At the start of President Donald Trump’s second term, he and his administration have issued unprecedented directives to halt domestic and foreign spending in order to align that spending with his “America First” agenda. The orders have had immediate and sweeping impacts, including widespread confusion over exactly what funding must be paused, ensnaring billions of dollars in the freeze and ending the employment of federal workers and contractors necessary to execute on those funds. Although the White House Office of Management and Budget (OMB) quickly rescinded the memo that generated the most chaos, Trump’s actions and subsequent comments suggest that the policies undergirding the memo still remain and raise questions about the legality of his ability to unilaterally stop spending, referred to in federal law as “impoundment.”
In addition to the legal questions raised, the Trump administration’s impoundment of foreign assistance, coupled with personnel-related actions, such as attempting to put thousands of U.S. Agency for International Development (USAID) officials on leave, could have long-term effects on U.S. and international security, some potentially quite serious. Foreign assistance is a key pillar of U.S. soft power, critical to helping millions of people around the world and advancing U.S. influence through good will. This includes funding for humanitarian aid, defense equipment for partners and allies, development assistance, health programs, and more. Traditionally, the United States has seen such initiatives as key to geopolitical competition and essential to international stability.
Executive Actions Regarding Foreign Assistance
Three executive actions in particular have abruptly impounded billions of dollars in foreign assistance.
The first occurred just hours after Trump’s inauguration. On Jan. 20, he signed Executive Order 14169, entitled “Revaluating and Realigning United States Foreign Aid.” The operative language of the executive order requires “a 90-day pause in United States foreign development assistance for assessment of programmatic efficiencies and consistency with United States foreign policy.” The Executive Order allows “new obligations and disbursements of foreign development assistance funds” for programs to resume after the pause only if the secretary of state and the OMB director agree they should continue.
Soon after, on Jan. 26, newly-confirmed Secretary of State Marco Rubio issued guidance to the State Department and USAID to implement the president’s Executive Order; it included waivers for Israel and Egypt (notably leaving out Ukraine and Taiwan), and world-wide emergency food assistance. But instead of applying the pause to foreign development assistance, as stated in the Executive Order, Rubio directed the State Department to pause all foreign assistance, a much broader category, encompassing world-wide humanitarian aid and security assistance to U.S. partners and allies.
The effects were immediately far-reaching, including at least the temporary stoppage of funding for things like humanitarian work in Ukraine, demining in Cambodia, Laos, and Vietnam, and the President’s Emergency Plan for AIDS Relief (PEPFAR) in Africa. A few days later, in a media note on the State Department’s website, the Office of the Spokesperson said that the State Department had approved, “within hours” requests for more waivers and issued another waiver for “life-saving medicine, medical services, food, shelter, and subsistence assistance, as well as supplies and reasonable administrative costs as necessary to deliver such assistance.” But reports indicate that despite the issuance of this additional waiver, uncertainty about what programs to stop still remains and the payment system USAID relies on has been inaccessible even to programs that receive a waiver.
A week after the inauguration, OMB issued the president’s most remarkable directive to withhold spending. On Monday, Jan. 27, Acting Director Matthew Vaeth sent a late-in-the-day memo (M-25-13) to federal agencies requiring them to:
temporarily pause all activities related to obligation or disbursement of Federal financial assistance, and other relevant agency activities that may be implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.
Emphasis added here to show the extraordinary language used to stop federal spending, which was accompanied by wide-reaching internal implementation guidance with a list that included well-known federal programs such as Head Start, Section 8 Housing, and the Children’s Health Insurance Program (CHIP).
Two separate lawsuits challenging the OMB memo were promptly filed in federal court, one by several non-profit and public health groups in the District of Columbia District Court and another by state attorneys general in a Rhode Island District Court. On Tuesday, Jan. 28, just a day after the OMB memo was issued, a judge in D.C. temporarily blocked M-25-13 and by midday Wednesday, Acting OMB Director Vaeth sent departments and agencies a two-line memo (M-26-13) that read: “OMB Memorandum M-25-13 is rescinded. If you have questions about implementing the President’s Executive Orders, please contact your agency General Counsel.” (The Rhode Island District Court later issued a temporary restraining order as well.)
Even with the most far-reaching memo enjoined by the courts and rescinded by the administration, there is still ongoing impoundment across the U.S. government, much of it at Trump’s direction, including billions of dollars in U.S. foreign assistance and the effective dissolution of USAID. Many Democratic senators and members of Congress have said Trump’s impoundment violates not only the U.S. Constitution, but also the Impoundment Control Act (ICA).
The Impoundment Control Act
It is widely agreed that the president does not have the authority to unilaterally impound federal funds. The drafters of the Constitution vested Congress with the spending and legislative powers of the federal government and tasked the president to “to take Care the Laws be faithfully executed.”
Several government memos help illustrate this dynamic. In 1969, then-attorney general and future U.S. Chief Justice William Rehnquist concluded that broad power to impound “is supported by neither reason nor precedent.” In 1985, lawyers in the Office of White House counsel wrote a memo on impoundment authority during the Ronald Reagan administration advising that “no area seems more clearly the province of Congress than the power of the purse.” A 1988 Department of Justice Office of Legal Counsel memo on the presidential veto power states there is “no textual source in the Constitution for any inherent authority [of the president] to impound.” And more recently, the Government Accountability Office (GAO), a government agency within the legislative branch that audits the federal government, made clear in a 2018 memo that an appropriation is like any other law and the president “must take care to ensure appropriations are prudently obligated during their period of availability.”
After Richard Nixon attempted to impound federal funds during his tenure (his administration often lost legal battles in federal court, including one case at the Supreme Court), Congress passed the Impoundment Control Act. The ICA cabins executive discretion to withhold appropriated funds to two narrow circumstances, and provides for congressional notification and involvement in each case. The law limits permissible withholdings to “rescissions” and “deferrals.” A rescission is a request from the president to Congress to cancel funds – it is the only mechanism by which he can permanently withhold funds – and a deferral is a delay in use of the funds.
The ICA establishes a detailed process for a president’s fast-tracked legislative proposal to rescind funds. If the president would like Congress to rescind appropriations because he determines all of the funding provided is not necessary to carry out the full objectives of the programs for which the money was provided, for fiscal policy or other reasons, or the president would like to reserve for obligation 1-year funds for that particular fiscal year, the ICA requires the president to submit a request to Congress via a “special message” that communicates the executive’s proposal.
The president’s special message to rescind funds must specify: (1) the amount to be rescinded or reserved, (2) the departments, agencies and specific projects or government functions involved, (3) the reasons to rescind or reserve the budget authority, (4) the estimated fiscal, economic and budgetary effect of the proposed deferral, and (5) all facts relating to the proposed rescission or reservation, including an estimate of the effects of the recission on the “objects, purposes and programs” for which the budget authority is provided (see 2 U.S.C. § 683).
If the president sends a special message with a request to rescind appropriations and if after 45 calendar days of continuous congressional session Congress does not pass a law, the president must make that money available for obligation (see 2 U.S.C § 683(b)). GAO takes the position that the president must propose recissions under the ICA in a way that provides sufficient time to prudently obligate the funds before the funds expire (e.g., the president cannot send a special message proposing a recission a week before October 1 for funds that will expire at the end of the fiscal year).
In contrast to rescissions, which cannot take place without affirmative Congressional approval, there are “deferrals” or temporary withholdings that the president can initiate unilaterally. However, the president may only temporarily defer spending over funds in limited circumstances. Those are (1) to provide for contingencies, (2) to achieve savings made possible by changes in requirements or greater efficiency of operations, or (3) as specifically provided by law (see 2 U.S.C § 684(b)). The president must also transmit to both houses of Congress a detailed special message about the deferral (see 2 U.S.C § 684(a)).
The statutory language is clear – and the Congressional Research Service (CRS) and GAO agree – that the ICA does not supersede any law that mandates spending, such as Medicaid, Medicare, or Social Security. That means the president has no authority under the ICA to temporarily impound these funds even after sending a special message to Congress.
If the Comptroller General – the head of the GAO – finds that the president has failed to submit a special message to Congress as required for either a recission proposal or deferral, the Comptroller General must submit a report to Congress with any information available concerning the reserve or deferral (see 2 U.S.C. § 686(a)). This includes reporting on actions that are considered “de facto” impoundments. For example, it would be a de facto impoundment if the president failed to hire a sufficient number of personnel to process federal grants and ended up spending less than what Congress appropriated. The Comptroller General’s report acts as a special message transmitted by the president and triggers the 45-day congressional consideration period. (Id.)
Prior to freezing federal funds, Trump did not transmit a special message notifying a deferral or proposing a recission to Congress as required by the ICA, suggesting a violation of the statute. Some in the Trump administration have characterized what the president is doing as a “programmatic delay,” which is not considered an impoundment that triggers the ICA. The GAO considers a programmatic delay to occur “when an agency is taking reasonable and necessary steps to implement a program or activity, but the obligation or expenditure of funds is unavoidably delayed.” For example, this could happen if the government needs to comply with other laws before obligating funds, like the requirement for an environmental review which delays the spending.
But Trump and his administration officials have verbally and in writing stated that the purpose of freezing billions in spending is to align such spending with the president’s policy objectives (see the entire text of Executive Order 14169, the press statement on Rubio’s implementing guidance, Vaeth’s Jan. 27 memo, remarks from White House Press Secretary Karoline Leavitt, and multiple posts by Elon Musk on X about why the administration is shuttering USAID). These statements illustrate how the spending freezes are not programmatic delays as defined by the GOA and are not being executed under an ICA-authorized purpose to temporarily defer obligations. Further, there also appears to be de facto impoundment given the many U.S. government officials who have been fired or put on administrative leave and now cannot now execute on programming.
Who Can Bring Suit Under the ICA?
Now that Trump has issued directives that require federal departments and agencies to impound funds without the transmittal of a special message under the ICA, can those affected seek judicial remedies under the statute? Clearly most private plaintiffs appear to think not, as the lawsuits that have been filed in federal court thus far have generally asserted standing, or the legal requirement to show a concrete and redressable injury, on grounds outside of the ICA, such as the Administrative Procedure Act and the First Amendment. One plaintiff, Council, is attempting to seek relief under the Administrative Procedure Act, alleging that Trump has violated the ICA, but winning on this claim could be difficult. The reason for this lies in the statute and related caselaw.
The ICA lays out a path for the Comptroller General to bring a civil suit. When the president’s budget authority is not made available for obligation as required by law, the ICA empowers the Comptroller General to bring a civil action in the D.C. District Court (see 2 U.S.C. § 687). Congress also empowered the D.C. District Court to enter a judgment against the president necessary to make budget authority available (Id.). However, before filing, the Comptroller General must first furnish an explanatory statement to the Speaker of the House and President of the Senate describing the circumstances giving rise to the need for judicial review and then wait to file suit until the expiration of 25 calendar days of continuous session of Congress (Id.)
While the ICA left unambiguous whether anyone else can sue under the statute, federal courts in the District of Columbia and Texas agree that not only does the ICA not confer a right to file suit on anyone except the Comptroller General, but actually precludes a private right of action. In 1977, the D.C. District Court concluded in Rocky Ford Housing Authority v. USDA that Congress did not intend for the ICA to create a claim upon which relief can be granted to individuals when the president fails to report impoundment to Congress. The court further explained that only the Comptroller General may bring such suits and can only do so after receiving tacit approval from Congress.
A few years later, in 1981, the D.C. District Court again ruled that Congress did not intend to confer a private right of action under the ICA. In Public Citizen v. Stockman, the court held that “the ICA does not expressly vest in any person besides the Comptroller General the right to bring suit to enforce the Act’s provisions” and that Congress did not intend to confer a private right of action under the ICA. More recently, during Joe Biden’s administration, Texas sued the Department of Homeland Security for diverting funds and the U.S. District Court for the Southern District of Texas held that the ICA has only one proper plaintiff and that is the Comptroller General. It also held that the ICA bars any Administrative Procedure Act review via the ICA’s provisions, a ruling that could influence the D.C. District Court in Global Health Council v. Trump.
With these court cases, there appears to be little chance of success for private plaintiffs to bring suit against Trump under the ICA, but one case from 1986 indicates some possible disagreement among the lower courts with respect to standing. In City of New Haven v. United States, a group of government officials and non-profit organizations sued president Reagan under the ICA to stop deferring housing funds. In footnote (3), the D.C. District Court acknowledged that at least one plaintiff had standing to sue, but said so without any analysis.
Given the above case law, it appears that the Comptroller General is best positioned to take action under the ICA, but there is hardly a clear way forward to do so. Describing the potential impact of such action, the D.C. District Court in Public Citizen wrote:
The Comptroller General’s determination as to whether to bring suit and the Congress’ decision whether to sanction the institution of such suit, will obviously turn on a host of politically sensitive factors, including the potential impact that such a suit will have on the legislative-executive relationship.
This raises the question of whether such action is actually at the sole discretion of the Comptroller General.
Because Congress is controlled by Trump’s co-partisans, many of whom have made public statements in support of the president’s impoundment actions, it is possible there could be resistance to any move by the Comptroller General against the president under the ICA. Further complicating any possibility of suit under the ICA is the fact that the 15-year statutory term of the current Comptroller General, Gene Dodaro, will end in December 2025 and Trump will choose his successor from a slate provided by a commission in Congress.
There are also potential pitfalls for litigants who want to uphold the ICA as it relates to spending on foreign assistance. Although members of the White House Counsel’s team in the Reagan administration, which included current U.S. Chief Justice John Roberts at the time, advised that generally the president has no independent constitutional power to impound funds, they also expressed the view that there could be situations in which the president has an inherent authority to impound under powers solely reserved in the Constitution for the president. For example, as commander-in-chief and the nation’s head of State, it is possible Trump could successfully argue that he can lawfully impound federal funds if spending would directly conflict with “a constitutional obligation vested in the President.” Still, in the 1985 memo the White House lawyers advised that “impoundment is not a promising avenue of resolving budget disputes with Congress on any significant scale,” indicating the massive freezes like we are seeing under the Trump administration might be unlikely to hold up in court.
Itching for a Legal Challenge
Trump has had occasion to become familiar with the ICA, its provisions, and how it applies to his actions in the oval office, as it became the focus of his first impeachment. In 2019, Trump impounded funds appropriated by Congress by withholding the apportionment of security assistance to the Department of Defense for Ukraine. The GAO issued a decision in January 2020 that determined President Trump’s OMB violated the ICA in withholding the Defense Department appropriations.
The OMB director at the time was Russ Vought. Described as a partisan warrior by the Washington Post, Vought is again serving as Trump’s OMB director. Vought’s actions at OMB and subsequent statements indicate that he not only considers the ICA meaningless, but also doubts the constitutionality of Congress’ sole control over spending. For example, in 2018, when Vought was deputy OMB director, OMB took the position that the president can continue to impound funds past the date of their expiration, which GAO argued would grant “the President unilateral authority to rescind funds that are near expiration…ceding Congress’ power of the purse to the President.”
More recently, in Vought’s Jan. 15, 2025, confirmation hearing, he gave no indication that the Trump administration would comply with the ICA. The back and forth between him and Senator Gary Peters (D-MI) is worth reading, but, in short, this is what Vought conveyed: Trump never violated the law in 2019 when funds for Ukraine were withheld (“we did not, inappropriately withhold funds”), Trump believes the ICA is “unconstitutional,” “for 200 years Presidents have had this authority” of impoundment, and Trump will develop his own “approach to this issue [of impoundment] and strategy once in his administration is in office” (i.e., impounding funds and drawing a fight in the courts). The strategy he referenced is made apparent in a leaked OMB slide deck. Under a list of action items, the Trump administration wrote:
Attempt to restore impoundment authority by challenging the ICA’s constitutionality in court, focusing on its violation of the separation of powers. Use executive orders to impound funds exceeding legislative intent or conflicting with constitutional duties, citing national security, fiscal waste, or statutory ambiguities. Seek legal precedent to affirm the President’s Article II powers under the Take Care Clause and Executive Vesting Clause.
None of this should be surprising. Trump himself said on the campaign trail that he would do everything he could “to challenge the Impoundment Control Act in court” and use impoundment “to squeeze the bloated federal bureaucracy for massive savings” and “obliterate the deep state, drain the swamp, and starve the warmongers.” Vought was the main author of Project 2025’s sections on dismantling the federal government (describing the required “boldness to bend or break the bureaucracy to the presidential will”) and controlling spending (asserting, contrary to the ICA, that OMB can direct the purpose of apportioned funding to “ensure consistency with the President’s agenda”). And prior to the inauguration, Vought also met for more than an hour with TV host Tucker Carlson to describe his plans to wield the power of OMB and “bring back the notion of impoundment.” In this interview Vought said “for 200 years, Presidents had the ability to not spend a congressional appropriation” and that it had “always been the constitutional system,” a “paradigm that had been brought from the U.K.” (it is not clear what he meant here except that he was likely referring to the king of England).
Looking Ahead
As the impoundment crisis unfolds alongside other seemingly unconstitutional executive actions, the takeaway should be that Trump considers compliance with laws like the ICA as optional and his appetite to ignore them high, especially when he thinks there is a chance he could win in court. But Georgetown Law Professor Steve Vladeck is pretty sure that if a case under the ICA ever makes it to the Supreme Court, the justices will be hostile to Trump and Vought’s position – he argues the high court is not likely to hold that the president can ignore laws passed by Congress given that such a ruling would fundamentally cripple Congress as a co-equal branch of government.
If a case under the ICA does eventually reach the Supreme Court, and the justices rule against Trump as Vladeck predicts, the next question will be whether the executive branch will uphold the court’s decision. Based on statements made last year and more recently by Vice President JD Vance related to specific actions the Trump administration might take and the judiciary’s authority to review those actions, it is an open question whether the president will uphold a court ruling he disagrees with. As Vladeck underscores, there is no history or tradition of a president defying a court’s order because he considered it illegal – such a move by Trump would be extraordinary. That said, given accusations of slow-walking court orders or even potentially out-right refusing to comply, coupled with administration officials’ statements of defiance and messaging by right-wing media, the tension between the courts and the executive branch will continue to be a space to watch closely.