Congress’s watchdog arm has found that the Trump administration illegally withheld federal funds last year from federal government programs at the Environmental Protection Agency and the Department of Health and Human Services.
In 2025, the Trump administration prevented the two agencies from distributing more than $1 billion appropriated by Congress, in prohibitions known as impoundments, according to two decisions that the Government Accountability Office sent to Congress on Wednesday.
Impoundments are illegal under a law passed in the aftermath of the Watergate scandal that further institutionalized the separation of powers. The GAO, as an arm of Congress, is the group empowered both to investigate possible impoundments and sue the executive branch over violations, but the GAO has never actually filed such a suit.
The watchdog arm is currently without an appointed or confirmed leader, and its acting general counsel is hesitant to pursue legal action, The Washington Sun previously reported. The GAO concluded in September that the Trump administration’s “pocket rescissions” of roughly $800 million in federal spending violated impoundment laws. The watchdog has previously reached impoundment decisions for several other government programs that lost funds last year.
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But GAO has taken no action in response to any of those conclusions.
At the EPA, the GAO found that the agency impounded funds in 2025 when it terminated more than $1 billion worth of grants distributed under the “Community Change Grants Program,” which was created in the Inflation Reduction Act to fund climate resilience and pollution reduction efforts in disadvantaged communities.
While Congress later voted to rescind the funds once they were clawed back from the communities that won the awards, the GAO found that the initial termination and removal of funds was an impoundment.
The Office of Management and Budget did not immediately respond to a request for comment.
The GAO also found HHS impounded funds when it terminated grants at the Agency for Healthcare Research and Quality, which investigates the nuts and bolts of how health care in the United States works.
The agency had disbursed less than 60% of its fiscal 2025 year funds, with more than $78 million unawarded, GAO found.
Over the summer, AHRQ notified recipients of more than 150 grants across 32 states that their awards had been terminated, according to a tally by Academy Health, a nonpartisan organization that advances evidence-based health policy.
Multiple AHRQ grantees received the same rationale for the cuts. Letters to grantees said the agency has new priorities, including several — nutrition, autism and “overmedicalization of children” — that are favorites of Health Secretary Robert F. Kennedy Jr.
“HHS has failed to detail to the Committee exactly how it has spent down AHRQ funding for fiscal year 2026,” said Sen. Patty Murray (D-Washington), the ranking member on the Senate Appropriations Committee, in a statement.
“GAO’s conclusion is clear,” said Academy Health President Aaron Carroll. “The law was not followed, and health research that Congress paid for did not happen. That should concern anyone who cares about whether our health care system actually works.”
Murray said previously that AHRQ has said it plans to fund just 90 grants this year — instead of the hundreds it typically funds — and transfer some of its dollars to other agencies.
She and Sen. Tammy Baldwin (D-Wisconsin) wrote to HHS last month asking for an explanation of how AHRQ has justified its changes.
“It is increasingly clear that once again, your department intends to ignore the law and—through a combination of gross negligence and intentional sabotage—will refuse to spend millions of taxpayer dollars that should be funding research to lower costs in the health care system and protect patients’ safety,” they wrote in the letter.
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