Millions of promised USAID dollars do not arrive
Jerusalem, March 7: The Trump administration’s cuts to USAID have frozen hundreds of millions of dollars in contractual payments to aid groups, leaving them paying out of pocket to preserve a fragile ceasefire, according to officials from the US humanitarian agency.
The cutbacks threaten to halt the small gains aid workers have made combatting Gaza’s humanitarian crisis during the Israel-Hamas ceasefire. They also could endanger the tenuous truce, which the Trump administration helped cement.
USAID was supposed to fund much of the aid to Gaza as the ceasefire progressed, and the Trump administration approved over USD 383 million on January 31 to that end, according to three USAID officials.
But since then, there have been no confirmed payments to any partners in the Middle East, they said. The officials, who have survived multiple rounds of furloughs, spoke on condition of anonymity for fear of retribution.
Two senior officials at aid organisations confirmed they have not received any of the promised funds, after spending millions of dollars on supplies and services. The officials, who spoke on condition of anonymity because of the political sensitivity of the issue and of their work in Gaza, said they could not afford to continue aid operations indefinitely.
Some organisations have already reported laying off workers and scaling down operations, according to internal USAID information.
That could imperil the ceasefire, under which Hamas is supposed to release hostages held in Gaza in exchange for Israel releasing Palestinian prisoners and ramping up the entry of humanitarian assistance.
“The US established very specific, concrete commitments for aid delivery under the ceasefire, and there is no way… to fulfill those as long as the funding freeze is in place,” said Jeremy Konyndyk, president of Refugees International and a former USAID official.
USAID has been one of the biggest targets of a broad campaign by President Donald Trump and Elon Musk’s Department of Government Efficiency, or DOGE, to slash the size of the federal government.
Before Trump took office, USAID had roughly USD 446 million to disburse to partner organisations in Gaza in 2025, the USAID officials said.
But after Trump froze global foreign assistance, USAID’s Gaza team had to submit a waiver to ensure the funds for Gaza aid could continue to flow. They received approval on January 31 to secure over USD 383 million in funding, less than two weeks after the US-brokered ceasefire was reached.
Some USD 40 million was subsequently cut under a measure that no money be provided for aid in the form of direct cash assistance.
USAID then signed contracts with eight partner organisations, including prominent NGOs and UN agencies, awarding them money to flood supplies and services into Gaza. Then, the officials said, they began hearing that organisations were not receiving the promised payments – even as they had already spent millions, expecting USAID reimbursement.
Since the end of Phase 1, Israel has cut off all aid shipments into Gaza in a bid to pressure Hamas to accept an extension of the ceasefire. That has sent aid groups scrambling to distribute reserves of food and shelter to the most needy.
Prime Minister Benjamin Netanyahu says he is considering cutting off electricity to raise the pressure on Hamas.
With USAID in flux, the US risks losing its influence, said Dave Harden, the former USAID assistant administrator of Democracy, Conflict and Humanitarian Aid and a longtime director of the agency’s work in the Palestinian territories. (AP)