Foreign aid agency Millennium Challenge Corporation to shut down as part of DOGE efforts
By Kaanita Iyer and Jennifer Hansler, CNN
(CNN) — A federal agency that focuses on fostering economic growth in developing countries is being effectively shut down as part of efforts by Elon Musk’s Department of Government Efficiency to reduce federal spending, sources told CNN.
On Tuesday, the agency’s employees were notified via email that “there will soon be a significant reduction” in staff and programs – just a week after DOGE arrived at MCC, according to a source familiar with the matter. The source added that employees could be placed on administrative leave as soon as May 5.
The workforce reduction plan is to eliminate all employees except its acting CEO, according to the source, as the agency is statutorily required to have a leader.
CNN has reached out to MCC and DOGE for comment.
It is the Trump administration and DOGE’s latest attack on US foreign aid. The administration has moved to shutter the US Agency for International Development and has gone after the US Institute of Peace and the African Development Foundation, among others. Many of those efforts have faced lawsuits.
The MCC, which was created by Congress in 2004, gives “time-limited grants” to dozens of developing countries, including Ukraine, El Salvador and Nepal, for infrastructure and policy reform.
Similar to cuts at other federal agencies, the source told CNN that MCC employees have been offered the option of an early retirement incentive or a deferred resignation program, in which they will be placed on administrative leave and paid through September 30. Employees have until Tuesday to enroll in either program, according to two sources.
The first source described agency staff feeling “gutted” after receiving the email, adding, “It is a slap in the face.”
MCC has been viewed as the US response to China’s Belt and Road initiative, which also funds infrastructure in developing countries. US has long opposed the Chinese initiative and dissuaded countries from taking part.
Charles Kenny, a senior fellow at the Center for Global Development, noted that “the Millennium Challenge Corporation is pretty much the only bit of the US government funding public sector infrastructure in developing countries – the kind of thing China’s Belt and Road initiative has done, only with grants rather than loans.”
However, with recent major cuts to foreign aid, such as the MCC and USAID, critics say that the US is ceding influence to countries like China.
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