February 14, 2025

The U.S. Spent Billions Fighting AIDS. What Now?

00:20:42

Summary

Main Topic: The Impact of the Trump Administration's Foreign Aid Freeze on PEPFAR and Global Health

Key Participants:

Nicholas Barrio, a colleague who visited an HIV-AIDS clinic in Kampala, Uganda, which was shut down due to the foreign aid freeze
Michael Phillips, a colleague based in Kenya, who discussed the effects of the funding freeze on PEPFAR programs
Carl Hoffman, CEO of HealthX Partners, a public health organization that works on HIV, AIDS, and other health programs in over 40 countries
Ryan Knudsen, host of The Journal podcast

Key Points:

The Trump administration's 90-day freeze on foreign aid has had a devastating impact on PEPFAR programs, which provide life-saving care to millions of people with HIV-AIDS in Africa
The freeze has resulted in the closure of clinics, the layoff of health workers, and the disruption of critical services, including antiretroviral treatment and prevention of mother-to-child transmission of HIV
The administration's decision to freeze PEPFAR funding was part of a broader effort to cut foreign aid, which has been criticized for being wasteful and ineffective
Carl Hoffman, CEO of HealthX Partners, argued that foreign aid is a small portion of the federal budget (1%) and that it has compounding benefits for global health and security
Hoffman also noted that the freeze on PEPFAR funding has created a vacuum that will be filled by other players, including other donor governments, which may not have the same level of commitment to global health

Takeaways:

The Trump administration's foreign aid freeze has had a devastating impact on PEPFAR programs and global health
The freeze has resulted in the closure of clinics, the layoff of health workers, and the disruption of critical services
Foreign aid is a small portion of the federal budget (1%), and it has compounding benefits for global health and security
The freeze on PEPFAR funding has created a vacuum that will be filled by other players, including other donor governments, which may not have the same level of commitment to global health.

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Michael Phillips: PEPFAR has been swept up in President Trump's 90-day freeze on foreign aid. Although the administration has signaled that it didn't intend to pause PEPFAR entirely, the order is having that effect. At this moment, PEPFAR programs are mostly at a halt all across Africa.

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Ryan Knudsen: I asked him about the effect of the funding freeze in Kenya, where he's based. Well, I think there's been a general sense of panic. So I spoke to somebody the other day. This person has family members who are HIV positive, and they've been on antiretrovirals through PEPFAR. And some of those family members are literally going out and picking out grave sites for themselves because they don't think they're going to make it.

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Ryan Knudsen: Oh, my goodness. So imagine that. Like, you thought you were okay. You thought you'd gotten past this disease. You could live with it. You're not transmitting it to anybody. And suddenly you're looking around and thinking, I can't afford to buy drugs, and no one's going to give them to me anymore. So, well, I'll save my family the trouble, and I'll pick a place to bury myself.

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Ryan Knudsen: And, you know, it's a stunning thought. Welcome to The Journal, our show about money, business, and power. I'm Ryan Knudsen. It's Friday, February 14th. Coming up on the show, America has spent billions combating AIDS around the world. Is that era now over?

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Ryan Knudsen: Fighting HIV-AIDS has been a big part of America's foreign aid spending for decades. Many hospitals tell people, you've got AIDS, we can't help you. Go home and die. In an age of miraculous medicines, no person should have to hear those words. In 2003, then President George W. Bush announced a new governmental initiative called the President's Emergency Plan for AIDS Relief, or PEPFAR.

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Ryan Knudsen: PEPFAR is a program that the United States government finances to combat AIDS worldwide and to treat people who have HIV to prevent them from becoming AIDS patients and then ultimately from dying. And Bush started this program as a way sort of to reach out to people who cared about Africa He was exhibiting his own concern about Africa.

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Ryan Knudsen: Yet across that continent, only 50,000 AIDS victims, only 50,000, are receiving the medicine they need. And the real innovation of PEPFAR was that the U.S. agreed to pay to keep poor Africans who had HIV infections alive. And the results have been really astounding. Something like 25 or 26 million people in Africa are alive today because the United States helps them stay alive.

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Ryan Knudsen: PEPFAR is the largest commitment by any nation to address a single disease in the world. It's credited with not only saving millions of lives in Africa, but also helping prevent HIV from spreading across the globe, in Asia and Latin America.

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Ryan Knudsen: Congress has reauthorized funding for the program every few years since its inception. Last year, funding for PEPFAR was estimated at about $6.5 billion, which is less than a tenth of a percent of the U.S. government's $7 trillion total budget.

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Ryan Knudsen: So how successful would you say this program has been? I think that most people would say it's been extraordinarily successful. People who would otherwise be dead, by the millions, are alive today. So I think, medically speaking, and for many, many, many years, politically speaking, it was a very popular project.

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Ryan Knudsen: I had some disagreements with my predecessor. but one of the outstanding things that President Bush did was to initiate the PEPFAR program. Its supporters have also included former Vice President Mike Pence. PEPFAR was an extraordinary bipartisan achievement of compassion. Former President Joe Biden. George W. Bush deserves great credit. And even Trump during his first administration.

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Ryan Knudsen: What we've done for AIDS in Africa is unbelievable. But when Trump took office a second time, cutting foreign aid funding was one of his first actions. He signed an executive order that essentially froze all of the roughly $65 billion the government spends on foreign aid in total around the world, including PEPFAR.

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Ryan Knudsen: I think there are people in the administration who believe that the aid industry or the world of foreign assistance was beyond repair in some way, wasn't achieving what they wanted to achieve, wasn't oriented enough towards American self-interest, which is clearly what the America First agenda is.

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Ryan Knudsen: They just thought that you couldn't fix it a little bit at a time, and you had to fix it or kill it all at once. One reason the Trump administration says it paused aid is that much of it doesn't align with Trump's politics.

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Ryan Knudsen: Last week, Press Secretary Caroline Levitt stood in front of the White House and listed off international aid programs that the Trump administration sees as wasteful. $70,000 for a production of a DEI musical in Ireland. $47,000 for a transgender opera in Colombia. $32,000 for a transgender comic book in Peru.

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Ryan Knudsen: I don't know about you, but as an American taxpayer, I don't want my dollars going towards this crap. And I know the American people don't... U.S. federal funds did go to all these programs through the State Department. Although the amount of federal money spent on that opera in Colombia was actually closer to $25,000, not $47,000.

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Ryan Knudsen: So was PEPFAR just caught in the crossfire then? Because obviously it's not a program that's supposed to have anything to do with DEI. I think the freeze on PEPFAR and everything else was very intentional. You'd have to know absolutely nothing about U.S. foreign assistance to not know about PEPFAR.

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Ryan Knudsen: I don't know what percentage of foreign aid has anything to do with diversity and those issues. It's not very large. I think we can be confident of that. Most of it is simply helping other people. And then, you know, there's a debate about whether that's what you want to do with taxpayer money. I won't make a judgment about that, but the administration has clearly signaled what their judgment is.

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Ryan Knudsen: On PEPFAR specifically, the Trump administration has sent mixed messages. Clinics around the world are closed, and there isn't much guidance from the State Department. But Trump's Secretary of State, Marco Rubio, said he supports PEPFAR.

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Ryan Knudsen: And the administration says that some life-saving activities can get a waiver to resume work. The problem is the waiver itself has to be approved. It's not just a blanket waiver go out and spend the money that was already allocated. Meaning each PEPFAR program has to get specific approval.

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Ryan Knudsen: And since so much work has stopped back in Washington, D.C. because of the freeze, in some cases, people on the ground don't know who to call for help. You've got nobody to call up and say, okay you and I have been working together for five years Here my new budget Who going to approve it There no one that answered the phone.

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Ryan Knudsen: So it like a promise of a waiver has been issued but the waivers themselves have not So there's a lot of confusion amongst the people who implement these AIDS programs as to whether they can actually go ahead and give out drugs to people who are sick.

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Ryan Knudsen: And so the chaos around these programs is extraordinary. The State Department says some waivers for life-saving programs have been issued. And yesterday, a judge ruled that USAID funding should be allowed to flow again temporarily.

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Ryan Knudsen: But our colleagues in Africa say that doesn't seem to be happening yet. In Uganda, Zambia, and the Democratic Republic of the Congo, hundreds of health workers who were being paid under PEPFAR were told to go home, and they haven't gone back to work.

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Ryan Knudsen: I think that most of the people who have been involved in PEPFAR, when asked, what does this mean, would say, people are going to die. Lots of people are going to die. There's nobody that's stepping in to provide these drugs that the U.S. government provided.

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Ryan Knudsen: And once you're off the drugs, you know, HIV will get you. Coming up, we talked to the CEO of a nonprofit that got a lot of its funding from PEPFAR about what this shift in policy will mean for America's standing overseas.

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Ryan Knudsen: Carl Hoffman is CEO of the public health organization HealthX Partners. He's also a former U.S. diplomat. How many countries have you lived in? Probably 10 or 15. Not a crazy number. I mean, that's a pretty crazy number for countries too.

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Carl Hoffman: When the aid freeze went into effect, HealthX Partners was hit particularly hard. Carl's organizations work on HIV, AIDS, and other health programs in more than 40 countries. And roughly half of their nearly $500 million budget comes from the U.S. government, including through PEPFAR.

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Carl Hoffman: So how would you describe and how would you characterize what traditionally has been the role of U.S. aid abroad? The U.S. foreign aid enterprise, not just U.S. aid, but the other parts of it too, are really about improving conditions in places far away so that threats don't manifest close to home.

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Carl Hoffman: That's the underlying principle. It's better for Americans if people far away are healthier, more productive, safer, because that makes us healthier, more productive, and safer. This is sometimes called soft power, but as somebody said to me the other day, soft power is power. And we should not be throwing it away at a time of great power competition for hearts and minds around the world.

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Carl Hoffman: So what do you make of the fact that, like, the Trump administration and a number of his supporters seem to think that this is not money that the U.S. taxpayer should be spending money on? That's a very understandable point of view, and it's been a longstanding view, I think.

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Carl Hoffman: I mean, a lot of Americans are under the misimpression that foreign aid is a huge part of the federal budget. And we should be spending that money at home. But the whole foreign aid expenditure of the U.S., including the cost of the entire State Department, all of our contributions to the U.N., all the investments in global health, Everything the U.S. does under the broad definition of foreign aid, foreign engagement, on the civilian side is 1% of the federal budget.

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Carl Hoffman: It's still tens of billions of dollars, though. Yeah, it's true. It's a lot of money. But the idea that we can sort of balance the budget by eliminating foreign aid, which you sometimes hear, is a fallacy.

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Carl Hoffman: In my view, the billions of dollars the U.S. spends on foreign aid has compounding benefits. I remember when many countries in Africa were contemplating almost a societal collapse because of HIV and AIDS That, of course, has been largely managed because of innovations in drugs and a huge political commitment and financial commitment led by the U.S., but not only by the U.S., right?

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Carl Hoffman: And so instead of collapsing societies from an infectious disease like HIV, you have societies that can manage their own affairs increasingly. That's good for us when people far away can manage their own public health crises, because otherwise they become our problem.

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Carl Hoffman: But if you listen to the stuff that Elon Musk has been saying, he said that there's also a lot of examples of corruption, waste, money that's being spent on things that Trump and a lot of his supporters don't believe in, like diversity, equity, and inclusion efforts.

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Carl Hoffman: Have you seen things like that? What do you make of that? My organizations, the ones that I'm responsible for, haven't been hired to deliver anything like that. We've been hired to deliver better health outcomes in countries around the world.

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Carl Hoffman: And I think we do it pretty cost-effectively. Do you think there's a lot of waste in the foreign aid system? I think there's a possibility of waste in everything the government does and also in everything that the private sector does.

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Carl Hoffman: That's why ideas around reform and improving and shifting the burden of these challenges onto host governments, those are all good agendas. Pushing for efficiency and cost-effectiveness That's all totally legitimate.

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Carl Hoffman: Carl says he's trying to keep his organization afloat. It's had to lay off or furlough thousands of employees, and they're looking for sources of new funding. Meanwhile, his organization has received waivers to resume some life-saving activities, but no funding to allow that to happen yet.

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Carl Hoffman: What do you think might step in to fill this void, if anything? Well, it's early to make predictions, but I think it's a mistake to assume that other players in this space are going to step up to gap fill and to come in behind the gap that's been created by the absence of the U.S. government.

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Carl Hoffman: Everybody else has seen these actions of beginning to dismantle the U.S. Agency for International Development, freezing all foreign assistance, and a lot of other donor governments, I think, are saying, ah, this is our time to pull back to. Other governments around the world.

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Carl Hoffman: Yes. Yes, I think so. The U.S. was getting bigger and bigger as a relative share of this. And now the U.S. tentpole has been pulled out of the tent. And I think the whole tent is going to get considerably smaller.

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Carl Hoffman: And so you're going to have a vacuum that's filled by misery. You'll have a vacuum that's filled by increased death, misery, and poverty. And yes, it's far away. But ultimately it's going to be bad for us, I think.

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Carl Hoffman: And that's one thing that I worry about. Right now, the future of PEPFAR is unclear. But Carl says most people with diseases like HIV-AIDS don't have time to wait.

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Carl Hoffman: The thing about infectious disease, be it HIV or malaria or TB, there's no option of just, like, pausing. Freezing is an odd concept in the case of infectious disease work, because if you're not moving forward, then you're falling behind. If you're not pushing against the disease, the disease is pushing back against you.

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Carl Hoffman: That's right. That's true on the geopolitical playing field as well. We're either gaining yards or we're losing yards. And right now we're sort of, we're putting the ball down and walking back and not even fighting for valuable terrain on this competitive landscape.

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Carl Hoffman: And I think that's a mistake for us. That's all for today. Friday, February 14th. The Journal is a co-production of Spotify and The Wall Street Journal.

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Carl Hoffman: The show's made by Catherine Brewer, Pia Gadkari, Rachel Humphries, Sophie Codner, Jessica Mendoza, Matt Kwong, Kate Leinbaugh, Colin McNulty, Annie Minoff, Laura Morris, Enrique Perez de la Rosa, Sarah Platt, Alessandra Rizzo, Alan Rodriguez Espinosa, Heather Rogers, Pierce Singhi, Jivika Verma, Lisa Wang, Catherine Whalen, Tatiana Zamis, and me, Ryan Knudson.

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Carl Hoffman: With help from Trina Menino. Our engineers are Griffin Tanner, Nathan Singapak, and Peter Leonard. Our theme music is by So Wiley. Additional music this week by Catherine Anderson, Peter Leonard, Bobby Lord, and Nathan Singapoth. Fact-checking by Mary Mathis. Thanks for listening. We're off for President's Day. We'll be back with a new episode on Tuesday. See you then.

The U.S. Spent Billions Fighting AIDS. What Now?

Summary

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