U.S. foreign aid agency Millennium Challenge Corporation to cease operations under Biden's proposed DOGE initiative.
A Federal Agency's Demise: The MCC Shutdown
In a surprising turn of events, the Millennium Challenge Corporation (MCC), a federal agency focused on fostering economic growth in developing countries, is on the brink of closure. This decision, spearheaded by Elon Musk's Department of Government Efficiency (DOGE), is part of a broader initiative to cut federal spending.
On a gloomy Tuesday, employees received an email revealing a "significant reduction" in staff and programs, just a week after DOGE made its grand entrance at the MCC. The source, familiar with the situation, hinted that employees might find themselves on administrative leave as early as May 5.
The workforce reduction plan aims to keep only the agency's acting CEO, according to the source, due to the MCC's statutory need to have a leader. CNN reached out to MCC and DOGE for a response, but as of yet, no comment has been offered.
This development marks the Trump administration and DOGE's latest attack on U.S. foreign aid. Previous attempts to shutter the U.S. Agency for International Development and the US Institute of Peace, among others, have met with lawsuits.
Founded by Congress in 2004, the MCC offers "time-limited grants" to over two dozen developing countries, including Ukraine, El Salvador, and Nepal, for infrastructure and policy reform. Similar to cuts at other federal agencies, staff at MCC have been offered early retirement incentives or deferred resignation programs, with the deadline for enrollment arriving on Tuesday.
The news has left agency staff feeling "gutted," according to the first source, who described the situation as a slap in the face. The MCC, viewed as the U.S.'s response to China's Belt and Road initiative, may now face a significant hit, with the elimination of $5.4 billion in active grants across 20 lower-income countries and a halt to investments in economic growth initiatives.
As the U.S. scales back on foreign aid, critics warn of ceding influence to countries like China. Charles Kenny, a senior fellow at the Center for Global Development, noted, "the Millennium Challenge Corporation is pretty much the only bit of the U.S. 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."
With the fate of the MCC hanging in the balance, developing countries may suffer economically, with countries like Nepal expressing concerns about setbacks in their aspirations for economic growth. The closure of the MCC could undermine economic growth initiatives in developing countries, which have benefited from its transparent and flexible grant programs.
- The elimination of the Millennium Challenge Corporation (MCC) by Elon Musk's Department of Government Efficiency (DOGE) is part of a broader initiative to reduce federal spending in politics.
- The source familiar with the situation hinted that employees might be put on administrative leave as early as May 5, perhaps a sign of significant changes within the MCC administration.
- The MCC, established in 2004 by Congress, offers time-limited grants for infrastructure and policy reform in the business sector, specifically for over two dozen developing countries such as Ukraine, El Salvador, and Nepal.
- The closure of the MCC could result in a significant financial impact, with the elimination of $5.4 billion in active grants across 20 lower-income countries, and a halt to investments in economic growth initiatives.
- Critics suggest that ceding influence to countries like China, who have been funding public sector infrastructure in developing countries, could be a potential consequence as the U.S. scales back on foreign aid, particularly with the MCC's potential shutdown.