The White House Demonstrates USAID’s Efficiency

The White House issued a press release three days ago apparently designed to justify the ongoing stop-work orders at USAID, alongside pulling agency staff out of the field and locking them out of their offices. I’d argue the release demonstrates precisely why these moves are a mistake.

The press release is a list of USAID-funded activities that, suggests the White House, demonstrate waste and abuse, the “massive sums of money” that flow to the “ridiculous—and, in many cases, malicious—pet projects of entrenched bureaucrats.” Strong stuff.

Looking at the list, I accept opinions might differ on the efficacy of the US government-backed musicals, operas, and comic books listed by the White House team (sum total spent: $149,000)—although to be fair to USAID, these were actually projects funded by the State Department.

Meanwhile, it is true that USAID has as bad a record as the rest of the US government in conducting the War on Drugs—in this case in Afghanistan, where projects to improve irrigation helped poppy farmers grow more, too (although the projects cost perhaps a little more than $100 million rather than “hundreds of millions” suggested by the White House). Still, I wouldn’t call irrigation projects for poor farmers ridiculous or malicious.

Some of the other examples are even more confusing. The White House complains that USAID spent $6 million supporting tourism in Egypt. Given that’s Egypt’s largest export, assisting it might make some sense. To add to the confusion, the press release links to an archived USAID page which suggests the $6 million went to “access to transportation for rural communities and economic livelihood programming for families” rather than tourism. This doesn’t seem all that ridiculous either. (Maybe the White House meant to link to this page?)

One of the larger accusations in dollar terms involves “millions to EcoHealth Alliance — which was involved in research at the Wuhan lab.” Indeed, EcoHealth financed bat-virus research at the lab. But the USAID project targeted by the White House had nothing to do with that research, or the Wuhan lab—it was about improved farming practices and sustainable opportunities to reduce reliance on land, wood, or wildlife in conservation areas in Liberia. This too sounds comparatively unmalicious.

Or the funding “to print ‘personalized’ contraceptives birth control devices.” This involves a program to make long lasting and effective intrauterine devices (IUDs) that don’t have the side effects of cramping and discomfort, by making them more personalized to each recipient’s body. Given that discomfort means more than ten percent of IUD users abandon their device within a year, it doesn’t seem such a bad idea. Maybe it won’t work, maybe it will be too expensive, but it seems worth giving the team involved at the University of Texas some support to give it a try.

It is worth clarifying that none of the cases listed amount to ‘abuse’ –or at least the release presents no evidence that the rules weren’t followed, and the spending wasn’t authorized. But give the White House team the benefit of the doubt, and add up all of the spending they list: it comes to about $120 million over a period of about two decades. That’s $6 million a year in arguable expenditures. Or about 0.01 percent of USAID’s budget. This seems rather weak grounds for shutting down an agency.

SpaceX’s Falcon 9 rocket family have a failure rate of 0.6 percent—sixty times as high—and nobody’s calling for that program to be abandoned. The amount that the Department of Defense has spent on weapons systems that haven’t delivered as planned is in the tens of billions—or hundreds of times the “waste and abuse” in aid suggested by the White House. It is a comparatively reasonable reaction that Secretary of Defense is suspending new contracts, but no Pentagon stop-work order has been issued on existing contracts, nor is newly appointed Defense Secretary Pete Hegseth shutting down the Pentagon and sending troops home.

Cases of “not actually wasteful or abusive aid” keep piling up: in the last couple of days we’ve gone through the cycle of discovering supposed spending on US media companies was actually on health supply chains. In a way that’s not surprising: USAID spending has always been under the microscope, picked over both by aid skeptics and by aid supporters who don’t want to give ammunition to the skeptics. And USAID delivers projects in complex environments with remarkably little evidence of serious fraud or corruption, which is why the White House press release is quite so underwhelming.

To be honest, if they’d asked aid experts, or even staff at USAID, the White House could have come up with a more impressive list of avoidable ways USAID spends money worse than it could. Some examples: the agency is forced to back efforts to prop up the US shipping industry. It often has to use US crops to feed people across the world which slows down the speed of famine response. It operates under a massive “counter-bureaucracy” of layers of oversight, regulation, inspectors, and the rest, which means USAID staff spend far too much time filling out forms rather than fostering development. That all favor contractors who understand how to navigate the regulations over contractors best placed to deliver the work. The list goes on. It would be fantastic if the administration put its reforming zeal behind efforts to fix these problems.

But of more immediate relevance, the amount of money involved in the cases the White House presented may well turn out to be a fraction of the amount that USAID is going to have to spend providing compensation to contractors under the Prompt Payment Act, because there is no one in the office to approve or pay invoices for work done prior to the stop-work, let alone the likely payments related to lawsuits or settlements over breach of contract. The 90-day pause and staff actions at USAID are themselves considerable sources of avoidable waste. Perhaps opinions vary over whether they are also abuse, malicious, ridiculous, or the pet project of a new bureaucrat.

We should try to maximize the impact of USAID spending, but what the White House list demonstrates is that it's hard to make the case that more than a tiny fraction of current activities are simply destined to be wasted, or prima facie ridiculous—let alone malicious or an abuse of procedures. And so there is no justification for the financial, human, political, reputational, economic, and national security costs of the 90-day pause and the (hopefully temporary) shuttering of USAID.