Democrats’ Budget Laws Restrict Presidential Spending Authority

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Imagine receiving $50 million to build a tank but completing the job for only $32 million. In most contexts, you would be praised for completing the task under budget, perhaps even earning a promotion. In Washington, D.C., however, many would argue you’re violating the law.

The Impoundment Control Act (ICA), as interpreted by numerous members of Congress and the Government Accountability Office (GAO), deems it illegal for the president to spend less money than Congress allocates to complete a task.

In 2019, the Democrat-controlled House impeached President Donald Trump partly because he delayed the disbursement of approximately $200 million in funds for Ukraine for 60 days to conduct a policy review based on national security concerns. (Disclosure: Mark Paoletta served as OMB general counsel and issued the legal opinion authorizing this pause on these funds). The GAO determined this 60-day pause violated the ICA, asserting that the president was prohibited from pausing the funds despite these concerns. Congress used this decision as a basis to impeach the president, marking an unprecedented and arguably unconstitutional challenge to presidential authority.

Nonsensical Appropriation Law

Enacted in 1974, the ICA mandates that the president must spend every dollar Congress allocates, regardless of whether it’s necessary. This law diverged from 200 years of historical precedent, during which both Congress and presidents concurred that not every dollar of an appropriation needed to be spent if the task could be completed for less money or if the president disagreed with the program.

Historically, appropriation laws were seen as spending ceilings, not floors. Originating with British parliamentary tradition, the legislative power of the purse aimed to prevent the king from accruing obligations that exceeded provided appropriations. The main concern was preventing excessive debt, not underspending.

During the early days of the American republic, presidents frequently did not spend the full amount of appropriated funds. One famous example occurred in 1803 when President Jefferson withheld $50,000 intended for 15 gunboats on the Mississippi, based on policy decisions during secret negotiations with France over the purchase of New Orleans and the Louisiana Territory. Once the purchase was completed, Jefferson spent the funds.

In 1809, President James Madison, known as the “Father of the Constitution,” informed Congress that he reduced the crews of New Orleans gunboats to save appropriated funds. Madison justified his decision by citing the need for economy and “just precaution.” Congress did not object to this impoundment.

When Congress began mandating the spending of funds on specific projects, presidents resisted. For instance, President Grant refused to spend more than half of the $5 million appropriated for internal improvements by Congress in the Rivers and Harbors Bill of 1876, asserting presidential discretion over purely local projects.

When Congress demanded the president’s rationale for impounding funds, the secretary of war replied that appropriations were not mandatory and that limiting the president’s discretion was constitutionally inappropriate.

Before and during World War II, President Franklin Delano Roosevelt engaged in several impoundments, including refusing to spend over $500 million in public works funds due to policy objections. Roosevelt argued that enforcing full expenditure would eliminate incentives for good management and economical practices. Presidents Truman, Eisenhower, Kennedy, and Johnson likewise used the impoundment power on efficiency and policy grounds, despite congressional directives.

President Kennedy, for example, impounded half of the $360 million budget for the B-70 strategic bomber, which was double the administration’s request. Despite intense opposition from individuals like Rep. Carl Vinson, Kennedy maintained that such language should respect the constitutional spirit by authorizing rather than mandating expenditure.

With the ICA’s enactment, Congress reversed centuries of precedent by treating every appropriation as a mandatory minimum rather than a ceiling. This shift emerged partly from the executive branch’s weakened position following the Vietnam War and Watergate. In June 1974, amid President Nixon’s Watergate scandal, Congress passed the ICA, which Nixon signed into law less than a month before his resignation.

Compounding the issue, then-Assistant Attorney General William Rehnquist issued a 1969 legal opinion asserting that the president did not have impoundment powers, contradicting historical practices. As chief justice, Rehnquist reiterated this view in Morrison v. Olson, allowing federal judges to appoint prosecutors.

Appeasing Special Interests with Reckless Abandon

The ICA is both ahistorical and unconstitutional. It encourages Congress to allocate funds recklessly to appease special interests and restricts the president’s constitutional authority. The ICA hampers the president’s ability to use funds effectively and make judgment calls as the chief executive and commander-in-chief.

For example, if Congress allocates $100 million in foreign aid to a country found to have funded a terrorist attack on the United States, the ICA would still require the president to distribute the funds. The law doesn’t consider the president’s executive and military judgment.

Though the president can propose a rescission to avoid spending, this cumbersome process requires Congress to pass a new law, an unlikely scenario given congressional dysfunction. This requirement ignores the president’s historically recognized impoundment power.

Should President Trump be reelected, he should promptly use his constitutional authority to impound funds for efficiency and policy reasons, consistent with historical precedent. Doing so would help curb reckless spending and reassert constitutional executive powers that Congress has increasingly encroached upon.

Mark Paoletta and Daniel Shapiro
Mark Paoletta and Daniel Shapiro
Mark Paoletta served as General Counsel of the Office of Management & Budget during the Trump Administration. He is a senior fellow at the Center for Renewing America. Daniel Shapiro is a former law clerk to Justice Clarence Thomas and Judge Neomi Rao.

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