As of July 1, 2025, the United States Agency for International Development (USAID) officially ceased to implement foreign assistance. As of September 2, 2025, news reports indicated that USAID completed its “final mission” by winding down its operations. Prior to its closing, USAID managed more than $35 billion in combined appropriations. The $35 billion is believed to include money obligated in Development Objective Agreements (known as DOAGs or DOAs) and Regional Development Objective Agreements (known as RDOAGs or RDOAs). However, the closing of USAID does not mean the end of foreign aid, for as Secretary of State Marco Rubio stated: “Foreign assistance programs that align with administration policies—and which advance American interests—will be administered by the State Department, where they will be delivered with more accountability, strategy, and efficiency.” 

What the exact future holds for foreign aid remains to be seen, but this September will be a pivotal month for the future of foreign aid and international development. With respect to the current federal government fiscal year (FY) 2025, a news report indicates there might be a $5 billion pocket rescission of foreign aid by the current administration.  Looking forward, Congress has commenced the appropriations process for government fiscal year (FY) 2026. As noted by the Congressional Research Service on September 5, 2025, there is uncertainty around what the House and Senate will do with respect to appropriations. The United States House Appropriations Subcommittee on National Security, Department of State, and Related Programs passed a proposed budget of $46.218 billion, which is $13.13 billion (22%) below the FY 2025 enacted level. The United States Senate Subcommittee on State, Foreign Operations, and Related Programs, as of September 7, 2025, has yet to approve a budget for foreign aid. The Senate’s proposed budget will be one of many bellwethers in September for the future of foreign aid and international development.

While the proposed House budget may suggest the foreign aid space is contracting, that does not necessarily mean there is less opportunity for future and current government contractors. Given reports that 83% of U.S. international development contracts had been terminated but there is only a proposed budget decrease of 22%, it stands to reason that there may be more opportunity for contractors in the international development space than in years past, and that outlook is further buttressed by Secretary Rubio’s statements referenced above.