The stage is being set for a constitutional battle between President Donald Trump and a little-known federal watchdog over the extent of presidential authority on spending as Trump seeks to make sweeping federal spending and personnel cuts.
Trump and his allies want to reduce existing restrictions on the so-called impoundment power, which allows a president to decline to spend money delegated by Congress. According to Trump, the Impoundment Control Act of 1974, which requires the president to seek permission to rescind funding, violates the Constitution and the separation of powers.
Specifically, Trump argues that the executive has broad authority to interpret and make decisions about congressionally mandated spending. His critics, meanwhile, say that the White House is transgressing on Congress’s power of the purse.
Since taking office, Trump and the Department of Government Efficiency (DOGE) have sought to identify and implement budget cuts through actions like shuttering or reorganizing federal agencies, mass staff reductions, and blocking funds.
In response, the Government Accountability Office (GAO)—the watchdog that oversees the legislation—has opened dozens of investigations into the executive branch. A series of lawsuits related to the issue are also pending in federal courts, meaning the underlitigated issue could make it all the way to the Supreme Court.
In legal terms, impoundment refers to a situation where the president declines to spend money appropriated by Congress.
It’s been used by presidents often across history, the first being President Thomas Jefferson.
In that instance, Congress called for the construction of 15 new gunboats at a cost of $50,000. Jefferson decided not to do so, informing Congress in his third annual address that the boats remained unconstructed and the money unspent.
Supporters of presidential impoundment point to this unilateral decision as the basis of the practice in U.S. law.
In Kendall v. U.S. ex rel. Stokes, the Supreme Court ruled that there were limits to the doctrine, however, finding that the executive could not unilaterally refuse to delegate funding when Congress’s intention was clear.
It’s been barely litigated since then, however, meaning that many of the separation of powers questions involved in the issue still haven’t been defined by the courts.
The Clean Water Act of 1972 required the executive to provide funding to municipalities like New York City to combat water pollution. Nixon initially vetoed the legislation, though Congress overrode the veto by a two-thirds vote.
After the law was passed, Nixon sought to block funding to New York City, prompting the city to bring suit.
In Train v. City of New York, the Supreme Court ruled 8–0 that Nixon had superseded his authority in refusing to disburse the funding.
Congress felt that Nixon’s actions had crossed from the executive function into the policy-making function—a prerogative of Congress—and passed the Impoundment Control Act in response. It was the first legislative effort to define the limits between Congress and the president on the impoundment issue.
The GAO—the government watchdog that oversees enforcement of the Impoundment Control Act—says they’re investigating various moves made by Trump that may violate the legislation.
GAO Comptroller General Gene Dodaro told a Senate panel in April that 39 investigations into impoundment violations are currently open. If any of those investigations yield evidence of violations of the Impoundment Control Act, the GAO will move forward with a suit against the administration.
Devin Watkins, an attorney for the right-leaning Competitive Enterprise Institute, told The Epoch Times it’s rare for an impoundment issue to make it all the way to a trial.
In the 1970s, the GAO brought suit against President Gerald Ford for his use of impoundment in Staats v. Ford. However, the case was resolved before being litigated.
Watkins explained that this behavior was normal for the GAO, which he said likes to flex its legal authority on the Impoundment Control Act.
Others besides the GAO have also brought suits against the Trump administration’s spending cuts and federal worker firings, arguing they are unlawful uses of impoundment. Most of these have failed to result in court reactions.
It’s impossible to say which of the many pending cases and investigations, if any, could make it to the Supreme Court, but the legislation is ripe for judicial review as political battle lines are being drawn around the issue.
The core constitutional controversy in the 1974 bill revolves around a tension between Congress’s power of the purse and the president’s executive discretion in implementing those appropriations.
Trump has consistently argued that the Impoundment Control Act unconstitutionally infringes on the president’s executive prerogatives.
In a 2024 campaign video, Trump made the case for presidential impoundment, saying it was simply a means for the president to exercise oversight on taxpayer funding.
“This disaster of a law is clearly unconstitutional—a blatant violation of the separation of powers,” Trump said, vowing to attempt to overturn it during his second term.
However, Democrats and other critics say that Trump’s use of impoundment transgresses congressional authority.
Sen. Patty Murray (D-Wash.) suggested as much during GAO Comptroller Dodaro’s hearing.
“From day one, President Trump has unilaterally frozen or contravened critical funding provided in our bipartisan laws,” Murray said.
“That’s really not what the Constitution envisioned. Congress has the power of the purse period, our presidents cannot pick and choose which parts of a law that they can follow.”
Several congressional Republicans, meanwhile, are currently pursuing legislation that would repeal the Impoundment Control Act altogether—however, it faces long odds in the Senate, where at least 7 Democrats and all Republicans would need to sign onto the move for it to pass.
—Joseph Lord
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