After weeks of behind the scenes negotiations and discussions, the White House on Thursday backed off a plan to cut billions of dollars from the State Department and U.S. Agency for International Development budgets, according to three sources familiar with the matter.
The battle pitted Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin, who opposed the cuts, against acting White House chief of staff Mick Mulvaney and acting Office of Management and Budget Director Russ Vought, whose agency set in motion the process to undertake up to $4 billion of cuts.
Foreign aid has been a favorite target of President Donald Trump's when trying to cut the federal budget, but ultimately, after much lobbying from Republican and Democrat lawmakers, Trump decided against them.
"The president has been clear that there is waste and abuse in our foreign assistance, and we need to be wise about where U.S. money is going -- which is why he asked his administration to look into options to doing just that," a senior administration official told ABC News.
"It's clear that there are many on the Hill who aren't willing to join in curbing wasteful spending," the official added, confirming that the White House would stand down.
The decision to not follow through on the cuts, formally known as a rescission package, has not yet been sent to Capitol Hill.
The package of cuts included key foreign policy priorities, including women's development, aid for Venezuela, efforts to counter Russian disinformation and Chinese expansion, international religious freedom advocacy, and global health funding amid the deadly Ebola outbreak in the Democratic Republic of Congo.
The Office of Management and Budget sent a letter to the State Department, which includes USAID, and asked for details on funds that were appropriated by Congress for specific purposes but have not yet been committed to a particular project.
No other agency received a similar letter, according to the U.S. Global Leadership Coalition, a nonprofit that advocates for U.S. diplomacy. Eliminating these funds would hit 7% of the State Dept and USAID budget, but amount to a decrease of just 0.09% in the federal budget -- with critics like USGLC saying earlier this month it would "significantly damage America's security and economic interests" without making a significant change to shrinking federal spending.
Those critics also included the powerful chairs and ranking members of the Senate Foreign Relations Committee and House Foreign Affairs Committee -- two Republicans and two Democrats. In a bipartisan letter on Aug. 9, Sen. James Risch, R-Idaho, Sen. Bob Menendez, D-N.J., Rep. Eliot Engel, D-N.Y., and Rep. Michael McCaul, R-Texas, wrote that these funds "were appropriated by Congress and signed into law" and are "essential" for U.S. leadership.
The four lawmakers warned that it would be "inappropriate," "precedent-setting," and "a direct affront to the separation of powers" if the Trump administration moved ahead and cancelled these funds and that they would "use all the tools at our disposal to respond appropriately."
While the decision was pending, the State Department ordered a spending freeze of 2% of the funding for these particular programs. At one point, the administration wanted to move ahead on the cuts except for projects championed by Vice President Mike Pence and senior adviser and presidential daughter Ivanka Trump and for combating the Ebola outbreak, a source said.
At a news conference in Ottawa, Canada, Thursday, Secretary Pompeo said he was working on the issue even that morning, but wouldn't comment on reports that a decision had been made.
But he added that "every penny" the State Department spends must be well-spent: "We've got to make sure we are using it in ways that are effective, that American interests are represented in the way we spend that money."
ABC News's Ben Siegel contributed to this report.