Senate Dems Accuse Admin of ‘Impoundment’ Over USAID Funds

As the Trump administration puts the finishing touches on its plan to bury the remains of USAID, it faces one final problem.

He plans to use money Congress appropriated for global health to cover the costs of closing USAID, Senate Democrats said in a letter Friday. That means redirecting funds intended to fight HIV, malaria and more to finance the aftermath of destroying the agency, a move the letter describes as “illegal impoundment.”

Democrats, led by Sen. Brian Schatz, a ranking member of the Senate Appropriations Committee’s Subcommittee on Government and Foreign Operations, are demanding that OMB Director Russ Vought and Secretary of State Marco Rubio instead spend the money for the purpose Congress authorized it for: foreign aid. At this point, the letter says, that means directing money specifically to global health providers, many of whom are demanding payment after DOGE pulled the plug on USAID without warning last year.

“In addition to abandoning our partners, ceding global leadership, and potentially wasting billions of taxpayer dollars, ending these programs as part of the Administration’s illegal and reckless decimation of USAID has resulted in significant costs as legal fees pile up and late payments are owed to U.S. implementing partners,” the letter read. “These prime contractors must be united and there are sufficient funds from the previous year to cover associated expenses. »

After DOGE threw a wrecking ball at the agency, questions remain about how the administration would shut down the agency. This left a financial disaster. Contractors assigned to the projects were immediately deprived of payments. They are now fighting to be reinstated, in some cases for work already completed when Elon Musk and other Trump appointees froze funding to the agency without warning in the first weeks of the administration. Part of the question is who gets paid into which account, and whether the money allocated to global health providers is pooled with other costs associated with the shutdown, as the senators claim. White House officials reportedly told Congress last week that the government had up to $19.2 billion to cover closing costs, including $3.2 billion from fiscal 2025 appropriations for global health issues.

Although administration officials told Congress last year that they intended to cut billions of dollars from the agency, what happened to the agency’s budget following its destruction has never been fully explained.

The fight raises broader questions about the power the White House has taken away from Congress over spending. Here, the administration’s April 20 notice to Congress folded $3.2 billion in 2025 global health appropriations into the larger pool available to cover administrative costs related to closing the agency that was once supposed to distribute those funds.

Trump officials began the president’s second term by announcing “seizure” of funds — either not spending or reappropriating money that Congress had ordered the executive branch to spend — as a right, not a violation of the law. Democrats and the Government Accountability Office, an independent watchdog of the legislature, have maintained their stance since the administration took office, signaling that funds appropriated by Congress were being seized. OMB Director Vought defended impoundment as a presidential right; Trump officials have not admitted that any action could be considered impounding.

The bottom line here is that the Trump administration wants to use USAID money it could spend on health to cover other costs associated with burying the agency.

“It seems like it was more important to them that no one get the money than to put it toward helping the dying overseas,” Bobby Kogan, senior director of federal fiscal policy at the Center for American Progress, told TPM. “They would literally rather set the money on fire than help save people who are dying overseas – who we could have saved and are supposed to save – in a hugely cost-effective way.” »

Kogan added that using the appropriated money outside of what it is intended to be used for could violate two different laws: the Purpose Statute and the Antideficiency Act.

“A violation of the anti-deficiency law happens if you spend money that you don’t have…and a violation of the purpose law is the fact that you use this money that was supposed to be for column A, but instead you used it in column B. So it’s kind of both at the same time,” Kogan said.

The White House Office of Management and Budget and the State Department did not respond to requests for comment.

Foreign aid appropriations can differ from other appropriated funds, providing a possible defense for the administration: “Foreign aid money looks different from many types of appropriations, the way we understand them,” Kogan said, and “they are set up in a way that gives enormous flexibility to the president.”

On another level, there’s an irony here: The administration plans in part to use the funds to cover the lawsuits that have arisen in the wake of the agency’s destruction. Paying these claims would be tantamount to admitting that the Trump administration botched the shutdown.
The destruction of USAID was deadly on a scale that is difficult to overestimate. The administration has been notified. According to documents obtained by TPM last year, the World Food Program warned the Trump administration that it would lose the ability to feed hundreds of thousands of refugees across the Middle East if USAID funding were to end. Atul Gawande, a New York writer and professor at Harvard’s Chan School of Public Health, estimated in November that the shutdown had caused the deaths of hundreds of thousands of people.