Presidential Spending Power and the Impoundment Control Act

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Philip Joyce
March 3, 2025

The “freeze” on federal spending ordered by President Trump early in his administration, and various statements made by Office of Management and Budget Director Russell Vought and incoming General Counsel Mark Paoletta supporting the practice of presidential impoundment suggest that the question of who has the power to control federal spending will be a major issue during the Trump administration. As this is not the first time that there have been controversies over the use of impoundments (that is, the refusal to spend money that has been provided for by law) it is useful to review the provisions of the Impoundment Control Act (ICA), a law which was enacted 50 years ago in an attempt to establish a process through which Presidents could propose the cancellation or deferral of appropriated spending, and the Congress could respond to those requests.

Attempts by Presidents to impound funds are nothing new. Some of the first impoundments occurred as early as the Jefferson administration, but normally there were informal agreements between the Congress and a given President concerning the failure to spend appropriated funds. Most of these early impoundments resulted not from policy disagreements, but from efforts by the executive to meet the associated policy goals more efficiently. They also normally were in compliance with laws that permitted the executive branch the discretion to make these choices.

Particularly in the Nixon administration, however, there were numerous efforts by the President to impound funds for policy reasons. That is, the Congress would pass appropriations, which Nixon would approve, and then he would simply refuse to spend the funds for their intended purpose, or sometimes at all. Although he asserted that his actions were legal, both an internal Justice Department opinion (written by future Supreme Court justice William Rehnquist) and various court decisions found that Presidents possessed no such inherent impoundment power. The argument against impoundment rested on the notion that the presidential oath to faithfully execute the laws, as well as the Take Care Clause of the Constitution, applied to ALL of the laws, not just the ones that the President agreed with.

Thus, policy-based impoundment was deemed legally impermissible by the early 1970s. The Congress, in a desire to clarify its spending power while providing the President with the ability to identify desired delays or cancellations of spending, enacted Title X (Impoundment Control) of the Congressional Budget and Impoundment Control Act of 1974. This law was part of a general effort by the Congress to reassert its constitutional “power of the purse”.

The act created a set of procedures through which Presidents could propose spending delays or reductions to the Congress (note that this applies only to the roughly 28 percent of the budget that is appropriated spending, rather than entitlement and other mandatory spending).  There are two types of changes that can be proposed—deferrals of spending, representing a delay in the obligation or spending of budget authority; or rescissions, which represent the cancellation of budget authority.

In the case of deferrals the law says that they can only proposed to “provide for contingencies”, to “achieve savings made possible through changes in requirements or greater efficiency of operations”, or “as provided for by law.” The ICA says that deferrals cannot occur for any other purpose, which is typically interpreted to preclude “policy” deferrals; that is, the delay in spending money because the President does not agree with the purpose of the spending. If the President proposes a deferral, he is to do so through sending both the House and Senate a “special message” outlining the specifics of, and the justification for, such a deferral. There are special expedited procedures that the Congress can follow to express disapproval of a deferral proposal.

A rescission, on the other hand, represents not a delay in the provision of budget authority, but a proposed cancellation of budget authority. Again, the President is to propose rescissions by providing a special message to the Congress. The practical effect of a rescission proposal is to put the spending in question “on hold” pending congressional action. If the Congress fails to act to approve the  rescission within 45 days, the law states that the funds should be made immediately available for obligation.

One implication of all of this is that President Trump had a clearly legal means to pursue some of the delays in spending that he desired, had he proposed them for rescission (deferral would be a more difficult case to make if these are viewed as policy deferrals; the administration has argued that the  delays are “programmatic delays” that have been found to be permissible). If he had done so, it would have put the spending in question on hold, pending congressional action.

It is also important to note, as pointed out by Doug Criscitello recently in an article in Forbes, that “(i)n the absence of such a presidential notification, the…Comptroller General, is required by the 1974 law to report to Congress any impoundment where the President has failed to follow the procedures to rescind or defer funding. That notification would then serve the same purpose as if a special message had been transmitted by the president and the 45-day consideration period begins.” The Comptroller General has acknowledged that GAO is investigating whether these actions are deferrals or rescissions under the ICA.

The key question is how the other two branches respond to this assertion of presidential power. The Congress is not in a strong position, as it has compromised its own legitimacy through its failure to either perform its most basic functions (such as passing appropriation bills) or solve ongoing problems (such as immigration). It would be unprecedented, however, for the Congress to sit idly by while the President takes the kind of full control of federal spending that is implied by an aggressive use of impoundments. Thus far, Republicans in Congress have allowed this challenge their spending power to stand, while Democrats are relatively powerless to do anything other than complain.

That brings us to the courts. As noted, the courts have historically not permitted policy-focused impoundments. There have been a number of lower court cases, but in Train Versus City of New York (a 1975 case) the Supreme Court ruled that President Nixon possessed no unilateral authority under the statute in question to impound funds. Again in 1997, when ruling the Line Item Veto Act (which was actually not a line item veto at all, but a stronger version of rescission authority) to be unconstitutional in the case of Clinton Versus City of New York the Supreme Court reiterated that the only way to legally cancel appropriated spending is through the same process (approval of both houses and the President) through which it was approved in the first place.

However, constitutionality is increasingly a fluid concept, and the fact that the Supreme Court found that Presidents did not have such authority in the past is not necessarily a predictor of what might happen now. Of course, the Congress could also acquiesce to the stated wishes of President Trump and repeal the Impoundment Control Act, but that would represent a kind of unilateral disarmament with respect to the power of the purse. The repeal of the ICA also does not, by itself, mean that impoundments would be legal, as the law did not make them illegal, but simply provided a fast-track mechanism for consideration of impoundments.

In the end, the checks and balances envisioned by the Constitution ultimately only work if these other two branches play their prescribed constitutional roles. There is no particular indication that the Republican Congress has any intention to challenge President Trump’s actions, even though they will be weakening themselves in the process (to be clear, Democrats also tended to defer to Presidents Obama and Biden, but not to the extent of giving away their authority over spending). And it is not clear how the Supreme Court would rule, as it may come down to their views on “unitary executive theory”, or simply whether the conservative justices may continue to support the actions of a conservative President. If these impoundment actions are allowed to stand by these other two branches, it may be short-sighted, as once power has been ceded to the executive, it may be difficult to get that power back, even in cases where the President is pursuing future policies that the Congress and the courts do not agree with. In that sense, we may be witnessing a “high noon” moment for the separation of powers.

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Author: Philip Joyce is Professor of Public Policy in the University of Maryland’s School of Public Policy.  He is the author of The Congressional Budget Office:  Honest Numbers, Power, and Policymaking (Georgetown University Press, 2011), two other books, and more than 70 other publications focusing primarily on public budgeting and performance management. Professor Joyce is a Fellow of the National Academy of Public Administration, and received the Aaron Wildavsky Award for lifetime scholarship in public budgeting and finance in 2012. 

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