On Jan. 21, 2025, during the Senate Budget Committee’s hearing to consider the nomination of Russ Vought to serve as director of the Office of Management and Budget (OMB), Sen. Patty Murray (D-WA), ranking member of the Senate Appropriations Committee and a senior member and former chair of the Senate Budget Committee, questioned Vought on his support for President Donald Trump unilaterally withholding funding Congress provided to communities across the country. Sen. Murray pointed out that the various executive orders the president signed on his first day in office illegally impounded funding that Congress approved to rebuild infrastructure and create jobs in the clean energy sector through the Inflation Reduction Act. Essentially, Sen. Murray and others are concerned that the administration is using impoundment to thwart congressional spending decisions and using impoundment as a form of line-item veto which does not exist in the federal system.
Then on Jan. 27, the Trump administration instructed departments and agencies to pause all federal grant, loan and other financial assistance programs effective 5 p.m. on Jan. 28. This has been responded to by Sen. Murray and Rep. Rosa de Laura (D-CT) sending a letter urging OMB to uphold the law and raising concerns that the administration is not following the Impoundment Control Act.
In the first Trump administration, in 2018, rescissions were proposed totaling approximately $15.5 billion of unobligated funds appropriated in prior fiscal years. In many cases, the proposed rescissions related to programs whose authority had lapsed or programs that were not expected to require the amounts proposed to be rescinded under the then current spending projections.
What is Impoundment?
Impoundment is an act by a president of not spending money that has been appropriated by the congress. Thomas Jefferson was the first president to attempt to exercise the power of impoundment in 1801. It was rarely attempted until President Richard Nixon took office. Nixon used impoundment often and it resulted in many lawsuits as well as the creation of the Impound Control Act (ICA) of 1974.
What does the Impound Control Act do?
The ICA created a public procedural process by which Congress considers and reviews executive branch withholds of budget authority. In particular, it established procedures to prevent the president and other government officials from unilaterally substituting their own funding decisions for those of Congress. It specifies how a president can request Congress change the law on an expedited basis to spend less than Congress initially provided for a program or government function. Congress through the consideration of a “rescission bill” can review the request and choose if it will rescind any, part or all of what the president is requesting. If Congress does not act on a “rescission bill” within 45 days, then the president must spend the funds as Congress directed.
The procedural process outlined in the ICA requires the president send a special message to the House and Senate specifying the amount of funds to be rescinded. The message must include the specific project or government functions involved with the funds; the reasons for the rescission, the fiscal economic and budgetary effects of the proposed rescission and all facts circumstances and considerations bearing upon the proposed rescission; and the estimated effect of the proposed rescission on the purposes for which the budget authority was provided. The ICA also authorizes deferrals of budget authority which are temporary delays in the release of funds for obligations. The Government Accountability Office (GAO) also has a role in that it can clarify the application of the ICA. For instance, it has ruled that the 45-day period cannot begin so late that the funds in question might expire before the period ends or be released so close to their expiration date as to be effectively unusable.
If the president requests that Congress rescind appropriated funds, OMB is likely to withhold those funds from the agency’s funding for the 45-day period beginning when the president submits the request to Congress.
Why Isn’t there a Line-Item Veto?
In 1996, Congress passed the Line Item Veto Act of 1996 which granted the president authority to unilaterally veto individual provisions of certain types of legislation and provide Congress fast track procedures for considering legislation to disapprove the line-item vetoes. However, the Act was overturned by the U.S. Supreme Court when President Bill Clinton used the authority. The court ruled that the act was unconstitutional because it gave the president the power to rescind a portion of a bill as opposed to an entire bill as he is authorized to do by Article1, Section 7of the Constitution.
Conclusion
Because the House and Senate are currently controlled by the same party as the president, it is unclear what appetite there would be to challenge the president’s use of impoundment without the opportunity for Congress to review a request. However, this would not stop some, including state and local governments, from using the courts to seek release of the funds.
