Presidential Bid to Take Over Federal Spending Is Four Years in the Making

[Passages]

On the last day of Trump’s first term, Office of Management and Budget officials asserted that presidents can alter spending they don’t like. They’re returning to OMB to finish the job.

by David Dayen January 30, 2025

After a day of confusion over the unlawful pause on federal grants and loans, with Democrats finally finding their voice in unified condemnation and a federal judge quickly putting a temporary stay on the order, the Office of Management and Budget (OMB) rescinded the pause on Wednesday. That is a victory for persistent opposition to the Trump administration’s radical schemes. When it started to reflect badly on the president, the plug had to be pulled. Rinse and repeat.

That being said, even if the pause on grants and loans is dead—and there’s some confusion on that point—the constitutional crisis around the president nullifying spending he doesn’t like still exists. Trump issued a day one executive order and subsequent memorandum pausing disbursement (pending a 90-day review) of so-called “Green New Deal” funding under the Inflation Reduction Act and the bipartisan infrastructure law. He placed a pause on research grants at the National Institutes of Health, as well as a pause on foreign aid, although on the latter the State Department is trying desperately to reverse negative publicity by adding a “humanitarian assistance” exemption that will allow things like the distribution of HIV drugs in Africa to continue.

In all of these cases, the White House is asserting the power to stop funding on programs, projects, or activities that don’t fit with its policy goals. But the underlying laws were passed by Congress, and money was appropriated to these programs. The president has no authority under the Impoundment Control Act of 1974 (ICA) to unilaterally halt the spending, particularly if it’s based on policy preferences.

As I noted on Tuesday, Trump’s MAGA allies have been spoiling for this fight. Trump himself said in June 2023 that he would “do everything I can to challenge the Impoundment Control Act in court” and then “use the president’s long-recognized impoundment power to squeeze the bloated federal bureaucracy for massive savings.”

https://prospect.org/politics/2025-01-30-presidential-bid-federal-spending-four-years-in-the-making-omb/