(ZENIT News / Washington, 03.04.2025).- The U.S. Conference of Catholic Bishops (USCCB) is facing a significant blow to its refugee resettlement efforts after the State Department canceled its contract on February 27. The decision not only disrupts a longstanding partnership between the federal government and the Catholic Church in aiding refugees but also casts uncertainty over an ongoing legal battle concerning millions in unpaid funds.
For decades, the USCCB has played a central role in coordinating refugee resettlement in the United States, distributing federal funds to Catholic Charities agencies across the country. Since 1980, the bishops’ conference has helped newcomers find housing, employment, and community support during their initial months in the U.S. However, that program is now in jeopardy following the State Department’s decision to end the agreement, stating that it “no longer aligns with the agency’s priorities.”
In a letter sent on February 26, State Department Comptroller Joseph Kouba informed the USCCB that its financial agreement for refugee resettlement was “immediately terminated” as of February 27. The letter ordered the bishops to halt all program activities and stated that only expenses incurred before the termination date could be reimbursed.
The decision follows a lawsuit the USCCB filed on February 18, challenging the federal government’s suspension of funding for Catholic-led refugee services. The bishops argued that federal law guarantees refugees the right to government-funded resettlement assistance, which they described as essential for helping displaced individuals establish stable lives in the U.S. The USCCB also contended that the Trump administration’s freeze on resettlement programs was unlawful and should be overturned by the courts.
Adding to the dispute, the bishops claim that the federal government owes them more than $20 million for services already provided. While the lawsuit is still in its early stages, a federal judge denied the USCCB’s request for immediate funding restoration on February 20, ruling that the bishops had not demonstrated that the funding freeze would cause “irreparable harm.”
With the contract now officially terminated, the legal battle may shift focus. The federal government, in its latest court filing on February 27, argued that the USCCB should seek unpaid reimbursements through administrative channels rather than litigation. The government’s position is that the termination of the agreement removes any legal grounds for a court-ordered injunction, stating that the USCCB’s only remaining option is to pursue financial claims through the Federal Court of Claims.
The cancellation of the contract is expected to have far-reaching consequences, particularly for Catholic Charities agencies across the country that rely on federal funding to support thousands of refugees each year. The impact is already being felt. Earlier this month, the USCCB laid off 50 employees—about one-third of its migration and refugee services staff—due to frozen federal payments. The latest funding cut could force further layoffs, potentially dismantling the entire refugee resettlement arm of the bishops’ conference.
Beyond Washington, Catholic Charities organizations nationwide are also scaling back. Some agencies have already begun laying off workers, with one office cutting 20% of its staff in response to the financial uncertainty.
In 2023, the USCCB received $130 million in federal contracts for refugee and migrant services, with the majority of funds distributed to local Catholic Charities agencies that provide direct assistance to refugees. Between 2014 and 2023, the conference managed nearly $800 million in federal funds for these programs, spending a total of $850 million on resettlement efforts.
Now, with the federal government severing ties, the future of Catholic-led refugee assistance remains unclear. Whether the USCCB will find alternative funding sources or restructure its programs to continue its mission without government support remains to be seen. Meanwhile, the legal battle over unpaid funds is likely to intensify as the bishops fight to recover what they claim they are owed.
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