The Trump administration reportedly intends to merge the US government’s main overseas aid agency with the state department, as workers were asked to stay out of its Washington headquarters.

Secretary of State Marco Rubio told reporters he was now the acting head of the United States Agency for International Development (USAID), the agency that distributes billions of dollars in aid around the world.

Democratic lawmakers have called it an “illegal, unconstitutional” move that would hurt poor people abroad, harm national security and reduce US influence on the global stage.

President Donald Trump and one of his top advisers, billionaire Elon Musk, have been strongly critical of the agency.

Speaking to reporters at the White House on Monday, Trump alleged the agency run by “radical left lunatics” was getting away with “tremendous fraud”, but did not provide names or details.

USAID was established in 1961 by President John F Kennedy, and has around 10,000 employees and a budget of nearly $40bn (£32.25bn), out of a total of $68bn in US government foreign aid spending.

Calling USAID “a completely unresponsive agency”, Secretary Rubio said that a lot of functions of the organisation “are going to continue”.

“They’re going to be part of American foreign policy, but it has to be aligned with American foreign policy,” he told reporters in El Salvador.

It’s not clear how the administration plans to implement such a change.

A former USAID official hit back at Rubio and Trump, saying the organisation represented “the best and brightest that the American government has to offer”. Speaking to the BBC, Gillian Caldwell described “absolute chaos and fear” at USAID, as Trump’s team had “literally decapitated the agency”.

USAID will remain a humanitarian aid entity, despite its merger into the state department, three officials told the BBC’s US partner, CBS News.

The developments follow comments from Musk, who heads an unofficial cost-cutting agency, that the administration was planning to shut USAID down.

Over the weekend, two top security officials were placed on leave and the agency’s website went dark. Workers have since been told to stay at home. Hundreds of employees have also been locked out of their email, according to an internal message obtained by the BBC.

Global aid was upended in a matter of days late last month, after President Trump froze all foreign assistance provided by the US on his return to the White House.

The turmoil was felt in countries including Afghanistan, where American aid has been funding life-saving services for women and children. One midwife told the BBC that all medical centres funded by USAID had closed and dozens of workers had told to stay at home.

In Syria, a “stop work” message was also received by hundreds of staff operating the Al-Hol displacement camp in the north-east. There, it is the job of humanitarian workers to stabilise the site – which holds 40,000 people, mostly women and children – displaced from areas previously controlled by the Islamic State group.

Outside USAID offices, Democratic Party lawmakers said the moves were against the law and that shuttering the agency would harm national security.

“It’s not only a gift to our adversaries… it is plain illegal,” said Senator Chris Van Hollen of Maryland, suggesting that the likes of China and Russia could be emboldened by weakened American influence on the world stage.

The situation in Syria was cited by Congressman Johnny Olszewski, who also represents Maryland. “This is real life, this is dangerous and this is serious,” he said.

Others alleged that Musk was motivated by his business interests.

“Elon Musk makes billions of dollars based off of his business with China, and China is cheering at this action today,” claimed Senator Chris Murphy of Connecticut.

Musk has been put in charge of an initiative called the Department of Government Efficiency (Doge), a team that is not an official government body but given broad leeway by Trump to slash government spending.

Its legal status is unclear, as is its authority to order the shutdown of government programmes without consulting Congress in the case of USAID, for example. Doge has already been the subject of several court challenges.

Over the weekend, Musk posted dozens of messages including allegations that the agency was rife with fraud and corruption.

On X, the social network that he owns, he called USAID “evil”, a “criminal organisation” and a “radical-left political psy op” – short for “psychological operation”, a term commonly used online to allege a conspiracy or cover-up.

In a live stream on X early Monday, he told followers: “You’ve got to basically get rid of the whole thing. It’s beyond repair. … We’re shutting it down.”

On Monday, US media – citing unnamed White House sources – said Musk had been given an unpaid job as a part-time “special government employee”, a status which would potentially make him subject to several rules about financial disclosures and conflicts of interest.

At the White House, Trump defended Musk’s handling of the situation, saying the tech tycoon had “access only to letting people go that he thinks are no good, if we agree with him, and it’s only if we agree with him”.

“Elon can’t do and won’t do anything without our approval,” he said.

USAID distributes billions in aid to non-governmental organisations, aid groups and non-profits around the world.

With its website down, several key information hubs, including an international famine tracker and decades of aid records, were unavailable.

Top officials have been placed on leave or resigned in the last several days following clashes with Musk’s Doge, including over requests that employees of the unofficial department be given access to a highly secure area used for reviewing classified information, the Washington Post and CNN reported this weekend.

“No classified material was accessed without proper security clearances,” Katie Miller, Doge spokesperson, wrote on X.

USAID director for security John Vorhees and deputy Director for Security Brian McGill, were both placed on administrative leave as a result, CBS reports.

A top political appointee, USAID chief of staff Matt Hopson, also resigned, the Washington Post reported.