Foreign Aid on the Clock: Pocket Rescission Explained and Charting a Practical Off-Ramp

By SERGIU TROIE

September 13, 2025 |

One of the bedrock principles of U.S. appropriations law is “availability.” For funds appropriated by Congress to be legally available for obligation and expenditure (i.e., committed, then spent) by the Executive branch, the three elements of funding availability – time, purpose and amount – have to be satisfied (GAO Redbook, Ch. 3, 3-9). The amount element is relatively straightforward and mathematical, like the amount of cash in our wallets or checking accounts. The time and purpose elements of appropriated funds make them more like gift cards that can only be used at specific stores and for a limited period of time.  

Given the recent rescissions of appropriated funds proposed by this Administration, one of which passed into law in late July and rescinded $9.4 billion of mostly of Fiscal Year 2025 foreign assistance funds (Public Law 119-28), I thought it might be of interest to explore the time element of appropriated funds. Especially in light of the August 28 “historic pocket rescission” request with respect to another $5 billion in foreign assistance funds, many of which were appropriated in Fiscal Year 2024.

This issue of time in appropriations law may seem technical and jargony, like a bit of inside baseball within the federal government. But this goes to the heart of the balance of power among the branches of the U.S. government. Who gets to decide whether U.S. taxpayer funds are spent? Under what conditions? If Congress appropriates funds through a law signed by the President, can the President later refuse to spend them?

As a threshold matter, when Congress appropriates funds in the annual appropriations acts, it specifies whether those funds are only available for obligation and expenditure by a certain date. This could include whether the funds have no time limit often signalled by the words, “to remain available until expended.” In recent years (Public Law 118-47), some civilian foreign assistance accounts (like for international disaster assistance) have no time limit to be spent. But many of the civilian foreign assistance accounts (including the Development Assistance, Global Health Programs and Economic Support Fund accounts) are appropriated with an initial two-year period of availability. So for FY 2024 Development Assistance funds, for example, which comprise $3.2 billion of the recent pocket rescission request, their period of availability ends on September 30, 2025.

This time limitation for many appropriations accounts, whether for foreign assistance or other purposes, is meant as an encouragement and incentive for the Executive branch to hurry up and spend appropriated funds before asking for more. This “use it or lose it” approach makes sense when the Executive generally intends to spend all appropriated funds but may face a number of delays to do it in a timely manner (more on that in a later post). But when the Executive has a policy not to spend appropriated funds, the time limitation for appropriated funds’ availability encourages the Executive to wait out the clock until the appropriated funds legally expire. 

This time-limited period of availability of the funds proposed to be rescinded is what makes this second rescission request, transmitted in late August, a so-called “pocket” rescission. As the U.S. Government Accountability Office (GAO) explained in an August blog post: 

“A pocket rescission occurs when a president asks Congress to rescind (or cancel) funds very close to the end of the fiscal year—so close that the funds expire before they can be used for new obligations.”  

This kind of rescission takes its name from the pocket veto, where a President receives a bill passed by Congress within 10 days of the end of a legislative session but takes no action on it (i.e., puts it in his pocket). Such a bill cannot become law through Presidential inaction (which requires a 10 day waiting period), and because there is no affirmative veto, Congress cannot override a pocket veto. 

The procedural legal framework for rescission of appropriated funds is based in large part on the Impoundment Control Act (ICA), which gives Congress 45 days to vote to approve an Administration’s rescission request. A simple majority vote in each of the House and Senate is sufficient to approve a rescission. If Congress does not approve a rescission request or the 45 days pass without action, the funds in question are not rescinded. Because the most recent rescission request was transmitted on August 28, the 45-day window for Congressional action would run out on October 12, nearly two weeks after the funds in question would no longer be available for obligation and expenditure under the terms of the FY 2024 appropriations act.

Although the GAO has taken the position that it is not within a President’s authority to use the ICA in this manner to time rescission requests near the end of the period of availability of the funds proposed to be rescinded (see B-330330) so that the funds are not expended before expiring, the GAO is part of the Legislative branch. So unlike a federal court, the GAO’s opinions are not binding on the Executive branch. This Administration believes it is in the right in its interpretation that Executive authority includes the authority not to spend funds appropriated by Congress. And it is invoking this pocket rescission request as part of ongoing litigation concerning foreign assistance in order to advance its legal theory on rescissions of appropriated funds (see Department of State v. AIDS Vaccine Advocacy Coalition, No. 25A269, Sept. 9, 2025).

All of this is taking place with the backdrop of less than three weeks remaining in the current U.S. fiscal year that ends on September 30, when funds in many appropriations accounts across the U.S. government will either expire or will be depleted. For nearly 50 years, Congress has only passed full year appropriations four times for the entire U.S. government before the start of a new fiscal year (see CRS, Continuing Resolutions: Overview of Components and Practices, updated Mar. 27, 2025), with most years seeing one or more Continuing Resolutions before a full year appropriation act (or a full year continuing resolution) is passed.

It is common for most of the funds appropriated in a Continuing Resolution to be provided subject to the same authorities and restrictions as in the previous year’s appropriation act and in a pro rata amount based on the time period covered by the Continuing Resolution and on the previous year’s appropriation level for each account. That is the general premise of a “clean” Continuing Resolution. But of course, there are always exceptions, which are called “anomalies” in appropriations-speak.

With many members of Congress expressing concern about the timing of the pocket rescission request landing during fiscal year end appropriations negotiations, it may be worthwhile for members and staff to consider several possible responses to the pocket rescission proposal.

One possible response would be to simply vote on the proposed rescission, either as an anomaly included as part of the Continuing Resolution or in parallel to the Continuing Resolution. That might be a reasonable approach if there are sufficient votes to rescind the funds in question, but if there are not or if the outcome of rescission is difficult to predict, tying rescission of prior year funds to a Continuing Resolution appropriating FY 2026 funds may make it difficult to pass the entire package. There is also the potential mismatch in voting thresholds for the rescission, which only requires a majority vote of both houses to pass, and the Continuing Resolution, which under most circumstances would require 60 votes to pass the Senate. The approach of voting on the rescission before September 30 also cedes the timeline Congress would have to consider rescission from the 45-day window contemplated in the ICA to a shorter window dictated by the Administration, and if Congress rejects some or all of the rescission, there is very little time for the Administration to responsibly obligate those funds.

One potential off-ramp from this situation would be for Congress to extend the period of availability of the funds subject to the rescission request as an anomaly in the Continuing Resolution. As explained above, the pocket rescission concept is an outcome of the interplay between a looming availability deadline for fixed-term appropriated funds and the 45-day ICA window for Congress to consider a rescission request. But there is nothing sacrosanct about the September 30 deadline for appropriated funds’ period of availability. Some funds appropriated for foreign assistance or other purposes have initial periods of availability of longer than 2 years. For example, FY 2024 funds designated for “local works” projects (projects intended to be implemented by local organizations who have not received significant funding from the U.S. government previously) have an initial period of availability of 5 years. And many foreign assistance funds also have extended periods of availability under certain circumstances, such as an additional year of availability following transfer to the Development Finance Corporation and an additional four years of availability if foreign assistance funds are obligated during their initial two year period of availability (which helps to facilitate reprogramming of funds from one project to another when circumstances warrant). Lastly, as mentioned previously, some foreign assistance funds like those available for international disaster assistance have no expiration date at all.

Such an approach to the recent pocket rescission request may have a few advantages. First, it preserves Congress’ prerogative to have a full 45-day window in order to consider any rescission request. Second, it would not force any member to take a position on the rescission request itself, allowing the Continuing Resolution to be considered without this complicating factor. Third, should there be a vote to reject the rescission request or should the 45-day window under ICA pass without action, the Executive branch would still have sufficient time to obligate the subject funds for an appropriate purpose consistent with Administration priorities. And lastly, this approach could eliminate the need for the Supreme Court to intervene on an emergency basis in the AIDS Vaccine Advocacy Coalition where some of the funds at issue are subject to the pocket rescission request.