Since the Marshall Plan rebuilt Western Europe after World War II, foreign aid has been a tool of American influence, humanitarian concern, and national security. It funds HIV treatment, vaccines, famine relief, democracy programs, and weapons for partners. Few areas of the budget have changed as dramatically as foreign aid did in 2025.
This guide explains how aid works, who runs it now, and the debate over its value.
Supporters of aid say it saves millions of lives at a small cost, builds goodwill and markets for American goods, prevents crises that could require military intervention, and competes with China's lending programs. Critics argue that aid has often been wasteful, propped up corrupt governments, created dependency, and funded projects at odds with American values or interests, and that taxpayer money should be focused at home. Many in both camps agree that aid should be measured by results and should help countries eventually stand on their own.
In January 2025 an executive order paused most foreign aid for a 90-day review. Most USAID awards were then cancelled, most of its staff were placed on leave or laid off, and on July 1, 2025 the agency was formally dissolved, with its remaining programs moved into the State Department. Lawsuits argued that closing an agency created by statute required Congress, and courts reached mixed results. Supporters said many programs were wasteful or did not serve American interests, while critics warned of deaths from interrupted health and food programs.
In July 2025 Congress passed a rescission law cancelling about $9 billion, mostly foreign aid along with public broadcasting funds, the first such package approved in decades. In late August 2025 the administration sent a pocket rescission request for about $4.9 billion more, close enough to the end of the fiscal year that the funds would expire before Congress could act. The Government Accountability Office has said pocket rescissions violate the Impoundment Control Act, but in September 2025 the Supreme Court allowed the funds to lapse while litigation continued.
Before 2025 the United States spent roughly $60 billion to $70 billion a year on foreign aid, the most of any country in dollars, though less than many wealthy nations as a share of national income. Aid falls into several types. Development aid supports agriculture, education, and economic growth. Global health programs such as PEPFAR, launched in 2003, fight HIV, malaria, and tuberculosis. Humanitarian aid responds to wars and disasters. Military aid, such as Foreign Military Financing, helps partners buy weapons, with Israel receiving $3.8 billion a year under a 2016 agreement and Ukraine receiving large sums after 2022.
On September 18, 2025 the State Department released the America First Global Health Strategy. It replaces contractor-run programs with five-year agreements negotiated with each country, setting targets and requiring rising spending by recipient governments, with the goal of ending most U.S. funding as countries become self-reliant. Dozens of countries, mostly in Africa, had signed agreements by 2026. In February 2026 Congress passed a foreign aid spending bill of about $50 billion, well below 2025 levels but far above the administration's request.
The Foreign Assistance Act of 1961 is the main aid law, and USAID was created the same year to run economic programs. The State Department oversees security assistance and refugee aid, the Defense Department manages arms transfers and training, and the Agriculture Department supplies food aid. Smaller agencies include the Peace Corps, the Millennium Challenge Corporation, which gives large grants to well-governed countries, and the Development Finance Corporation, which invests in private projects abroad.
See how aid fits the larger picture in how foreign policy is made, compare it with other spending in where your tax dollars go, or see a related tool in how sanctions work.