Berliner Boersenzeitung - US cuts overseas aid contracts by more than 90%

President Donald Trump signed an executive order on his first day in office, demanding a 90-day freeze on all US foreign aid to give his administration time to review overseas spending, with an eye to gutting programs not aligned with his "America First" agenda.

A federal judge had given the Trump administration on Tuesday less than two days to unfreeze all aid after a previous court order issued nearly two weeks earlier went ignored.

But the Trump administration filed an emergency petition to the US Supreme Court, which issued an administrative stay late Wednesday, pausing the lower court's order.

"At the conclusion of a process led by USAID leadership, including tranches personally reviewed by Secretary (Marco) Rubio, nearly 5,800 awards with $54 billion in value remaining were identified for elimination as part of the America First agenda -- a 92 percent reduction," a State Department spokesperson said in a statement.

The administration's review in part targeted multi-year foreign assistance contracts awarded by the US Agency for International Development (USAID), with the vast majority eliminated during its course.

It also looked at more than 9,100 grants involving foreign assistance, valued at more than $15.9 billion.

Following the review, 4,100 grants worth almost $4.4 billion were targeted to be eliminated, a 28 percent reduction.

"These commonsense eliminations will allow the bureaus, along with their contracting and grants officers, to focus on remaining programs, find additional efficiencies and tailor subsequent programs more closely to the Administration's America First priorities," the State Department statement said.

USAID distributes US humanitarian aid around the world, with health and emergency programs in around 120 countries.

Programs that were not cut included food assistance, life-saving medical treatments for diseases like HIV and malaria, and support for countries including Haiti, Cuba, Venezuela and Lebanon, among others, the State Department spokesperson said.

Late Wednesday, US Supreme Court Chief Justice John Roberts issued the administrative stay, which grants the Trump administration temporary reprieve from having to unfreeze around $2 billion in payments for overdue foreign aid.

The decision also gives the court more time to consider the matter.

- 'Bankrupt' without cuts -

USAID, created after a bill passed by Congress in 1961, had a workforce of more than 10,000 employees before the freeze, which sparked shock and dismay among personnel.

During his election campaign, Trump promised to slash federal government spending and bureaucracy, a task he bestowed upon his top donor and close advisor Elon Musk, as part of the newly created Department of Government Efficiency (DOGE).

Trump has said USAID was "run by radical lunatics" while Musk has described it as a "criminal organization" needing to be put "through the woodchipper."

The agency announced on February 23 that it was laying off 1,600 of its employees in the United States and placing most of the remaining staff on administrative leave.

Musk, the world's richest person, spoke about the controversial DOGE program at Trump's first cabinet meeting Wednesday.

"If we don't do this, America will go bankrupt," the tech tycoon told cabinet members, adding that he was "taking a lot of flak, and getting a lot of death threats."

One-third of his DOGE staff resigned in protest on Tuesday after he engineered a mass email to the federal government's two million workers, ordering them to justify their work or risk being fired.

US media reported that some cabinet members had expressed frustration over the DOGE emails, but Trump insisted at the cabinet meeting that his team was "thrilled" with Musk.

Trump also signed an executive order on Wednesday broadening DOGE's power to review federal spending on contracts, grants and loans.

The order said it "commences a transformation in Federal spending" and called for a number of changes, including a "credit card freeze."

"To the maximum extent permitted by law, all credit cards held by agency employees shall be treated as frozen for 30 days from the date of this order."

The freeze does not extend to staff in critical services such as "disaster relief or natural disaster response benefits."

(S.G.Stein--BBZ)