Elon Musk Is on a Mission to End USAID
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From the opinion pages of The Wall Street Journal, this is Potomac Watch. The Trump administration and its ally, Elon Musk, upend the U.S. Agency for International Development in what might be a test case for the new Department of Government Efficiency. But how far can they and President Trump go on executive authority alone? Welcome, I'm Kyle Peterson with The Wall Street Journal.

We're joined today by my colleagues, editorial board members, Colin Levy and Manay Ukwe-Berua. The U.S. Agency for International Development, or USAID, is America's humanitarian and foreign aid agency. It used to have about 10,000 employees, around two-thirds of them overseas, but it has now become one of the first targets of Elon Musk's Department of Government Efficiency, or DOGE.

By Monday, the agency's main building in Washington had been closed. And this now is the message on the USAID website as we are taping this on Wednesday afternoon. It says, by Friday, all USAID direct hire personnel will be placed on administrative leave globally with the exception of designated personnel responsible for mission-critical functions, core leadership, and specially designated programs.

It goes on to say that personnel currently outside the United States is working on a plan with the Department of State to arrange and pay for return travel to the United States within 30 days and then provide for termination of any contracts and so forth.

Let's listen to Elon Musk. This is him in an X Spaces conversation on Monday. With regard to the USAID stuff, I went over it with him in detail, and he agreed that we should shut it down. I want to be clear, and I actually checked with him a few times, said, "Are you sure?" I'm like, "Yes." So we're shutting it down.

And yeah, it's also incredibly politically partisan and has been supporting radical left causes throughout the world, including things that are anti-American, which is insane. Him in that clip, Musk obviously referring to President Trump, his conversations with the White House.

And then listen to this is Marco Rubio, Secretary of State on Fox News. Well, that was always the goal was to reform it. But now we have rank insubordination. Now we have basically an active effort where their basic attitude is we don't work for anyone. We work for ourselves. No agency of government can tell us what to do.

So the president made me the acting administrator. I've delegated that power to someone who's there full time. And we're going to go through the same process at USAID as we're going through now at the State Department. I think there are some—this is not about getting rid of foreign aid. There are things that we do through USAID.

that we should continue to do. That makes sense. And we'll have to decide is that better through the State Department or is that better through something, you know, a reformed USAID? That's the process we're working through. There are things that are happening at USAID that we should not be involved in funding or that we have a lot of questions about.

but they're completely uncooperative. So we had no choice but to take dramatic steps to bring this thing under control. Colin, what do you make of this? And maybe it would help give listeners a better sense of what USAID is and the mission that it has overseas. Right, Kyle. Thanks. Yeah. I mean, I think

I think listening to these clips, there's no question that this is an agency that needs reform, that's really in need of reform. You know, as a brief overview, USAID was started in 1961 by the Kennedy administration. And the view really was toward increasing American influence abroad in the context of the Cold War. It was later officially chartered by Congress as an independent organization in 1998.

So the agency operates aid programs all over the world, as you know, in the context of both natural disasters and human-driven humanitarian crises. We see a lot of money going to places like Ukraine, for instance. But it's important to understand here, I think, that the money that Congress approves for USAID is then funneled through regional partners, and those can include countries.

governments in the regions where we're operating, nonprofit organizations, private contractors, and other international groups. So it's very diffuse. And I think it's become really very difficult to monitor adequately in a centralized way. So what Musk and what Marco Rubio are addressing here is that that money really has to be redirected so that it is back to

working toward U.S. interests and not just sort of accountable to, you know, the global citizenry. There's no question at the outset that it has had good influences in the world in certain areas, disaster relief, you know, many health initiatives, polio reduction, efforts to reduce HIV through PEPFAR and the, you know, the global HIV program. You know, there are ways that the agency and its partners can directly help

people with humanitarian assistance that really rebound to the credit of the United States. And I mean, that's an instrument of soft power. I think it's important for us not to forget that. The problem is when the money starts going to things further from that core mission. According to a Congressional Research Service report that was updated in January, USAID in 2023 had a budget of about $43 billion to

And it breaks it down into big categories, about $17 billion for governance programs, $11 billion for humanitarian programs, $7 billion for health programs. Those are the three biggest. And the trouble about this, Manay, is that I don't doubt that Marco Rubio and Musk are right that USAID has done all sorts of things that would not be my choice of sending U.S. taxpayers abroad.

The journal's editorial on this cites a few examples, including a $1.5 million grant to advance diversity, equity and inclusion in Serbia's workplaces and business communities. And part of the argument that Rubio is making is that if USAID is operating independently of the State Department, or so it thinks, it may be doing things that antagonize

the host governments as it were, and are working at cross purposes with what the State Department itself is trying to get done. On the other hand, I do think that there's a US interest in polio vaccinations. Just to pick one example, I was poking around looking for examples

which are a bit hard to find now that USAID's own website is shut down. But here's an example from the U.S. Embassy in Indonesia from last September. It talks about USAID providing about $880,000 to fund renewed polio vaccination activities in

in Indonesia. And, Manay, there's an argument about that in terms of soft U.S. power, but it's also good for the United States if polio does not continue to circulate. If we can eradicate polio once and for all, that would be great for the United States.

to do efforts to fight HIV so that governments where that is a real scourge are more stable. There are some real US interests at play here, I think. Yeah, I agree with you. And I think Marco Rubio agrees with you too, based on that clip that we played. I don't think that the arguments that we're hearing from the Trump administration at this point is that none of the activities that USAID was involved in are worth continuing to pursue.

It's very clear that a lot of the humanitarian assistance that's given to poor countries overseas does serve certain vital purposes, particularly with health aid and some of those other issues where you have the possibility, if these countries aren't able to manage and reduce some of the problems they face with dangerous diseases that can spill over and affect U.S. allies or even the United States itself,

And you could say the same for a whole lot of these issues. So I think that the idea is that funding will continue to flow to certain purposes that USAID is currently in charge of serving. But the Trump administration is taking the same approach to it that it's taking to government spending in general, which is that there is so much waste and there's so much spending that's going to purposes that run counter to what it sees as the American interest that they want to begin by just

halting it all to begin with. And the idea is that after that point, they'll be able to review a lot of the spending. I think they want to rededicate a lot of it to the State Department. They don't believe that so much of it has to go through a freestanding organization, which has become ideologically wayward over the decades.

Legally, they are on pretty solid ground with a lot of that rededication of the money, as I'm sure we'll get into in more detail later on. A lot of USAID's appropriations are shared with the State Department. So Congress passes bills which give...

few dozen billions of dollars to be spent on international development and foreign aid, and it will say that this can be spent either by the State Department or USAID, that means the Trump administration would be well within its rights to reallocate

much of that funding to the State Department without having to get any additional authorization from Congress to do so. So I think that they're focused on ways that they can, A, halt some of the worst of the spending and try to restructure USAID. Right now, they have it shuttered completely, but they're probably thinking, what are the next steps in terms of potentially keeping some of the positive functions up and running, but under different auspices? Hang tight. We'll be right back.

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and everything else you need to know leading up to tax day on your money briefing. Welcome back. I think Mene is right that there seems to be a different perspective being advocated here by Musk than by Marco Rubio, who has also said in recent interviews things like we're not going to stop

doing all foreign aid. Some of the foreign aid that we do is very important. We're just going to make sure that it is done right and it is done in concordance with U.S. interests. But it does seem like at the moment, Elon Musk is winning that battle. Again, the statement on the USAID website right now that

everybody by Friday is going to be on administrative leave and then saying that he has spoken with the president and the president agrees with him that the right approach here is just to shut it down. And Colin, what is the limits of the authority that the executive branch

has here in your view. I mean, my understanding is that even though USAID was created by executive order back in the 60s, it was subsequently enshrined in a law by Congress. There's one report that I read that says that the law does not specifically get into the details of the internal organization of USAID. So there may be a lot

that the president can do in terms of shifting employees around, letting employees go, giving it a tighter leash from the State Department. But it does seem like the existence of something called USAID is in statute, and that cannot be changed without an act of Congress.

Right. You definitely need congressional buy-in to get rid of it altogether. I think moving the deck chairs on the Titanic may be something more like what the administration can do here. I think there's no question that Musk is engaged in the kind of slash and burn that, you know, they're trying to do in so many areas right now of just trying to shut everything down and create this, you know, major reboot and get things sort of

back to an even footing and to proceed on just with a better, more profitable, more efficient way of doing business. The biggest problem though here, Kyle, I think is that when you are just going straight up against the way things are done, needing congressional authority to shut something down and you're courting lawsuits, it's

point you have sort of diminishing returns on efficiency if you're going to be fighting endless, endless uphill battles within the legal system. Now, it may seem right now like just saying shut it down and shutting down the website and firing a bunch of people seems really efficient, but

Six months from now or a year from now, when you have to staff up with unbelievable amounts of lawyers and the government is almost ground to a halt by the amount of litigation that's going on, I think that starts to become quite counterproductive. And it is still worth having this discussion, I think, among us and among thoughtful people looking at USAID.

about what would make the program better. And I think if the administration is looking for intentional but significant reforms, a good place to start is probably with the recent report from the USAID Inspector General. The IG identified some problem areas and one of them was the tendency of USAID to mismanage and not be totally forthcoming about efficiencies or even fraud in its programs.

And in some instances, there have been situations where USAID partners with foreign NGOs. Really, they haven't been able to hold the NGOs accountable in U.S. courts because of jurisdiction. And there have been serious problems as well, as we've discussed in our editorials, with the ability to vet AIDS organizations for their ties to designated terrorist organizations.

or other corrupt actors. And I think applicants for assistance should be expected to certify that they did not provide any material support to terrorism or terrorist-adjacent organizations. I mean, these are really, really basic qualifications that we should be getting more serious about. And I think a lot of the energy should be spent on making sure those basic requirements are met by any U.S. foreign aid, whether it's through USAID or otherwise. But it does seem to me that the president here may be

getting into some murky waters about how far his executive authority to basically shut down USAID goes. Colin suggests one final resolution to those questions, which would be some kind of lawsuit. I don't know who would have standing to bring one, maybe an American who was a contractor brought back from a USAID mission. Maybe some kind of nonprofit group could sue if it had

some sort of deal to get some funding that was going to a specific purpose and that funding has now been stopped. Another is the political check on the executive branch coming from Congress. Let's listen first to Maryland Senator Chris Van Hollen. This is him outside of the USAID headquarters. Trying to shut down the Agency for International Development by executive order is plain illegal.

It is illegal. Elon Musk may get to be dictator of Tesla.

But he doesn't. And he may try to play dictator here in Washington, D.C., but he doesn't get to shut down the Agency for International Development. Democrats, of course, are in the minority in both the House and the Senate. But, Manet, that doesn't mean that they have no power over anything. This is a notable news story from The Wall Street Journal saying Hawaii Senator Brian Schatz says he will place a blanket hold on

on all of President Trump's State Department nominees until the administration's attack on the leading U.S. foreign assistance agency ends.

He's saying, I will oppose unanimous consent. I will vote no. I will do maximum delays until this is resolved, requiring the Senate potentially to eat up floor time to advance the president's nominees for the State Department. And not an unprecedented move. Remember, Menee, Tommy Tuberville, the Alabama senator, Republican senator, did a hold about the Pentagon's abortion policy that he kept that hold on for

many, many, many days in order to use his leverage as a member of the United States Senate, even though that was about the only leverage at the moment that that Republican senator had. Yeah, I think that it's not surprising to see Democrats seizing on this issue and saying this is an opportunity for us to really shine a light on

how destructive we think the administration approach is. I do think that there are a lot of people who broadly support humanitarian assistance from the United States. Most progressives certainly do. And they think that this is exactly the kind of overreach that they've been looking for in terms of saying, we're going to take a stand here. And the ability to stall some of the nominations, which President Trump is deeply invested in, is a good leverage point.

We did already see President Trump reverse his memo, freezing spending across a whole bunch of administrative agencies. And that was largely because of the blowback that they received. Lawsuits already very quickly filed, resistance from some of those employees. And so it isn't as if President Trump is full speed ahead and is not going to be influenced by any of the resistance he faces on this. And it's possible that he will at some point tell Elon Musk,

Cool your jets a little bit here. Maybe we can resort to nipping around the edges with USAID. I don't want this to be a long fight that ends up going for weeks and weeks. But I do think it's also worth pointing out that Chris Van Hollen in that clip that you played is overstating the Democrats' case somewhat.

He says that shutting down USAID is illegal, quote unquote. And I think that there are a lot of parts of what President Trump is doing that are plainly legal. Most of the appropriations and legislation backing USAID doesn't require them to engage in specific activities. Most of what they do is discretionary. You have...

hundreds of employees there who are taking applications from organizations overseas for how their charitable money should be spent. And they make decisions about how to do that. But the president ultimately is in charge. And if he wants to say, I'm going to halt all of this spending, he has the authority to do that.

He has the authority to halt work at the organization temporarily, not permanently, but he could impose a 90-day work stoppage. He probably doesn't have the authority to permanently dismiss staff in the way that Elon Musk seems to have gone ahead and done. So...

In as much as the lawsuits are targeted at restoring the civil service protections of a lot of those employees, I think there's a good chance that they might be successful. But I do think that there are arguments on both sides here. And litigation is probably going to be how we hash out exactly what President Trump is and isn't able to do. Hang tight. We'll be right back after one more break. Don't forget, you can reach the latest episode of Potomac Watch anytime. Just ask your smart speaker. Play the Opinion Potomac Watch podcast.

From the opinion pages of The Wall Street Journal, this is Potomac Watch. Welcome back. The other point of leverage for Democrats in Congress, though, Colin, is spending bills, one of which is supposed to be coming here shortly. The deadline to fund the government is now on March 14th. So that is not this coming Friday. And remember the difficulty that Republicans have had in doing that on a party-line basis in the past because of

dissenters in their ranks among the Freedom Caucus and so forth. So if Speaker Mike Johnson needs any Democratic votes to get a spending bill over the line to keep the government open, to keep members of the military paid and Social Security checks going out, it only seems to me that some of those Democrats are probably going to insist

on a reversal of some kind of USAID changes as part of that spending package from Congress. Or alternatively, if you do have Speaker Johnson trying to get a Republican-only spending bill over the finish line, that is something that Congress could ratify the kind of changes that President Trump and Elon Musk want at USAID. They could put a line in that spending bill. I think, I don't know why they couldn't,

saying that USAID is now going to be part of the State Department, just to pick one thing. I mean, that would, in effect, kind of legalize the kind of moves that the Trump administration is trying to make by executive action in the past week or so. I think that's right. There are certainly levers here to be pulled.

within those bending details. And I think the ideological battle that is heating up between Democrats and Republicans is a bigger one as well. There's really something, I think, to parse between the Trump administration's intention of

shaking up areas of government where there's dysfunction and inefficiency that have become so deeply entrenched over decades and also the impulse within the Trump administration toward a really isolationist foreign policy. So the question has to be, are we doing all of this with USAID wrecking havoc

because it's inefficient? Or are we doing it because there are elements in the administration or the Republican base who just think that the U.S. shouldn't be involved as a force for good in the world and, you know, we should retreat to our borders and put up walls and tariffs and handle the dangers of the world by reducing our engagement abroad? Those are two very different things. And I would...

point out here, I think, as a voice of American interest that the programs that the U.S. administers directly in terms of foreign aid are almost certainly a better plan for spending money than the way it goes through other international organizations like the U.N. You know, we've historically given money to fund United Nations agencies, peacekeeping or human rights or refugee agencies to

that have been enormously unaccountable and problematic, you know, with downstream funding flowing to groups that really don't share any of America's best interests. So I do think there's room for rationality here and a little bit of real politic about the lesser of two evils as the administration and as Congress considers it. But that question that Colin raises, I think, is a good one, which is, is this driven by

by a hard-nosed kind of Rubio sense of we need to make sure that our foreign aid is doing the good that we want it to do? Or is it driven by a more America-first view of we can retreat to within our borders and there is not really a U.S. interest in whether Indonesia is dealing with polio or not? And, Manay, we'll give you the last word on that. But one other thought that I would throw out here is you see polls of the public, of

What do you think we should cut in order to balance the budget and so forth? And foreign aid is always very high on the list. But just to put these numbers in a little bit of perspective, the USAID budget in 2023, about $40 billion, according to, again, the Congressional Research Service. If you look at the amount of money that the United States spent in fiscal 2024, it was about $6.7 trillion in

So we're talking about, you know, a half a percentage of federal spending. If you even look at the deficit for fiscal 2024, it was almost $2 trillion. So we're talking about even if you totally eliminated USAID, you would only eliminate about 2% of the one-year deficit that the federal government is running. Yeah, I think the skeptics of USAID are clear-eyed about it.

dollar figure that's attached to it. And they believe, I think rightly, that if you're curtailing money that's being misspent, even a penny is worth doing. And $40 billion is not necessarily a huge sum, but to put it in perspective, that's the amount that

Democrats added for IRS enforcement, for example, in the Inflation Reduction Act. And Republicans have gone out clawing that money back and rededicating it to what they see as more important purposes, funding other parts of government. And I think that that was a worthwhile endeavor. Again, a lot of those $40 billion that USAID spent do go to worthwhile causes.

I think it's an open question what Elon Musk's view about that is. I couldn't tell you whether he believes that the whole idea of humanitarian aid from the U.S. government is complete nonsense and that every single penny of it should be clawed back, or whether he simply thinks that that organization had become completely wayward in its priorities and that that money should be shifted to other auspices in the way that Marco Rubio mentioned. But either way, I think that

It's a positive step to pause USAID's activities, reevaluate the way that money is being spent. And I think it's very unlikely that we're going to see a negative consequence from the approach that the Trump administration has taken to that agency and to other agencies, which are also involved in a whole lot of counterproductive and sometimes un-American causes. Thank you, Manay and Colin. Thank you all for listening. You can email us at pwpodcast at wsj.com.

If you like the show, please hit that subscribe button. And we'll be back tomorrow with another edition of Potomac Watch.