Washington, April 24, 2025 — The U.S. Millennium Challenge Corporation (MCC), a flagship foreign aid agency established by President George W. Bush to fight global poverty, is being dismantled as part of a broad government downsizing led by the Department of Government Efficiency (DOGE) under Elon Musk and President Donald Trump.
Agency Closure and Workforce Reductions
Staff were informed this week that all MCC programs will be terminated and the agency’s workforce—over 320 employees—will be reduced to a bare minimum, with only the acting CEO retained to fulfill statutory requirements. Employees have been offered voluntary early retirement or deferred resignation, with administrative leave beginning as early as May 5. The full shutdown is expected to be completed within 90 days.
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Impact on Global Development and U.S. Policy
MCC currently oversees $5.4 billion in active grants across 20 developing nations, supporting major infrastructure, education, and energy projects. The agency, known for its transparency and bipartisan support, partners with countries that meet strict standards for good governance and anti-corruption. Countries such as Côte d’Ivoire, Mongolia, Senegal, Nepal, and Belize now face uncertainty, with ongoing projects at risk of abrupt termination.
“Foreign aid is not a key focus for the administration, so the work of the MCC must come to a close,” said Kyeh Kim, a senior MCC official, during the staff meeting.
The shutdown follows the Trump administration’s earlier dismantling of USAID, the primary U.S. foreign aid agency, and is part of a larger campaign to reduce federal expenditures, arguing that taxpayer funds are being wasted on overseas development. DOGE’s actions have also targeted other foreign assistance organizations, including the U.S. Institute of Peace and the African Development Foundation, many of which are fighting back through legal channels.
Strategic and Geopolitical Consequences
MCC has been a key instrument in U.S. efforts to counter China’s Belt and Road Initiative by funding public sector infrastructure in developing countries through grants rather than loans. With the agency’s closure, critics warn that the U.S. is ceding strategic influence to China and other global competitors.
What’s Next?
DOGE is expected to present a resolution to MCC’s board—including Secretary of State Marco Rubio and other top officials—to formally terminate grants in the coming months. Several recipient countries have requested brief extensions to wind down projects, but the future of contracts like Belize’s $125 million grant remains uncertain.
The closure of the MCC marks one of the most significant shifts in U.S. foreign assistance in decades, effectively ending a Bush-era initiative that had become a model for transparent, results-driven development aid.