By Tom Hals and Andy Sullivan
(Reuters) -U.S. President Donald Trump’s administration on Monday issued a sweeping directive to federal agencies to temporarily pause billions of dollars of spending on health care, housing assistance and disaster relief.
Trump’s political opponents vowed to challenge the directive and a judge temporarily blocked it from taking effect. Below is a look at the legality of the directive.
CAN THE TRUMP ADMINISTRATION BE SUED FOR WITHHOLDING SPENDING?
Yes, and at least one lawsuit was filed on Tuesday. Legal experts said states, cities, nonprofits and virtually anyone else who stood to receive money under a federal program could probably sue.
Legal experts said withholding funding might violate the Constitution, which gives to Congress the “power of the purse,” or the authority to decide how to spend government money and which programs to fund. Parties to government contracts that will now go unpaid will also likely have grounds to sue. The first lawsuit that was filed said the Trump administration violated an administrative law that prevents agencies from adopting arbitrary and capricious actions.
Opponents of the administration’s spending pause said it also might violate the Impoundment Control Act of 1974 (ICA).
WHAT IS THE IMPOUNDMENT CONTROL ACT?
The ICA created a process for Congress to review a federal agency’s withholding of funds that were approved by Congress. The law grew out of decisions by the administration of Richard Nixon to withhold, or impound, highway and water control funds in a bid to control inflation.
The act allows a president to withhold funds in certain specific circumstances for limited periods of time and requires the president to send a special message to Congress explaining the action. Congress must then decide whether to allow spending to be deferred or rescinded.
Under the act, a president can defer budgeted funds to “provide for contingencies” or to achieve savings made possible by changes in requirements, or as specifically provided by law. The president cannot withhold funds to achieve policy goals. However, the directive by the Trump administration seemed to do that, stating that “the use of Federal resources to advance Marxist equity, transgenderism, and green new deal social engineering policies is a waste of taxpayer dollars.”
Trump’s Office of Management and Budget said in a memo to agencies that the directive was not an impoundment under the ICA. “It is a temporary pause to give agencies time to ensure that financial assistance conforms to the policies set out in the president’s executive orders, to the extent permitted by law,” the memo said. It said temporary pauses have been ordered by past presidents to ensure funds are spent in accordance with a new president’s policies.
WHO HAS OVERSIGHT OF THE IMPOUNDMENT ACT?
The Government Accountability Office monitors compliance. The office is a nonpartisan agency that works for Congress, can investigate spending, and determine if withholding of funds appropriated by Congress is legal. It determined during Trump’s first presidency that his administration violated the ICA by withholding security aid for Ukraine.
WHAT HAVE TRUMP AND CONSERVATIVES SAID?
Trump vowed during his presidential campaign to use impoundment of spending “to squeeze the bloated federal bureaucracy for massive savings.” He also said the law allowed Congress to usurp power from the executive branch. Russell Vought, Trump’s nominee to head the OMB, testified to Congress earlier this month that he thought the ICA was unconstitutional.
Conservative advocates have argued that until the presidency of Nixon, who took office in 1969, it was understood that the Constitution gave Congress the power to set a ceiling on spending, but the president had the authority to spend less.
(Reporting by Tom Hals in Wilmington, Delaware; additional reporting by Andy Sullivan; Editing by Leslie Adler and Rosalba O’Brien)
