The Request, As Filed
On September 25, the White House sent Congress a package of 11 proposed rescissions totaling $810 million, covering programs at the Departments of Commerce, Education, Health and Human Services, Homeland Security, Housing and Urban Development, and Justice, along with international assistance accounts. The transmittal, signed by the president and addressed to House Speaker Mike Johnson, invokes Section 1012 of the Congressional Budget and Impoundment Control Act of 1974, the statute governing how a president can ask Congress to cancel already-appropriated funds.
Within that package, one proposal would rescind $56.1 million of the $58 million Congress appropriated in fiscal year 2025 for HUD's Housing Counseling Assistance program, which funds grants to nonprofit and public entities that counsel households on buying, renting, and avoiding foreclosure. The administration's justification, included in the filing, argues the program has not demonstrated reduced delinquency rates among counseled homebuyers and criticizes some past grantees.
The Office of Management and Budget published formal notice of the transmittal in the Federal Register, confirming the September 25 release date and the $810 million total across the affected agencies.
Why Timing Makes This a Pocket Rescission
Federal budget law allows a president to ask Congress to cancel funding and to withhold that money for up to 45 days while lawmakers consider the request. Because the fiscal year ends September 30, a request filed this late leaves only days before the underlying appropriation would otherwise expire — meaning the money can lapse before the 45-day review period runs its course, regardless of whether Congress approves or rejects the proposal. That sequencing is what commentators label a pocket rescission.
The housing counseling dollars at stake are nearly the entire amount HUD had available for the program this year. HUD's own guidance for distributing the FY2025 funds had already excluded prepurchase counseling as an eligible use and limited postpurchase counseling to homeowners with federally backed mortgages, narrowing the program's reach even before this rescission request.
The Government Accountability Office, Congress's nonpartisan watchdog, has previously taken the position that the law does not permit the executive branch to run out the clock on funds this way, and GAO weighed in again on this specific package after its September 25 filing.
Reaction and What Happens Next
The request drew criticism from lawmakers in both parties, including members of the Senate Appropriations Committee, who argued the maneuver bypasses Congress's constitutional authority over spending decisions it has already enacted into law. The administration used a similar approach on a separate rescission package roughly a year earlier; in that instance, the Supreme Court allowed the funds to be withheld under a preliminary order that did not resolve the underlying legal question of whether pocket rescissions are lawful.
Industry groups that work with HUD-approved counseling agencies, including the National Association of Realtors, have pressed both HUD and Congress to preserve funding for prepurchase counseling specifically, noting that the House Appropriations Committee had already adopted language supporting that activity as part of its fiscal 2027 HUD spending bill.
Because the fiscal year closed at the end of September, the practical effect for housing counseling agencies is likely to turn on litigation and on whatever decisions GAO and the courts reach regarding the legality of pocket rescissions generally, rather than on the 45-day congressional review process that governs an ordinary rescission request.