants to prevent.
There is no way to undo the damage already done to American interests and values by the administration’s process so far, but it’s not irreversible. With clarity of purpose and humility in process, the administration can still build something worthy of America’s values — and its interests.