U.S. District Judge Jia Cobb issued an order late Wednesday in National Urban League et al. v. Trump et al. suspending the Sept. 30 deadline that would otherwise have caused $56.1 million in FY2025 HUD Housing Counseling Assistance funds to lapse, while the court considers the ten nonprofit plaintiffs' request for broader relief. The order followed a Sept. 29 complaint alleging HUD unlawfully withheld appropriated money and retaliated against grantees for their viewpoints; WRE News reported the order did not resolve those allegations and that the government argued the court lacks power to override a congressional deadline. The court directed the parties to continue briefing through Oct. 19.
The White House's Sept. 25 rescission proposal sought to cancel $56.1 million of the $58 million appropriated for the program.
U.S. Government Accountability Office · on GAO's finding on the FY2026 pocket rescission
GAO issued a legal decision on Sept. 29 reviewing the President's Sept. 25 special message proposing rescissions from 11 appropriation accounts, for which OMB had also issued a reapportionment letter withholding the proposed amounts from obligation. GAO concluded that the Impoundment Control Act does not allow the President to withhold appropriated funds through their expiration date merely by proposing a rescission, writing that "the President may not force the expiration of budget authority Congress has already enacted and did not rescind."
The special message was transmitted five days before the fiscal year ended Sept. 30; WRE News reported the affected accounts include HUD's Housing Counseling Assistance program.
Roll Call · on the National Urban League suit over the $56M housing counseling rescission
The National Urban League and state and local housing nonprofits sued in the U.S. District Court for the District of Columbia on the night of September 29 to block the $56 million HUD housing counseling cut included in the administration’s $810 million pocket rescission, arguing it violated the Impoundment Control Act and the Constitution. In decision B-338788, GAO’s general counsel concluded on September 29 that the September 25 special message, covering 11 appropriation accounts, does not permit withholding the funds past the end of FY2026 because the 45-day review period runs at least to November 9. New York Attorney General Letitia James filed a separate suit on September 30, and her office said more than 7,000 New York households were at risk of losing counseling services; Sen. Jeff Merkley’s unanimous-consent request to nullify the rescission was blocked by Budget Chairman Ron Johnson.
The pocket rescission was transmitted September 25; the GAO decision is B-338788 and the New York complaint was announced by the attorney general’s office on September 30.