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Trump wants Nixon’s impoundment power. What’s impoundment?

Another installment in the presidential power series.

- May 15, 2024

In 1974, Congress made it illegal for presidents to refuse to spend appropriated funds. Fifty years later, Donald Trump has brought this practice – known as impoundment – back to presidential politics. As Eric Cortellessa wrote recently in Time magazine, “One weapon in Trump’s second-term ‘War on Washington’ is a wonky one: restoring the power of impoundment…. He would, at his personal discretion, withhold funds appropriated by Congress, according to top advisers.” According to Trump’s campaign website, impoundment will “cut waste, stop inflation, and crush the Deep State.”

Good Authority does not need much of an excuse to get wonky. So what is the history of impoundment – and does it have a future?

Richard Nixon’s budget wars

The “battle of the budget,” as Nixon budget director Roy Ash dubbed it, was one front of the wide-ranging wars of Watergate. Impoundment was Nixon’s key weapon in that battle. It helped him wield a de facto line-item veto – of the kind possessed by many state governors but absent from the U.S. Constitution. This allowed Nixon to claim fiscal rectitude while undercutting programs he disfavored, even after he signed a spending bill into law. 

This was not a brand-new tactic. In 1803, Thomas Jefferson declined to buy weaponry he said was no longer needed. And in 1876, Ulysses S. Grant stated that he would refuse to spend funds from a river and harbor bill for projects “of purely private or local interest.” At times, Congress went along, allowing presidents such as Theodore Roosevelt to withhold funds under certain circumstances. (For additional details and citations to others’ scholarship, see my book, The New Imperial Presidency.)

Nixon’s predecessor Lyndon Johnson had faced huge new deficits as costs for both the Vietnam War and Great Society programs ramped up. Johnson announced he would withhold first highway trust monies and then funding for other programs that exceeded his budget requests. Congress pushed back, amending the highway act to make clear that “no part of any sums” under the law “shall be impounded or withheld from obligation.” But by 1968 legislators had decided to let Johnson make the tough fiscal calls, giving the president power to withhold monies beyond the spending ceilings legislators had imposed on non-entitlement (and non-Vietnam) expenditures. 

Nixon wanted Democrats to look like big spenders

Facing a Democratic Congress, Nixon saw both fiscal and political ground to gain in attacking purportedly profligate spending. (Of course, he was perfectly happy to spend money where it would help politically. As the 1972 election approached, Nixon supported both tax cuts and 20% benefit hikes for Social Security recipients.)

Nixon’s approach to impoundment, accordingly, was extremely aggressive. He tried to eliminate entire programs, including the Office of Economic Opportunity (OEO). In 1972, though Congress had overridden Nixon’s veto of the Federal Water Pollution Control Act Amendments, the president impounded more than half of the funds committed through the law. By fiscal year 1973, Nixon announced he would impose a new budget ceiling administratively, “with or without the cooperation of the Congress,” with plans to withhold as much as 20% of discretionary spending – some $15 billion.

Nixon also upped the impoundment ante by claiming his powers were inherent and non-negotiable. He claimed in early 1973 that “the Constitutional right of the President of the United States to impound funds… is absolutely clear.” Caspar Weinberger, Nixon’s deputy budget director at the time, tried to explain, differentiating the power to appropriate from the authority to control expenditure: “a law appropriating funds is permissive and not mandatory in nature.” The deputy attorney general added that “substantial latitude to refuse to spend” derived from the “‘executive power’ vested in him by the Constitution” itself. Or, as the White House joked, “Just because Congress passes the buck doesn’t mean the president has to spend it.”

Congress and the courts strike back

Legislators weren’t amused. They saw a huge gap between delegating the power of the purse to the president, and the president seizing it. As early as March 1971, Sen. Sam Ervin (D-NC) blasted impoundment, declaring Nixon had “no authority under the Constitution to decide which laws will be executed or to what extent they will be enforced.” Members of Congress introduced numerous bills to that effect. 

In 1974 the Impoundment Control Act (ICA) passed as part of the Congressional Budget Act, a larger makeover of the federal budget process. (Quick digression: Happy 50th birthday, Congressional Budget Act!) Under the ICA, Congress had to approve any spending the president wanted to rescind (i.e., cancel). And there was no requirement that Congress had to vote on or even debate the president’s proposals. 

After Nixon left office, President Gerald Ford briefly pressed the point by repeatedly proposing to withhold all funding appropriated above his recommended spending levels. However, Congress approved just 12% of Ford’s requests. 

Presidents more or less gave up on the rescission process. By 1988, Ronald Reagan summarized the statute by stating, “only Congress can decide how much the Government spends…. In fact, it’s against the law for the President to spend a penny more or a penny less than Congress directs him to spend.”

The courts agreed. A federal district court had overturned the OEO impoundment in 1973. Its ruling blasted the administration’s claim that “the Constitution confers the discretionary power upon the President to refuse to execute laws passed by Congress with which he disagrees,” noting that “if the power sought here were found valid, no barrier would remain to the executive ignoring any and all Congressional authorizations if he deemed them… to be contrary to the needs of the nation.” As Ash understatedly told Nixon, “Defending [impoundment] continues to be a difficult proposition, and some setbacks in the courts have occurred.”

The Supreme Court weighs in

Those setbacks extended to the Supreme Court, where a New York challenge to the water project impoundments were heard as Train v. City of New York (Russell Train was the administrator of the Environmental Protection Agency). In February 1975 the court ruled against the EPA’s failure to follow the statutory formula for allotting money to the states. “The legislation was intended to provide a firm commitment of substantial sums within a relatively limited period of time…,” wrote Justice Byron White for a unanimous court. “We cannot believe that Congress at the last minute scuttled the entire effort by providing the Executive with the seemingly limitless power to withhold funds from allotment and obligation.” 

The opinion did not dwell on Nixon’s broader constitutional claims. But presumably, if the president had inherent impoundment authority grounded in the Constitution, statutory language could not have set it aside. 

Trump’s platform and prospects

So how does Trump plan to “restore” what he calls the “long-recognized Impoundment Power to squeeze the bloated federal bureaucracy for massive savings”? 

There’s little evidence from his first term that Trump actually cares about deficit reduction, and Trump’s own impoundment promises are largely incoherent. (He says, for example, that the practice will lead to a balanced budget – but also that all impounded money “will be in the form of tax reductions” and that none of it will come from Medicare, Social Security, or defense spending, which constitute more than half of federal spending.) 

But that incoherence doesn’t make the promise less important, both for presidential power and for policy.

The idea, apparently, is to argue that Nixon was right all along. Trump’s campaign website claims that “leading constitutional scholars” (none are named) “agree that impoundment is an inherent power of the president.” Thus, Trump argues, the 1974 Impoundment Control Act – a “disaster of a law” – is unconstitutional. The Trump camp even quotes Joseph Sneed, Nixon’s deputy attorney general, giving Nixon’s arguments.

Further echoes from the Nixon era

Other strands of Trump’s argument suggest that congressional appropriations set a ceiling, not a floor, for spending – and that presidents’ duty to faithfully execute the law can be achieved more “effectively and efficiently” via impoundment. As OMB’s Weinberger pointed out in 1971, Congress had passed a number of conflicting statutes arguing for lower inflation and debt even as it approved higher spending levels. According to this view, presidents were forced to impound in order to navigate contradictory Congressional desires.

Presidents clearly do have some discretion over at least the pace of spending. OMB apportions appropriations across fiscal years, for example, so money is available when it is needed. Law professor Eloise Pasachoff has detailed a variety of ways presidents can use budgetary tools to assert control over executive agencies. Scholars have also traced how presidents can maneuver grant money to bolster their preferred programs.

Sure, presidents have some say

But this power is limited. The Government Accountability Office (GAO) concluded that the Trump administration had violated the ICA by withholding $214 million in military aid to Ukraine in 2019. The delay, GAO said, was for policy reasons – as we know from Trump’s first impeachment, its purpose was to pressure Ukraine into investigating the Biden family. (OMB, unsurprisingly, disagreed, claiming the delay was to enhance programmatic efficiency.)

And that argument was about delaying, not canceling, spending. Impoundment itself has remained flat-out illegal. So without a congressional change of heart, Trump will need the courts to revisit the matter. A Trump Justice Department might argue to redefine the issue as a “political question” beyond the courts’ jurisdiction. 

Or perhaps the Supreme Court is of a mind to revisit the 1975 Train case and give the ICA an unwelcome 52nd birthday present. The original judgment was relatively narrowly drawn and not, as other courts have held, a matter of constitutional doctrine. While the ruling certainly didn’t favor unfettered executive authority in this area – and a 1997 case flatly rejected congressional efforts to give the president line-item veto authority – the federal courts have recently been extraordinarily solicitous even of plaintiff Trump’s most extreme claims of executive authority. (More on that in a separate post). Why not take a flier?

After all, getting pent-up funds released could be time-consuming. Meanwhile those monies might serve as useful bargaining chips – perhaps with Ukraine, again, or as the recent Time interview hints, with local law enforcement not eager to “adopt [Trump’s] preferred policing methods.” Hundreds of billions of spending appropriated for infrastructure, green energy, and climate projects that Trump has attacked is still in the bank. In short, resurrecting even a zombie impoundment could be a useful political bludgeon – even if it never saves a penny.