Rubio redirects $52 million in military aid to Latin America over a congressional hold, and clears $320 million more for Egypt

The State Department ended the fiscal year with two military-aid decisions that, taken together, put Congress on notice: when the administration wants to move money, a legislative hold will not stop it. On Wednesday, the Trump administration notified Capitol Hill that it was moving ahead with the reprogramming of $52 million in foreign military financing from Slovakia, North Macedonia, Tunisia, and Iraq to Panama, Peru, Ecuador, and Colombia, defying a formal hold that Senate Democrats and House Foreign Affairs ranking member Gregory Meeks (D-NY) had placed on the funds. Hours earlier, Secretary of State Marco Rubio had separately cleared $320 million in military aid to Egypt by waiving congressionally imposed human rights conditions, citing Cairo's cooperation since the United States entered the war with Iran.

The two actions landed as the new fiscal year began and as hundreds of thousands of legal immigrants lost Medicaid coverage under a separate provision of the administration's "One Big Beautiful Bill." The fiscal and foreign-policy calendar compressed a remarkable amount of executive authority into a single 24-hour stretch.

The Latin America redirect

The Trump administration, acting in defiance of top Democrats on the House and Senate foreign affairs committees, stripped tens of millions of dollars in U.S. military assistance from European and Middle Eastern countries and gave those funds instead to conservative-leaning governments in Latin America, three U.S. officials told The Washington Post. The diverted funds include tens of millions of dollars that Congress approved for countries affected by the war in Ukraine.

The State Department notified Congress that it will reprogram $52 million in foreign military financing from Slovakia, North Macedonia, Tunisia, and Iraq to Panama, Peru, Ecuador, and Colombia. The move is the latest in a series of reductions in either money or troop deployments to Europe, and both North Macedonia and Slovakia are NATO members.

When the State Department notified Congress last month that it intended to make the switch, Sen. Jeanne Shaheen (D-NH) and Rep. Gregory Meeks (D-NY) put a hold on the funds. Late on Wednesday, the administration told Congress it was defying the hold and moving ahead. Shaheen and Meeks warned the White House that Congress had provided the money for a specific purpose and that "the Executive Branch does not have unlimited discretion to redirect these funds toward unrelated Administration policy priorities or countries."

The State Department said the funds would be used to "combat narcoterrorism in our backyard and help continue to secure the Panama Canal," adding that "these funds will prevent adversaries from establishing strategic footholds in our hemisphere," in a veiled reference to China's growing presence in Latin America. The move aligns with the administration's deep ties to right-wing governments, which Trump has framed as a renewal of 19th-century Monroe Doctrine principles.

Secretary Rubio visited Colombia, Ecuador, and Peru last week and pledged additional support as the administration has prioritized the Western Hemisphere in its foreign policy, with an emphasis on combating drug trafficking and illegal immigration.

The Egypt waiver

On the same day, Rubio signed off on a separate, larger move. Rubio waived a restriction on $320 million in military aid to Egypt that had been previously withheld over human rights concerns, with the State Department saying he had signed off "in the interest of U.S. national security." In a letter sent to lawmakers whose contents were shared with The Associated Press, Rubio cited Egypt's "helpful role" in the war with Iran.

A memo bearing Rubio's signature, dated September 4, said the waiver authority was "essential for the U.S.-Egypt relationship and U.S. national security priorities, particularly in light of Egypt's helpful role following Operation Epic Fury," the U.S. military's name for the campaign against Iran launched alongside Israel in late February.

Egypt has been a key mediator between the U.S. and Iran in efforts to wind down the more than seven-month-long conflict. The $320 million is part of an annual U.S. contribution of $1.3 billion in economic and military assistance to Egypt, specifically earmarked as foreign military financing, which provides money for recipient nations to purchase U.S.-produced weaponry.

Congress inserted the human rights requirement over concerns about Egypt's record, and the State Department itself has in recent years pointed to credible reports of torture, arbitrary arrest, child labor, and restrictions on expression. That said, granting a waiver to Egypt has become routine for both Republican and Democratic administrations; the Biden administration, for example, last issued such a waiver in September 2024, citing Egypt's assistance in U.S. efforts to end the Israel-Hamas war in Gaza.

The appropriations fight underneath

The Latin America redirect is the sharper constitutional test of the two. A congressional hold is a traditional legislative tool to block executive reprogramming of funds, and the administration's decision to ignore it fits a pattern that spans multiple agencies. Separately, The Washington Post reported that the State Department has also stripped tens of millions in U.S. military assistance from European and Middle Eastern countries for transfer to Latin American conservative governments, and that when Democrat lawmakers placed a hold on that diversion in September, the Trump administration on Wednesday notified Congress it was defying the hold and moving ahead.

The constitutional argument is simple on paper. Congress passes appropriations for specific purposes and specific recipients. An executive branch that reprograms that money by declaring national-security priorities circumvents the power of the purse. California and six other states filed suit Wednesday, accusing the administration of withholding federal funds approved by Congress, including around $810 million the White House moved to cancel before the end of the fiscal year, arguing the refusal to spend appropriated money violates the Constitution's separation of powers, appropriations, and presentment clauses. The foreign-aid redirect adds a parallel foreign-policy dimension to the same underlying legal question.

Medicaid cuts land the same morning

While the State Department moved on two continents' worth of military aid, a domestic cut from the same administration's legislative agenda took effect at midnight. Starting October 1, refugees, Afghan allies, Ukrainian parolees, and survivors of torture and human trafficking who are living in the United States legally are no longer eligible for Medicaid or the Children's Health Insurance Program.

The change stems from H.R. 1, the Trump administration's major budget bill that Republicans passed in summer 2025. Hundreds of thousands of immigrants with legal status are at risk of losing government health coverage, with state data suggesting the impact may be greater than anticipated. More than 281,000 immigrants from nine states and the District of Columbia are expected to lose Medicaid in October alone.

The Congressional Budget Office estimated the immigration-related provisions will cause at least 100,000 people in Medicaid and 100,000 in Medicare to lose their health coverage, with approximately 900,000 more losing marketplace coverage by 2034, for a total of more than 1.4 million lawfully present immigrants losing some form of health insurance.

Drishti Pillai, director of immigrant health policy at KFF, said most of those losing Medicaid will have no other options: full-price ACA marketplace coverage is often unaffordable, and employer-sponsored coverage is unavailable to many immigrants who work in construction, agriculture, and food service.

The Medicaid cuts are only the first of several. In January, many lawfully present immigrants will lose help paying for marketplace insurance, and refugees enrolled in Medicare will lose that coverage as well.

In a statement, the Centers for Medicare and Medicaid Services said it was implementing rules set by Congress and did not respond to NPR's follow-up question about the impact on refugees with disabilities.

What to Watch

• Legal challenge to the Latin America redirect. Shaheen and Meeks have put the administration on notice in writing. Whether they move to court, refer the matter to the Government Accountability Office, or pursue other legislative remedies will determine how quickly this confrontation escalates beyond letters and press statements.
• Egypt and the Iran endgame. Rubio's memo tied the $320 million waiver explicitly to Operation Epic Fury and Egypt's mediation role. Congressional human rights advocates, who have pressed Cairo on political prisoners for years, are now watching whether the administration uses the Iran ceasefire negotiations to make the waiver permanent rather than annual.
• State lawsuits over Medicaid. With Florida identifying nearly 177,000 immigrants who will no longer qualify for its Medicaid program starting in October, advocacy groups are exploring whether emergency litigation can restore coverage while a broader legal challenge works through the courts.
• FOMC meeting, October 27 to 28. The Federal Reserve's two-day meeting runs October 27 to 28, with a press conference expected. Federal Reserve Vice Chair Philip Jefferson is scheduled to speak publicly on the U.S. economy and monetary policy before then, and markets will be listening for any signal on whether the foreign-policy turbulence has changed the rate calculus.

Sources: The Washington Post | Associated Press / WFTV | Just Security Early Edition, Oct. 2 | NPR | KFF Health News / U.S. News | Bloomberg | Reuters / Al-Monitor | Global Refuge