Bringing Back Impoundment to Defund Endless Wars

The Constitution vests in Congress the power to appropriate funds.  U.S. CONST. Art. I, Section 9, cl. 7.  This provision clearly limits the amount of money the Executive Branch may expend each year, but it raises an interesting question:  Does the amount of money appropriated operate only a cap on expenditures, or does it carry with it the requirement that the money be spent, making it both a floor and a cap on spending?  Simply put, is the Executive Branch obligated to expend all the funds appropriated by Congress?

That constitutional issue has been in dispute for almost as long as we have had our Constitution.  The term used to describe a decision by the President not to spend all funds appropriated is “impoundment.”  And, there are two types of “impoundments”:  (i) “deferrals,” which only delay when appropriated funds are spent; and (ii) “rescissions,” when Presidents refuse to spend appropriated funds.  In general, Presidents like the impoundment power; Congressmen and Senators (especially on the Appropriations Committees) don’t.

Congress limited the power of the President to impound appropriated funds with the Impoundment Control Act of 1974 (ICA).  That law severely restricts how and when appropriated funds can be left unexpended.  Some believe that law to be unconstitutional because it restricts Executive authority by forcing Presidents to spend whatever is appropriated, regardless of whether they believe it wise to spend.

While President, Donald Trump only once attempted to defer spending in this manner.  
The Trump Administration’s Office of Management and Budget deferred disbursement of $250 million in aid to Ukraine from July 2019 until September 2019, at which time it released the money.  The Democrat Congress reacted savagely, including this “impoundment” among the many charges in Trump’s first House impeachment proceeding.  Now as a candidate, Trump has announced that, if elected again, he will resurrect the presidential power of “impoundment.”  Since Congress seems unable to stop spending on endless wars like Ukraine, it may be that Trump will need to bring back impoundment to restore peace to that part of the world.

Impoundment has been used by Presidents since Jefferson to stop unnecessary federal spending.  Some excellent illustrations of the use of impoundment are in a law review article entitled “Checking the Purse: The President’s Limited Impoundment Power.

President Jefferson first exercised impoundment in 1803.  After France closed the port of New Orleans, closing off the Mississippi River to American shipping, Congress appropriated funds to construct 15 gunboats.  Fearing that this expenditure would antagonize France while negotiations were underway, Jefferson refused to spend the money.  After the Louisiana Purchase was concluded and America obtained possession of New Orleans, Jefferson released the funds.  Thus, Jefferson’s impoundment was a deferral, not a rescission.  President James Buchanan impounded funds for an Illinois post office to punish the state’s congressional delegation.

There are other illustrations as well.  In 1876, President Grant rescinded funds for a rivers and harbors bill he believed was “for works of purely private or local interest, in no sense national.”  Presidents Roosevelt, Truman, Eisenhower, and Kennedy all refused to make certain military expenditures approved by Congress, under their role as Commander in Chief of the military.  In 1966, even big-spending Lyndon Johnson impounded some $5.3 billion in funds for highways, housing, and other domestic programs.

But the most significant use of impoundment came under President Nixon.  Frustrated by a runaway Congress with no fiscal discipline, Nixon proclaimed in 1973 that “he would ‘not spend money if the Congress overspends [nor support] programs that will raise the taxes and put a bigger burden on the already overburdened American taxpayer.’”  He impounded an estimated $18 billion in fiscal year 1973, asserting that Presidents have the Constitutional power to ensure preservation of the nation’s fiscal integrity, and therefore have the authority to refuse to spend funds if necessary to protect that fiscal integrity, and Congress may not mandate spending which jeopardizes it.

In the weeks before Nixon’s resignation, the Democrat-controlled Congress struck back against Nixon’s assertion of executive power, and overwhelmingly passed the ICA’s restrictions, which the damaged Nixon reluctantly signed.  The Act allows a President to delay spending on a given appropriation for 45 days and must ask Congress to approve the rescission.  But if Congress does not approve, the money must be expended after 45 days.  In other words, there is limited power for deferrals, with the ultimate decision being up to Congress.

In 2010, Barack Obama proposed a bill to Congress entitled the “Reduce Unnecessary Spending Act of 2010.”  Obama’s bill would have allowed the President to propose specific cuts in a congressionally passed bill, send the proposal to Congress, and be ensured an up-or-down vote on the proposed cuts without amendment.  The bill never received a floor vote.

Now President Trump is campaigning against the Impoundment Control Act.  “This constitutional power of the President should never have been curtailed, but I will get it back and will use it to stop inflation and bring federal spending under control,” Trump told Real Clear Politics in June.  President Trump described his plans to challenge the ICA in court if he is re-elected, and if unsuccessful, seek reversal in Congress.

A President probably could make his strongest case for exercising an impoundment power with respect to his role as Commander in Chief.  Given that Congress is hopelessly addicted to spending on endless wars, and still is beholden to “the Military-Industrial Complex” that President Eisenhower warned against, it may be time to consider giving the President the authority to do what Congress will not do — cut spending.