The Bush Administration announced its reform package on January 19 in a speech delivered by Secretary of State Condoleezza Rice. Rice admitted that previous attempts to integrate State and USAID programs and budgets had failed. She was right: The U.S. government ran 19 separate major aid accounts in 2005, ranging from child survival to strategic support for Egypt, and including those run by the new and promising Millennium Challenge Corporation (MCC). Taken together, these accounts totaled about $17 billion in spending. As the Administration realized, that's a lot of money to risk wasting on account of organizational incoherence.

After what the Secretary termed a "comprehensive review", the Administration concluded that "the authority to allocate foreign assistance" was still "too fragmented among multiple State Department offices and bureaus, and between State and USAID." Reform was necessary for three purposes: to ensure that foreign assistance is used as effectively as possible, to more fully align the foreign assistance activities carried out by the State Department and USAID, and to demonstrate that the Administration is a responsible steward of taxpayer dollars.