On June 3, President Trump proposed $9.4 billion of rescissions, primarily from foreign assistance programs ($8.3 billion) and grants to the Corporation for Public Broadcasting ($1.1 billion). A rescission is a cancellation of funding approved by Congress and signed by the President for FY 2025 and prior years. The House passed a bill (H.R. 4) approving the President’s recissions without change on June 12 by a vote of 214 – 212. Senate action is not yet scheduled, but the Senate Parliamentarian has advised that Congress must complete action by July 18, 2025, or the funds proposed for rescission will be required to be obligated.
The Department of Government Efficiency (DOGE) set a goal of reducing Federal spending by $2 trillion. Subsequently, that goal was reduced to $1 trillion. The President’s proposed rescission package, which the Administration characterizes as “wasteful and unnecessary spending,” total’s $9.4 billion, see Chart I. OMB Director Vought asserted that the items proposed for rescission include funding for the “World Health Organization, LGBTQ+, “equity” programs, radical Green New Deal-type policies, and color revolutions in hostile places…and to CPB which subsidizes a public media system that is politically biased.”
Chart I. Source: White House, FBIQ
These rescissions were submitted to Congress pursuant to the Impoundment Control Act (ICA) of 1974. The ICA provides a specific procedure for the President to propose rescissions. The President is allowed to temporarily withhold from obligation funds proposed for rescission. If the rescissions are not enacted into law (passed by Congress and signed by the President) within 45 days of continuous session, the executive branch is required to obligate the funds. ICA does not provide the President with the authority to unilaterally rescind funds.
In the Senate, a rescission bill can be passed with a majority vote (i.e., no filibuster). Senate action is not expected until after the July 4 recess.
OMB Director Vought testified that he believes the ICA is unconstitutional and that the President does have unilateral authority to rescind funds. Based on that assertion, the administration has withheld billions of dollars of programs recommended by DOGE and OMB across the government. A January 2020 Government Accountability Office (GAO) legal opinion states, “The Constitution grants the President no unilateral authority to withhold funds from obligation”. Many of the administration’s actions are now pending in Federal court. Democrats are keeping a running total of funds being withheld; frozen funds allegedly total $425 billion according the House Appropriations Committee Ranking Member DeLauro (D-CT) and Senate Appropriations Committee Vice Chair Murray (D-WA). Examples include: $5.3 billion in DOE Office of Energy Efficiency and Renewable Energy project contracts; $2.8 billion in DOD security assistance for Ukraine; $735 million in DOE Office of Nuclear Energy project contract dollars; and $133 million in Space Development Agency (DOD) funds for satellite contracts.
“POCKET RESCISSIONS”
A related impoundment issue is so-called “pocket rescission authority.” In 2018, the OMB General Counsel asserted that the President could propose a rescission late in the fiscal year and that the funds would lapse on September 30 even if Congress had not enacted into law the proposed rescissions. A December 2018 GAO opinion concluded that the Impoundment Control Act does NOT permit the withholding of funds through their expiration. “Under the Constitution, the President must take care to faithfully execute the appropriations that Congress has enacted. Though the ICA permits the President to withhold amounts from obligation under limited circumstances, the amounts are permanently rescinded only if Congress takes affirmative legislative action through the constitutional processes of bicameralism and presentment.”
While OMB did not end up proposing rescissions late in FY18 and withholding the funds until they expired, the President may take that action this year.
Until the impoundment issues are resolved, the timing of Federal procurements across the government could be delayed. Agencies will continue to withhold funding until it is determined whether the President has authority to unilaterally withhold the funds or whether the funds approved by Congress and signed by the President must be obligated.
If the President’s proposed rescissions are enacted into law, it is likely that the President will propose additional rescission packages this summer. If it is not enacted, it will be interesting to see whether the Administration subsequently obligates the funds as required by law.