As the Trump administration completes its first month in office, one of its most prominent actions has been an assault on the federal bureaucracy, offering millions of workers payouts to resign and attempting to eliminate entire agencies. This effort is led by the newly created, quasi-official “Department of Government Efficiency”, or DOGE, (unofficially) led by the richest man in the world, Elon Musk. The two agencies that have so far been targeted for near-complete closure are USAID, the United States Agency for International Development, and the CFPB, the Consumer Financial Protection Bureau.
USAID
USAID was established in 1961 by President John F. Kennedy. It is under the authority of the U.S. Secretary of State, the American equivalent of a foreign affairs minister. The agency, along with the Peace Corps, was established as part of a wider foreign policy vision to flex American “soft power” and present a positive, helpful image of the United States to the rest of the world. This objective was particularly relevant in the context of the Cold War between the United States and the Soviet Union, where both superpowers battled for influence over developing nations. Even after the end of the Cold War, USAID has been a key component of American national security strategy, as expressed by the saying “Defense, Diplomacy and Development”. To this end, USAID distributes civilian humanitarian and development aid around the world. According to the Congressional Research Service, in 2023 USAID managed 40 billion dollars of appropriations and employed a staff of 10,000. For context, USAID’s budget that year was around 0.7% of the 2023 United States federal budget, and its workforce constituted around 0.5% of the federal workforce. Much of USAID’s budget goes to non-governmental organizations, or NGOs, which distribute government funds for humanitarian purposes. These organizations include religious charity groups, creating a possible point of political contention as many evangelical Christians support Trump. USAID’s humanitarian work is perhaps most recognized for its wide-reaching efforts to reduce and eradicate HIV/AIDS, under the President’s Emergency Plan For AIDS Relief (PEPFAR), which was established by President George W. Bush.
USAID’s work has not been without criticism, however. It has engaged in political operations connected with the CIA (Central Intelligence Agency), such as the creation of ZunZuneo, a social media platform intended to destabilize Cuba’s government. The premise for Trump’s attack on the agency, however, is what he has characterized as “wasteful spending” under the agency. Trump and his press secretary, Karoline Leavitt, have mentioned several specific agency programs to support this contention, such as a $1.5 million grant to “advance diversity equity and inclusion in Serbia’s workplaces and business communities”, as stated by Leavitt to reporters, or $2.5 million to promote electric vehicles in Vietnam. However, many of these grants and programs were described inaccurately or hyperbolically, or were funded by the wider State Department and not USAID.
On February 2, Elon Musk posted on X (formerly Twitter) that USAID was “a criminal organization” and it was “time for it to die.” The next day, Marco Rubio, the Secretary of State, was named as director of USAID in an acting capacity. The agency’s website was quickly closed down, and on February 7, all USAID personnel—except for some essential staff—were placed on administrative leave and told to return to Washington D.C. USAID’s disbursements of humanitarian aid were paused, although Rubio stated that organizations conducting life-saving assistance could apply for a waiver to continue receiving funding.
Trump’s and DOGE’s moves to shutter USAID were immediately challenged both by Democrats in the United States Congress and civil lawsuits by the union that represents USAID workers. The basis for these challenges is that USAID, as a congressionally-established agency, can only be closed or folded into the State Department by an act of Congress. Furthermore, the funding for USAID programs has already been authorized by Congress, and is not traditionally considered to be subject to executive discretion in the distribution of the funds. On the same day as the administrative leave order, a federal judge, Carl Nichols, blocked the order. On the 13th, the injunction was extended until February 21.
Many human rights advocates and former administrators of USAID have sharply criticized the decision to close the agency, characterizing it as a win for autocrats, who often resent USAID’s assistance to civil society groups, and a danger to vulnerable populations around the world who rely on USAID for basic humanitarian assistance, such as for food and healthcare. Many have focused on the impacts of cutting HIV/AIDS assistance. Christine Stegling, director of a UN agency aimed at preventing HIV/AIDS, estimated that the demolition of USAID will lead to a 400% increase in HIV-related deaths.
CFPB
The CFPB is a much newer agency. Formed in 2011 in the wake of the financial crisis and the Great Recession, it was originally proposed by Elizabeth Warren, then a law professor at Harvard and now a prominent progressive senator. Like USAID, it was authorized by congressional action: the Dodd-Frank Wall Street Reform and Consumer Protection Act directed the Federal Reserve, the central bank of the United States, to establish it as an independent bureau. The Bureau is charged with protecting American consumers from the financial sector, which includes banks, credit unions, payday lenders and some financial transaction platforms such as PayPal or Venmo. To do this, the Bureau can issue regulations related to financial activities. All financial institutions with assets over $10 billion must be regulated by the CFPB. If the Bureau finds companies to be in violation of its regulations, it can bring enforcement actions against them, leading to lawsuits and fines. In fact, settlements or damages won by the Bureau are used to pay consumers who have been harmed by predatory financial practices. In one notable action last year, the CFPB limited credit card late fees to $8, although this move was challenged in court. Apart from these responsibilities, the Bureau operates several financial tools and collects consumer complaints.
The CFPB has long been a target for congressional Republicans, who have described its regulations as a burden on the financial sector. The agency has also drawn the ire of prominent Silicon Valley tech corporations who wield considerable influence on the new administration. This month, Elon Musk tweeted on X “CFPB RIP” with a picture of a gravestone, and the White House quickly accused the Bureau of “government overreach,” weaponizing its authority against political opponents of former President Biden and wasting taxpayer money. The main proponent of the plan to dismantle the CFPB is Russell Vought, the newly confirmed director of the Office of Management and Budget, which administers the federal budget. On February 7, he announced that he was the acting director of the CFPB. Three days later, Vought emailed CFPB employees, ordering them to cease all work. He further closed the Bureau headquarters. As of February 18, the Bureau’s main page displays a 404-Error notification. Vought announced that he would not seek new funding for the agency during the next funding round, essentially closing down the agency. As with USAID, the move has been decried as illegal, given that the CFPB was established by the Dodd-Frank Act and, according to traditional legal understanding, could only be dismantled by another act of Congress. Two lawsuits by the union representing Bureau employees are pending against Vought.
Closing down these two agencies would ostensibly save the federal government almost $75 billion, although lawsuits related to the closure process will likely come at a high cost as well. This figure represents slightly more than one percent of all government expenditures. However, it will deprive millions of Americans and others of crucial services that provide essential aid or protect them from financial predation. The outcomes of the court cases related to the agencies could also shift the entire understanding of constitutional checks and balances and drastically expand the legal power of the executive.
