The State Department announced yesterday that Russian President Vladimir Putin has informed the United States he will not permit any further activities by the U.S. Agency for International Development (USAID) in the Russian Federation.

State officials tried to put the best face on this humiliating rejection, saying they are “extremely proud of what USAID has accomplished in Russia over the past two decades” and pledging to “work with our partners and staff to responsibly end or transition USAID’s programs.”

The reality is that this is a slap in the face from Putin to President Obama and U.S. Ambassador to Russia Mike McFaul, who became a target of vicious attacks by the Russian state media.

And exactly why is the State Department so proud? Two decades ago under Boris Yeltsin, there may have been a chance for genuine democracy to take root in Russia. That chance was squandered by the Russian ruling elites. After billions of dollars spent on USAID programs in the 20 years since, what has been accomplished? In the words of the Peterson Institute’s Anders Aslund, “Russia is no longer a democracy by any stretch of the word,” as Putin has systematically transformed it “from a semi-democracy to an authoritarian state.”

The United States should have unilaterally ended foreign aid to Russia years ago when the oil revenues poured in, but apparently the Obama Administration put a higher premium on throwing more good taxpayer dollars after bad to create jobs for USAID bureaucrats than it did on sending a clear message about American values to a rival nation.

Now it is Putin who is doing the throwing—of Obama’s Russian aid program under the bus.

Coming on the heels of the tragedy in Benghazi, this is another Obama foreign policy humiliation by those who deeply dislike America.