USAID has received a multibillion cash injection. What next?

President Joe Biden has signed a $95 billion national security bill into law — unlocking not just wartime support for Ukraine, Israel, and Taiwan, but $9.15 billion in humanitarian assistance for crises across the world. Biden’s signature marks the end of a long-languishing battle on Capitol Hill, where for months, Republican lawmakers have stalled the legislation over its support for Ukraine. While the bill is largely tied to military financing, there’s also a carveout for both global humanitarian assistance and Ukrainian economic recovery — and now, some $18.7 billion will be channeled through USAID and the United States Department of State to do that work. “This legislation will provide the resources we need to respond to a number of historic crises around the world, and in doing so, support our own national security by helping to keep these crises from spiraling further,” said USAID Administrator Samantha Power in a statement Wednesday morning. As a result of the bill, $5.6 billion will now be funneled to USAID to provide general humanitarian assistance worldwide, while another $3.5 billion will go toward the State Department’s Bureau of Population, Refugees, and Migration. Neither is earmarked to a particular region — something that experts have told Devex is exactly by design. “This aid will reach people fleeing Sudan. This aid will support Rohingya refugees that have fled Myanmar. This aid will support populations in Venezuela,” said David Cronin, a government affairs specialist at Catholic Relief Services. “It will go toward a list of places that are in conflict, and in crisis, but are not on the front pages of the news. And that is, I think, the most important piece of this supplemental aid.” A further $7.9 billion will flow through the Economic Support Fund, or ESF, a government program that provides assistance to countries of strategic importance to the United States. Traditionally, ESF money is managed by the Department of State — but experts in the development community told Devex they expected this cash would flow through USAID. The agency has not yet confirmed whether it will be the recipient of the funds. There’s also another $1.6 billion tab for general assistance across Europe, Eurasia, and Central Asia, funds that most experts think will go toward responding to the war in Ukraine. “There is a lot of relief, and there’s a lot of gratitude,” said Jenny Marron, the interim vice president of development policy, advocacy, and learning at InterAction, an alliance of U.S.-based aid organizations. “And while we shouldn’t understate how important this supplemental funding is, it also really underscores how inadequate the base funding is, and how important supplementals have come to be because emergency contexts around the world just keep growing.” A long and bumpy road The bill is a big deal — not just because of the money behind it, but because of the fight it took to get here. The legislation was first passed by the Senate in February, and despite continued pressure from Democratic lawmakers, the bill was blocked in the halls of Congress for months. Many far-right members of the Republican Party — which holds a majority in the House of Representatives — criticized the legislation for its continued support of Ukraine. But in mid-April, Iranian airstrikes hit Israel and after Republican House Speaker Mike Johnson received intelligence about the dire state of play in Ukraine, the stakes changed for a politician long-criticized for holding up the bill. “The world is destabilized, and it’s a tinderbox,” said Johnson, speaking to reporters over the weekend. “If we turn our backs right now, the consequences could be devastating.” In the days following Iran’s strike, Johnson sliced the Senate-approved legislation into four parts. There was one bill for Ukraine, another for Israel, and a third for Taiwan, along with an additional piece of legislation focused on Iranian sanctions, TikTok divestment, and an assortment of other measures. The $9.15 billion of humanitarian aid was tucked inside the $26 billion bill on Israel, a concession for the many Democrats who were opposed to sending more military support to the country. The $9.5 billion in economic and development aid for Ukraine was included in the country's legislation, bringing the total to over $60 billion. Johnson’s move sent shockwaves across his party, with some of his fellow Republicans — like Representative Marjorie Taylor Greene — threatening to oust him from his position for signaling support for Ukraine. But despite the criticism, the House passed all four pieces of legislation on Saturday, paving the way for a 79-18 Senate vote three days later. Why it matters Earlier this month, USAID Administrator Samantha Power told lawmakers that the national security supplemental bill was critical for the agency — and that without the $5.6 billion in humanitarian assistance, USAID’s program funds for humanitarian response would drop by 35% when compared to last fiscal year. Since the war in Ukraine began, she explained, money has been shuffled across the agency to pay for the skyrocketing needs in the region, making USAID dependent on supplemental bills to recover the base assistance shifted away. “To lose the supplemental means falling off a cliff,” Power told lawmakers, speaking at an April hearing to discuss the agency’s budget. “The human consequences can’t be understated.” Kate Phillips-Barrasso, Mercy Corps vice president for global policy and advocacy, explained further: “Losing the humanitarian aid dollars in the legislation would have had ripple effects across the world. Those hits would have been the hardest,” she said, in places often left out of the headlines such as Sudan. “We knew that if this money didn’t come through, it was going to be really hard for the U.S. to rise to the occasion [in Sudan],” Phillips-Barrasso told Devex. “With [USAID’s Bureau for Humanitarian Assistance] having to make budget cuts across the board, they were in no position — despite wanting to — to be able to step up there in a major way.” Pinning down the numbers USAID did not respond to requests for information about the humanitarian portion of the bill, and how the agency plans to spend its $5.6 billion chunk of money. But in a document released by the agency, USAID’s Bureau for Legislative and Public Affairs laid out all the populations that would be at risk without supplemental dollars, including those in Gaza, Afghanistan, and the Democratic Republic of Congo. “Stark reductions in humanitarian funding would cut off lifesaving assistance to millions of vulnerable people worldwide and cause further destabilization in crises around the globe from Sudan to Burma [Myanmar] and the regional Venezuelan migration crisis,” the document states. One thing we do know is that the money cannot fund the United Nations Relief and Works Agency for Palestine Refugees in the Near East, or UNRWA, according to the bill’s text. Despite UNRWA providing the backbone of Gaza’s humanitarian response, American dollars have been stripped from the agency since earlier this year, when Israel accused a dozen of UNRWA’s staff of participating in Hamas’ Oct. 7 massacre. The Economic Support Fund money for Ukraine is more complicated, said Scott Cullinane, director of government affairs at nonprofit group Razom for Ukraine. It comes in the form of a “forgivable loan,” a concession to Ukraine aid critics that largely seems to lack teeth. “Even though everyone is calling this a loan, it’s actually not a loan. Go figure,” said Cullinane. “They are programs subject to repayment, which is the difference.” Cullinane explained that such repayment is not necessarily one-for-one, especially the $1.6 billion meant to support “assistance for Europe, Eurasia and Central Asia” — a provision that reads like a typical grant. In fact, the bill states that after Nov. 15, 2024, the president of the United States can cancel half the loan if they choose to do so, and after Jan. 1, 2026, they can forgive whatever amount remains. “This is the first time that [Economic Support Funds] for Ukraine would/will be structured this way, so I’m not clear that the mechanics of how it would be structured have been figured out,” said Elizabeth Hoffman, the director of congressional and government affairs at the Center for Strategic and International Studies, or CSIS, over email. “From my perspective, Congress is leaving that question to the Administration to figure out.” Exempt from the loan language are other, smaller pots of money, such as $64 million for USAID’s general operations and stabilization work in the region, and funds to enhance the Inspector General offices overseeing both USAID and the State Department. Either way, Cullinane said, the support for Ukraine is extraordinary — and will play an essential role in ensuring Ukraine survives the war intact. “Budget support and economic aid [are] designed to allow Ukraine to survive — and not just as a well-armed refugee camp, but as a society,” Cullinane told Devex. “For us, the economic side of this bill is just as important as the military side.”