Senate Dems Accuse Admin of ‘Impoundment’ Over USAID Funds

As the Trump administration puts the finishing touches on its plans to bury the remains of USAID, it’s running into a final problem. 

It plans to use money that Congress appropriated for global health to cover the costs of shutting down USAID, Senate Democrats said in a Friday letter. That means redirecting funds meant for fighting HIV, malaria, and more to instead pay for the aftermath of the agency destruction, a move that the letter describes as an “illegal impoundment.”

The Democrats, led by the Senate Appropriations Committee’s State and Foreign Operations Subcommittee’s Ranking Member Sen. Brian Schatz, are demanding that OMB Director Russ Vought and Secretary of State Marco Rubio instead put the money toward the purpose for which Congress authorized it: foreign aid. At this point, the letter says, that means directing the money towards global health contractors specifically, 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, terminating 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 overdue payments are owed to U.S. implementing partners,” the letter reads. “These implementers need to be made whole, and sufficient prior year funds exist to cover related expenses.”

After DOGE took a wrecking ball to the agency, questions have lingered over how the administration would shut the agency down. It’s left a financial mess. Contractors assigned to projects were immediately cut off from payments. They’re now fighting to be made whole, in some cases for work that was already complete when Elon Musk and other Trump appointees froze the agency’s funding without warning in the administration’s first weeks. The question is partly who gets paid out of what account, and whether money that was allocated for the global health contractors gets pooled with other costs associated with the shutdown, as Senators allege. White House officials reportedly told Congress last week that the government has up to $19.2 billion to cover the close-out costs, with $3.2 billion of that coming from FY 2025 appropriations for global health matters. 

Though administration officials told Congress last year that they intended to rescind billions from the agency, what happened to the agency’s budget in the aftermath of its destruction has never been fully explained. 

The fight raises larger questions about how much power the White House has seized from Congress in 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 around shutting down the agency that was once meant to distribute those funds. 

Trump officials went into the president’s second term heralding “impoundment” of funds — either not spending or reappropriating money that Congress had ordered the executive branch to spend — as a right, not a violation of law. Democrats and the Government Accountability Office, an independent legislative-branch watchdog, have kept up a drumbeat since the administration came into office, reporting that congressionally appropriated funds are being impounded. OMB Director Vought has defended impoundment as a presidential right; Trump officials have not conceded that any one action qualifies as impoundment. 

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

“It seems it was more important to them that no one got the money than that it actually went to helping dying people overseas,” Bobby Kogan, senior director of federal budget policy at Center for American Progress, told TPM. “They would rather literally set the money on fire then help save people who are dying overseas — who we could have saved and we’re supposed to save — in extremely cost efficient ways.”

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

“An Antideficiency Act violation happens if you spend money you don’t have … and a Purpose Statute violation is where 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 of them at the same time,” Kogan said.

The White House Office of Management and Budget and the State Department did not reply 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 that we kind of understand them,” Kogan said, and “they’re set up in ways that give enormous flexibility to the president.”

At another level, there’s an irony here: the administration is in part planning to use the funds to cover lawsuits that have emerged over the agency’s destruction. Paying out those claims would amount to an admission that the Trump administration botched the shutdown.
The destruction of USAID has been deadly on a scale that’s hard to overstate. The administration was warned. Per documents obtained by TPM last year, the World Food Programme 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 halt. Atul Gawande, a New Yorker writer and professor at Harvard’s Chan School of Public Health, estimated in November that the shutdown had caused hundreds of thousands of people to die.