Sharing the Facts About Last-Minute Funding Cuts

Congress holds the power of the purse. Each year, Congress debates spending plans for a variety of programs, and then passes legislation to put that funding into law with the president’s signature. The money that Congress appropriates goes to a number of recipients, including states who use it to help build and fix roads and bridges, provide health care for children and older Americans, and support first responders, farmers, and educators. Before the fiscal year ends, Congress starts the process all over again.

But since taking office, President Trump has repeatedly attempted to unilaterally withhold or freeze funding without the approval of Congress, skirting the usual structures of checks and balances.

In his administration’s latest effort to gut federal funding for essential programs that Congress approved, the president utilized a rarely used, likely unlawful maneuver known as a “pocket rescission.” Russell Vought, who Trump nominated as the director of the Office of Management and Budget, has said the president can use this maneuver—without Congress’s approval—to stop billions in funding from being distributed to agencies and organizations that need it. On Aug. 28, the president used this tactic to propose canceling $4.9 billion for foreign aid programs.

But there are constitutional and statutory limitations in place to ensure Congress is the one that allocates funding, including the Impoundment Control Act. This 1974 law is intended to limit the president’s ability to withhold or delay the use of congressionally approved funds. The law outlines one way the president can propose funding cuts to Congress: Upon the president sending a message to Congress identifying funding he thinks should be rescinded, the funds are temporarily frozen while Congress takes up to 45 days to approve or deny the president’s request. If lawmakers don’t take action, the funds must become available again to the recipients.

The administration is now using this law to freeze program funds at the last minute, in hopes of cancelling them permanently. Administration officials argue that if the president submits a request and freezes funding within 45 days of the end of the fiscal year, Congress will not have enough time to respond and unfreeze them. As a result, the administration argues, the money will never become available.

In this case, the president requested that Congress cancel $4.9 billion in funding just 33 days before the end of the fiscal year. If Congress doesn’t respond before then, the funding will expire and recipients will never receive it—despite Congress already having approved it. Effectively, the president is trying to bypass Congress by running out the clock.

This maneuver has been used before, though no president has tried to use it in more than four decades—and never at this scale. Because its use is so rare, no court has addressed the legality of the move. However, the Government Accountability Office has repeatedly said that the maneuver is not legal, since it attempts to give the executive branch power that Congress wields.

On Sept. 3, a federal judge ruled the tactic was illegal, finding that unless Congress acts the Trump administration must spend the allocated money by the end of the month. “There is not a plausible interpretation of the statutes that would justify the billions of dollars they plan to withhold,” U.S. District Judge Amir Ali wrote in his ruling. The Trump administration appealed the decision to the D.C. Circuit Court of Appeals. 

Here are some key takeaways about the Trump administration’s last-minute funding cuts:

• The Trump administration is trying to pull a sneaky, and likely illegal, stunt.
  • It’s using a shady legal loophole to violate the separation of powers between Congress and the president. The GAO has stated that this is unconstitutional.
  • This is not the way our system should operate. If this action stands, it gives the president a line-item veto to cut funding he doesn’t like.
  • This ruse goes against the exact purpose of the very law being used, the Impoundment Control Act. If Congress wanted to give the president this power, it would have outlined it in the law.
  • The administration has already spent months ignoring court orders and going around the Constitution. This is par for the course for an executive branch that doesn’t respect the American people or the rule of law.
• Similar cuts could devastate essential services in the states.
  • Unless Congress or the courts act, the president can use this tool to cut any funding that he disagrees with, slicing up veterans’ health care, research that finds cures to deadly diseases, early childhood education programs, and projects that improve the safety of America’s roads. And he can do this on his own, without congressional approval.
  • States are already struggling to manage the fallout from broad, indiscriminate cuts to billions of dollars in federal funding nationwide.
  • We’ve seen courts repeatedly hold that the executive branch does not have the power to cut funding for programs like these on a whim.
  • He shouldn’t be allowed to do this with a stroke of his pen—whether it’s on an executive order or on a last-minute letter to Congress.
• This is not how the American system works.
  • The president generally does not have power under the Constitution and our nation’s laws to withhold or freeze funding without Congress’ approval.
  • The president cannot pick and choose the laws he wants to follow and the programs he wants to defund. Bills are passed by Congress, and he signs them into law. The Supreme Court has said line-item vetoes are illegal. This gimmick is basically a line-item veto waiting for the clock to run out.
  • The president wants power without limits.