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The Joys of Impounding Funds, or DOGE vs. Judge Ali
Impoundment has traditionally been considered a part of the executive power that the Constitution invests in the president. From Jefferson to Nixon, the president regularly impounded funds that he felt were unconstitutional or did not comport with Congress’s intent or infringed on the president’s national security and foreign policy powers.
Examples include Jefferson impounding funds for constructing navy yards that the previous congress had appropriated or funds for gunboats on the Mississippi at the time he was secretly negotiating with France to purchase Louisiana. In a 20th-century example, Truman asked for money for 48 Air Force groups, but Congress appropriated money for 58. Truman held the money for the extra 10 groups in reserve. Generally the president and Congress ironed out their differences, especially when changed circumstances proved one or the other correct. Unfortunately, we can’t count on such goodwill today.
Consider a hypothetical example where Congress appropriates $1 billion for building a bridge, but the president finds he can build it for $500 million. What should he do with the extra half-billion? Did Congress intend for him to give it as a gift to the bridge contractor? Many of the USAID impoundments and canceled contracts may fall in that category. It seems unlikely that Congress specifically appropriated money for trans operas, so Trump may be on strong grounds when he refuses to spend money on that. He can also argue that funding trans operas in some country infringes on his foreign policy authority. The president has to have some reasonable flexibility when he executes the appropriation that Congress made, especially in areas where he has strong constitutional authority.
Nixon was determined to push the impoundment authority to new levels, and he already had a contentious relationship with Congress, so there was no attempt to work out an amicable solution. The Supreme Court ruled some of his impoundments unconstitutional because Congress had specifically ordered that a certain thing be done.
The Impoundment Control Act of 1974, which many view as settled law, was passed AFTER Nixon’s attempted impoundments, so SCOTUS has never ruled on its constitutionality. The ICA attempts to prevent the president from impounding any funds without congressional approval. It seems likely that some of its restrictions are constitutional while some are not. Trump and OMB Director Vought are determined to press the matter to restore the president’s traditional authority to impound funds. The legal spat with Judge Ali over DOGE’s cancellation of $2 billion in USAID contracts is only the first step in a journey that is certain to end in the Supreme Court.
Published in Finance
From what I’ve read, it may be arguable that the President must spend appropriations for USAID through USAID (or whatever it is now, and maybe if USAID is no more then the funding is now moot), but Congress never specified to start with, the exact contracts that must be funded. So Trump could just not spend, and Congress can take it back if they want to. Or just leave it in some “USAID” slush fund.
Maybe those unspent USAID funds could be used for those DOGE “Rebates.”
I applaud Elon Musk’s and Donald Trump’s efforts to downsize the federal government, and I hope they succeed.
However, it has been concerning me since the beginning that there are a lot of roadblocks they will likely run into in this effort.
The federal government agencies, as do the state government agencies, dole out most of the money using a grant process. “If you meet these standards, you will be qualified for this grant.” The authorization for these grants comes from Congress or the state legislatures. It’s a long approval process usually, and it involves a lot of paperwork and approvals, and then upon project completion, compliance to make sure the money has been spent as intended. Cutting down the Department of Education, for example, might mean cutting out those grant writers, grant application reviewers, and the compliance and accounting personnel. I say that because most of what the Department of Education does is financing. I don’t know the exact percentage of personnel in the financing departments, but I imagine it’s huge. Education is largely a state and local project. I think the federal grants go to new school buildings, school lunches, and possibly transportation in some areas.
I am really curious to see how this ends.
But in addition, if I were Congress, I’d be upset if we had passed a highway improvement bill and the executive branch refused to administer it–that is, refused to make the grant program available to the states, review applications, issue the grant checks, then follow up with a final check for compliance with the terms of the grant and the accounting for the monies spent.
This all seems extremely complex and not easy to change. A legal morass. :)
But I have to missing something because I trust Trump to have some idea of what he can do and what he can’t. And he is addressing a long-festering frustration among Republicans for the out-of-control spending. He’s probably been hearing a lot over the last four years, and he saw it himself while he was in office in his first term.
There’s a moral issue here that the press is overlooking: I am responsible for how my money gets spent. How can the president accept responsibility for such a huge federal government? Money can be used for a lot of evil purposes. The president needs to know what’s going on in the agencies he is responsible for.
I hope we find a way to come up with some new systems that are auditable going forward.
Seems to me a lot of this has been flipped onto its head, at minimum. Funding requests through Congress have been – and probably should continue to be – along the lines of the Administration or perhaps someone else, asking Congress, “May we have some money for X?” Congress answers “you may spend up to X amount, no more.” Somehow that has been twisted into “You MUST spend X amount, NO LESS.”
The Impoundment Act should be toast. Congress’ power of the purse is defined by the Constitution. Congress does not have the authority to arbitrarily expand or extend that power with legislation, especially not to detract from authority granted to POTUS in Article II.
However, there must be a limit to impoundment power. I just don’t know what it is or how to define it. The President can take money from one EPA activity to give some to another and not spend it all. But can he withhold 100% of funding for EPA and effectively veto the existence of the agency and all the legislation it is supposed to enforce/implement? I don’t think so.
The problem is that Congress chose not to do any heavy lifting and made pots of money available to the permanent bureaucracy to distribute without meeting any criteria identifiable as congressional intent. And before AI, Presidents and their appointees did not have the levers required.
So up till now, the bureaucracy could thumb their collective noses at Congress, dare them to do the heavy lifting in the detailed work required to constrain agency discretion and dare them to cut anything while the bureaucrats hold popular or influential programs hostage. At the same time, they can also defy the President if he tries to rein them in on the grounds that they are merely carrying out the lawful intent of Congress. And there is always some federal judge who will help the agencies and departments pretend to be servants of the Constitution while they wrongfully carve out money and power taken from both Congress and the President and play litigation rope-a-dope.
Does anyone have a rough estimate of how much money the DOGE team has discovered as being waste, fraud, abuse, duplication of services, etc?
I think I heard the figure stood at around 2 Trillion, but I am not sure if that is the case or not.
One thing I am sure of is that Dem governors from Massachusetts to Calif and many points in between are sweating this out. Should some locals decide to look into what the states of Illinois, Minnesota, Colorado etc are actually funding,the activity would prove to be very embarrassing to the Dems.
It is no secret that here in California, Gavin Newsom’s wife received over one million dollars for her selling her films and books on various gender and trans issues to the Calif school districts.
We also have a gazillion different programs supported by every other Calif agency in existence who are all about ending drug addiction. I’m not arguing that drug addiction is not an issue. But when it becomes an industry such that the inner circle of government-money-dependent politicians and their friends in bureaucracies continually breed new programs duplicating those already in existence, then someone somewhere should be stopping such waste and fraud.
At the same time the above is occurring,most Calif hospitals have very few beds for mentally ill people as well as those suffering with brain traumas..
Percival, I went to the DOGE.gov website, too, but there doesn’t seem to be running tally of savings. Is that impractical to do along the way?
According to the site, that is the running total. They have plans to make the updates in real-time, but for now, they are updating every week.
$115B in a single month (approx) ain’t too shabby. Keep it up folks.
Wouldn’t be a giant step forward to simply give the president the ability to do a line item veto of what is in Congressional budget bills?
All the way back to Obama’s campaign in 2008, this has been suggested as a solution. But I think what causes the situation to flounder is that Congress has to vote it in as legislation. Our Congress critters might be snarky about government fraud, waste and abuse that is occurring in the other congressional districts, but remain quite protective of every penny that their constituents want for their themselves.
On top of that, job patronage figures into it very heavily. Would we ever find out what the connection was to some Congress critter’s extended family members for ventures like transgendered basket weaving programs in Somalia or ballet programs for the blind in Ecuador?