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.