As part of his barrage of executive actions upon taking office, President Trump has halted federal payments on potentially trillions of dollars in federal spending that Congress has already approved, a step known as “impoundment.” Can the President legally refuse to spend funds already authorized in law, or set additional conditions on them? And how is this battle likely to play out?
Trump’s Impoundment Freezes Spending
Trump’s action is breathtaking in scope. Without clear guidance, agencies are suspending disbursements of funds that already have been approved, cutting back activities ranging across child care, cancer trials, scientific research, international aid, and housing and educational spending.
Democratic Senate leader Chuck Schumer (D-NY) says the order could affect “disaster relief efforts, local law enforcement, rural hospitals, food assistance, aid to the elderly, infrastructure programs, cancer research and opioid addiction treatment, among other things.”
Trump’s actions are being carried out under a two-page letter from the Office of Management and Budget (OMB) to federal agencies. OMB also has sent agencies a 51 page spreadsheet listing around 2600 specific programs, each of which in turn has many grants.
OMB’s letter says spending must be stopped for all activities “including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal” to stop “Marxist equity, transgenderism, and green new deal social engineering policies.” The spreadsheet asks agencies whether each specific program funds such activities, requiring them to report back by February 7.
Take careful note of the OMB letter’s language. Although it mentions standard Republican targets like “DEI” (diversity, equity, inclusion) and “woke gender ideology,” the letter covers spending “including, but not limited to” those hot-button issues. So it essentially could cover all federal discretionary spending, and perhaps even be used to halt mandatory spending such as Medicaid. (States are reporting they have been unable to access Medicaid funding through regular channels.)
The Pushback Against Impoundment
Trump’s action has brought immediate and swift reactions. A federal judge in D.C. already has ruled temporarily against OMB blocking funds scheduled for distribution, pending a hearing next week. And a coalition of 23 state attorney generals filed a federal lawsuit to halt Trump’s actions, arguing he is exceeding his Constitutional authority.
Because the Constitution gives Congress the power to authorize spending, Trump’s action has led some, like Senator Jeff Merkley, (D-OR), to label the spending withholding as a “constitutional crisis.” But Congressional Republicans, like Senate Majority Leader John Thune (R-SD), have called Trump’s order “a normal practice at the beginning of an administration,” signaling they will support Trump.
Although previous Presidents have attempted to withhold Congressionally authorized spending, nothing on the scale of Trump’s order has been tried. Georgetown University law professor Steve Vladeck says “the prevailing consensus” in the law views the Constitution giving Congress the “broad power to specify the purposes for which appropriated funds are to be spent—and that a broad presidential impoundment power would be inconsistent with that constitutional authority.”
This has been a widely recognized Constitutional standard. In 2020, the General Counsel of the Government Accountability Office (GAO) testified in Congress that “the president doesn’t have any constitutional authority to withhold, doesn’t have any inherent authority to withhold” funds already authorized by law.
Can The President Constitutionally Freeze Spending?
There is a specific law giving the President limited powers to request Congressional approval for reducing already-authorized spending—the Impoundment Control Act (ICA) of 1974. But the ICA was enacted to stop President Richard Nixon—and all future presidents—from unilaterally impounding Congressionally authorized funds, not to give the President sweeping spending control.
The ICA specifies the legal procedures the President must follow to request Congressional approval of reductions for a limited range of federal spending. But Trump’s sweeping budget order also seems to violate the ICA.
The order does not follow the ICA’s requirements that Congress be formally notified about specific proposed spending reductions, which must then be legislatively approved in 45 days. Otherwise, the previously authorized money must be spent.
Some conservative legal scholars are ducking the larger Constitutional issue by focusing only on the ICA, arguing it illegally restricts the President’s executive authority. But the key issue isn’t the ICA—it’s the Constitutional limit on the President’s power.
The Center on Budget and Policy Priorities (CBPP) notes “the Constitution (not the ICA) gave Congress the power of the purse, and that power precludes the President from unilaterally deciding not to spend money that Congress has provided.” CBPP says “courts—including the Supreme Court” have “repeatedly rejected presidential attempts to spend less than Congress had provided,” including a unanimous 1975 decision overturning an impoundment attempt by Nixon.
Trump’s spending order may be headed for the same legal roadblocks that face his executive order on birthright citizenship. A federal judge (appointed by President Ronald Reagan) said the citizenship order could not take effect, calling it “blatantly unconstitutional” in way he hadn’t seen in forty years of being a federal judge.
Will Impoundment And Freezing Spending Cause A Constitutional Crisis?
So what is Trump up to? He has a lifelong history of taking the most aggressive and disruptive negotiating stances possible, and his breaking of Constitutional norms (and laws) on spending are consistent with that strategy of maximum disruption. And the Republicans control both chambers of Congress, so they may well accede to this radical expansion of presidential power.
But another goal is to chill dissent and opposing views from states, cities, universities, non-profits—any institution that relies on federal funds. Even if courts reject Trump’s sweeping claims, his order is already disrupting federally-funded activities, embroiling all these organizations in difficult and expensive legal actions while halting their daily activities.
There’s more disruption to come. Trump’s nominee to oversee federal spending and regulations as head of the Office of Management and Budget (OMB) is Russell Voight. Voight’s think tank, the Center for Renewing America, issued a white paper defending Nixon’s impoundments as “well within constitutional understanding and practice going back to the Founding.” With Republican control of the Senate, Voight will likely be put in charge of OMB.
Trump’s spending order ignores the ICA’s legal ways to ask Congress to cut spending. As he did with birthright citizenship, Trump has chosen to assert the most confrontational position, going against not only legal precedent but also political and Constitutional norms.
This issue is no doubt headed for the Supreme Court, which has been quite deferential to previous Trump claims of sweeping executive power. The disruption from impoundment to federally-funded programs will be very damaging both to overall services to Americans and to the economy. And the country may face a potential Constitutional crisis, stirred up by Trump’s confrontational actions.
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