At midnight on Sept. 30, the federal government will close its books on another fiscal year. For hundreds of millions of dollars in foreign aid, that routine accounting deadline could decide whether the money ever reaches the programs Congress selected.
Democratic Sens. Patty Murray and Brian Schatz say the Trump administration is preparing to let $725 million pass that deadline without committing it to new projects. They have also accused the White House of taking another $2.5 billion, originally approved for global health and development, and using it to pay for the dismantling of the US Agency for International Development. This information was published in a report by Politico.
Together, the two actions place more than $3.2 billion at the center of a widening argument over a basic question: Once Congress approves money for a particular purpose, how much freedom does the president have to spend it differently, or not spend it at all?
Why Sept. 30 matters for the $725 million
Federal funding does not work like money kept indefinitely in a savings account. Many appropriations come with a limited period during which an agency can make new financial commitments.
For the $725 million in question, that period ends on Sept. 30. The administration does not necessarily need to finish the programs or distribute every dollar before then. It does, however, generally need to “obligate” the money by entering into a legally binding commitment, such as approving a grant or signing a contract.
If that does not happen before the deadline, the money expires for new uses. It normally remains in an expired account for five years, but only to settle or adjust commitments that were properly made while the funding was active. It cannot ordinarily be revived for a new grant after the deadline. Any balance left after five years is cancelled and returned to the Treasury.
So when lawmakers warn that the money will “expire,” they do not mean that it instantly disappears. They mean the opportunity to launch the programs Congress funded may be lost.
The programs caught against the clock
The $725 million covers three areas that extend beyond conventional humanitarian aid. About $115 million was approved to fight international narcotics networks and human trafficking. Another $310 million was meant for assistance in Europe and Eurasia, including efforts to resist Russian influence.
The final $300 million was allocated to economic growth initiatives. Those programs were intended to support secure supply chains and improve American competitiveness, issues the Trump administration has frequently described as national priorities.
Murray and Schatz want Republican lawmakers to join them in demanding that the money be obligated before the clock runs out.
A separate $2.5 billion fight over USAID
The larger disagreement concerns $2.5 billion that may still be spent, but not in the way its Democratic critics say Congress intended. Of that amount, $1.3 billion was approved for global health programs and $1.2 billion for development assistance. The administration reportedly plans to use the money for “closeout costs” connected to dismantling USAID.
Closing a large federal agency is not free. Grants must be terminated, contracts resolved, staff arrangements completed and offices wound down. The dispute is over whether money set aside for health and development can legally or appropriately cover those expenses.
Murray, the Senate’s leading Democratic appropriator, and Schatz, the senior Democrat overseeing State Department funding, argue that Congress did not give Trump permission to rewrite those priorities.
The fight is bigger than foreign aid
The confrontation is part of a broader struggle over control of federal spending. The Constitution gives Congress the power of the purse, but executive agencies carry out the actual spending. Conflict erupts when an administration delays, redirects or withholds money after lawmakers have approved it.
Some Republicans have also resisted the White House’s attempts to exert greater control over federal grants. Senate Appropriations Chair Susan Collins recently objected to a proposal that would place political appointees in charge of deciding which National Institutes of Health grants receive funding. She called the idea contrary to congressional intent.
Another deadline is approaching for education funding, including hundreds of millions of dollars that could expire. A federal judge has ordered officials to provide an update on that money as part of a lawsuit involving Education Department grant recipients.
FAQs
How much foreign aid is involved?
The dispute covers approximately $3.225 billion: $2.5 billion that may be redirected and $725 million at risk of expiring for new obligations.
Will the $725 million disappear on Sept. 30?
Not literally. It may remain in expired accounts, but it generally cannot be used for new programs after the deadline.
