While polling has tightened since President Joe Biden exited the race, a second term for former President Donald Trump remains a distinct possibility, setting the stage for perhaps the biggest confrontation with Congress over the power of the purse since the Nixon administration.
Trump hasn’t been shy about his affinity for “impoundments,” a practice Congress clamped down on in a landmark 1974 law that the former president and his aides believe is unconstitutional. The basic idea is simple: Refuse to spend money that’s been appropriated, or in some cases, redistribute it to places Congress didn’t intend.
The ex-president during his Republican National Convention speech referenced his first-term decision to redirect some $10 billion in military funds toward his southern border wall project after lawmakers largely wouldn’t go along.
“On the wall, we were dealing with a very difficult Congress and I said, ‘Oh, that’s OK. We won’t go to Congress,’” Trump said in his speech upon accepting the GOP nomination. “We gave our military almost $800 billion. I said, ‘I’m going to take a little of that money, because this is an invasion.’ And we built — Most of the wall is already built, and we built it through using the funds, because what’s more, what’s better than that?”
Trump’s defense funding diversion cited two specific statutes allowing the moves, including declaration of a border emergency and the use of Pentagon drug interdiction authorities. Much of the money was successfully shifted before court challenges were resolved.
Later in his speech, Trump went after funding approved for clean energy projects during Biden’s term, including as part of the 2021 bipartisan infrastructure law and Democrats’ 2022 budget reconciliation package.
“And all of the trillions of dollars that are sitting there not yet spent, we will redirect that money for important projects like roads, bridges, dams and we will not allow it to be spent on the meaningless green new scam ideas,” Trump said, putting a new spin on what some Democrats have pitched as a Green New Deal to reduce carbon emissions.
‘Starve the warmongers’
At other times during his campaign, Trump has pitched his impoundment philosophy as a deficit-cutting tool. In a video posted last year, Trump said withholding federal funds was “the only way we will ever return to a balanced budget.”
He called it a “crucial tool with which to obliterate the deep state, drain the swamp, and starve the warmongers,” although Trump also made clear that defense would be spared from cuts, along with Social Security and Medicare. Considering those three programs account for over 60 percent of all federal noninterest spending, many federal agencies and other benefits would need to be wiped out to balance the budget without also raising taxes.
But even if Trump were to start smaller, he’d still be headed for a major clash with Congress and the courts over the 1974 budget law, which the former president has called a “disaster,” “clearly unconstitutional” and a “blatant violation of the separation of powers.”
Experts widely believe, based on past court decisions and legal opinions, that the president does not have an inherent constitutional right to impound appropriated funds. Former aides to Trump, some of whom may end up populating a second-term administration, have already been laying the groundwork for him to challenge that assumption.
There has never been a conclusive court ruling on the issue of constitutionality. And Mark Paoletta, who served as general counsel in Trump’s Office of Management and Budget, argues in a short history of impoundment that the president has a right to cancel appropriated funds and that the 1974 law is unconstitutional.
Paoletta, a senior fellow at the Center for Renewing America — founded by Russ Vought, Trump’s former budget director — writes that administrations going back to George Washington believed that the president was not required to spend the full amount appropriated by Congress.
One famous example he gives is Thomas Jefferson’s initial refusal in 1803 to buy gunboats to patrol the Mississippi River, for fear of upsetting negotiations with the French over what became the Louisiana Purchase.
Other examples: President Ulysses S. Grant refused to spend some money Congress appropriated in 1876 for rivers and harbors, pointing out that he didn’t like funds being spent for “purely private or local” interests — foreshadowing latter-day debates over earmarks. The Roosevelt, Truman and Eisenhower administrations all made high-profile impoundments, Paoletta wrote.
“These impoundments were justified based on the longstanding understanding that appropriations could only set a ceiling on executive spending,” not set a minimum, he wrote.
‘Past the breaking point’
Then came President Richard M. Nixon, who took the practice to a new level.
He delayed or canceled funding for multiple programs funded by Congress, including farm programs, wastewater treatment allotments and housing aid. The Nixon administration justified the impoundments in various ways, sometimes depicting the spending as unnecessary or ineffectual, other times citing efforts to control inflation.
“Used with restraint and circumspection, impoundment is a viable instrument, capable of being used without precipitating a crisis,” Louis Fisher, a constitutional law expert and veteran of the Congressional Research Service and Library of Congress, wrote in 1973. But under Nixon, “restraint was replaced by abandon, precedent stretched past the breaking point, and statutory authority pushed beyond legislative intent.”
Fisher’s research was credited with laying the groundwork for what became the 1974 budget law. Fisher said in an interview that Nixon sent him the pen used to sign the law, despite their differences over presidential powers.
Fisher had worked with House and Senate staff and top executive branch officials on the impoundment legislation, he said. “They agreed with me, and I think they were the ones who told him, just sign it because it’s bipartisan and if you veto it, they are going to override you,” he said.
Paoletta and his co-authors, however, argue that Nixon’s use of impoundment “was well within constitutional understanding and practice going back to the founding.” They write that Congress’ “use of its power of the purse to make it illegal for the president to intentionally spend less than the full amount of what was appropriated was norm-breaking, unprecedented, and unconstitutional.”
Impoundment to impeachment
Trump has previously tried to work within the 1974 law to cancel appropriated spending. While impoundments are otherwise forbidden under that statute, a president can withhold funding for 45 days after sending a “special message” informing Congress of a decision to block the money, which triggers legislation to implement the proposal. If lawmakers have not cleared legislation to cancel the funding by the end of the 45-day window, the money is released.
The Trump administration attempted to cancel $15 billion in unspent funds in 2018, but legislation to implement the cuts stalled in the Senate.
A president also is allowed to temporarily defer spending, but only for specified reasons including providing for contingencies and achieving savings through improved efficiency.
In 2019, with Democrats back in control of the House, Trump again toyed with impoundment powers, with ultimately historic consequences: his first impeachment.
Trump’s budget office temporarily withheld security assistance to Ukraine in what critics said was retaliation for President Volodymyr Zelenskyy’s failure to produce political dirt he could use against Biden, his 2020 campaign opponent. The Senate didn’t convict him, but Trump’s move touched off a congressional review of whether he violated the 1974 law.
The Government Accountability Office ultimately ruled that some, but not all, of the deferred Ukraine spending was an illegal impoundment made for “policy reasons.” Paoletta, who was then OMB general counsel, responded on Jan. 19, 2021 — just before Trump left office — that the executive branch has discretion to “delay spending for even a very short period so that it may determine the best policy in order to comply with the statute.”
Impound first, ask questions later?
It’s unclear what path Trump might pursue to challenge the constitutionality of the impoundment law. Based on conversations with supporters and critics of the former president, what appears most likely is that he would impound funds and then defend against any litigation in court. Fighting an impoundment that opponents view as illegal could take months or years, meaning the funding that is withheld could expire before a challenge is resolved.
While there’s no statutory penalty for violating the impoundment law, it does give the comptroller general authority to sue an executive agency or employee who withholds funding after first providing the speaker and president of the Senate with an “explanatory statement.” That’s only happened once, in 1975, when the GAO sued then-President Gerald Ford, his budget director and Housing and Urban Development secretary.
HUD had suspended a program that subsidized mortgage interest payments for low-income families under Nixon. Ford continued the suspension in order to conduct a review following reports of abuse. After the GAO suit was filed, the program was reactivated, with some revisions, before the case was concluded in the courts.
Paoletta argues it is unconstitutional for the comptroller general to enforce the impoundment law since the comptroller is a legislative branch official who, though appointed by the president with the consent of the Senate, cannot be removed from office by the president.
Whether the GAO sues or not, aggrieved parties could seek standing to challenge an impoundment in court by arguing they were injured by it.
That was “the posture of the cases from the 1970s, where the Nixon administration withheld funding under various particular statutory provisions that would have resulted in grant and loan payments to the cities that filed the lawsuits,” said Eloise Pasachoff, a Georgetown University law professor who’s written on the topic. Courts ultimately held that the statutes didn’t allow such impoundments, but constitutional questions weren’t decided.
Whether Congress can claim standing to challenge impoundments in court hasn’t been tested either, legal experts say. Some left-leaning groups, like Protect Democracy, are prepping their own legal arguments, including backup from Justice Department opinions released during Ronald Reagan’s administration and even Nixon’s.
But Trump certainly seems ready for a fight.
“With impoundment, we can simply choke off the money. This policy is anti-inflation, anti-swamp, anti-globalist — and it’s pro-growth, pro-taxpayer, pro-American, and pro-freedom,” Trump said in his 2023 campaign video. “I alone can get that done.”
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