Rights Groups Miss Out on Millions in Foreign Aid Due to U.S. Spending Restrictions

Tens of millions of dollars for human rights programs run by the State Department are now in jeopardy after bureaucratic maneuvers by the Trump administration to pare down U.S. funding for foreign aid, officials and humanitarian organizations tell Foreign Policy. 

The impacted funding includes roughly $70 million worth of programming under the State Department’s Bureau of Democracy, Human Rights and Labor, including $10 million to support civil society and human rights issues in China, and over $12 million for Iraq.

The move created a backlog that left State Department officials scrambling, some working well past midnight, in the days before the fiscal year ended and the unobligated funds would be automatically returned to the Treasury Department. Tens of millions of dollars in State Department funding to non-profit and humanitarian organizations were not delivered in time, current and former officials say.

“They used an administrative process to create a choke in the system … They wanted to muck up and slow down the process with this type of an outcome in sight,” said one official familiar with the matter. “It’s the worst way to cut funding. It’s not surgical, it’s not smart, and it’ll have major ripple effects.”

However, the State Department could have asked for exemptions to obligate more funding in certain cases if the spending restrictions from the White House’s Office of Management and Budget (OMB) risked vital aid programs, but never did. The State Department did not respond to requests for comment for the story.

“It is incumbent on all federal agencies to properly use funds provided by Congress. To ensure this, OMB requested the status of several foreign assistance accounts over the summer to identify the amount of funding that was unobligated,” a senior administration official said in response. “After receiving that information the funds were made available to be spent.”

Some current and former officials saw the restrictions as a way for the White House budget office to surreptitiously slash foreign aid funds, even as proposals to do so have drawn widespread and bipartisan Congressional backlash. Since first coming into office, President Donald Trump’s administration has repeatedly sought to hollow out U.S. foreign assistance budgets through budget cut plans and rescission proposals. Senior officials said it was an administration priority to review foreign aid programs to ensure they did not waste or misuse taxpayer money. Congress has repeatedly rebuffed the administration’s rescission plans.

The move comes nearly two months after the Trump administration floated plans to slash nearly $4 billion in foreign aid funding for the State Department and U.S. Agency for International Development in a process known as rescission.

The White House backed down from that plan following widespread, bipartisan backlash from Capitol Hill. But OMB still placed restrictions on how much money the agencies could parcel out in the months before the end of the fiscal year on Sept. 30.

Because of the inability to use all the money, programs that support human rights in China and civil society in Iraq, among other programs, are in jeopardy and at risk of shutting down. At least four non-profit organizations and humanitarian organizations that operate in China are at risk of shutting down without the funds, according to two sources familiar with the matter, who spoke on condition of anonymity because of the sensitivity of the NGOs’ work in China. Roughly $1 million to support programming in Ethiopia through the non-profit group Freedom House, and $1.5 million to support programming on religious freedom—one of the Trump administration’s top foreign policy priorities—were also impacted. 

“It’s not like these are low-priority issues. The administration is on record as wanting to support democracy and human rights in China,” said one former official familiar with the matter, who spoke on condition of anonymity. “The idea that State would be stiffing partners working toward its own self-described ends is ludicrous.”