“There is no escaping our obligations,” John F. Kennedy said, and then named three kinds: moral, economic and political. America, he argued, owed the world as a good neighbor, as a rich nation among poor ones, and as the main check on freedom’s adversaries. USAID still quotes the line on its history page. The law behind it was signed on 4 September 1961.
That law was the Foreign Assistance Act of 1961, Public Law 87-195. Until then, as USAID’s own account puts it, no single agency had been charged with foreign economic development. Aid ran through a patchwork that grew out of the Marshall Plan, which George C. Marshall oversaw as Secretary of State and which helped Europe rebuild after 1945, and Harry Truman’s Point Four program, proposed in 1949.
Two steps, two months apart
Kennedy did it in two moves. Congress passed the Act and he signed it in September. Then, on 3 November 1961, he issued Executive Order 10973, which delegated the Act’s functions to the Secretary of State and told the Secretary to build a new agency within the State Department, the Agency for International Development, under an Administrator.
The order handled the handover with care. The Development Loan Fund and the International Cooperation Administration were allowed to carry on until the end of 3 November 1961, and the new agency could use their people, offices, property, records and funds before they were abolished. USAID counts that date as its birthday.
An agency Congress built
The structure matters again in recent years. A Congressional Research Service note from February 2025 explained that the Secretary of State created USAID under that executive order to carry out parts of the Foreign Assistance Act. The note was written after Secretary of State Marco Rubio announced on Monday, 3 February 2025 that he would serve as Acting Administrator, and after staff were told not to report to the agency’s Washington headquarters.
Lawmakers asked whether the President could simply abolish it. According to the CRS, he cannot. Section 1413 of the Foreign Affairs Reform and Restructuring Act of 1998 made USAID an independent establishment outside the State Department, and the temporary power given to the President to reorganize it expired in 1999. Congress has not granted new authority since. Abolishing, moving or consolidating the agency would take congressional authorization.
That same 1998 law says the Administrator reports to and operates under the foreign policy guidance of the Secretary of State.
Sources
- USAID History
- Congressional Research Service: USAID insight (IN12500)
- Executive Order 10973 Administration of Foreign Assistance and Related Functions
