On January 27, the Trump administration directed federal agencies to pause the obligation and disbursement of all federal financial assistance.  This is the first shot in an impending struggle over impoundment, which is a President’s refusal to spend Congressional appropriations on time, or at all.  Former Trump administration officials and current nominees for the new administration have repeatedly argued that the President has a constitutional right to impound funds, and stated that they plan to exercise that right very broadly.  While the Constitution prohibits the President from spending money that has not been appropriated, it does not speak specifically to the question of impoundment.  There has been a half century of settled scholarly consensus that the President cannot legally impound Congressional appropriations.  The Trump officials’ vigorous assertion to the contrary has prompted various rebuttals, threatening to unsettle the consensus and opening a space to reexamine impoundments as a practice.

After a brief review of the constitutional and statutory background, I argue that both sides of the debate are overlooking important aspects of impoundment.  First, impoundment advocates are mistaken that historical examples of impoundment can establish the practice’s constitutionality.  Second, impoundment opponents fail to adequately account for the functional and administration challenges posed by the contemporary legal framework, the Impoundment Control Act.  I conclude that Congress retains the power to prohibit presidential impoundment, but, faced with the first meaningful challenge to that prohibition in fifty years, it should alter its approach to enable its enforcement.

Background

The textual basis for the anti-impoundment case rests in the President’s constitutional obligation to “take Care that the Laws be faithfully executed.”  If Congress passes a law saying that $30 million must be spent to clean up a river, then it stands to reason that the President is required to do exactly that.  When the Nixon administration attempted to impound funds across the federal budget, the Supreme Court heard two cases challenging the impoundment of EPA funds designated for state and municipal grants.  The Court held that the statute required the EPA to disburse all of the funds and did not permit the impoundment of some part of the money.  However, the Court did not directly address any constitutional questions, taking for granted Congress’ power to mandate executive spending; it also did not state if its conclusions were specific to statutes transferring money to another entity or if they also applied to direct government spending.

In response to the Nixon impoundments, Congress passed the Congressional Budget and Impoundment Control Act (ICA).  In addition to other effects, such as creating the Congressional Budget Office, the ICA lays out permissible procedures for Presidents to impound funds through deferrals or rescissions.  A deferral is a temporary delay in expenditures, and must be accompanied by a “special message” to Congress explaining what the delay is for and how long it will last, with a maximum limit of the end of the current fiscal year.  Deferrals are only permissible for contingencies, for savings from efficiencies, or as otherwise provided by law.  

A rescission is a permanent cancellation of some appropriation that will not be spent.  The President must propose the rescission in another special message to Congress, and then must spend the money anyway (considering the proposal rejected) if Congress does not pass a bill or joint resolution within 45 days to rescind the relevant budget authority.  The ICA requires the President to spend the entirety of any money Congress appropriates, on time, unless explicitly given permission otherwise.

The Supreme Court has not evaluated the constitutionality of the ICA’s deferral and rescission provisions, but there are strong indications that the Court would uphold them.  In a 2013 case, the D.C. Circuit described the ICA’s prohibition of impoundment as valid law and quoted a memorandum written by then-Assistant Attorney General William Rehnquist (as head of the Department of Justice Office of Legal Counsel) stating that, with respect to presidential impoundment power, “existence of such a broad power is supported by neither reason nor precedent.”  Previous Supreme Courts have evinced skepticism of the idea that a President could pick and choose which Congressional appropriations to honor.  In 1994 the Supreme Court held that a mechanism for line item vetoes, whereby a President could veto certain tax or spending provisions, including individual appropriations, was unconstitutional.

Advocates for impoundment contend, contra Rehnquist and most scholarship, that the ICA impermissibly infringes on the President’s constitutional powers.  They point to several parts of the Constitution, from the Executive Vesting Clause to the Take Care Clause, that they say give the President the authority to determine what money should and shouldn’t be spent, depending on the President’s judgment of its necessity.  They argue that Congress’ “power of the purse” only sets a ceiling on what money can be spent and does not enable Congress to require that some minimum amount of money be spent.  

The ICA has also raised constitutional concerns by designating the Comptroller General to enforce its terms through civil proceedings, subject to Congressional approval.  Most appropriations law disputes are resolved between the legislative and executive branches without judicial enforcement.  The ICA, however, empowers the Comptroller General to bring suit in the District of Columbia District Court to request a court to order the President to spend the impounded funds. This is highly unusual, particularly because twelve years after the ICA passed the Supreme Court held that the Comptroller General is an agent of Congress and cannot take executive actions.  The Comptroller General has only exercised this power once, when President Ford impounded $264 million in contracting authority for federal housing.  Although the case was dropped after Ford released the funds, Assistant Attorney General Rex Lee’s motion to dismiss argued that the Comptroller General’s power to sue to enforce the ICA was unconstitutional.  

Misguided Originalism

With only vague Constitutional clauses as support, the case for impoundment primarily rests on claims about the historical practice of impoundment.  Impoundment advocates have marshalled evidence that executives have impounded funds since before constitutional ratification, arguing that this is originalist (or “history-and-tradition”-ist) proof that impoundment is a Constitutional prerogative of the President.  But just because Congress permitted a practice does not mean it lacked the power to prohibit it; it may simply mean the power was not exercised.  Modern legislation has regulated many practices, like tobacco sales to minors or open immigration, that were common through most of American history.

The federal budget process is substantially different now, in every respect, than 250 years ago.  The early Congress passed very general appropriations, with the understanding that the executive had flexibility to spend less than appropriated, or even to use funds appropriated for one purpose to cover other costs.  President Jefferson performed the first known “impoundment” in 1801 of some portion of the $500,000 Congress had allocated for 74 gun ships and to complete navy yards, docks, and wharves.  In his First Annual Message to Congress, Jefferson informed the legislature that “I have in certain cases suspended or slackened these expenditures, that the Legislature might determine whether so many [naval] yards are necessary as have been contemplated.”  There is no indication, in that speech or subsequent records, that Jefferson expected Congress to object or that it did in fact object to his decision.  Congress seems to have approved of this presidential exercise of judgment, including its implication that Congress would make the final determination on the expenditures.

Beginning with Jefferson, it is possible to follow a persistent but disjointed trail of impoundments across American history.  However, focusing on the impoundments neglects the 99% of appropriations that were never impounded, even if a President might prefer not to spend the money.  The sporadic cases of impoundment might be exceptions that prove a more consistent rule of non-impoundment.  Indeed, the inchoate scholarship on non-impoundment has documented at least one early case, where James Madison built naval vessels to comply with an appropriation despite his belief that the spending was wasteful.  The architect of the Constitution apparently understood the Congressional appropriation to be binding on the executive branch. 

Most scholars believe that historical “impoundments” were only used to increase government efficiency and prevent waste, not to pursue policy disagreements.  At least another claims impoundments were only applicable to military spending.  Either way, there was an understanding by Congress that the President was permitted to spend less money than it allocated, within some bounds and so long as the appropriation’s purposes were still accomplished.  

This historical analysis does not resolve the constitutional question.  If Presidents impounded, was that because there was a common understanding that they had a constitutional right to do so or because Congress was unwilling to fight the political battle to stop them?  The fact that some Presidents used to impound appropriations may just mean that Congress had forborne from exercising its full control over the fisc.  If the background norm for appropriations in the 1800s was that the President could impound, the ICA emphatically reversed that norm in 1974, requiring Congressional permission to withhold funds.

There is evidence for the argument that Congress had simply not exercised its power to restrict impoundment from a parallel practice: fiscal transfers.  Originally, Presidents freely transferred money between the different accounts that Congress designated.  For example, if the Treasury was low on money to pay postal workers, it might transfer some unspent money designated for army salaries to cover the difference.  In the nineteenth century Congress passed various measures to constrain such transfers, and it finally restricted them entirely in 1868.  There is no serious contention that the early practice of Presidents transferring funds between accounts vested in them a constitutional right to do so; it was merely permitted by Congress until it passed laws, by which the President is bound, to prevent it.  Similarly, since Congress passed the ICA in 1974, Presidents (until the first Trump term) consistently complied with its provisions, apparently understanding its effect as binding.

Functional Concerns

While impoundment advocates overstate the consequences of their historical research, opponents are too quick to dismiss the functional difficulties created by the ICA.  Most fundamentally, defining impoundment in objective terms is almost impossible.  The ICA itself fails to define the term, requiring instead that all budget authority be made available for obligation.  Assuming this means that all money must be spent, what is to be made of the billions of dollars the executive branch has left over each year?  Federal agencies can’t spend exactly the amount appropriated to them, down to the last penny.  Sometimes unforeseen delays in contracting or other processes make it impossible to comply with other requirements while getting all the money spent on time.  Distinguishing between such legitimate unspent funds and an illegitimate impoundment is problematic.

Moreover, agencies that save money through efficiency should be rewarded, not subject to legal liability.  If Congress appropriates $100 million to build a bridge and the agency’s contractor does it for $80 million (assuming no other deficiencies), that spending deficit should not be included in the scope of illegal impoundments.  The ICA does permit the President to submit a $20 million rescission proposal to cancel the now-excess budget authority.  But Congress is institutionally disinclined to act and has failed to approve the vast majority of presidential rescission proposals since the ICA was enacted.  In practice, the process of rescissions is too unwieldy to approve individual efficiency improvements across all federal agencies.

There is no accepted standard to determine whether unspent funds were impounded, unobligated due to factors outside the agency’s control, or saved through efficiency.  The Government Accountability Office (GAO), which reports on ICA violations, has developed an intent standard for distinguishing between “deferrals,” which the statute requires be reported to Congress, and “programmatic delays,” which GAO defines as unintentional withholdings that occur despite an agency’s efforts to spend the money.  This standard, which is the only meaningful attempt to distinguish between legitimate from illegitimate non-spending, has been roundly criticized by both impoundment advocates and opponents.  Both sides agree that the definition of impoundment should not depend on the subjective “intent” of an institution or its component members, but there is no obvious alternative.

Suggestions

A common definition of impoundment would both improve the debate over its legitimacy and increase the efficacy of its enforcement.  Whether through Congress, the courts, or the Comptroller General, a more specific definition will likely emerge over the next four years.  That definition must include an element of intent—if not the agency’s motive for withholding funds, then Congress’s purpose in appropriating them.  Impermissible impoundment should only include unspent funds that (1) could have been spent through reasonable effort and that (2) would have meaningfully advanced the purpose of the appropriation if they had been spent.  Because appropriations bills are spare, identifying the appropriation’s purpose will require careful statutory interpretation and possible resort to legislative history.  Appropriating committees could aid future interpreters by clarifying more of their intentions within the bills’ texts.

The more immediate problem is the ICA’s enforceability.  Comptroller General lawsuits are potentially unconstitutional and, even in more unified times, unlikely to occur; the current Congress is especially unlikely to greenlight litigation against the Trump administration.  Moreover, the very existence of this enforcement mechanism may prevent other methods of accountability.  In Rogers v. United States (1988), the Court of Federal Claims held that because the Comptroller General is designated to sue over ICA violations, everyone else is precluded from doing so.  If other courts follow this holding, then recipients of the recently impounded federal assistance funds, like state Medicaid agencies, would be barred from suing the Trump administration to get the funds released.  Until Congress amends the statute to provide for a private right of action the ICA may prove unenforceable, enabling the Trump administration to impound with impunity.

Mark Thomas is a student at Harvard Law School.