Trump directly calls for the U.S. aid agency to close down.
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President Trump on Friday directly called for the closure of the U.S. Agency for International Development just hours before most of its staff were expected to be suspended with pay or laid off, the latest sign that his administration will dissolve the government’s main provider of global humanitarian and development aid.
“CLOSE IT DOWN!” Mr. Trump wrote of U.S.A.I.D. on Truth Social, accusing the agency of unspecified rampant corruption and fraud. He had previously asserted that the agency was “run by radical lunatics.”
Mr. Trump’s demand to end the agency came as the vast majority of the agency’s direct hires were expecting to be placed on indefinite administrative leave, while contractors were to be let go. The notice announcing that change, which was posted to the U.S.A.I.D. website on Tuesday, also informed foreign service officers that the agency would pay for them to return home within 30 days, with extensions offered on a case-by-case basis.
That guidance was amended overnight to inform workers that they had the option of staying abroad longer at their own expense.
A new frequently asked questions section, with just one entry, was appended to the original notice on U.S.A.I.D.’s website, explaining that foreign service officers could remain overseas if they were willing to cover the cost of travel themselves. It did not specify whether workers who stayed overseas while on administrative leave would continue to have their cost of living subsidized.
The original instructions had set off a panic, as foreign service officers wondered how they would be able to uproot their lives and their families in a matter of weeks. But the clarification that they could stay abroad, provided that they paid for their own return, came as little comfort to aid workers facing the loss of their jobs.
Only a small subset of U.S.A.I.D. officials received notice this week that they had been deemed “essential” personnel.
“This your formal notification that you are expected to keep working, effective immediately, and until notified otherwise,” the emailed notification sent to those personnel said, according to a copy reviewed by The New York Times.
It was not immediately clear how many employees fell into this group.
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The Mexican government announced the first results of its deployment of 10,000 members of its National Guard to the U.S. border, part of the deal with President Trump that averted tariffs on the country’s exports. In two days, officials said, the authorities arrested 116 people and seized hundreds of pounds of drugs — mostly cocaine and marijuana. Officers also seized 35 firearms, at least 15 of which had been smuggled from the U.S. They did not mention any fentanyl seizures.
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President Claudia Sheinbaum of Mexico was asked at a news conference about Pam Bondi’s pledge to achieve the “total elimination” of cartels and transnational criminal organizations. She said U.S. authorities should first “start with their own country,” adding: “Or what, are there no cartels or organized crime there?” She questioned how fentanyl gets to American users, where the money from those illicit sales goes and how U.S.-made firearms are smuggled into Mexico.
President Trump called for the closure of the U.S. Agency for International Development, just hours before the vast majority of the agency’s remaining workers were expected to be put on indefinite administrative leave or have their contracts canceled. “CLOSE IT DOWN!” he wrote on Truth Social, accusing U.S.A.I.D. of rampant corruption.
Two student advocacy groups jointly filed a lawsuit against the Education Department today, seeking to block associates of Elon Musk from accessing students’ personal data and financial information that the department regularly collects as part of calculating federal student aid. It alleges that efforts by DOGE to capture that data have been violations of the Privacy Act of 1974 and the Internal Revenue Code, which prohibit the department from disclosing nonpublic personal information to third parties.
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Turmoil at U.S. aid agency threatens supplies to Gaza, officials say.
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The Trump administration’s efforts to downsize the United States Agency for International Development have endangered the funding for food, tents and medical treatment for hundreds of thousands of Palestinians in Gaza, according to U.S. officials and workers for humanitarian groups funded by the agency.
Officials said that the threats to the aid supply chain risked destabilizing the fragile cease-fire agreement between Hamas and Israel, which is contingent on the weekly entry of 4,200 aid and commercial trucks to the territory.
With almost all U.S.A.I.D. staff set to be placed on administrative leave by Friday night, there will be only a handful of officials left to sign off on and audit hundreds of millions of dollars in outstanding payments to the agency’s partners on the ground in Gaza, raising alarm about how those groups will fund their operations.
Of more than 200 officials in the agency’s Mideast team, just 21 will remain in post to manage its entire regional portfolio, according to an internal agency email reviewed by The New York Times. The team that organizes emergency aid supplies in dozens of crisis zones around the world each year, of which Gaza was just one, is down to just 70 staff members from more than 1,000.
This is expected to slow or prevent the delivery of food packages to hundreds of thousands of Palestinians, as well as tents, mattresses, blankets, hygiene kits and medical treatment, according to three officials and an aid worker. All four people spoke on the condition of anonymity because they were not authorized to speak to the news media.
While the aid agency does not operate inside Gaza, it has provided roughly $1 billion in aid to international aid groups on the ground since the war began in October 2023 — about a third of the total aid response, according to the United Nations. Hundreds of millions of dollars have yet to be disbursed and now may never be transferred to United Nations agencies and other major aid organizations, three officials said.
“They’re making an already fragile cease-fire more fragile,” said Dave Harden, a former U.S.A.I.D. mission director for Gaza and the Israeli-occupied West Bank. “Lifesaving aid to Gaza is going to be disrupted.”
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The State Department, which oversees the aid agency, declined to comment. The agency’s director in Jerusalem referred reporters to the U.S.A.I.D. press department, which did not respond to requests for comment. It was unclear if it was still operational.
The World Food Program, the International Organization for Migration and the International Medical Corps, all of which distribute aid or run projects in Gaza funded by U.S.A.I.D., also declined to comment.
Secretary of State Marco Rubio said in a television interview this week that the moves were “not about getting rid of foreign aid,” but an attempt to prevent “rank insubordination” by uncooperative workers.
The Trump administration says the agency wastes taxpayers’ money on costly and unfocused overseas programs that do little for the American people.
Mr. Rubio said that agency employees “take taxpayer money and they spend it as a global charity irrespective of whether it is in the national interest.”
Officials interviewed for this article said that the aid to Gaza was a clear example of how the agency’s work was helping to further President Trump’s stated foreign policy goals. He has repeatedly called for an extension of the cease-fire, which is partly dependent on the smooth flow of aid.
The virtual collapse of U.S.A.I.D. is expected to remove a key form of oversight over that aid delivery. The agency is set to lay off officials who monitor the distribution of supplies within the territory, three officials said, making it harder for the United States to assess who controls and receives the aid within areas run by Hamas.
It is also likely to sideline officials who previously coordinated between the Israeli military, the Egyptian government, the United Nations and private aid groups, helping various parties to troubleshoot problems in the supply chain and prevent soldiers from mistakenly firing on aid convoys. An Israeli official, speaking on the condition of anonymity to discuss a sensitive matter, confirmed the importance of the aid agency’s coordination role and said it was unclear which institution would step in to fill it.
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Some aid and development programs in Gaza and the West Bank have already been halted or restricted after a freeze in January on most of U.S.A.I.D.’s programs and the firing or suspension of thousands of its workers. By the start of this week, more than half of the roughly 50 officials who work on the Gaza response in Jerusalem and Washington had already been placed on leave or had their contracts terminated.
They included a U.S.A.I.D. representative who worked from an Israeli military control room in Tel Aviv, helping to coordinate between the military and aid groups in Gaza, according to three U.S. officials.
The funding freezes have already suspended tens of millions of dollars earmarked for Gaza, including for water infrastructure, mobile hospital units and psychological support programs, according to one of the U.S. officials.
Among the groups affected was the International Medical Corps, a Los Angeles-based medical aid group funded by U.S.A.I.D. that runs two large field hospitals in Gaza. As a result, the group said in a statement that it may no longer be able to sustain an emergency room that treats up to 200 patients a day, an outpatient department that serves up to 2,000 people a day and a childbirth unit that delivers roughly 20 babies a day.
Anera, a Washington-based aid group, said in a statement that the freeze on a U.S.A.I.D. grant worth $50 million had forced it to suspend work on a program to restore Gaza’s decimated health services.
Tens of millions of dollars for West Bank and East Jerusalem projects have also been frozen, endangering key funds for several hospitals that President Biden pledged to sustain during a visit to the region in 2022.
Ronen Bergman contributed reporting from Tel Aviv.
The International Criminal Court denounces Trump’s order imposing sanctions on it.
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The International Criminal Court on Friday condemned President Trump’s executive order imposing sanctions on it, saying that the action sought to harm the court’s “independent and impartial judicial work.” Key European allies of the United States also distanced themselves from his decision.
Mr. Trump’s order on Thursday said that his administration would “impose tangible and significant consequences” on people who work on investigations that threaten the national security of the United States and its allies, including Israel.
Last November, the court issued arrest warrants for Benjamin Netanyahu, Israel’s prime minister, and the country’s former defense minister, Yoav Gallant, accusing them of crimes against humanity and war crimes in Gaza. The I.C.C. faced backlash from the U.S. and Israel as a result. The court also issued a warrant for a Hamas leader, Muhammad Deif.
In its statement on Friday, the court said that it stood by its personnel and pledged “to continue providing justice and hope to millions of innocent victims of atrocities across the world.” The court was set up under a 1998 treaty and has jurisdiction to prosecute people for war crimes, genocide and crimes against humanity.
Some in Israel and elsewhere expressed support for Mr. Trump’s order. Gideon Saar, Israel’s foreign minister, said that the court did not have jurisdiction over the United States or Israel because neither country was a member. “The I.C.C. aggressively pursues the elected leaders of Israel, the only democracy in the Middle East,” he wrote on social media.
The court’s jurisdiction can extend beyond member states. The Rome Statute, which established the court, empowers the U.N. Security Council to refer atrocity crimes committed in any country to the court for investigation.
Some right-wing leaders in Europe also praised Mr. Trump’s move or criticized the court.
“Can’t the International Criminal Court be moved to Belgium or something?” Geert Wilders, the right-wing leader of the Netherlands’ biggest political party, wrote on social media. “Never understood the point of that club being located here.”
Viktor Orban, the right-wing leader of Hungary and a friend of Mr. Wilders, said Hungary would “review what we’re doing in an international organization that is under U.S. sanctions!”
“New winds are blowing in international politics,” Mr. Orban wrote. “We call it the Trump-tornado.”
But several other organizations and leaders criticized Mr. Trump, and key American allies in Europe reaffirmed support for the court.
Amnesty International called the order vindictive and aggressive. “It is a brutal step that seeks to undermine and destroy what the international community has painstakingly constructed over decades,” Agnès Callamard, the organization’s secretary general, said in a statement.
Caspar Veldkamp, the foreign minister of the Netherlands, where the court is based, called the I.C.C.’s work “essential in the fight against impunity,” while Ursula von der Leyen, the president of the European Commission, said the court “guarantees accountability for international crimes and gives a voice to victims worldwide.”
“Europe will always stand for justice and the respect of international law,” she said in a statement.
A spokesman for Prime Minister Keir Starmer of Britain, speaking on condition of anonymity under Downing Street rules, said Mr. Trump’s executive order was “a matter for the U.S.” but added that “we support the independence of the I.C.C., and therefore have no plans to sanction individual court officials.”
France, which has been cautious in its reaction to the I.C.C. warrant against Mr. Netanyahu — suggesting last year that it would not immediately arrest him if he traveled there — expressed its “unwavering support” for the I.C.C.
Christophe Lemoine, a spokesman for the French Foreign Ministry, told reporters that France would “mobilize to ensure that the court can continue to fulfill its mission independently and impartially.”
Stephen Castle contributed reporting from London and Aurelien Breeden from Paris.
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After Trump signals interest, Iran’s supreme leader says talks would be ‘unwise.’
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Ayatollah Ali Khamenei, Iran’s supreme leader, said negotiating with the United States was “unwise, unintelligent, and not honorable,” just days after President Trump said he was willing to revive negotiations with Tehran.
But Mr. Khamenei stopped short of ordering Iran’s government, which for months has sent signals that it is interested in negotiations, not to engage with Washington. And though Mr. Khamenei made an unusual gesture last year of openness to talks, he has generally taken a publicly hostile posture toward Washington even while quietly allowing Iranian officials to negotiate.
In comments on Friday, Mr. Khamenei argued that Iran’s previous experiences negotiating with the United States showed that Washington could easily renege on agreements. Under Mr. Trump’s previous administration, the United States unilaterally withdrew from a nuclear deal under which Iran would limit its enrichment and stockpiling of uranium in exchange for sanctions relief.
“Negotiating with America will solve no problem. The proof? Experience,” Mr. Khamenei said, according to Iran’s state news agency, IRNA, which said his comments came during a meeting with commanders and staff from the Iranian armed forces.
“The very same person who is now in office tore up the agreement,” Mr. Khamenei said. “One shall not negotiate with a government like this. Negotiating is unwise, unintelligent, not honorable.”
Ali Vaez, the Iran project director for the International Crisis Group, said on social media that the comments could simply be “in line” with Mr. Khamenei’s previous public approach. In 2011, he had publicly opposed negotiations with the Obama administration, even as he authorized negotiators to meet secretly with U.S. officials in Oman.
“If a true ban, it’s once again his stubbornness making him the antagonist in his own story.” Mr. Vaez said.
The leader’s comments seemed to undercut gestures last week from Iran’s reformist president, Masoud Pezeshkian, who told NBC News he was ready to negotiate with the United States, as long as they “respect our honor and wisdom and are conducted on an equal footing.”
Tehran is feeling weakened by its diminishing influence in the Middle East — including through Israel’s successful decimation of its Lebanese partner, Hezbollah, and the rebel ouster of its longtime ally in Syria, President Bashar al-Assad — which has raised concern that it would be even more inclined to turn to weapons-grade nuclear enrichment.
U.S. officials warned earlier this week that they believe that Iran was working to develop a faster, cruder approach to developing an atomic bomb.
In his comments on Friday, Mr. Khamenei brushed aside concerns that rejecting talks would further hurt Iran’s economy, arguing Iran must find domestic responses to the crisis.
“What resolves those problems is a domestic element,” he said.
Earlier this week, Mr. Trump himself seemed to indicate he was looking to revive negotiations, even as he signed an executive order that would return a “maximum pressure” policy that would seek to block Iranian oil exports, a critical source of revenue for the country.
“This one I’m torn about,” he told reporters as he signed the order. “Everyone wants me to sign it. I’ll do that,” he said, but added he was “unhappy to do it.”
On his social media site, the president this week vowed to negotiate a “verified nuclear peace agreement,” similar to the one he torpedoed in his previous administration. He said he wanted to start working toward a deal “immediately.”
“I want Iran to be a great and successful Country, but one that cannot have a Nuclear Weapon,” he wrote.
But Mr. Trump also threatened this week he would have Iran “obliterated” if its assassins killed him.
Mr. Khamenei’s remarks on Friday included an apparent response to that threat. “If they threaten us, we will threaten them,” he said. “If they actuate that threat, we will actuate ours. If they violate our nation’s security, we will violate their security.”
Trump’s executive orders leave an imprint on the Fed.
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President Trump has so far restrained himself from trying to meddle with the Federal Reserve on matters related to monetary policy during his second term. But some of the more than 50 executive orders he has signed since returning to the White House are leaving an imprint on the central bank.
The latest evidence is a decision by the Fed to halt hiring for permanent workers. The central bank has removed all job postings listed on its website aside from a single summer internship opportunity.
The Fed acted after Mr. Trump mandated a governmentwide hiring freeze, ordering that no federal position vacant at that time could be filled and no new positions created. The only exemptions were granted for jobs related to military personnel, immigration enforcement, national security and public safety.
As a wholly independent organization that strives to operate apolitically, the Fed is not legally obligated to carry out decrees by the executive branch. But its decision to do so in certain cases reflects a strategy of sorts: Align with the executive branch when the Fed sees it is appropriate and lawful and, above all else, safeguard the independence of the central bank’s monetary policy decisions.
“The Fed has historically zealously guarded its independence,” said Jeremy Kress, a former Fed banking regulator who is now co-faculty director of the University of Michigan’s Center on Finance, Law & Policy. “The Fed is trying to demarcate some boundaries of executive influence.”
Jerome H. Powell, the Fed chair, touched on aspects of this approach at a news conference last week when pressed about changes taking place at the central bank since the start of Mr. Trump’s second term.
That included whether the Fed remained committed to diversity, equity and inclusion efforts in the wake of Mr. Trump’s executive order instructing federal workers to cease such activities.
“As has been our practice over many administrations, we are working to align our policies with the executive orders as appropriate and consistent with applicable law,” Mr. Powell said.
The Fed recently removed a “Diversity and Inclusion” section from its website. The section highlighted the central bank’s efforts to “promote equal employment opportunity and diversity” and included a pledge to “work to foster diversity in procurement, with a focus on minority-owned and women-owned businesses.” Regional Federal Reserve banks have followed suit.
The decision to adhere to the executive order on hiring mirrored a similar one made by Janet L. Yellen when she led the Fed during Mr. Trump’s first term. As outlined in the Fed’s Annual Performance Report for 2017 — Ms. Yellen’s final full year as chair — the central bank “voluntarily complied” with a temporary hiring freeze as well as a memorandum from the Office of Management and Budget for government agencies to enhance “efficiency and effectiveness.”
Even the Fed’s practice of releasing an annual report since the mid-1990s reflects its choice to be in lock step with prevailing law when it sees fit. The Fed has long explained its decision to publish one yearly as embodying the “spirit” of the Government Performance and Results Act of 1993, which required federal agencies to prepare a strategic plan and a report.
Mr. Trump’s actions targeting climate-related initiatives have also had an impact. The Federal Reserve Bank of New York recently dropped out of cosponsoring a conference with New York University’s Stern School of Business, according to a document seen by The New York Times.
The event, which is still set to take place in May, plans to focus on the “impact of climate migration on economic output, household welfare and consumption” and “the effect of natural disasters and disaster mitigation on output and financial stability,” among other topics.
The San Francisco Fed will now no longer host a virtual seminar on climate economics that it had regularly organized since 2020, a person familiar with the matter said. Upcoming sessions were recently postponed, and videos of earlier sessions have been removed from its website.
One economist who was a regular attendee expressed the sense that, for researchers, highlighting or putting a priority on climate-related work was no long considered a good idea.
The Fed announced just days before Mr. Trump’s inauguration that it was withdrawing from an international group of central banks and regulators focusing on climate-related risks in the financial sector, the Network for Greening the Financial System. Mr. Powell told reporters last week that he had decided to bring the matter to the Fed’s Board of Governors “some months ago” but that he was “aware of how it can look.”
“It was really not driven by politics. It was driven by the disconnect between the work of the N.G.F.S. and our mandate,” he said, referring to the Fed’s congressionally designated goals of maintaining a healthy labor market and achieving low, stable inflation.
The pullback extends to professional enrichment, as Peter Tufano, a professor at Harvard Business School who organizes a course for researchers on climate finance, witnessed firsthand.
Last fall, employees at 14 central banks and financial regulators around the world — including seven in the United States — were slated to participate in the free sessions, which are open to academics, practitioners and policymakers. Soon after the inauguration, Dr. Tufano said, the federal employees who had enrolled in the 2025 events contacted him to withdraw, citing directives from the new administration.
Some said they were not even supposed to look at the course materials, which include papers and classes on asset pricing, carbon disclosure and how climate change affects household finances.
“It’s the first time in my life I’ve had a set of students who uniformly wanted to learn something and were told that they weren’t allowed to do that,” Dr. Tufano said.
Changes have also occurred on the regulatory side. Michael Barr, the Fed’s vice chair for supervision, announced just weeks before Mr. Trump became president again that he would step down from his role to avoid a lengthy legal battle with Mr. Trump that he feared would damage the central bank.
On other regulatory matters, however, the Fed has been more reluctant to comply with directives from the executive branch. Rule changes of that nature also require the seven-person Board of Governors to vote.
Mr. Kress cited the Fed’s decision in 2021 to disregard an executive order by President Joseph R. Biden Jr. calling on regulators to strengthen oversight of bank mergers. In explaining the decision at an event in April, Mr. Barr said the central bank already had a “pretty robust process that follows our existing guidelines in this area.”
These decisions in the aggregate have generated unease but also understanding about how the Fed decides which orders to comply with and which to ignore and about its overarching interest in protecting its independence in setting interest rates.
“They’ll give up almost everything to try to maintain independent monetary policy and not have to raise and lower interest rates to suit the president,” said Glenn Rudebusch, a former senior adviser at the San Francisco Fed who spearheaded the climate seminar just over four years ago. “They’re willing to pare away quite a bit of other stuff for that.”
The Fed declined to comment beyond pointing to Mr. Powell’s statement at the January news conference. The Federal Reserve Banks of New York and San Francisco declined to comment.
Lydia DePillis contributed reporting from New York.
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Privatizing Fannie Mae, a firm that underpins the mortgage market, is back on the table.
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Fannie Mae and Freddie Mac, two giant mortgage finance firms, have been controlled by the federal government for nearly 17 years, but a long-dormant idea of making them private businesses is starting to make the rounds in Washington again.
Scott Turner, the secretary of Housing and Urban Development, said in an interview this week that coordinating the effort to privatize the two firms would be his priority. One of President Trump’s backers, the hedge fund investor William A. Ackman, is calling on the president to quickly move forward on the privatization.
But Fannie and Freddie underpin the nation’s $12 trillion mortgage market, so they need to be handled with care. Scott Bessent, the Treasury secretary, said last month that any plan for ending the so-called conservatorship of the two firms “should be carefully designed and executed.”
The last time Mr. Trump was president, a number of his advisers took steps toward coming up with a plan for releasing Fannie Mae and Freddie Mac from government control. In the end, the first Trump administration took no action, and the Biden administration put the issue on the back burner.
Here is a quick primer on why Fannie and Freddie are so critical to the mortgage market and some of the issues likely to come up in the debate over how to end the conservatorship.
What do Fannie and Freddie do?
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Formally known as the Federal National Mortgage Association (Fannie) and Federal Home Loan Mortgage Corporation (Freddie), the two finance giants do not actually make any home loans. They buy mortgages from banks and package them into securities that are sold to big investors. In creating those mortgage-backed securities, Fannie and Freddie guarantee bond investors that they will be made whole if too many borrowers default.
The guarantee makes those bonds more attractive to investors and helps keep mortgage rates relatively low. It also encourages banks to keep writing home loans. In theory, it is easier for potential home buyers to qualify for a mortgage when banks write more mortgages.
Why did the government have to bail out Fannie and Freddie?
Fannie was created in 1938 by the federal government to promote homeownership, and Freddie was created 32 years later to do the same. Historically both companies operated as independent public businesses — answering to shareholders just like any other publicly traded business.
For decades the hybrid system worked well. But over time the government-sponsored entities, as they are known, began to guarantee bonds stuffed not only with plain vanilla 30-year mortgages, but also with ones backed by riskier home loans. In 2007, as housing prices across the country started to crumble and homeowners began to fall behind on their mortgage payments, Fannie and Freddie ran into trouble because they had insured too many iffy home loans.
As the housing crisis worsened in 2008, bond investors and investors in shares of Fannie and Freddie panicked. Eventually, the federal government had to step in with a $187 billion bailout to prevent the firms from filing for bankruptcy, which might have led to a full-fledged depression.
Laurie Goodman, founder of the Housing Finance Policy Center at the Urban Institute, a Washington think tank, said that though the conservatorship might be unpopular, the current arrangement was largely working. She said a rushed decision could make mortgages more expensive and bring about other unintended consequences.
“Do you want the current system, which isn’t broken, or what is behind door No. 2 and we don’t know what it is?” she said in an interview.
What’s the argument for ending the conservatorship?
Some of the most vocal proponents of putting Fannie and Freddie back in private control are hedge fund managers and wealthy investors, who still own shares of the companies even though they’re government controlled. That’s because shares of Fannie and Freddie have continued to trade largely in anticipation that the government will eventually release the companies. Shares of both companies most recently traded around $5.
These investors — many of whom snapped up shares and related securities at deeply discounted prices — are hoping to cash in and make billions if Fannie and Freddie are allowed to become independent, publicly traded companies. One of the more outspoken is Mr. Ackman, the hedge fund manager, who has argued for years that the conservatorship should be ended. Last month, he prepared a 104-page presentation called The Art of the Deal that lays out his case for ending the conservatorship. (The presentation’s title is an allusion to Mr. Trump’s book of the same name.)
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Others say that keeping Fannie and Freddie under government control stifles competition and has deterred rivals from emerging. They contend that releasing Fannie and Freddie would make it easier for other mortgage finance firms to gain market share. They also say that the status quo — two giant firms dominating the market — makes another government bailout more likely.
Some say that privatizing Fannie and Freddie could potentially also be a quick fix to the federal government’s budget woes. Both companies long ago paid back the $187 billion in rescue money provided by the government, but the Treasury still owns equity stakes in the companies that could be worth more than $190 billion. The potential for the government to tap that pile of money by selling the companies could be tempting to politicians.
What could go wrong in setting Fannie and Freddie free?
The most immediate risk is that it could upset the mortgage market and cause the rate on the 30-year mortgage, now at an average of 7 percent, to rise. Doing anything that might make homeownership more expensive could be politically unpalatable.
Back in 2019, when the first Trump administration was giving serious thought to privatizing Fannie and Freddie, the average rate on a 30-year mortgage was just over 4 percent, and concern about housing affordability wasn’t driving voters the way it did in 2024.
Another risk is the potential harm to the market for mortgage-backed securities, which is dominated by Fannie and Freddie. Investors in bonds sold by Fannie and Freddie have long operated under the assumption that the federal government would never let the companies fail. On Wall Street, it was called an implied guarantee, and it’s one reason Fannie and Freddie bonds often carried the highest of credit ratings.
If they somehow lost that implicit guarantee in the process of privatization, it might make those bonds less attractive to investors and potentially increase the company’s own borrowing costs.
A functioning mortgage-backed securities market is important not only to the housing market but also to the overall financial system. The Federal Reserve has from time to time bought mortgage-backed securities to help stabilize the financial markets.
Are Freddie and Fannie capable of operating as independent entities?
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The short answer is yes. But as with everything with Fannie and Freddie, getting there is complicated.
A recent report by the Congressional Budget Office found that if Fannie and Freddie were put on a path of becoming independent in 2027, the companies would have about $208 billion in combined capital — a huge cushion to help cover losses in a crisis. But Fannie and Freddie would need to raise tens of billions more through a sale of stock to be adequately capitalized to cover any losses, and also pay back investors and the federal government on the equity stakes they still hold.
The Federal Election Commission chair says Trump moved to fire her.
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Ellen L. Weintraub, the chairwoman of the Federal Election Commission, said on Thursday that President Trump had moved to fire her.
Ms. Weintraub, who has served as a Democratic commissioner on the bipartisan panel since 2002, posted a short letter signed by Mr. Trump on social media that said she was “hereby removed” from the commission effective immediately. She said in an interview that she did not see the president’s move as legally valid, and that she was considering her options on how to respond.
“There’s a perfectly legal way for him to replace me,” Ms. Weintraub said on Thursday evening. “But just flat-out firing me, that is not it.”
The F.E.C., the nation’s top campaign watchdog agency, is made up of six commissioners, three aligned with Democrats and three with Republicans. That structure has contributed to repeated partisan deadlocks over elections investigations that scrutinize one party or another. Ms. Weintraub’s term as commissioner expired in 2007, but she has continued to serve on the board. The position of chair rotates every year. Ms. Weintraub took up the post again in January.
A commissioner is removed only after a replacement is nominated by the president and confirmed by the Senate, and Ms. Weintraub said that the president did not have the power to force her off the commission before that. Mr. Trump did not name a successor to Ms. Weintraub in his letter, and it would take weeks at least for his choice for commissioner to be approved by the Senate.
Trevor Potter, a former commissioner and chairman of the commission nominated by President George H.W. Bush, denounced the move to fire Ms. Weintraub in a statement, saying that doing so would violate constitutional separation of powers.
“Congress explicitly, and intentionally, created the F.E.C. to be an independent, bipartisan federal agency whose commissioners are confirmed by Congress,” said Mr. Potter, who is now the president of the Campaign Legal Center, a nonpartisan campaign watchdog. He added: “As the only agency that regulates the president, Congress intentionally did not grant the president the power to fire F.E.C. commissioners.”
The White House did not respond to requests for comment.
Ms. Weintraub was the chief architect of a novel strategy to further paralyze the commission in partisan deadlocks in order to compel enforcement of the nation’s election laws through the courts. She previously described it as a last resort after years of enforcement efforts being stymied by the three Republicans on the commission.
Ms. Weintraub on Thursday also pointed to her public statements about F.E.C. complaints focused on Mr. Trump’s presidential campaigns as one reason she may have earned the president’s ire.
“There have been dozens of complaints filed against the president,” Ms. Weintraub said, noting that the commission has not been able to pursue them because of the 3-to-3 partisan deadlock.
She added, “I have pointed that out. I’ve written about this. So I’m not really surprised that I am on their radar.”
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The Senate confirms Russell Vought as director of the Office of Management and Budget.
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The Senate voted along party lines on Thursday to confirm Russell T. Vought to lead the Office of Management and Budget, putting in place one of the most powerful architects of President Trump’s agenda to upend the federal bureaucracy and slash spending that the administration thinks is wasteful.
The 53-to-47 vote returns Mr. Vought to the White House budget office that he also led during Mr. Trump’s first term. During his tenure, he took steps to expand the number of federal employees required to work during a government shutdown, froze military aid for Ukraine and railed against spending on foreign aid.
Mr. Vought emerged as one of Mr. Trump’s most contentious nominees, drawing intense backlash from Senate Democrats who described him as a lawless ideologue. They used every legislative tool at their disposal to delay his confirmation vote, commandeering the Senate floor on Wednesday night and into Thursday morning to make the case against him.
“We’re going to be speaking all night,” Senator Chuck Schumer, Democrat of New York and the minority leader, said as his colleagues prepared to burn through the clock. “We want Americans, every hour, whether it’s 8 p.m. or 3 a.m., to hear how bad Russell Vought is and the danger he poses to them in their daily lives.”
After leaving the office, Mr. Vought founded the Center for Renewing America, a conservative think tank, and was an architect of Project 2025. That document was an effort by conservative groups to develop detailed ideas for policies and executive actions that Mr. Trump could pursue to tear down and rebuild executive government institutions in a way that would enhance presidential power.
In speeches, Mr. Vought made clear that he relished the opportunity to overhaul the ranks of career federal workers that Mr. Trump views as part of the “deep state.”
“We want the bureaucrats to be traumatically affected,” Mr. Vought said in a 2023 speech. “When they wake up in the morning, we want them to not want to go to work because they are increasingly viewed as the villains.”
Mr. Vought has also been a proponent of the idea that the executive branch should have the power to claw back, or impound, congressionally approved funding for government agencies and overhaul the so-called administrative state.
During his confirmation hearing last month, Mr. Vought dodged questions about whether Mr. Trump would follow the will of Congress, which authorizes federal spending, but made clear that Mr. Trump intended to test the law.
“No, I don’t believe it’s constitutional,” Mr. Vought said of the Impoundment Control Act of 1974, which reasserted Congress’s power of the purse. “The president ran on that view. That’s his view, and I agree with it.”
In recent weeks, Mr. Vought has been working in an advisory role at O.M.B. and was involved in the chaotic rollout of Mr. Trump’s federal funding freeze. That order to freeze trillions of dollars of federal grants and loans was drafted by the office’s general counsel and sent to agencies last week, creating widespread confusion around the country.
The White House rescinded the order the next day after legal challenges and condemnation.
The Trump administration has portrayed the spending freeze as an effort to make sure that grants and loans do not violate other executive orders Mr. Trump has issued in which he has sought to end several policies he dislikes, like diversity, equity and inclusion initiatives.
A federal judge issued a restraining order this week that temporarily blocked the administration from carrying out the freeze.
Once he is back at the helm of the budget office, Mr. Vought will lead the Trump administration’s efforts to reduce the size of the federal work force and craft the White House’s upcoming budget proposal, which is likely to include slashing funds for a variety of programs.
In late 2022, while working at his think tank, Mr. Vought released a budget blueprint that aimed to reduce the debt by nearly $9 trillion over a decade through deep spending cuts and “dismantling the woke and weaponized bureaucracy.”
The Trump administration will lay off nearly all U.S.A.I.D. staff.
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The Trump administration plans to reduce the number of workers at the U.S. Agency for International Development from more than 10,000 to about 290 positions, three people with knowledge of the plans said on Thursday.
The small remaining staff includes employees who specialize in health and humanitarian assistance, the people said, speaking on the condition of anonymity because they were not allowed to publicly discuss the cuts.
A spokeswoman for the State Department, whose umbrella the remnants of the agency have moved under, did not immediately return a request for comment.
Officials at U.S.A.I.D. are pushing for less severe cuts, and they submitted significantly longer lists to the State Department of personnel they deemed essential to carry out lifesaving and other critical programs, according to two people with knowledge of their efforts.
U.S.A.I.D. officials were also told on Thursday that about 800 awards and contracts administered through the agency were being canceled, the three people said.
The moves also came just one day before almost all of the agency’s direct hires, including its roster of Foreign Service officers, will be put on indefinite administrative leave. In addition, almost all contractors will see their work orders terminated. Foreign Service officers will have 30 days to return to the United States.
Secretary of State Marco Rubio, who took control of U.S.A.I.D. as acting administrator on Monday, insisted during a Fox News interview this week that the takeover was “not about getting rid of foreign aid.”
“But now we have rank insubordination,” he said, adding that U.S.A.I.D. employees had been “completely uncooperative, so we had no choice but to take dramatic steps to bring this thing under control.”
On Thursday, he reiterated the promise that some workers would be offered exemptions to minimize the hardship of the sudden recall. The pledge was made first in a notice put on the U.S.A.I.D. website Tuesday night that announced that employees around the globe would be put on administrative leave or let go by Friday.
“We’re not trying to be disruptive to people’s personal lives,” Mr. Rubio told reporters while traveling in the Dominican Republic. “We’re not being punitive here. But this is the only way we’ve been able to get cooperation from U.S.A.I.D.”
Two unions representing U.S.A.I.D. employees on Thursday filed a lawsuit over the cuts against President Trump, Mr. Rubio and Treasury Secretary Scott Bessent, along with the agency, the State Department and the Treasury Department. The suit argues that the reduction in personnel and the cancellation of global aid contracts is unconstitutional and violates the separation of powers.
“What we’re seeing is an unlawful seizure of this agency by the Trump administration in a plain violation of basic constitutional principles,” said Robin Thurston, the legal director for Democracy Forward, one of two advocacy organizations that filed the lawsuit on behalf of the American Foreign Service Association and American Federation of Government Employees, adding that the administration had “generated a global humanitarian crisis.”
The suit seeks an injunction to stop the firing and furloughing of employees and dismantling of the agency. It argues that U.S.A.I.D. cannot be unwound without the prior approval of Congress, which passed legislation backing the agency and continues to fund it as a unique entity.
U.S.A.I.D. officials have been bracing for a drastic reduction to their ranks since contractors started being let go last week, just days after the Trump administration announced a sweeping stop-work order for foreign aid.
The order was later amended to say that the agency’s lifesaving activities could continue. But several U.S.A.I.D. officials and contractors have reported that they cannot gain access to the funding for projects that received a waiver.
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Employees’ fears were heightened on Monday, after Mr. Rubio announced that he had become the agency’s acting administrator, delegating its day-to-day governance to Pete Marocco, the department’s director of foreign assistance. That day, Erica Y. Carr, the acting executive secretary, also told bureau heads in an email to come up with the “leanest essential personnel numbers” they would need “to provide essential services only,” according to a copy viewed by The New York Times.
In the days since, nearly all other U.S.A.I.D. employees in the United States were either terminated or put on administrative leave, while the agency’s global work force was told to expect to be put on a similar status by the end of the day Friday.
The loss of nearly the entire U.S.A.I.D. work force threatened to have dire consequences for an enormous swath of programs run by the agency, which has for years led the government’s humanitarian aid and global development efforts, as well as the greater global aid industry that relies on U.S.A.I.D. funding.
While the exact size of the U.S.A.I.D. work force could not be precisely determined, estimates range as high as 14,000, a number that includes all contractors and foreign nationals who work with agency missions.
“Rubio claims that @USAID lifesaving assistance for health and humanitarian needs will continue,” Atul Gawande, who served as assistant administrator of the bureau of global health during the Biden administration, said in a social media post on Thursday. “But his team just communicated that the entire agency will be imminently reduced from 14,000 to just 294 people. Just 12 in Africa.”
Mr. Gawande’s post included a screenshot of an email from Joel Borkert, the acting chief of staff, breaking down the projected staffing per bureau after the cuts. The email showed that the administration planned to retain 12 people focused on Africa, eight focused on Latin America and the Caribbean, 21 on the Middle East and eight on Asia.
According to that chart, 78 people from the bureau of humanitarian affairs and 77 from the bureau of global health would also be retained.
The moves have affected the State Department as well. On Monday, the department issued a stop-work order to companies employing about 60 contractors in Washington who work on democracy and human rights issues and focus on authoritarian states.
Michael Crowley contributed reporting from Santo Domingo, Dominican Republic, Stephanie Nolen from Halifax, Nova Scotia, and Edward Wong from Bangkok.
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Elephants, tigers and coral reefs are on the U.S.A.I.D. chopping block.
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The money has restored coral reefs in the Seychelles, helped create a national park in Vietnam and turned former guerrillas into tour guides in Colombia. It has established tiger conservation programs, and brought back wildlife to areas decimated by bloody civil unrest.
All those are among the surprising programs affected by the Trump administration’s possible shutdown of the United States Agency for International Development, which, in addition to its other work, has established and maintained overseas national parks and conservation areas.
That role now has an uncertain future. On Thursday, U.S.A.I.D. leaders found out that the Trump administration planned to cut nearly all jobs at the agency and cancel hundreds of grants and contracts. Congressional Democrats say any move to eliminate the agency could be illegal.
National parks have proved to be a stabilizing force for countries around the world, creating local businesses and jobs, protecting fragile ecosystems and kick-starting tourism efforts and other economic opportunities. Communities around parks and preserves often benefit from new or improved health services and schools. The financial benefits may diminish the need for local people to migrate, either internally or overseas.
In Colombia, the Destination Nature Activity ecotourism program preserves forest and natural habitats in six regions previously occupied by guerrillas, paramilitary groups and drug traffickers. The five-year, $40 million program, entirely funded by U.S.A.I.D., supports the operations and infrastructure to attract international travelers. One of the habitats being developed encompasses the Ciudad Perdida, older than Machu Picchu in Peru, in the Sierra Nevada de Santa Marta range.
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Activities for visitors include hiking, rafting and birding, often led by former guerrilla fighters who have become guides. Most of these destinations are off the beaten path in a country where tourism is sizzling — Colombia’s visitor numbers reached record highs in 2023, up nearly 25 percent from 2022. Nearly 1.2 million of those international visitors, or more than 26 percent, came from the United States.
U.S.A.I.D. also helped establish the Song Thanh National Park in central Vietnam, funded the creation of marine protected areas in Papua New Guinea and restored coral reefs in the Seychelles. Agency funding was instrumental in creating Gabon’s national parks system and establishing a tiger conservation program in Bangladesh.
After a 16-year civil war in Mozambique wiped out more than 95 percent of the country’s large mammals, U.S.A.I.D. provided support for wildlife and habitat restoration to the 1.6-million-acre Gorongosa National Park. Now it shelters more than 100,000 animals, including elephants, lions, hippos, antelope, painted wolves, hyenas and leopards. In 2023, U.S.A.I.D. grants trained nearly 470 rangers, provided veterinary care and ran local youth education and meals programs. Gorongosa receives just a few thousand visitors a year, but roughly half of them come from the United States.
Greg Carr, an American philanthropist and entrepreneur, is founder of the nonprofit Gorongosa Project, which teams up with the Mozambique government to support the park. He said that funding overseas national parks is in the United States’ national interest.
“There are four international criminal enterprises that are closely entwined: human trafficking, drug trafficking, arms trafficking and exotic wildlife trafficking. It is often the same groups involved in all four,” he said.
U.S.A.I.D. funding to Gorongosa amounts to $5 million a year, to which Mr. Carr then contributes $7 million and fund-raises the rest to reach the park’s annual operating budget of $25 million. “Thus the U.S.A.I.D. money is leveraged fivefold,” he said.
Jay L. Knott, a former U.S.A.I.D. foreign service officer who has worked in Gorongosa and other parts of the world, said U.S.A.I.D. has played an important, early role in tourism efforts, “setting the table” to create a foundation through the early conservation of habitats, the development of a revenue model and the training of local staff. For example, U.S.A.I.D. years ago provided core funding that kick-started the restoration of Ghana’s former and dilapidated slave forts. They are now a major tourist draw.
Successful tourism destinations require vision, collaboration and engagement, Mr. Knott said. U.S.A.I.D.’s seed investments in parks often catalyzed and leveraged national governments, philanthropies and investors to follow suit. The loss of U.S.A.I.D. would affect the viability of current parks as well as prospects for future national parks.
“That means lost opportunities for conservation, tourism, U.S. business investment opportunities, local communities more prone to instability and terrorist influence — all of it,” he said.
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