Devex Pro Insider: Can the US State Department do development?

Welcome to the first installment of a special Saturday edition of Devex Pro Insider from Senior Reporter Michael Igoe. For the next few months, this newsletter will tackle some of the biggest questions about the future of U.S. foreign aid, with insider reporting and analysis delivered straight to your inbox. U.S. foreign aid is in a strange state of suspended animation. What remains of the U.S. Agency for International Development is mostly occupied with its own “responsible decommissioning” — i.e., shutting itself down — while the State Department structure that will absorb the agency’s remaining programs does not yet exist. USAID staff both in the U.S. and abroad know they will be out of a job soon, but they face a maddeningly opaque competition for limited State Department jobs, paired with a foreign aid hiring market that has been flooded and decimated at the same time. Meanwhile, U.S. President Donald Trump is asking Congress to rescind billions of dollars of foreign aid funding for contracts and grants the White House already terminated, in what looks like an effort to lend after-the-fact legitimacy to actions that are currently the subject of multiple lawsuits — and which some predict could eventually end up in front of the U.S. Supreme Court. Some of this uncertainty will come to a head in the next few weeks, as the State Department barrels toward its self-imposed July 1 deadline to undertake a massive restructuring while taking control of USAID’s remaining programs. Secretary of State Marco Rubio and his leadership team — which is also still a work in progress — have a lot of questions to answer in that process. Perhaps the biggest one is: Can the State Department actually do development? In his recent congressional testimony, Rubio has been adamant that it can — and not only that, but it will do a better job than USAID did at aligning development programs with U.S. foreign policy priorities and ensuring they are held accountable for delivering results for American taxpayers. “We’re going to be doing foreign aid,” Rubio told a Senate committee last month. “The difference is, it’s going to be coordinated out of the umbrella of the State Department, and it’s going to be part of a cohesive, coherent foreign policy, and it's going to be driven by our embassies and our regional bureaus.” It’s a bold assertion, and not everyone is rushing to endorse it. “I don’t see long-term development doing very well in this context,” said Brian Atwood, who led USAID during former President Bill Clinton’s administration and fended off a previous effort in the 1990s to fold the agency into the State Department. Atwood — who also served as undersecretary of state, assistant secretary of state, and dean of the Foreign Service Institute — tells me that the State Department is a “crisis-oriented place” where diplomats see resources as a form of influence over the behavior of counterparts in other countries. That clashes with the incentives, time frames, and goals of development professionals working for USAID, he says. “An AID officer has to basically see their success as the success of their partner. And if they don’t have a trusting relationship there, it doesn’t work. So it’s an entirely different orientation,” he says. Read: 'Avalanche of outreach' as people vie for State global health positions Plus: Death, reform, and power — Rubio spars with Senate over USAID cuts Clash of cultures That looming potential clash of culture and mission is one area of concern. Another is operations. A former senior State Department official, who requested anonymity to discuss sensitive matters, tells me that the State Department is “ill-equipped” to monitor contracts, grants, and cooperative agreements. Under Trump, they witnessed parts of the department “asking for huge resources without understanding what the workload is,” while still refusing to request help from the USAID staff who ran these programs and might know the answer. “This is like if you tell a doctor to go write a legal memo,” says a former senior USAID official. “There’s a lot of people, current or former, who would be very happy to help put this together. But nobody’s phone is ringing, so everybody’s just twiddling their thumbs, and hurricane season is right around the corner.” The State Department’s independent watchdog has weighed in with its own concerns, calling the short time frame “unprecedented,” and pointing to gaps in strategic workforce planning, unclear leadership, and an interdependent review process that has not been well coordinated. Congressional Democrats want even more scrutiny. New York Rep. Gregory Meeks and California Rep. Sara Jacobs have requested that the Government Accountability Office examine the State Department’s takeover of U.S. aid programs, writing that it is “not clear that the State Department will have the capacity — including staff with the necessary skills and expertise — to execute these authorities and oversee these programs.” Lessons from last time Some are cautiously optimistic about the State Department’s chances of successfully absorbing foreign aid programs — while watching to see how important details resolve. “I'm not offended by [the] merger,” said Jim Richardson, who directed the State Department’s Office of Foreign Assistance — known as the F Bureau — during Trump’s first term. “Linking development strategies to integrated country strategies into overall foreign policy guidance — that's the right call. That absolutely needs to happen. The challenge will be the implementation.” During the first Trump administration, Richardson led the largest reorganization in USAID’s history until that point. (The agency’s shuttering would probably claim that title now.) That was a multiyear process that sought to better position USAID to help build countries’ self-reliance so they could transition off of assistance, and involved extensive consultation with people inside and outside the agency. Richardson said they approached the reorganization that way to help ensure it would be sustained beyond a single administration. I asked Richardson if he thinks Rubio and his team will be able to complete their restructuring by the July 1 deadline. “I wish them all the luck,” he said. Richardson sees potential in the organizational chart Rubio sent to Congress last month — in particular, his proposal to elevate the head of the F Bureau to a newly created undersecretary for foreign assistance and humanitarian affairs. Richardson said he hopes that would be a position with broad authority over U.S. foreign aid. It is not entirely clear if that’s the direction Rubio is going, though — he has repeatedly emphasized that the State Department’s regional bureaus will play a key role in deciding how money gets spent. “Anyone who’s been around foreign assistance very long just knows that the State Department regional bureaus always want more money, and they're not very good at executing it,” Richardson said. “I keep hearing that the president wants outcomes and results and impact and doesn't want waste, and you can only do that when you have an accountable official doing that.” ICYMI: State Dept overhaul to cut 3,400 jobs, recast focus on US values Follow the leader The former senior State Department official agreed that the question of foreign aid leadership under Rubio is critical. “If you get the right leader in, you might be able to do some better consolidation. If you don’t, then I think it will just be a big old mess,” they said, adding that “it currently does not have the right leadership.” A current front-runner to land the undersecretary for foreign assistance and humanitarian affairs job is Max Primorac, according to two former senior State Department officials, one of whom shared that Primorac has been inside the department in recent weeks. Primorac, who did not respond to an email, was the lead author of the Project 2025 chapter that proposed major reforms to U.S. foreign aid agencies — but stopped well short of advocating for USAID’s abolition. A senior adviser at USAID during Trump’s first term, Primorac was seen as a likely candidate to lead the agency. Those predictions were derailed by the surprise appointment of Peter Marocco as director of the F bureau and deputy administrator of USAID, who, working alongside Elon Musk’s Department of Government Efficiency, promptly froze all of the agency’s projects and set about dismantling it from the inside, before being unceremoniously fired in April. That is the unprecedented and dramatic backdrop to this reorganization of U.S. foreign aid programs, and some feel Trump’s team has yet to fully pivot from destruction to creation mode. “Everybody does a good job of telling you what AID did wrong,” said the former senior USAID official. “Nobody has been able to say — what is it we do want?” At some point, U.S. lawmakers will have to weigh in on that, too. Read: Trump official behind USAID's dismantling exits the State Department Background reading: A US conservative's plan to beat the 'aid industrial complex' (Pro) One plan to rule them all As my colleague Elissa Miolene and I recently reported, the Republican-led House Foreign Affairs Committee has started drumming up plans for its own State Department reorganization, which would be part of a broader effort to update the department’s authorizing legislation. A big question is how that congressionally driven process will intersect with Rubio’s restructuring. Will Republican lawmakers just rubber-stamp Rubio’s proposal, or will there be some kind of negotiation between the White House and Congress? How will the timelines work together, given Rubio’s rapidly approaching deadline and the comparatively glacial pace of congressional lawmaking? Lawmakers are currently reviewing not only the State Department reorganization that Rubio outlined in his congressional notification, but also the Trump administration’s budget request for next year, as well as the White House request that Congress rescind nearly $10 billion in funds it already appropriated. Democrats on Capitol Hill have said they are open to working with the Trump administration to reform U.S. foreign aid programs. Bipartisan collaboration has been difficult though in the face of allegations that the White House has repeatedly trampled over Congress’ constitutional authority, and in the face of reports that babies are starving, children are dying from cholera, and HIV patients are losing access to medications that keep them alive — reports that Rubio has labeled “false.” “We can talk about the reorganization of the State Department, but this becomes quickly not an abstraction, not a normal public policy tug and pull, because … it’s been done in just a catastrophic fashion,” Sen. Brian Schatz, a Democrat from Hawaii, told Rubio last month. “You are pushing on an open door, and instead of pushing on that open door, you are lighting the room on fire.” Rubio responded that the intent is “to rebuild the foreign aid enterprise under the State Department,” before quickly pivoting back to blaming aid “distribution problems” in South Sudan, and instances of waste, fraud, and abuse in Namibia. More reading: • Congress kick-starts State Department reorganization planning • Trump unveils his full 2026 budget, with 'draconian' cuts to foreign aid • Trump’s $9.4B rescission package targets ‘woke’ and ‘wasteful’ aid • Rubio: 'No children are dying on my watch' + The Trump effect: Stay up to date with the latest news, in-depth analysis, and exclusive insights into how Trump administration policies are reshaping global development.