Alliance News

Most USAID Projects Now Canceled, Supreme Court Blocks Foreign Aid Freeze, NIH Cuts Halted

Mar 12, 2025

In a legal blow to the Trump administration, the Supreme Court on March 5 blocked a $2 billion freeze on foreign aid, ruling 5-4 against the spending cuts. Aid organizations, including the Global Health Council, had urged the Supreme Court to enforce the restart of foreign aid, citing the administration’s disregard for prior court orders. This appeal highlighted significant layoffs and disruptions to life-saving services. The March 5 ruling compelled the administration to compensate contractors for completed foreign aid work and requires further clarification of payment obligations from the trial judge.

On March 10, a US federal judge followed up on the Supreme Court’s decision by ruling that the administration’s foreign aid freeze usurped Congress’s constitutional authority, and he ordered the administration to pay the humanitarian assistance quickly. His ruling is expected to be appealed.

The decisions follow a tumultuous period for USAID, which has had thousands of aid projects canceled. Secretary of State Marco Rubio announced that 83% of the agency’s contracts had been canceled. The remaining 1,000 will be administered from the State Department. The decision jeopardizes significant health initiatives, including the development of an HIV-preventative injectable drug, malaria and HIV vaccine trials, and other studies aimed at enhancing health services delivery in remote areas.

In a separate decision, a US district judge in early March issued a nationwide injunction against the Trump administration’s National Institutes of Health funding cuts for federal research grants. The proposed reductions, aimed at saving $4 billion annually, threatened layoffs, research disruptions and laboratory closures nationwide. The court found the cuts unlawful, raising concerns over their impact on ongoing medical research, clinical trials, innovation,  patient care, and public health. The administration is circumnavigating that ruling by instead making more surgical cuts to funding, from LGBTQ+ and DEI research to vaccine hesitancy research

In other recent news…

  • As the largest donor to global health, the U.S. has historically played a pivotal role, making the sector highly susceptible to policy changes and funding cuts. A report from the Center for Global Development underscores the vulnerability of certain nations that heavily rely on U.S. health assistance, especially for diseases like HIV, tuberculosis, and malaria. The ongoing cuts pose a major risk, with uncertain recovery as other donors or affected countries might struggle to compensate due to global economic challenges. Read more on KFF.
  • The U.S. International Development Finance Corporation (DFC), founded in 2019 with a seven-year mandate set to expire in October. Congressional hearings this week indicate bi-partisan support to reauthorize and potentially expand DFC’s lending limit to enhance DFC’s ability to support U.S. national security interests and economic influence globally. (Devex)
  • One of the best recaps of the impact of the dismantling of US foreign aid was a memo written by Nicholas Enrich, acting assistant administrator for global health at U.S.A.I.D. (now placed on administrative leave. The memo highlighted that stopping these funds could lead to significant increases in preventable diseases such as malaria, tuberculosis, and HIV/AIDS, with potentially millions of new cases and deaths. The memo also warns that such health crises could destabilize regions, heighten security risks, and burden the U.S. economically and healthcare-wise. (NYTimes)
  • The Trump administration’s recent firings of CDC employees have disrupted public health training programs essential for supporting state and local health departments across the U.S. These dismissals have impaired the country’s ability to manage and respond to infectious diseases like dengue, measles and the flu. Although a federal judge has ruled some of these firings likely illegal, leading to a partial reversal, the situation highlights ongoing challenges within the U.S. public health system, already strained before and further tested during the COVID-19 pandemic. (KFF)
  • In a recent KFF Health Tracking Poll, conducted between February 18 and 25, 2025, a significant majority of Americans express concerns that this will exacerbate health crises in low-income countries and lead to more humanitarian disasters. They also recognized global health investment’s role in protecting U.S. public health by preventing the spread of diseases. The public’s views on USAID’s downsizing starkly divide along partisan lines. Moreover, the poll highlights a substantial gap between public perception and reality regarding U.S. foreign aid expenditure. (KFF)
  • In February, the Alliance conducted an anonymous survey to gain insights from its multi-sector members about the impact of the USG policy shifts. With 15% of members responding, the survey revealed significant dependency on US government (USG) funding
    • In addition to struggles to maintain operations amidst funding shortages and the immediate need to seek alternative funding, members also noted the near and long-term risks to healthcare infrastructure, potentially causing irreparable damage and setting back progress in health equity, partner trust, and global security. Members are focused on maintaining cash reserves, retaining essential staff at scaled-down levels, and continuing projects not dependent on USAID. Respondents also noted the crucial need to understand the evolving landscape of US foreign aid, maintain commitments despite financial strains, and plan for recovery. 
    • To support our members, the Alliance has been playing an active role curating news related to U.S. policy changes and directing members to advocacy efforts and resources. Earlier recaps are here (2/4) and here (1/23 & 28). Future roles suggested for the Alliance include: surfacing new operational models and business strategies that circumvent traditional dependencies on USG funding, fostering new collaborations for advocacy and fund mobilization, and holding convenings to plan for recovery. If you would like to add your voice to the survey, please respond here

Resources

Advocacy and Mobilization

Navigating the Legal Questions and Resources for Organizations and Individuals

 

Sources and What We Are Reading

March 13, 2025

March 12, 2025

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February 28, 2025

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February 24, 2025

For further sources, see our previous recaps here and here.