That's the gist of this Financial Times story linked on Free Republic.
It's not a bad idea, in principle. USAID obviously has more than one prostitution scandal in its multi-billion dollar budget. Not to mention my suspicion that it may possibly fund Islamist terrorists or their supporters. In any case, to lose an agency in Washington means that things are screwed-up inside worse than any oustsiders know. Worse than SNAFU. It's equivalent the death penalty for bureaucrats--some people might actually lose their jobs as well as their budgets.
Unfortunately the State Department is hardly the best-managed agency in the US Government. Maybe Condoleezza Rice will change that, but it certainly won't be easy. She's scheduled to make a speech about something at the Heritage Foundation on Tuesday, and I'll try to attend and see if she says something about USAID.
Until then, good night, and good luck...