LEGAL
Federal memo ordering spending pause under legal challenge
The question being addressed is if the president can independently revoke spending approved by Congress
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On Jan. 27, the Office of Management and Budget (OMB) issued a memo that described a pause of certain federal grants and loans, though it is not entirely clear which grants it applies to. The purpose of the pause, as described by the memo was to “provide the Administration time to review agency programs and determine the best uses of the funding for those programs consistent with the law and the President’s priorities.” The release of the memo caused widespread concern and confusion as states, municipalities, civic and community organizations and other recipients of federal funds scrambled to determine if their funding was at risk and what that could mean for their work.

Two lawsuits challenging the memo were immediately filed — one by Democracy Forward and various other nonprofit organizations in Washington, D.C., and another by several attorneys general in Rhode Island. As of this writing, both courts have issued a temporary restraining order blocking the memo’s implementation while the cases are being heard. In the meantime, the memo has been rescinded by the OMB.

This series of events and legal actions elevated a question that legal scholars and political analysts have been considering since the previous Trump Administration — that is, whether the president can decline to spend funds appropriated by Congress to advance his policy preferences and objectives. The executive orders issued by the Administration include several instances of language that suggested funds would be withheld by the executive branch. For example, the executive order titled “Protecting the American People Against Invasion” threatened to end some federal funding for “sanctuary jurisdictions.” But the memo went a step farther and created instances where funds were actually withheld from certain entities, heightening the importance of a clear answer to this question.

A clear answer to that question is one that will have to come from a court, likely the U.S. Supreme Court. But the constitutional, legal and political history of the United States may offer some insight on the arguments that will be made and how questions related to the specifics of federal funding may be answered to conclude the issues raised by the memo. That conclusion may also provide some clarity about how the Trump Administration can or cannot execute the policy objectives it describes in its various executive orders.

Precedent
The question of a president refusing to spend appropriated funds is one tied to the idea of “impoundment,” which is a legal concept based on constitutional principles and statutory law. While these are complicated issues, past presidential trends, and Congress’ response, offer some insight into future legal outcomes. Article I of the Constitution includes the Spending Clause and Appropriations Clause, which describe Congress’s “power of the purse” or control of the federal funds. Though the president is often heavily involved in the budget setting process, Congress has the ultimate power to determine how funds are spent. Those “appropriations” are laws that the president is required by Article II to “faithfully execute.”

Historically, presidents pushed the limits of what it means to faithfully execute appropriations laws and at times did spend less than — or impound funds — Congress allocated for a specific law. According to many legal experts and historians, existing examples of impoundment suggest a political understanding and cooperation between the two branches, more than a clear presidential authority to impound funds. President Nixon took the limits too far in his efforts to impound funds, and Congress responded by passing the Impoundment Control Act (ICA) in 1974.

The constitutional, legal and political history of the United States may offer some insight on the arguments that will be made and how questions related to the specifics of federal funding may be answered to conclude the issues raised by the memo.
It has been argued by legal scholars that the ICA codified the Article I and II principles described here and statutorily limited the ability of the president to refuse to spend funds Congress appropriated. To spell out limits on the president’s authority more explicitly, the ICA sorts impoundment actions into deferrals, or a delay in spending of funds as required by Congress, and recissions, completely stopping spending. Deferrals are permissible in limited circumstances and within certain limitations. Programmatic delays that are meant to address practical obstacles or to use funds more efficiently are generally acceptable (though the scope of this “programmatic delay” has been controversial), whereas policy-based delays because a president does not agree with the law’s objective are not permissible. Any deferral by the president must be reported to Congress and can be overridden.

Distinctly, recissions by the president must be proposed to Congress and are considered on an expediated timeline, during which spending continues. So, there is an ability for the president to try to pull back some of the funding that Congress has appropriated, but not without significant guardrails set by Congress. Those guardrails reinforce the constitutional roles and duties of Congress. As previously described, the ICA arguably did not create new limitations but instead reinforced the powers of Congress found in Article I and the duties of the president found in Article II.

Some individuals such as Russell Vought, the new head of the OMB, argue that the ICA is in fact unconstitutional, and the Constitution does allow the president to be more directly influential in how appropriated funds are spent. So far, two courts, including in a case brought by California’s Attorney General Rob Bonta and several other state attorneys general, have disagreed with that theory, but there will certainly be more consideration of the issue as the memo is further considered by courts and future actions suggested by the new Administration lead to additional legal battles.

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