Can Trump and Musk Shut Down USAID Without Congress?

If you thought Washington was chaotic before, hold onto your hats, because Elon Musk and President Trump just threw another wrench into the gears. The U.S. Agency for International Development (USAID), which has been doling out billions in foreign aid for over 60 years, is now on the chopping block. Musk, leading the newly minted Department of Government Efficiency (DOGE), has declared USAID “beyond repair” and is gunning to shut it down. So, what’s happening? Why is Musk taking a blowtorch to USAID? And more importantly, what does this mean for businesses, taxpayers, and America’s role on the global stage? Let’s dive in.

Musk, DOGE and the Treasury

When Elon Musk was handed the reins of the Department of Government Efficiency (DOGE), he didn’t waste any time making headlines. His latest move? Halting Treasury payments to U.S. contractors. Musk claims that payment officers at the Treasury Department were rubber-stamping approvals without ever denying payments, even to known fraudulent entities. Pretty bold, right? The problem is, he hasn’t dropped the receipts yet. Musk has also gone scorched earth on USAID, calling it a “criminal organization” that should “die.” And according to him, President Trump is all-in on the plan to shut it down. Trump, never one to mince words, told reporters, “It’s been run by a bunch of radical lunatics.” Subtle.

Sen. Ron Wyden, the highest-ranking Democrat on the Senate Finance Committee, has raised alarms over Musk’s moves, stating, “To put it bluntly, these payment systems simply cannot fail, and any politically motivated meddling in them risks severe damage to our country and the economy.” Meanwhile, former Treasury official David Lebryk resigned, reportedly due to DOGE’s access to sensitive payment systems. Some are calling it a much-needed crackdown on wasteful spending, while others say it’s chaos with no clear plan. Either way, it’s got the attention of lawmakers and business leaders alike.

Why Is USAID Being Targeted?

The humanitarian organization, which has been around since the Kennedy administration, is one of the biggest players in foreign aid, helping with everything from poverty reduction to disaster relief. But Trump and Musk argue it’s bloated, inefficient, and according to Musk "a ball of worms." That’s right, he says there’s no apple, just worms. Secretary of State Marco Rubio has hinted at folding USAID into the State Department, which would significantly cut its funding and influence.

Meanwhile, thousands of employees are being put on administrative leave, and several of the agency’s programs are already in limbo. Rubio defended the move by stating, “Every dollar we spend and every program we fund must be aligned with the national interest of the United States.” However, critics like Sen. Chris Murphy argue this move weakens U.S. global influence, stating, “Dismantling USAID would be a callous, destructive political power play that would have deadly consequences for millions of people living in dire humanitarian emergencies and extreme poverty.”

How This Affects the Economy and Businesses

• Contractors Left High and Dry: With Treasury payments frozen, government contractors, especially those working with USAID, are in a tight spot. Defense contractors, aid organizations, and infrastructure firms are waiting for funds that may not come anytime soon. If the freeze continues, expect layoffs, financial instability, and a whole lot of frustrated business owners knocking on Washington’s door.
• America’s Global Influence Could Take a Hit: Love it or hate it, USAID has been a major tool of U.S. diplomacy. When America provides aid, it builds strategic alliances. Cutting off foreign assistance could leave a vacuum, and guess who’s ready to fill it? China and Russia. If the U.S. pulls back, those countries will be more than happy to step in and strengthen their influence in key regions.
• Market Uncertainty and Investor Jitters: Wall Street isn’t a fan of unpredictability, and this situation is serving up plenty of it. Investors are watching closely to see whether Musk’s aggressive cost-cutting will help government efficiency or just create instability. If the Treasury payment freeze drags on, businesses dependent on federal contracts might see their stock prices take a hit.

The Expected Call

Things are moving fast, but here’s what to watch:

• Democrats are already questioning whether Trump and Musk even the legal authority have to shut down USAID without congressional approval. Sen. Susan Collins has pointed out that any restructuring of USAID legally requires Congress to be notified 15 days in advance, a requirement that may not have been met.
• If payments remain on hold, expect growing pressure from contractors and businesses to resume funding. Lawsuits and political battles could follow.
• With U.S. aid drying up, other global powers may step in to fill the gap. The long-term consequences for American foreign policy could be huge.

Wrapping it up

Countries dependent on U.S. aid are watching closely. If America backs out, international rivals could swoop in to fill the gap, shifting global power balances. Meanwhile, protests are heating up outside USAID headquarters, and lawmakers like Sen. Brian Schatz are threatening to block Trump’s State Department nominees in retaliation. “I will do maximal delays until this is resolved,” Schatz promised. For now, everyone from government contractors to international aid recipients is in a holding pattern, waiting to see where the chips fall. One thing’s for sure—this isn’t just another day in Washington. Whether it’s a brilliant move toward efficiency or a massive blunder, we’re all about to find out. Get the Best Insights Delivered Straight to Your Inbox, Subscribe Now!