US funding cuts: Projecting ODA amid uncertainty

Our initial projections published on March 7, 2025, were developed based on limited information available at the time, primarily the announcement that the US administration intends to cut US 'foreign aid' by ~US$60 billion. As new figures have emerged on US funding cuts, we have updated the Budget Cuts Tracker. These figures are estimates and represent our interpretation of the general direction of US funding. The current version was published on May 14, 2025.

Estimating US Development Assistance

As more and more details emerge allowing for a clearer picture on the future of US development funding, one fact has become increasingly certain - making predictions on funding cuts is a rather speculative affair, with data available to the public falling short of the rigor and detail needed to perform meaningful quantitative analysis of the Trump Administration’s funding cuts. Still, as the largest OECD DAC donor, even preliminary predictions on the US’ funding future provide valuable direction for the development community and advocates.

How do we estimate US ODA?

There are several important points to consider when attempting to reckon with any widely-publicized figures of US 'foreign assistance' spending cuts as they may apply to US ODA:

• The US' definition of 'foreign assistance' is broader than ODA and includes non- ODA eligible items: This includes military and “peace and security” assistance, although there are significant gaps in Department of Defense reporting. The difference between ODA and foreign assistance reporting is highlighted in this table;
• USAID, while frequently the focus of popular discussion about US foreign assistance, is not the only department responsible for disbursing US ODA: The Department of State contributes to the US' assessed contributions to 44 international organizations, including the UN regular budget and its specialized agencies, as well as a significant amount of humanitarian assistance. Smaller amounts are also disbursed by the Department of Defense and the Department of Agriculture, as well as an assortment of more obscure bodies;
• US ODA also includes IDRCs and foreign student support costs: These are significant sectors that will factor into ODA calculations that have not been addressed by the much-publicized spreadsheets covering cuts to USAID and the State Department;
• Cutting obligated vs. unobligated funding has different implications, and it is not always clear what final cuts will total: Even if an award survived the mass closures, its unobligated funding is not guaranteed and represents only the maximum potential funds an award might have received. Obligated funding has been committed by the government but not necessarily paid—it could be already disbursed or pending payment, meaning that unspent obligated funds might still be pulled back (more on this below); and
• There is significant uncertainty about the scope and accuracy of the many leaked spreadsheets detailing USAID and State Department cuts: Duplications, variations in the scope of total funds reported, and uncertainty about disbursement figures means that any calculations based on these figures are by nature rather uncertain.
  

US ODA in 2025

Note: All US$ figures, unless otherwise noted, are deflated to constant 2023 prices.

Noting the caveats above, the available data allows us to estimate upper and lower bounds, in which the 2025 US ODA figure likely lies.

Following the Senate confirmation of the continuing resolution to carry on FY2024 funding for FY2025, with some minor changes, the amount outlined for the US international affairs budget in 2025 is US$56.2 billion in non-emergency funding, with an additional US$2.4 billion in emergency funding, totaling US$58.6 billion. This is slightly lower than former US President Joe Biden's FY2025 request of US$63.2 billion, with the decreases largely coming from cut contributions to UN Peacekeeping and the ADF.

The Continuing Resolution mandates that the administration adhere to the Congressional directives, reporting requirements, and instructions outlined in the FY2024 spending bills when allocating and spending international affairs resources. The government is legally required to spend funds appropriated by Congress.

However, since taking office, the administration has halted the distribution and use of international affairs funds approved by Congress and prolifically canceled the majority of foreign assistance awards, and attempted to withhold funding meant for foreign assistance. Although withholding funds already appropriated by Congress is unconstitutional, the current administration has defied a number of legal challenges brought against it on this matter and appears willing to continue to do so in the future as it works to shutter USAID.

This means that, in comparison to other donors who have introduced ODA cuts by shrinking their development budgets, the US effectively has the same foreign assistance budget in 2025 as it did in 2024. Any ‘cuts’ to US ODA in 2025 would therefore stem from budgeted funds not being paid out rather than a reduction in the development budget.

The administration has signaled intent to ask Congress to rescind ~US$20 billion in previously approved funds. If approved, this would reduce the foreign affairs budget by approximately 84%, for a total of US$9.6 billion in new funds. This would provide a legal path to withholding funds already appropriated for foreign assistance. A process, outlined in the Impoundment Control Act of 1974, would allow potential rescissions to be considered on an expedited basis and would require only a simple majority in both the House and Senate to become law.

Even if the administration’s legal petitions to evade or rescind these funds fail, it is highly unlikely that final US ODA figures will stand at the same levels as 2024. The efforts to shutter USAID, end partner contracts, and gut agency supply chains mean that these funds will not be able to be implemented as intended now that foreign assistance systems, staffing, and infrastructure are defunct or dismantled.

ODA projections: High and low

The Trump administration has announced an overarching intention to cut the USAID budget by ~US$60 billion. A Passback{title=”A document from the Office of Budget Management that lays out proposed cuts at the State Department/USAID”} that circulated in April 2025 laid out that 2025 enacted levels of foreign assistance stand at US$38.4 billion.

As noted above, foreign assistance and ODA are not a 1:1 match; however, in an optimistic scenario we can assume that ODA in 2025 will resemble this figure, with IDRCs and student costs balancing elements of foreign assistance not eligible for ODA.

For the low estimate, the Trump administration has announced an overarching intention to cut the USAID budget by 86% and foreign assistance via the State Department by about 40%, which it detailed in the spreadsheet sent to Congress in late March 2025. With some back-of-the-envelope calculations, if these cuts were to immediately apply in 2025, USAID obligations in 2025 would fall to US$6 billion, and foreign assistance via State would fall to US$11 billion.

To get a gist of how this will impact ODA, we can assume that all of USAID funding can reasonably be counted as ODA for a total of US$6 billion. Calculations for ODA via the State Department are more nebulous, as foreign assistance through this channel also “peace and security” assistance, which is not always eligible for ODA and is also not slated to see cuts on nearly the same scale as ODA-eligible sectors. If we apply the 40% cut to State foreign assistance excluding peace and security, then US$5.5 billion in ODA could be expected from State, for a total of US$11.5 billion. However, much like our high estimate, this is a hypothetical minimum that will almost certainly not be realized.

US ODA in 2026

On May 2, 2025, the president’s 2026 budget request was released, outlining a planned budget of US$28.4 billion for both USAID and the State Department. While not all of this is likely to be ODA-eligible, budget requests are guidelines for Congress rather than official plans; this figure can in the meantime be considered an estimate of US ODA in 2026 until further details are released or confirmed.

A low scenario here is calculated as the fulfillment of the pledged 86% USAID cut to total ODA levels (compared to 2023), given the proposed reorganization of State is slated to fold in the agency by summer 2025 and significantly downgrade development and humanitarian assistance within the department as a whole. It is unlikely, though, that these cuts will fully materialize in 2026, as many of the programs covered by these cuts spanned multiple years.

Further Updates

The Budget Cuts Tracker will be updated as more granular information about funding cuts emerges and will provide insight into the future of US ODA. As more information about the future of US development funding emerges, the Donor Tracker team will work to narrow our range of projections and more accurately incorporate the US into our global calculations.