Trump Administration Announces Plans to Cancel Nearly $1 Billion in Spending Approved by Congress, Including $56 Million for Housing Counseling
Sep 28, 2026
By Kim Johnson, NLIHC Senior Policy Director
The House of Representatives adjourned for recess on September 16, with lawmakers returning to their home districts to campaign ahead of November’s midterm elections. The Senate is scheduled to remain in session this week before heading home for its October recess. October will be an important time for advocates to weigh in with their federal lawmakers on priorities and lay out the groundwork for the work Congress will do after the elections and before the current congressional session ends.
The Trump administration announced plans on September 25 to illegally claw back $810 million in funding for housing, health, education, and other programs, including $56 million of the $58 million appropriated in fiscal year (FY) 2025 for housing counseling programs. The so-called “pocket rescission” cancels money Congress has already appropriated. The administration announced the move just a few days before the end of the fiscal year, leaving little time for lawmakers to respond before the new fiscal year begins on October 1.
Top appropriators of both parties denounced the move and accused the administration of acting illegally by intentionally withholding and then canceling funds without congressional approval.
“This move shows that [the Office of Management and Budget] intentionally withheld these funds for months to execute this unlawful cancellation of appropriations that were approved on a bipartisan basis and signed into law,” stated Senator Susan Collins (R-ME), chair of the Senate Appropriations Committee. She added that the Government Accountability Office has determined that pocket rescissions are illegal.
The cancellation of funds threatens to escalate tensions over spending after the midterm elections.
Finalizing an FY27 Spending Bill for HUD
The Senate Appropriations Committee is not expected to release fiscal year (FY) 2027 spending bills before adjourning. Disagreements between Senate Appropriations Chair Susan Collins (R-ME) and Vice Chair Patty Murray (D-WA) over funding between defense and non-defense programs have stalled negotiations, with Chair Collins pushing for a significant increase in defense spending and Vice Chair Murray insisting non-defense spending receive an equal or greater increase. With Congress in recess, the Senate’s FY27 spending bills – including the Transportation, Housing, and Urban Development (THUD) bill funding HUD’s vital programs – will not be released until after November 9, when federal lawmakers return to D.C. for the end of the 119th Congress. While FY27 will begin on October 1, Congress passed a continuing resolution (CR) extending funding for federal programs and services through December 11, giving lawmakers more time to reach an agreement on final FY27 spending bills and avoid a partial shutdown of the federal government when the current CR expires.
Increased funding needed to maintain current levels of assistance
Because the cost of rent, housing development, and homelessness services increase every year, HUD programs like Tenant- and Project-Based Rental Assistance (TBRA and PBRA), Homeless Assistance Grants (HAG), and Public Housing must receive increased funding to maintain the services they currently provide. Flat funding, as in a long-term continuing resolution (CR), acts as a cut and reduces the number of people and communities HUD programs serve.
For example, the House’s FY27 spending bill proposed a drastic 8% cut to HUD programs overall and would provide less than a 1.5% increase in funding for contract renewals under HUD’s TBRA program. A recent analysis from the Center on Budget and Policy Priorities found that, if enacted, an estimated 471,000 fewer people would receive housing vouchers to help them afford rent in 2027. Typically, when a family no longer needs its voucher, public housing authorities (PHAs) can give it to a new family on the waitlist; without sufficient funding, PHAs administering vouchers cannot provide vouchers to new families when others leave the program.
Any final FY27 spending bill should at least provide sufficient funding to maintain services for currently assisted households, ensuring the millions of people helped by HUD programs do not lose the assistance they rely on for safe, stable, affordable, accessible homes, including:
- Providing at least $45.6 billion for TBRA programs, which would be enough to renew all current TBRA contracts.
Investing at least $5.1 billion in HUD’s Homeless Assistance Grants (HAG) program.
Fully funding the Public Housing Operating Fund at the full, formula-determined need, plus $598 million to address the cumulative shortfall in Public Housing operations reported in FY25, and providing increased funding for the Public Housing Capital Fund to begin addressing the capital needs backlog in Public Housing.
Investing in accessible, affordable homes for older adults and people with disabilities by fully renewing all existing PBRA contracts and Project Rental Assistance Contracts (PRACs) and expanding funding for the Section 202 Housing for the Elderly and Section 811 Housing for Persons with Disabilities programs.
Providing at least $15 million for HUD’s Eviction Protection Grant Program (EPGP), which gives communities grants to establish right to counsel and other programs that help people avoid eviction and remain housed.
At least maintaining $1.1 billion for the Indian Housing Block Grant (IHBG) program and increasing funding for the IHBG-Competitive program to $150 million, targeted to tribal communities with the most urgent housing needs.
Language protecting HUD resources and the people who rely on them
In addition to increased funding, Congress should include in its final FY27 spending bills language limiting the administration’s ability to rescind, withhold, freeze, or otherwise prevent appropriated funding from reaching communities, and reasserting Congress’s exclusive authority to expend federal funding:
Protect funding for Continuum of Care (CoC) programs so they are not destabilized by potential changes from the administration. HUD’s CoC program is the backbone of the nation’s homelessness response system, funding thousands of communities across the country for services like permanent supportive housing. The Trump Administration has proposed drastic changes to the program that would disrupt communities’ homelessness response efforts and put an estimated 97,000 people who had previously been experiencing homelessness at risk of losing their housing. The National Alliance to End Homelessness’s factsheet details the threats to homelessness assistance funding and the language needed to protect these important resources.
Permanently block implementation of the Office of Management and Budget’s (OMB’s) proposed rule, “Regulation for Federal Financial Assistance.” OMB published a notice of proposed rulemaking (NPRM) that would radically reshape the federal grantmaking process, giving the administration broad authority over the grantmaking cycle, including the authority to suspend or terminate a grant if a recipient runs afoul of the administration’s policy positions. Congress included language in its most recent CR delaying implementation of the rule until the CR expires on December 11; in an attempt to circumvent the delay, Trump Administration officials reportedly considered an executive order that would expand the administration’s authority over grants at the National Institutes of Health (NIH). The administration dropped the executive order idea after swift backlash, including from Senate Appropriations Chair Collins, who sent a letter to OMB and NIH officials warning them not to move forward. Congress should permanently stop the administration from moving forward with these harmful changes by including language that permanently blocks implementation of OMB’s proposal.
Stop illegal “pocket rescissions.” Congress should strengthen future appropriations with guardrails like more specific timelines to prevent the Trump Administration from withholding or freezing funds over policy disagreements with Congress.
Use NLIHC’s August Recess Toolkit to Tell Congress to Expand – Not Cut – Federal Investments in Affordable Housing and Homelessness Assistance Programs!
October will be a crucial time to lay the foundation for the work Congress will need to finish before year's end. Advocates still have time to weigh in with their federal lawmakers on the importance of expanding federal investments in affordable housing and homelessness assistance. Much like August Recess, the pre-election break in October gives federal lawmakers the opportunity to return to their home states and districts not only to campaign, but to hear from constituents about the issues that matter most to them.
Advocates can take action today by:
Using NLIHC’s August Recess Advocacy Toolkit for ideas and information on engaging members of Congress when they are in their home states or districts, including:
- How to schedule an in-district meeting with a member of Congress or invite an elected official to tour a housing development in your community.
NLIHC’s policy priorities for the remainder of the current Congress.
Links to additional resources for more information, and to help understand what the affordable housing crisis looks like in your community.
Emailing or calling members’ offices to tell them about the importance of affordable housing, homelessness, and community development resources to you, your family, your community, or your work. You can use NLIHC’s Take Action page to look up your member offices or call/send an email directly!
Sharing stories of those directly impacted by homelessness and housing instability. Storytelling adds emotional weight to your message and can help lawmakers see how their policy decisions impact actual people. Learn about how to tell compelling stories with this resource.
Organizations can also join CHCDF’s sign on letter calling for the highest possible funding for HUD and USDA affordable housing, homelessness, and community development programs in any final FY27 spending bills. Read the letter and sign your organization on here.
Visit NLIHC’s Advocacy Hub for more information and resources that can help you take action and help protect the affordable housing programs people rely on.