Douglas Rissing/iStock/Getty Images Plus
This initially appeared in the Planet Money newsletter. You can subscribe here.
A constitutional dispute is emerging concerning Congress’ financial authority and whether the president can disregard spending directives from Congress.
Since assuming office, the Trump administration — in conjunction with Elon Musk’s Department of Government Efficiency (DOGE) — has aimed to reduce federal expenditure, cut workforce numbers, and dismantle programs and bureaucracies without legislative input. They are asserting that the president possesses the authority to unilaterally override Congress’s spending plans.
The Trump administration’s sweeping claim of executive authority to slash spending is not entirely unexpected. Prior to his presidency, President Trump’s Office of Management and Budget (OMB) director — Russell Vought, a key architect of Project 2025 — and OMB general counsel Mark Paoletta vocally argued that the president could and ought to act unilaterally to cut spending. In a Wall Street Journal op-ed published in November, Musk and then DOGE co-leader Vivek Ramaswamy proclaimed that DOGE would “particularly focus on enacting change through executive action based on existing legislation instead of passing new laws.”
Moreover, in 2023, during his reelection campaign, Donald Trump released a campaign video articulating his stance that the president should hold a unique power to cut spending, termed “impoundment,” or the ability to refuse to disburse funds allocated by Congress.
“For 200 years under our government system, it was unquestionable that the president had the constitutional ability to stop unnecessary spending through what is known as impoundment,” Trump stated. “In plain terms, this meant that if Congress allocated more funding than necessary to operate the government, the president could opt not to squander the surplus funds.” According to Trump, granting the president the power of impoundment would aid in balancing the budget, “drain the swamp,” and “obliterate the deep state.”
In Trump’s narrative, presidents wielded impoundment authority freely until 1974, when the government, amidst the Watergate scandal, enacted the Impoundment Control Act that limits presidents from unilaterally withholding funds.
“This catastrophic law is clearly unconstitutional — a blatant breach of the separation of powers,” Trump asserted.
However, a substantial number of legal experts, officials, and judges from both major political parties — including Brett Kavanaugh, who Trump appointed to the Supreme Court — have dismissed the notion that the president has the constitutional power to disregard spending laws. They assert that the Constitution explicitly designates Congress as having the power of the purse, including the authority to dictate how much — and how little — to allocate for various initiatives (when such spending directives have been passed by both chambers of Congress and endorsed by the president, or when, in the case of a presidential veto, Congress enacts the spending law with a supermajority in both chambers).
In today’s Planet Money newsletter, we explore what presidential impoundment power entails. Is it genuinely constitutional? Or is this a case of an unconstitutional power grab? We delve into the discussion.
Trumpworld’s Argument for Presidential Impoundment
First, let’s examine Trumpworld’s case that impoundment is an inherent presidential power that was unlawfully stripped away.
Paoletta and his colleagues have articulated the most comprehensive argument for this perspective. Paoletta was the lead lawyer at the OMB during Trump’s first term and is currently serving his second term in the same role. He is not just an obscure academic.
Last year, Paoletta and his team drafted legal memorandums outlining their argument for a presidential impoundment power (and also their reasoning for why the Impoundment Control Act, which curtails the president’s ability to exercise this power unilaterally, is unconstitutional).
In their first memorandum, they delve into the history of America. “Since the time of the Founding, Congress’s control over financial expenditures has been interpreted as establishing a ceiling on executive spending, rather than a floor,” they state. “Until Richard Nixon’s presidency, it was widely accepted that the power of the purse merely constrained the president’s ability to exceed an appropriation — and did not prohibit the president from spending below an appropriation.”
Paoletta and his colleagues argue that numerous presidents have exercised impoundment power prior to the Nixon-era restrictions — and that this was generally accepted at the time. For instance, they note that President Thomas Jefferson “refused to allocate a congressional appropriation of $50,000 for 15 gunboats for use on the Mississippi.” Although Congress had passed a law funding these gunboats, Jefferson ultimately decided that he did not need them, and Congress accepted his decision.
President Ulysses S. Grant, according to Paoletta and his associates, withheld some infrastructure appropriations for rivers and harbors, viewing certain expenditures as wasteful and not serving the national interest.
President Woodrow Wilson allegedly “declined to spend appropriated funds for a peace conference with major powers aimed at ending World War I.”
President Franklin D. Roosevelt reportedly “engaged in widespread and highly publicized impoundments during the Great Depression and World War II.”
And examples continue.
However, in the early 1970s, President Richard Nixon extensively withheld billions of dollars in federal funds allocated for various social programs, inciting anger among many lawmakers. At that time, Nixon was attempting to manage inflation and curb expenditures. Following Nixon’s entanglements in the Watergate scandal, Congress began to reclaim its authority, particularly over fiscal matters.
In 1974, Congress enacted and Nixon sanctioned the Impoundment Control Act, which limited the president’s capacity for withholding funds and provided mechanisms for the president to collaborate with Congress if he aimed to withhold funds. Nixon, who would be forced to resign less than a month later, portrayed the signing of the law as providing the government with essential tools for reducing expenditures and combating inflation.
Nonetheless, Paoletta and his co-authors contend that “The Impoundment Control Act is an unconstitutional encroachment on the president’s long-standing power of executive impoundment.”
The Constitutional Opposition to Presidential Impoundment
For many legal scholars and jurists, the Constitution unequivocally awards Congress the power of the purse — encompassing the authority to enforce a minimum on executive spending. This view transcends party lines.
William Rehnquist articulately explicated his interpretation of the Constitution. Prior to his appointment to the Supreme Court by Nixon — and subsequent elevation to chief justice by President Ronald Reagan — Rehnquist served as an assistant attorney general in the Nixon administration. In that capacity, he authored an Office of Legal Counsel memorandum in 1969 stating that the “existence of such a broad power” — specifically, a presidential impoundment power — “is endorsed by neither reason nor precedent.” He elaborated that, “It is extremely challenging to formulate a constitutional rationale justifying a president’s refusal to comply with a congressional directive to expend funds.”
Kavanaugh, appointed to the Supreme Court by Trump, mirrored this sentiment. In a 2013 opinion during his tenure on a federal appellate court, Kavanaugh noted, “the President does not possess unilateral authority to decline to spend funds.”
David Super, a law and economics professor at Georgetown Law, conveyed to NPR that this ongoing debate hinges upon a critical clause in the U.S. Constitution: The president is mandated to “ensure that the Laws be faithfully executed.”
When appropriations receive legal enactment, Super asserts, the Constitution unequivocally obliges the president to implement them. “So, if Congress allocates a million dollars for a specific activity, the president fails to faithfully execute that law if he refrains from utilizing those funds.”
Super emphasizes that the Supreme Court has already addressed this issue. In 1975, the Supreme Court decided the case of Train v. City of New York, ruling on Nixon’s unilateral withholding of funds. Nixon had instructed the government not to fully allocate the funds Congress had appropriated for cleaning public water systems in New York City under the Federal Water Pollution Control Act. The court unanimously concluded that Nixon did not possess the authority to refrain from spending these funds, as the president “did not have the power to withhold the expenditure of the funds,” according to Super. The Supreme Court declared, “That’s not demonstrating that the laws are being faithfully executed. You are required to expend the funds provided by Congress.”
In one of their memorandums addressing this matter, Paoletta and his co-authors affirm that the Supreme Court’s ruling in Train does not definitively settle the question of presidential impoundment power. They argue that the ruling is “limited to the specific statutory framework at stake and does not engage with the President’s constitutional authority to impound funds.”
Super contends it is true that Nixon’s Justice Department did not argue in Train that the president possesses an inherent power of impoundment, and thus, the Supreme Court never explicitly considered that argument. However, Super argues that “this is because it is an absurd contention.” Nixon’s legal team did not even attempt to assert that the president had the inherent right to override the spending mandates of Congress.
Super further references another Supreme Court case: Clinton v. City of New York. In 1996, Congress enacted and President Bill Clinton endorsed the Line Item Veto Act. This legislation aimed to grant the president the special authority to veto specific funding elements within budget bills after signing them into law. This scenario is analytically akin to impoundment: the line-item veto empowered the president with unilateral authority to nullify specific appropriations — thus spending less than Congress had dictated.
“And the Supreme Court ruled ‘No, that is unconstitutional,'” Super remarks. “That provision effectively grants the president legislative amendment powers, which he does not possess. The court ruled that even with Congress’ consent, the president cannot refuse to expend funds in this manner.”
Rebuttal to Trump’s Interpretation of Presidential History
But what about the 200-year period before the Impoundment Control Act when presidents seemingly did impound funds? Trump and his legal team have emphasized this point. Why were presidents permitted to impound funds if it wasn’t constitutionally sanctioned?
Super indicates that he has analyzed Paoletta and his colleagues’ historical arguments, finding inaccuracies in their interpretation.
For instance, regarding the notable case of Jefferson declining to expend funds appropriated for gunboats, Super explains that the statute’s phrasing illustrates that Congress authorized Jefferson to do so. The law permitted the president to allocate funding for “a number not exceeding fifteen gunboats” to deploy “for purposes he deems necessary for public service” — with “a sum not exceeding fifty thousand dollars.” In essence, the law provided a ceiling — yet not a floor — on the funds Jefferson could utilize for gunboats.
“Jefferson was not failing to ensure the law was faithfully executed, as the law granted him this discretion,” Super clarifies. “Congress retains the authority to enact laws that grant the president such discretion. However, if Congress passes a law requiring the allocation of funds, that is among the laws the president must adhere to.”
Zachary Price, a law professor at UC Law San Francisco, shares a similar perspective on this historical context. More broadly, he notes that during the 200 years leading up to the Impoundment Control Act, there existed a mutual understanding between Congress and the president that, if a president could conserve funds while fulfilling a particular congressional objective, such a practice was permissible.
However, when Nixon began directly countering Congress’s policy goals by withholding billions allocated for various programs, it became a substantially different scenario. This compelled Congress to assert its authority over the appropriations process and terminate unilateral funding cuts.
The Impoundment Control Act does not prohibit the president from impounding funds. Instead, it establishes legal avenues for the president to both withhold and eliminate expenditures. However, both routes necessitate congressional oversight and collaboration.
Super emphasizes his belief that the Impoundment Control Act is constitutional. Ironically, he suggests that if the Supreme Court or Congress were to invalidate it, it would curtail the president’s ability to impound funds altogether, stripping away the legal means to do so.
Were the Impoundment Control Act to be annulled, Super concludes, “we would revert to what the Supreme Court stated in Train v. New York, which is that the allocated funds must be expended. End of story. No exceptions.”
Super expresses concern over the Trump administration’s actions that defy congressional mandates and various moves that he believes deteriorate the Constitution’s system of checks and balances.
Nonetheless, he acknowledges a silver lining. This semester, he is teaching a class on legislation, and coincidentally, the Impoundment Control Act was scheduled for discussion the day after the Trump administration released a memorandum halting several federal expenditures. “So, I sent an email to my students the night before, suggesting they include it in their readings.”
“As an instructor, I couldn’t be more thankful for this timing,” Super remarks. “As a lawyer and citizen, I find it troubling.”
