Millennium Challenge Corporation will survive, but many programs might not

The Millennium Challenge Corporation has survived the Trump administration’s foreign assistance review, but more than half of its programs are slated for cancellation. “MCC's resulting portfolio will clearly align with the Trump Administration's America First foreign policy and ensure that the agency continues to make America safer, stronger, and more prosperous,” the agency posted in a statement on Friday. It noted that additional details will be available in the coming weeks following a board process and engagement with the U.S. Congress. In April, MCC staff members were told that the Department of Government Efficiency, or DOGE, had informed senior leadership about a significant reduction in the agency’s programs and staff. The news sparked fears that the agency would be shuttered, even before the foreign assistance review was completed. A behind-the-scenes campaign seemed to stall that effort, according to sources, and it now appears the review concluded that the agency is here to stay, though the administration is seeking to gut a large portion of its programming. For some, the agency’s survival of the foreign aid review is welcome news, despite the cuts “Given what’s happened in the foreign aid landscape in the United States, this is clearly a victory for MCC’s model and the people who work there,” James Mazzarella, a former senior MCC and national security official, told Devex. “Even if it is pretty harsh, it’s not as harsh as what other agencies have gone through and it keeps them independent, keeps them engaged in the world, and it allows them to fight poverty for another day.” But not everyone is pleased. Sen. Jeanne Shaheen, the top Democrat on the Senate Foreign Relations Committee, criticized the administration for seeking to terminate half of MCC’s programs, calling it a “gift to our adversaries” that will undermine U.S. partnerships and “cede geopolitical influence to China.” Staff at the agency were informed that programs in Cape Verde, Gambia, Indonesia, Kenya, Lesotho, Malawi, Mauritania, the Philippines, Senegal, Tanzania, Timor-Leste, Togo, and Zambia would be recommended for termination. MCC’s board will have to sign off on those cancellations and will decide the fate of two other programs — in Albania and Liberia — at its next meeting, likely in late August. Many on the chopping block are threshold programs, which are smaller grants for countries that are not yet eligible for MCC’s large grant agreements called compacts, which are often worth hundreds of millions of dollars. Many, though not all, of the programs were also in earlier stages — either in the planning process or not yet being fully implemented. Those programs would be easier to cancel or unwind. Still, the list of canceled programs left some scratching their heads. “They don’t make a ton of sense,” a former senior MCC official, who asked for anonymity to share information that was not public, told Devex. “The missing link is what is the rationale behind them.” That’s especially true if MCC is to counter China, the official added, citing cancellations in the Philippines, Indonesia, and Zambia, where MCC’s work was particularly effective in providing an alternative to Beijing. Another former official said African countries have clearly been hit hard and laid the blame at the feet of the State Department Africa bureau for failing to make the case as to why those programs were important during the review. There are also questions about what exactly aligning with “America First” might mean for existing compacts. A Belize compact will be changed to align with administration policy, one former official said, but it’s not clear how. Part of that project focuses on solar power projects and battery storage. With the review completed, it’s unclear exactly where the agency will go from here, and many staff at MCC don’t have a good sense of what’s coming next, sources told Devex. In addition to questions over what “America First” might look like, it remains to be seen whether there will be staffing changes, when a CEO might be nominated, and, critically, what new programs might be in the works. Whether MCC creates new programs in 2025 will likely become clearer only late in the year. It typically publishes its scorecard ranking countries on a variety of factors — such as corruption, political rights, civil liberties, fiscal policy, health spending, employment opportunity, land rights, and gender — in November, with the board approving new compacts or grants in December. Whatever happens will have to be implemented by a much smaller staff. About a third of MCC’s employees have left since the start of the administration, with many taking retirement or deferred resignation offers when it looked like the agency would fold, a former official told Devex. As MCC charts a path forward, it could be a moment to reform the agency, change its scorecard, and speed up its operations, former officials told Devex. But lawmakers in Congress may have other ideas, with some pushing to keep MCC’s current model. That could put staff in a tough spot between pleasing Congress and the White House. It is clear, however, that the agency still enjoys support from both Democrats and Republicans in Congress. MCC funding levels in the fiscal 2026 budget bill crafted by the House Appropriations Committee provide the same amount of funding for the agency as in the past several years. Update, July 29, 2025: This article and headline have been updated to clarify that about half of MCC’s programs were recommended for termination. The board will have to make the final decision.