Trump Admin’s EV Funding Freeze Violated Federal Law, Says Government Watchdog

The GAO says the Transportation Department had overstepped its authority in a directive to revoke EV-related funding that had been mandated by Congress.

President Donald Trump, accompanied by Speaker of the House Mike Johnson, speaks to members of the media as he arrives for a House Republican meeting at the Capitol on May 20, 2025. Andrew Harnik/Getty Images

A government watchdog says President Donald Trump’s administration may have violated a little-known federal law through a move to rescind funding for a Biden-era electric vehicle (EV) program.

The law in question, known as the Impoundment Control Act of 1974, places limits on the president’s power to “impound,” or unilaterally refuse to disburse, funding appropriated by Congress.

As the administration seeks to downsize the federal government through sweeping executive actions, some observers have been expecting a showdown on the issue between Trump, who has raised questions about the law’s constitutionality in the past, and the Government Accountability Office (GAO), the watchdog that oversees impoundment law.

In a May 22 report, the GAO said the Department of Transportation (DOT) had overstepped its authority in a directive to revoke EV-related funding that had been mandated by Congress.

On Feb. 6, the DOT announced a freeze on new EV infrastructure grants under the Infrastructure Investment and Jobs Act (IIJA) of 2021. That legislation appropriated $5 billion toward constructing new charging stations and other EV infrastructure as part of former President Joe Biden’s push to rapidly phase out gas-powered vehicles.

All 50 states, as well as Puerto Rico, have sought funding under the law, the GAO reported.

The GAO said that the move to cancel funding appropriated by Congress is in violation of the 1974 law. According to the GAO, there was a “mandate to spend” within the IIJA, so “DOT is not authorized to withhold these funds from expenditure and DOT must continue to carry out the statutory requirements of the program.”

The revocation of new EV grants comes as the president has ordered government-wide staff reductions, withheld funds, and shuttered or merged multiple government agencies and departments in an effort to reduce the size and spending of the federal government.

These sweeping executive actions have prompted at least 39 investigations by the GAO, Comptroller General Gene Dodaro told a Senate panel in April. Multiple lawsuits from affected agencies and former employees have also been brought to court.

However, until now, there had been few major developments on the issue, with most courts that heard cases related to impoundment refusing to grant injunctions.

Party lines have already been forming, however.

Trump and his allies have made the case for broad presidential impoundment authority, saying it is a means for the president to exercise oversight on taxpayer funding and prevent wasteful spending.

Trump promised on the campaign trail to legally challenge the Impoundment Control Act during his second term.

“This disaster of a law is clearly unconstitutional—a blatant violation of the separation of powers,” Trump said in a 2024 campaign video.

Democrats and other critics say the president’s use of impoundment transgresses congressional authority.

“From day one, President Trump has unilaterally frozen or contravened critical funding provided in our bipartisan laws,” Sen. Patty Murray (D-Wash.) said during the April hearing in which Dodaro testified.

“That is really not what the Constitution envisioned. Congress has the power of the purse, period. Our presidents cannot pick and choose which parts of a law that they can follow.”