Why It Matters
The House Foreign Affairs Committee held a hearing on May 20 to scrutinize the fiscal year 2027 budget requests for the National Endowment for Democracy (NED) and the Inter-American Foundation (IAF), two quasi-independent organizations that operate outside the State Department but receive the vast majority of their funding from Congress. The Trump administration's fiscal year 2027 budget request zeros out both organizations, putting them directly at odds with the committee's oversight mission and setting up a sharp confrontation over the future of American soft power.
The Big Picture
NED was established in 1983 under President Reagan with bipartisan support and operates as a private nonprofit that funds democracy-building efforts in roughly 80 countries. The IAF, created in 1969, funds locally led development across Latin America and the Caribbean. Neither organization reports directly to the Secretary of State. Chair Rep. Brian J. Mast (R-FL-21) said it was the first in a series of hearings examining organizations that "implement US foreign policy with taxpayer funds but do not report to the Secretary of State," noting it had been roughly a decade since either organization appeared before the committee.
What They're Saying
- Damon Wilson, President, National Endowment for Democracy: "We are critical infrastructure for support of freedom globally."
- Sara Margalit Aviel, President & CEO, Inter-American Foundation: "If taxpayers stop funding this, we lose an effective tool in the US toolkit."
- Tom Malinowski, Former Assistant Secretary, Bureau of Democracy, Human Rights, and Labor: "When the Iranian Revolutionary Guards praise the proposed dismantlement of an American institution, that's probably a good argument not to dismantle it."
The sharpest exchanges centered on NED's past funding of the Global Disinformation Index, an organization that labeled conservative outlets like The Federalist and Newsmax as high-risk for disinformation. Multiple Republicans, including Rep. Scott Perry (R-PA-10), Rep. Bill Huizenga (R-MI-4), and Rep. Warren Davidson (R-OH-8), pressed Wilson on why no individual was held accountable and whether NED's bipartisanship was genuine given that, according to Perry, 98 percent of staff political donations go to Democratic candidates. Davidson said, "The origin story is great, but I do believe NED has lost their way, and hopefully, they'll lose their funding."
Rep. Max L. Miller (R-OH-7) grew visibly frustrated when Wilson declined to give a yes-or-no answer on whether NED-linked funding in Georgia, where parliament subsequently passed a law allowing a ban on pride parades, was a good use of taxpayer money. "The simple fact that you're sitting there in front of this body and you can't even answer a simple question is a part of why we need to look at the NED," Miller said.
Ranking member Rep. Gregory W. Meeks (D-NY-5) called Republican criticism a "slash and burn campaign," and argued the combined fiscal year 2026 budget for both organizations was less than $350 million, a fraction of other administration expenditures he cited.
Political Stakes
Wilson's inability to provide direct answers on specific grant decisions handed Republicans a sustained line of attack. For the administration, zeroing out both organizations aligns with its broader foreign assistance cuts but puts it at odds with some Republicans, including Rep. Christopher H. Smith (R-NJ-4) and Rep. Andy Barr (R-KY-6), who used their time to highlight the organizations' value in countering Chinese and Russian influence. Malinowski warned that ceding oversight of these institutions to the executive branch would set a precedent future presidents of either party could exploit.
Yes, But
Aviel's testimony offered the clearest alignment with administration priorities, citing Secretary of State Rubio's own statement that "making America great again also means helping our neighbors achieve greatness." She pointed to a 77 percent reduction in migration intent among IAF grantees, and also noted the fiscal year 2027 House Appropriations Bill includes a transfer of funds to the IAF from the National Security Investment Programs account, suggesting at least some Republican appetite to preserve the organization in modified form.
What's Next
Mast said he intends to invite the Office of Management and Budget to testify on why it wants both organizations' operations folded into the State Department. Members have five days to submit additional questions for the record.
The Bottom Line
Republicans used the hearing to build a case for defunding or restructuring NED and the IAF, but intra-party divisions over China and Russia policy may complicate any unified push to eliminate them.
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