By Sept. 10, 2001, the U.S. Agency for International Development, or USAID, was increasingly slouching toward irrelevance. Although USAID Administrator Brian Atwood had instituted important reforms during his tenure at the helm during the 1990s, the agency had been badly bloodied by a contentious political battle with the Republican-controlled Congress over whether it should be folded into the State Department. Remarkably, Atwood held both the State Department and Sen. Jesse Helms at bay when Congress tried to abolish USAID and place its remains in Foggy Bottom.
But Atwood and the agency paid a steep price for their resistance, and angry Republican lawmakers were determined to get their pound of flesh. Severe budget cuts triggered layoffs and a 29 percent reduction in staff at USAID between 1995 and 2000. By 2001, USAID’s direct-hire staff was about half the size it had been 20 years earlier. Using attrition to stay afloat, USAID was left with a graying staff, as more than one-third of its foreign service employees were nearing retirement age.
Once famous for its ability to directly implement development programs, USAID was forced to shed expertise in some of its core competencies. USAID’s staff in agriculture, engineering and monitoring and evaluation were slashed close to zero. With fewer and fewer staff, USAID increasingly resembled a contracting agency, as it relied more heavily on large American for-profit firms to carry out its work in the developing world.