The Trump administration broke the law by holding back tens of millions of dollars that Congress had set aside for the Agency for Healthcare Research and Quality (AHRQ), according to a new report from the Government Accountability Office (GAO).
The GAO concluded on Wednesday that the Department of Health and Human Services (HHS) violated the Impoundment Control Act (ICA) when it failed to spend more than $78 million in fiscal year 2025 funds, a shortfall that followed a wave of layoffs that gutted the agency's grant-making operations.
The 1974 law restricts the president's ability to cancel or delay spending that Congress has already approved. The GAO's finding is a formal legal determination that the executive branch overstepped its authority.
"We conclude that HHS withheld funds when it declined to obligate or expend more than $78 million of its FY 2025 appropriation before the close of the fiscal year," the GAO wrote. "We further conclude that this withholding constituted an impoundment under the ICA rather than a programmatic delay. Because HHS did not submit a special message proposing to rescind AHRQ funds, HHS's actions violated the ICA."
HHS did not immediately respond to a request for comment. The decision follows a formal request from Democratic lawmakers, who had been pressing for an investigation after the agency fired all of its grant-processing staff in July 2025.
After those firings, AHRQ's ability to obligate and disburse funds slowed dramatically, leaving $78 million unspent at the end of the fiscal year. The GAO noted that the agency did not shift money to other programs to compensate for the drop in grant activity, and that the combination of a large unobligated balance, canceled peer review sessions, and admissions of funding uncertainty pointed to a deliberate decision not to spend the money.
AHRQ is a relatively small agency but plays a significant role in healthcare research, having funded studies that have saved thousands of lives and billions of dollars over nearly three decades. The funding problems have continued into the current fiscal year. Congress allocated about $345 million for AHRQ this year, but in July the agency told researchers it would halt nearly all previously awarded grants. Last month, the White House notified Congress of its intention to reclaim $28 million of AHRQ's funding as part of a broader effort to cancel nearly $1 billion across multiple agencies.
Democratic lawmakers have been warning for more than a year that the administration was violating the law, and they welcomed the GAO's ruling as official confirmation. Senator Patty Murray (D-Wash.), the top Democrat on the Senate Appropriations Committee, said in a statement: "This decision confirms what we've long known: President Trump lit health research funding on fire last year, and it's clear as day he's just done the same again this year." She added that the research has saved lives and reduced costs, but "President Trump and Secretary Kennedy are intent on breaking the law to cut it off, and Republicans in Congress have all but let them do it." Murray vowed to keep pushing for consequences.
In the House, Representatives Diana DeGette (D-Colo.), Doris Matsui (D-Calif.), and Don Beyer (D-Va.) issued a joint statement calling on Republicans to join them in demanding that the Constitution be upheld. "The administration's unilateral dismantling of AHRQ's grantmaking operations is an illegal impoundment of congressionally appropriated funds," they said. "Trump's administration cannot simply refuse to spend the resources we authorized for lifesaving health care research. Republicans must join Democrats in demanding that the Constitution is upheld."
The GAO's finding adds to a growing list of legal challenges facing the administration over its handling of federal spending. As Democrats eye midterm gains, the dispute over health research funding could become a flashpoint in the broader battle over executive power and congressional authority.
