Limits on President's ability to reduce federal spending of amounts appropriated by Congress

An "impoundment" is any action or inaction by an officer or employee of the federal government that precludes obligation or expenditure of budget authority. The President has no unilateral authority to impound funds. The Impoundment Control Act of 1974 (ICA) allows the President to impound funds when he transmits a "special message" in accordance with the ICA. Upon sending the message, amounts proposed for rescission (that is, for permanent cancellation) may be impounded for a period of 45 days of continuous congressional session. At issue here is whether the ICA allows such an impoundment for fixed-period appropriations expiring during this 45-day period to continue through the date on which the funds would expire. We conclude that the ICA does not permit the impoundment of funds through their date of expiration. The plain language of the ICA permits only the temporary withholding of budget authority and provides that unless Congress rescinds the amounts at issue, they must be made available for obligation. Amounts proposed for rescission must be made available for prudent obligation before the amounts expire, even where the 45-day period provided in the ICA approaches or spans the date on which funds would expire.

Impoundment Control Act--Withholding of Funds through Their Date of Expiration | U.S. GAO

https://www.gao.gov/products/b-330330

A traditional budgeting procedure by which the President of the United States once could prevent any agency of the Executive Branch from spending part or all of the money previously appropriated by Congress for their use. He would accomplish this, in essence, by an executive order that would forbid the Treasury to transfer the money in question to the agency's account. (The Constitution provides that no money from the Treasury can be spent without a specific Congressional appropriation, but it is silent on the question of whether all money appropriated by Congress actually has to be spent.) All American presidents since John Adams asserted the right to impound appropriated funds, and presidents often used this as a way of making relatively small cuts in Federal spending on programs that they deemed unwise or unnecessary, despite occasional murmurings of dissatisfaction from Congressmen annoyed by the cancellation or trimming of some of their pet pork-barrel projects. In 1973-1974, however, President Nixon made unusually large-scale use of impoundment in his efforts to fight the unusually serious inflationary pressures of the time by trimming back the budget deficit. President Nixon impounded nearly $12 billion of Congressional appropriations, which represented something over 4% of the spending Congress had appropriated for the coming fiscal year. Congressional leaders, who were already up in arms against the Nixon White House because of the Watergate scandal, rebelled against the implicit presidential rebuke of their judgment and authority over spending decisions posed by such large-scale impoundment. In 1974, Congress passed legislation purporting to make the old practice of presidential impoundment illegal and legally requiring the Executive Branch to spend every last penny that would ever be appropriated for it by Congress in the future. The administration denied that Congress had the constitutional authority to over-ride the President's control over the executive branch agencies in this manner, but a Federal Court eventually upheld the Congress's position on this matter, and the new Ford Administration chose to acquiesce in this lower court ruling rather than to further antagonize the already hostile Congress with an appeal to the Supreme Court.

Impoundment: A Glossary of Political Economy Terms - Dr. Paul M. Johnson (auburn.edu)

http://webhome.auburn.edu/~johnspm/gloss/impoundment.phtml

2 USC Ch. 17B: IMPOUNDMENT CONTROL (house.gov)

https://uscode.house.gov/view.xhtml?path=/prelim@title2/chapter17B&edition=prelim

§683. Rescission of budget authority

(a) Transmittal of special message

Whenever the President determines that all or part of any budget authority will not be required to carry out the full objectives or scope of programs for which it is provided or that such budget authority should be rescinded for fiscal policy or other reasons (including the termination of authorized projects or activities for which budget authority has been provided), or whenever all or part of budget authority provided for only one fiscal year is to be reserved from obligation for such fiscal year, the President shall transmit to both Houses of Congress a special message specifying—

(1) the amount of budget authority which he proposes to be rescinded or which is to be so reserved;

(2) any account, department, or establishment of the Government to which such budget authority is available for obligation, and the specific project or governmental functions involved;

(3) the reasons why the budget authority should be rescinded or is to be so reserved;

(4) to the maximum extent practicable, the estimated fiscal, economic, and budgetary effect of the proposed rescission or of the reservation; and

(5) all facts, circumstances, and considerations relating to or bearing upon the proposed rescission or the reservation and the decision to effect the proposed rescission or the reservation, and to the maximum extent practicable, the estimated effect of the proposed rescission or the reservation upon the objects, purposes, and programs for which the budget authority is provided.

(b) Requirement to make available for obligation

Any amount of budget authority proposed to be rescinded or that is to be reserved as set forth in such special message shall be made available for obligation unless, within the prescribed 45-day period, the Congress has completed action on a rescission bill rescinding all or part of the amount proposed to be rescinded or that is to be reserved. Funds made available for obligation under this procedure may not be proposed for rescission again.