Podcast Summary: This Week in Global Development

Episode: Special Episode – The US Budget Deadlock Explained
Date: September 10, 2025
Hosts: David Ainsworth, Adva Saldinger, Michael Igoe
Topic: Unpacking the US budget deadlock, its impact on foreign aid, and what the gridlock means for global development.

Episode Overview

This special episode provides a deep dive into the complexities of the 2025 US budget process, focusing on foreign aid. The hosts—David Ainsworth (playing the “confused British person”), Adva Saldinger, and Michael Igoe—break down why this fiscal year is particularly tumultuous, explore well-established Congressional procedures and how they've come off the rails, and analyze the Trump administration’s unprecedented moves to limit and reshape development aid. The episode also examines the broader constitutional questions now at stake and the on-the-ground logistical impact of the ongoing deadlock.

How the US Budget Process Normally Works

[01:51] Adva Saldinger:

• The executive branch (the President and administration) proposes a budget, with agencies receiving top-line numbers from the Office of Management and Budget.
• Agencies allocate funding and submit the President’s budget request to Congress.
• Congress (via the House and Senate Appropriations Committees) drafts, marks up, and passes appropriations bills. House and Senate versions must be reconciled into a single bill.
• Deadline: All this is supposed to happen by September 30, before the new fiscal year begins. If not, a Continuing Resolution (CR) keeps spending levels at status quo to avoid a government shutdown.
• "If nothing happens by October 1st, there’s a government shutdown, which has a whole number of ramifications." – Adva Saldinger [03:57]

Recent years have seen repeated failures to pass timely budget bills, resulting in routine reliance on CRs.

What’s Different in 2025?

[04:43] David Ainsworth & Adva Saldinger:

• In 2025, Congress could not pass new budget bills, instead passing a year-long CR, funding the government at 2024 levels.
• Despite appearances of looming major cuts, actual cuts were averted, but the Trump administration has aggressively sought to claw back funding through mechanisms like rescissions.
• “Just because the money has been appropriated, we are not necessarily seeing this administration spend all those funds.” – Adva Saldinger [05:06]

The Trump Administration's Unusual Approach

[05:48] Michael Igoe:

• Normally, the executive branch spends appropriated funding as directed by Congress, especially since so much foreign aid is earmarked.
• The Trump administration, however, has:
  • Froze and canceled a large swath of foreign assistance programs.
  • Sought to fold USAID into the State Department, drastically reducing the US’s foreign aid infrastructure and programming.
  • Utilized the rescission process in an atypically broad, aggressive manner as a tool for retrenching US foreign assistance.
• "Congress hands over a budget...In this case, they have opted not to do that and sought a number of different procedural mechanisms to carry out that ambition." – Michael Igoe [07:46]

The Scope of Rescissions

• $8 billion in aid previously appropriated was rescinded, with another $4 billion+ in proposals to be pulled back.
• The rescission process is normally for small, technical adjustments, but here aims to downsize broad swaths of policy.
• Resistance is visible: legal challenges to the administration’s maneuvering are moving toward the Supreme Court.

Major Legal & Constitutional Clash

[11:32] Adva Saldinger:

• There’s now a central constitutional question: What power does the executive have to not spend (or unilaterally withhold) Congressionally appropriated money?
• The Trump administration argues the executive doesn’t have to spend funds Congress has appropriated—a break from precedent.
  • "Russell Vought...made clear even in his nomination hearing that he actually believes that the government doesn't have to spend all the money Congress has appropriated. And this is...an unprecedented point of tension." [12:17]
• Recent court decisions have instructed the administration to spend or obligate funding before expiration; the administration is appealing to the Supreme Court.
  • The specter of “pocket rescission”—letting money expire unspent at the end of fiscal year—is now central to litigation.

[15:00] Michael Igoe:

• The balance of power between Congress (power of the purse) and the executive branch is facing a major test.
• "This question goes far beyond...several billion dollars for foreign assistance. But this question goes far beyond that. It's about the relative balance of power between the executive branch and the legislative branch..." [16:11]
• Foreign aid has become the arena for a broader constitutional test about US democracy.

Structural & Logistical Barriers After USAID

[18:17] David Ainsworth:

• USAID has been dismantled; its operations transferred to the State Department.
• The State Department lacks the experience and personnel to efficiently administer large aid flows.
  • "[Hill staff] would typically have received about 300 of those congressional notifications...so far, as of last week, they had yet to hit the 100 mark." – Michael Igoe [19:30]
• Slowed pace of spending is attributed to both intentional slow-rolling and capacity gaps.
• Capacity constraints mean even funds that are available may not be spent effectively or at all.

The House, Senate, and White House Proposals

[21:22] Michael Igoe:

• President requested a 48% cut to foreign aid; House proposed a 23% cut. Senate’s position is pending.
• Notably, House cuts target multilateral assistance heavily, while money remains in bilateral channels and key agencies.

[24:04] David & Adva:

• Congressional negotiations are tricky: Republican majorities are slim, and Democratic support is needed in the Senate for most budget processes (typically requiring 60 votes).
• Intraparty disagreements and procedural hurdles mean majorities alone don’t guarantee fast resolution.

Timeline and Funds at Stake

[25:50] Adva Saldinger:

• Not all foreign aid appropriations operate on the same timeline:
  • Some is “one-year money”
  • Some “two-year money”
  • Some “no-year money” (available until spent)
• Significant amounts of unspent funds remain from FY2024 and FY2025 appropriations. If unresolved, future "crunches" are likely as deadlines approach.

Key Takeaways & Final Thoughts

[27:01] David Ainsworth summarizes:

• The US appropriated substantial funding for foreign assistance in both FY2024 and FY2025, much of it unspent.
• Ongoing executive-legislative battles leave the final aid disbursement level highly uncertain, regardless of headline Congressional figures.
• Even if a deal is made, a shrunk aid delivery infrastructure poses huge challenges for actually deploying funds.
• "There’s some good news and some bad news...But there’s a great deal of work to be done to actually get that money out the [door]." [27:14]

[28:35] Michael Igoe:

• Routine end-of-year surges in foreign aid spending, normally addressed by large grants to multilaterals and big NGOs, are harder to execute because these are the very entities the administration disfavors.
• “It’s going to be interesting to see how they kind of square their past statements and philosophical priorities with the logistics of getting that done.” [29:25]

[29:46] Adva Saldinger:

• The process doesn’t end with appropriations—protracted congressional notification processes mean delays are inevitable even after budget deals.

Notable Quotes & Memorable Moments

• "In normal times, that's what would sort of direct the White House through federal agencies to carry out foreign aid policies and programs. What we've seen this time is something radically different." – Michael Igoe [05:48]
• "Congress hands over a budget, typically the executive branch is responsible for expeditiously deploying those funds. In this case, they have opted not to do that..." – Michael Igoe [07:46]
• "This is one of those places where foreign aid is more of a, like an arena for an incredibly basic question about US Democracy." – Michael Igoe [16:40]
• "The quickest way to do it is to write large grants to multilateral organizations like UN agencies...those are the two categories...the Trump administration has shown the most antagonism toward." – Michael Igoe [29:03]

Timestamps for Major Segments

• 00:00 – Episode introduction, US budget process overview
• 01:51 – Normal vs. current budget process explained
• 05:06 – Year-long Continuing Resolution and its implications
• 07:46 – The executive branch’s new approach to aid
• 11:32 – Congress vs. executive: legal showdown on spending
• 14:11 – Pocket rescission and Supreme Court battle
• 18:17 – USAID deconstruction and capacity issues at State Department
• 21:22 – What the House, Senate, and White House propose
• 24:04 – Why a one-party government isn’t enough for a deal
• 25:50 – Timelines and types of foreign aid funding
• 27:01 – Summary of the current state of play

Conclusion

The US budget deadlock is an unprecedented tangle of procedure, ideology, and constitutional brinksmanship. The fate of billions in foreign aid—and the global programs relying on it—hangs on legal outcomes and the practical ability (and willingness) of US agencies to spend. Listeners are left with a sense of immense ongoing uncertainty, but with new clarity about the mechanics and stakes of the 2025 budget battle.

"Hopefully this helps, and we'll continue to keep you informed." – David Ainsworth [30:08]