Breaking Down OMB’s Growing Use of Category C

Since January 2025, the White House Office of Management and Budget (OMB) has led an aggressive campaign to withhold federal funds from agencies and programs the Trump administration disfavors. Central to this effort has been OMB’s vigorous use—and at times abuse—of its authority under the Antideficiency Act to apportion the funds Congress appropriates. OMB has used its apportionment authority to delay agency access to funds by designating funds as “unallocated,” conditioning the release of funds on OMB’s approval of detailed “spend plans,” and waiting “longer than in past administrations” to approve apportionments in the first place.

But there is another, less publicized, tactic that OMB has used to tighten its control over—and in some cases deny agencies access to—congressionally appropriated funds: Category C. A Category C action sets aside, for use in a future fiscal year, funds that Congress has made available across multiple fiscal years (multi-year money) or without fiscal-year limitation (no-year money). When OMB apportions funds in Category C, it blocks an agency from spending that money in the current year unless OMB provides otherwise in a new apportionment or in a binding apportionment footnote.

Since the beginning of the second Trump administration, OMB’s use of Category C has increased both numerically and as a percentage of the total number of apportionments the office has issued. At least two factors have contributed to this increase. The first is the enactment of President Trump’s One Big Beautiful Bill Act (OBBBA), the execution of which OMB appears to be closely managing through Category C. Category C allows OMB to slowly meter out OBBBA funds, including in agencies such as the Department of Defense and NASA. The second is OMB’s expansion of Category C to at least 64 budgetary accounts that—based on apportionment data OMB began publishing in 2022—have never before seen funds withheld in Category C. In addition to using Category C in dozens more accounts, OMB also has increased the amount withheld in some accounts that previously saw funds apportioned in Category C under the Biden administration.

Here, we address each of these developments in turn, drawing on a review of every apportionment OMB issued with at least some funds placed in Category C from Jan. 20, 2025, to Jan. 28, 2026—the first full year of the second Trump administration. In doing so, we provide a road map for Congress and advocates to track both where and when OMB is using Category C to delay funding and where and when OMB is using Category C to unilaterally cut funds, implementing the president’s budget in violation of congressional spending directives.

Legal and Factual Background 

Before an agency spends, OMB seeks to ensure the appropriation is subject to an apportionment, making the funds available for obligation. An apportionment sets the pace at which an agency may spend appropriated funds over the course of the fiscal year. It tells the agency when it may spend funds and subject to what conditions.

OMB parcels out funds in an apportionment in one of four ways. Amounts apportioned in Category A are separated by time—for instance, by dividing funds across fiscal quarters. Amounts apportioned in Category B are separated by project, program, or activity. Amounts apportioned in Category AB are separated by time and project, program, or activity. And amounts apportioned in Category C are set aside for obligation in future fiscal years. Funds apportioned in Category C are unavailable for obligation absent either reapportionment (OMB’s revision of a prior apportionment) or contrary instruction from OMB in a binding apportionment footnote. 

Congress created the apportionment authority in 1905, but Category C did not emerge until nearly a century later. In May 2003, the Bush administration announced in a letter that it had “creat[ed] a new line for apportioning funds into future fiscal years”—that is, Category C. OMB derives its authority to issue apportionments from the Antideficiency Act, which Congress enacted to ensure agencies spend within the limits of appropriated amounts. In briefing before the U.S. District Court for the District of Columbia in July 2025, the Justice Department asserted that two provisions of the Antideficiency Act supply the legal basis for Category C: 31 U.S.C. § 1512(a) and (b)(2). 

Section 1512(a) requires OMB to apportion fixed-period appropriations in a manner that “prevent[s] obligation or expenditure at a rate that would indicate a necessity for a deficiency or supplemental appropriation.” And it requires OMB to apportion “no-year” appropriations (funds that Congress has made indefinitely available) in a manner that “achieve[s] the most effective and economical use” of the funds. Section 1512(b)(2) provides that officials with the authority to issue apportionments “shall apportion an appropriation … as the official considers appropriate.” 

The administration reads this language as a sweeping grant of authority to set funds aside in Category C for use in future fiscal years (thus withholding, delaying, or deferring them). But Category C actions may run afoul of both the Antideficiency Act’s reserve provision and the Impoundment Control Act’s deferral provision, which allow OMB to withhold funds in an apportionment only “to provide for contingencies,” “to achieve savings made possible by or through changes in requirements or greater efficiency of operations,” or “as specifically provided by law.” As plaintiffs in two lawsuits challenging Trump administration withholdings in Category C have observed, and as the U.S. Court of Appeals for the District of Columbia Circuit confirmed in City of New Haven in 1985, the Antideficiency Act bars the president from withholding funds for policy reasons. And even if OMB withheld amounts in Category C for one of the permissible reasons enumerated in statute, the office still would have to report those withholdings to Congress in a special message given the overlapping notification requirements in the Antideficiency Act and the Impoundment Control Act.

Because OMB did not begin publicly disclosing apportionment data until July 2022, following Congress’s enactment of a pair of laws requiring that disclosure, it is impossible to assess trends in the Bush, Obama, and first Trump administrations’ use of Category C. Nevertheless, these administrations provided identical justifications for using Category C (see 2008, 2016, 2020): It enabled them to provide for the sound management of funds Congress had made available across multiple fiscal years.

In a 2022 briefing, however, Lester Cash—a former senior executive who served as the Department of Health and Human Services’s associate deputy assistant secretary for budget from 2007 to 2022—challenged this explanation. “While the stated purpose of Category C is to reserve funds for cost in subsequent years,” Cash explained, “it also facilitates OMB slowly metering out funds during the fiscal year, e.g. OMB putting funds needed in the current fiscal year into Category C until the apportioning official or his or her policy official [at OMB] is satisfied with [the agency’s] financial plans.” Put differently, Category C served not just as a ministerial tool for fiscal management but also as a source of power for OMB. That kind of Category C use can allow OMB to micromanage particular funds or particular agencies—and it is a use that, according to our data, is becoming increasingly common under the current administration.

The findings detailed below are based on an analysis of the apportionment data OMB has made public at https://apportionment-public.max.gov/ since July 2022. Thus, characterizations about the history of apportionments for a particular budgetary account, or uses of phrases like “never before,” necessarily are limited to the period for which there is publicly available data—that is, fiscal year 2022 to the present. 

New Uses of Category C 

Under the Biden administration, OMB’s use of Category C held mostly steady across fiscal years. Category C lines appeared in 3.90 percent of apportionments in fiscal year 2022 (234/6,007 apportionments); 3.69 percent in fiscal year 2023 (232/6,291); and 3.94 percent in fiscal year 2024 (258/6,544). (See Table 1.) Based on data available for those years, it appears OMB used Category C in part to manage the multi-year funds enacted in the American Rescue Plan, Inflation Reduction Act, and Infrastructure Investment and Jobs Act. OMB may use Category C actions to structure implementation of these large, reconciliation act investments, for example, by providing funds to grow the staff and resources of an office first before apportioning significant funds. And OMB’s use of the tool appears to have been concentrated in the departments of Commerce, Energy, Health and Human Services, Homeland Security, Labor, and Treasury, which saw the highest numbers of budgetary accounts with funds apportioned in Category C. (See Table 4.) 

During the second Trump administration, OMB’s use of Category C has increased notably. (See Table 1.) In fiscal year 2025, OMB issued 374 apportionments with funds in Category C, comprising 6.06 percent of the total number of apportionments issued. And in fiscal year 2026, OMB seems poised to surpass those numbers. As of data available on Mar. 18, 2026, OMB had issued 345 apportionments with funds in Category C, comprising 8.64 percent of the total number so far issued. (See Figure 1.) Under President Biden, by contrast, OMB issued a full-fiscal-year maximum of 258 apportionments with Category C lines, comprising only 3.94 percent of the total number of apportionments issued. 

Figure 1. Percentage of apportionments that have a portion of funds in Category C, over the years of data available publicly, from 2022 through partial information available for fiscal year 2026.

Beyond President Trump’s general consolidation of executive branch decision-making in the White House, his administration’s increased use of Category C appears to be driven by the enactment of OBBBA and the expansion of Category C to 64 other accounts that never before have seen amounts withheld in Category C. The use of Category C in these latter accounts—which existed in prior years but were not subject to Category C actions until Trump’s second term—is particularly significant. It suggests that the prior administration believed it did not need Category C to manage the funds responsibly. And it raises the question of why the second Trump administration is taking a different approach. (We provide a detailed assessment of this question below and in Table 3 of the spreadsheet.)

Since the enactment of OBBBA in July 2025, OMB has deployed Category C to manage the use of funds in at least 80 of the accounts financed by that law, similar to OMB’s management of reconciliation act investments under President Biden. (See Table 3.) However, OMB’s use of Category C to manage OBBBA spending is notable in several respects. 

First, it suggests that OMB is helping to closely oversee the administration’s execution of OBBBA. As Cash mentioned in 2022, Category C “facilitates OMB slowly metering out funds” to secure policy and program execution concessions from relevant agency officials.

This appears to be happening in some accounts at the Department of Homeland Security. Take, for instance, the DHS Border Support account, which saw amounts in Category C decrease and be redistributed to other programmatic areas in an array of apportionments. One can observe the same phenomenon in Immigration and Customs Enforcement’s (ICE’s) Operations and Support account, as well as in ICE’s procurement account.

That OMB coupled the release of funds out of Category C with binding footnotes requiring either agency submission of or adherence to a “spend plan”—in one case OMB further required that funds released be used “solely for the purchase of the five Boeing 737-700 aircraft which ICE has previously briefed to OMB”—shows OMB is not just apportioning funds to keep agencies on budget, but is also closely controlling agencies’ execution of OBBBA.

OMB’s OBBBA apportionments are notable for a second reason. They represent the first time, based on the data OMB has made public, that either the Defense Department or NASA has received apportionments with funds placed in Category C. (See Table 3 and Table 4.) The Defense Department in particular went from receiving no apportionments with funds in Category C in fiscal years 2022-2024 to receiving seven in fiscal year 2025 and 103 in fiscal year 2026. And that was just as of Jan. 28, 2026—not even halfway through the second quarter of the current fiscal year. Although the appropriations to the Defense Department in OBBBA were unusual in that Congress made them both mandatory and available for a five-year period (fiscal years 2025-2029), the Defense Department routinely receives appropriations for procurement and research that are available across two or three years, or that sometimes have no fiscal year limitation. That OMB has decided to use Category C in apportioning OBBBA accounts, but not in apportioning the two-, three-, or no-year money the Defense Department has received for procurement and research, shows OMB is taking a different approach to managing OBBBA programs.

Additionally, in fiscal years 2025 and 2026, OMB expanded the use of Category C to 64 non-OBBBA funded accounts without any prior history of amounts apportioned in Category C. (See Table 3.) OMB’s use of Category C in these accounts appears to have had at least three different purposes or effects.

The first are cuts. In 25 accounts, Category C actions have essentially effected cuts to programs that the administration proposed eliminating or reducing funding for in the president’s fiscal year 2026 budget request or his June 2025 rescission request. These actions are effectively cuts because funds remain (in fiscal year 2026) or remained (in fiscal year 2025) withheld in Category C, preventing the agency from obligating or expending those funds in the year for which Congress appropriated them. These cuts—explained in greater detail below—have targeted International Assistance Programs (11 accounts) and accounts at the departments of State (8), Agriculture (2), Commerce (2), Housing and Urban Development (1), and the Treasury (1). 

The second are delays. In 23 other accounts, Category C actions have delayed the apportionment and obligation funds; the funds were apportioned in Category C and have since been released onto Category A, B, or AB lines, thus nominally making the funds available for the agency to spend. In apportionments to at least four of these accounts, however, OMB has used binding footnotes to continue to restrict the use of the released funds. These accounts include the National Institute of Food and Agriculture’s Extension Activities account, the Department of Housing and Urban Development’s Community Development Fund and Fair Housing Activities accounts, and the Department of Labor’s Office of Job Corps account.

The third purpose is to wind things down. In order to manage large or complex investments made from an account over several fiscal years, such as for the purchase or construction of satellites or buildings, agencies often reserve some small portion of the funds to wind down the project—by covering closing costs or small unexpected costs in the final year. Category C appears to be facilitating the wind-down of two American Rescue Plan accounts for which statutory authorization has expired (Treasury’s Emergency Rental Assistance account and the Federal Communication Commission’s Emergency Connectivity Fund account) and one account where, according to the White House, an allocation for the Affordable Connectivity Fund “was exhausted” and its operations were “wound down.”

Finally, there are a number of accounts where the purpose of OMB’s use of Category C is unclear. For these 13 accounts, there was not enough information to form a strong hypothesis as to why the administration withheld a particular amount in Category C.

Breaking Down Cuts 

Several examples are worth noting among the apportionments we have categorized as cuts, as they amount to potentially problematic attempts to use Category C to evade congressional spending directives and impose the president’s preferences unilaterally. (See Table 3.)

These include cuts to State Department and International Assistance Programs accounts. In 11 State Department and International Assistance Programs accounts, OMB reserved the entirety of Congress’s appropriation—100 percent of it—in Category C. In 9 of those 11 accounts, that full amount remains in Category C in the current fiscal year (fiscal year 2026). And in two Democracy Fund accounts (2022/2027 and 2023/2028), that amount has been moved from Category C onto an “Unallocated” line, subject to a restrictive footnote providing that “[a]mounts apportioned on this line are available only for obligation for salaries, payroll expenses, closeout costs, or other payments required by law.”

Additionally, the National Endowment for Democracy, an independent, nonprofit foundation, has faced two sets of attempted cuts. After threatening the future of the foundation in 2025 by placing over 30 percent of its appropriation in Category C, OMB released the funds only after the D.C. District Court ordered them to do so. The court ordered the release of funds on Aug. 11, 2025, and OMB approved a corresponding apportionment on Aug. 13. Despite this loss, OMB targeted the foundation again in fiscal year 2026. As the foundation explained in papers supporting a recent preliminary injunction motion: as of March 9, 2026, “the Endowment ha[d] not seen a single dollar of its appropriated fiscal year 2026 funding.” Although Congress “appropriated $105 million in partial-year funding for the Endowment in Nov. 2025,” OMB “refused to apportion and disburse the funds,” and continued to withhold funding even after “Congress appropriated the balance of the Endowment’s full fiscal year 2026 funding.” On Mar. 16, just days after the foundation filed for an injunction, OMB finally apportioned its funds. And in a joint status report on March 31, the foundation confirmed that the State Department had obligated them in full—making them available to the foundation to spend. But for the second time in just a year, the foundation received its funds only after seeking injunctions in court.

At the Department of Agriculture, OMB has used Category C to effect cuts to salaries and expenses related to rural development (last year, OMB placed amounts in Category C and then transferred them out of the account, leaving only $1 remaining for fiscal year 2026), as well as to Conservation Operations, an account funded by the Inflation Reduction Act. The latest apportionment OMB issued for Conservation Operations, on Feb. 7, 2026, withheld all of its budgetary resources—100 percent of them—in Category C. 

Additionally, at the Department of Housing and Urban Development, in fiscal year 2025, OMB apportioned funds in Category C for HUD’s Research and Technology account to effect a unilateral cut to the Eviction Protection Grant Program, which is funded through that account. OMB has thus far declined to issue an apportionment for this account in the current fiscal year. 

OMB has also used Category C to make cuts at both the Commerce and Treasury departments. At the Commerce Department, OMB has used Category C to cap amounts available for Economic Development Assistance Programs, which fund “investments [that] help to establish a foundation for long-term job growth and build durable regional economies throughout the United States.” At the Treasury Department, OMB also has used Category C to effect a unilateral cut of 96.7 percent to the Community Development Financial Institutions Fund, which generates “economic growth and opportunity in some of our nation's most distressed communities.” 

Accounts With Prior History of Category C Use

OMB also has increased the amount it is withholding in Category C in some accounts that received apportionments with funds set aside in Category C before the second Trump administration. (See Table 5.) To determine where these increases occurred, we compared amounts Trump’s OMB withheld in Category C in fiscal years 2025 and 2026 to the amounts the Biden administration withheld in Category C in the same accounts at the end of each fiscal year. 

Because fiscal year 2026 only recently passed its midpoint, this comparison is necessarily preliminary. To account for this, the analysis below features only a snapshot of accounts that, so far, have seen the most dramatic increases in the amount OMB is withholding in Category C. Table 5, by contrast, provides a granular look at where things stood as of Jan. 28, 2026, across all accounts with funds apportioned in Category C, and marks in red those accounts that saw an increase in the amount withheld in Category C as compared to the prior fiscal year.

The following accounts have seen particularly sharp increases in the amount OMB has withheld.

First, the Council of the Inspectors General on Integrity and Efficiency. Trump’s OMB increased the amount of Inspectors General Council Fund money withheld in Category C from 43 percent at the end of President Biden’s term to 69 percent in March 2026. Three groups have sued to challenge the withholding, alleging OMB has “materially harmed” the council’s “ability to perform its statutory obligations.”

Additionally, accounts at the Department of Commerce witnessed Category C actions. In fiscal year 2026, OMB has apportioned 92.7 percent of the Commerce Department’s Digital Equity account in Category C. In fiscal years 2024 and 2025, under the prior administration, 46.5 percent and 14 percent of the resources in the account were withheld in Category C, respectively. An October 2025 lawsuit by the National Digital Inclusion Alliance challenges the Trump administration’s “unilateral repeal” of the Digital Equity Competitive Grant Program. And in fiscal year 2026, OMB has apportioned 99.7 percent of the National Telecommunications and Information Administration’s Middle Mile Deployment account in Category C. Under the prior administration, in fiscal years 2024 and 2025, OMB apportioned 83 percent and 76.7 percent of the funds in the account in Category C, respectively.

In fiscal year 2025, OMB apportioned 89.8 percent of the Patient Protection and Affordable Care - Program Management account in Category C at the Department of Health and Human Services. The prior administration apportioned 68.9 percent in Category C in fiscal year 2022, 72.6 percent in fiscal year 2023, and 0 percent in fiscal year 2024. Trump’s OMB has not yet apportioned funds for this account in fiscal year 2026.

Finally, at the Department of the Treasury, in fiscal year 2026, OMB has apportioned 88.8 percent of the State Small Business Credit Access account in Category C. This is a marked increase over 3.7 percent in fiscal year 2022, 3 percent in fiscal year 2023, 12.9 percent in fiscal year 2024, and 41.4 percent in fiscal year 2025—all under the prior administration.

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Though OMB’s use of Category C continues to shift, its increased reliance on this tool as a means to effectuate administration priorities—at times at the expense of those Congress has expressed in appropriations laws—cautions additional scrutiny of Category C. This is especially the case for the budgetary accounts subject to Category C actions that we categorized as cuts because they withheld amounts the president sought to eliminate in his fiscal year 2026 budget request. Indefinitely withholding funds in those accounts may run afoul of Congress’s prohibition—reiterated in the Consolidated Appropriations Act of 2026—against using

[T]he funds made available in this or any other appropriations Act … to increase, eliminate, or reduce funding for a program, project, or activity as proposed in the President’s budget request for a fiscal year until such proposed change is subsequently enacted in an appropriation Act, or unless such change is made pursuant to the reprogramming or transfer provisions of this or any other appropriations Act.

Violations of this prohibition could trigger consequences under the Antideficiency Act, which include a range of administrative and criminal penalties, for OMB officials approving offending apportionments. 

Separately, as OMB uses Category C to meter OBBBA funds, or similar multi-year investments, tracking OMB’s uses of Category C can help Congress and the public better understand how these large investments are being managed, and what choices or prioritizations OMB or the White House is making in the execution of OBBBA.

As Congress weighs reforms to appropriations laws, guardrails on OMB’s use of Category C may also be worth considering. In response to OMB’s aggressive use of its apportionment authority, former OMB General Counsel Samuel Bagenstos has called on Congress to “seize control of apportionments” by “specify[ing] the apportionment itself.” In other words, Bagenstos explains, Congress could legislate that “[m]ulti-year appropriations [are to] be available in equal fractions each [fiscal] quarter …. For no-year appropriations, Congress could adopt a similar presumptive rule of time-based availability.”

Given OMB’s use of Category C both to control program execution and, in an array of places, to effect cuts, greater statutory specification of the kind Bagenstos advocates may be warranted. However, if Congress remains concerned about unduly restricting executive branch discretion in executing and managing its appropriations, it might instead consider exempting certain accounts from apportionment. Doing so would remove OMB from the process but allow agencies to retain flexibility in managing the funds Congress has provided them.