Opinion: US foreign assistance recasting is a test of national strategy

As the U.S. State Department’s reorganization takes shape and USAID’s functions are absorbed, a fundamental question emerges: Will long-term development remain a pillar of U.S. foreign policy or be eclipsed by short-term geopolitical aims? What was once a hybrid system, balancing development goals with foreign policy interests, is being structurally recast into a diplomacy-first model. The State Department’s 2025 plan, previewed in its reorganization blueprint and recent congressional notifications, would officially consolidate foreign assistance under State Department authority. Programming would be centralized in Washington and more tightly aligned with national security and economic objectives. Secretary of State Marco Rubio has framed the changes as essential to building an “America First State Department,” emphasizing efficiency and control. Meanwhile, the fiscal 2026 president’s budget request proposes cutting international affairs spending by nearly 50%, including the cancellation of over $21 billion in previously appropriated funds. Sectoral accounts for global health, food security, democracy, and peacekeeping face deep cuts or elimination, with remaining funds consolidated into new State Department-managed vehicles. Yet even as the center of gravity shifts and foreign aid levels dip to historic lows, long-term development does not have to disappear from U.S. foreign policy. The choices made now, particularly by the U.S. Congress, will determine whether development expertise, field-based knowledge, and institution-building remain part of America’s global engagement. “Development is not a luxury; it is a strategic necessity. When the U.S. invests in inclusive growth, accountable governance, and resilient local systems, we help prevent the very crises … that eventually reach our borders.” --— A shift with consequences The State Department’s expected reorganization doesn’t eliminate foreign assistance but dramatically reorients it. Operationally, it concentrates authority in Washington, merges funding streams, and embeds foreign assistance functions directly within the department’s regional and functional bureaus. Program design, budgeting, and oversight would increasingly be driven from the top. A new undersecretary for foreign assistance and humanitarian affairs would coordinate across the system, while new compliance structures emphasize risk management and policy alignment. Strategically, these changes would recast development not as a distinct discipline but as a tactical instrument of diplomacy. Program decisions that once centered on technical expertise and development outcomes will increasingly be evaluated for near-term diplomatic alignment. Long-term institution-building may give way to shorter, highly visible diplomatic wins. The space for politically sensitive sectors such as rule of law, civil society, or anti-corruption is likely to narrow or disappear entirely. In effect, the reorganization would prioritize speed, control, and diplomatic alignment over technical depth, adaptability, and long-term impact. It represents not just an administrative shift, but a redefinition of what U.S. foreign assistance is for — and who it ultimately serves. What risks being lost USAID was more than an administrator of foreign aid. It was an institution grounded in development practice, with technical depth, multiyear planning, and a global field presence. Its missions worked with local institutions to co-design and manage investments in health, education, agriculture, and governance. This field-driven model created feedback loops, allowing programs to evolve with changing realities. Its relative autonomy made room for programming in politically sensitive areas that might otherwise be sidelined. That legacy is now at risk. Centralized, politically aligned programming managed by the State Department may overtake technical rigor and innovation. Without field-based expertise and local engagement, foreign aid risks becoming more about visibility than value. Programs may launch without adequate design, monitoring, or accountability. The loss is not just operational; it is strategic. It erodes the development capacity that once made our foreign assistance credible and effective. Opportunities still within reach Much will depend on whether Congress insists that development capacity be preserved within the new system. That requires both political will and institutional design. First, Congress could reaffirm the strategic role of development by restating its intent in the Foreign Assistance Act of 1961. The act not only designated USAID as the lead development agency but also established development as a core objective of U.S. foreign policy. That mandate remains in force, even as USAID has been effectively dismantled without formal congressional repeal or reform. Even if Congress accepts this structural shift, it can still act — through appropriations language or a resolution — to ensure that dedicated development capacity, technical expertise, and field presence are preserved elsewhere in the system. Second, Congress could require the creation of technical units within the State Department’s new structure. Dedicated teams with expertise in economic growth, global health, and democratic governance would ensure that programs are rooted in both evidence and policy priorities. These teams could be staffed through a blend of civil service, foreign service, and seconded experts to maintain subject-matter depth and flexibility. Third, Congress could mandate development advisers on embassy country teams. This staff, with expertise in political economy and systems change, would help preserve field-based insight and ensure assistance aligns with local institutions and long-term U.S. interests. Their presence would reintroduce an important adaptive function that would be lost in a centralized system. Fourth, bipartisan reforms of the past decade to localize aid delivery and shift power must not be abandoned. Largely, U.S.-based implementing partners have played a critical role in managing compliance and supporting local capacity. But if compliance frameworks are not adapted to reflect a more diverse partner base, those gains risk being reversed. Under the April 15 Executive Order, “Restoring Common Sense to Federal Procurement,” the federal government is undertaking a comprehensive overhaul of the Federal Acquisition Regulations. As FAR is overhauled, Congress could require the State Department to adopt more nuanced oversight systems — ones that maintain accountability while supporting simplified reporting and shared risk that keep participation viable for a broader range of partners. A strategic choice with national consequences Does the U.S. still view development as a co-equal instrument of global leadership, alongside diplomacy and defense? Or will foreign aid be reduced to a short-term tool for managing crises? As the reorganization unfolds and funding cuts loom, the decisions ahead will determine whether U.S. foreign assistance evolves or erodes. This is not simply a bureaucratic change. It is a test of national strategy. Development is not a luxury; it is a strategic necessity. When the U.S. invests in inclusive growth, accountable governance, and resilient local systems, we help prevent the very crises — conflict, pandemics, migration, extremism — that eventually reach our borders. These are not distant problems but national security and economic challenges in the making. The world is watching whether the U.S. still understands that.