On Thursday evening, the Trump administration’s budget office notified Congress that it is cancelling $4.9 billion in foreign aid funding through a so-called “pocket rescission” – a controversial maneuver that the Government Accountability Office (GAO) has indicated is illegal. This maneuver was not a surprise because, as the fiscal year winds down, the Trump Administration has been openly considering the tactic to enact additional spending cuts.
Last month, we discussed President Trump’s $9 billion rescissions package. That proposal successfully passed the Senate and House, effectively ‘clawing back’ appropriations that Congress had previously approved for fiscal year 2025. That effort followed the process for rescinding funds delineated in the Impoundment Control Act of 1974 (ICA). While there was sharp disagreement over the substance of this package and the disruptive effect it could have on bipartisan budget negotiations, there was no disagreement that the president was following the law. An attempted pocket rescission, however, would likely be met with litigation that could result in a landmark legal decision over the power of the federal purse. At stake is whether a president may, in effect, unilaterally repeal previously enacted spending law.
What is a “Pocket Rescission”?
The ICA outlines the process through which a president can submit to Congress a special message requesting the rescission (cancellation) of specific federal funding. After receiving the special message, Congress has 45 days to take action, during which the president can withhold the funds from obligation (in other words, not spend the money). If the package is not approved in that period, the funds must be released and spent by the executive.
A pocket rescission is not explicitly recognized in the ICA. It occurs “when a president asks Congress to rescind (or cancel) funds very close to the end of the fiscal year—so close that the funds expire before they can be used for new obligations,” according to GAO, which is the agency charged with overseeing and enforcing the ICA.
Advocates of pocket rescissions claim that under the ICA if the president submits a special message requesting rescissions within 45 days of the end of the fiscal year and Congress takes no action on this request, the funds expire with the fiscal year. In that way, the president, by not giving Congress enough time to act, would essentially impound and cancel funds without Congressional approval. With less than 45 days left in FY2025, the Trump Administration is poised to test the legal standing of the pocket rescission.
The Legal Background
The GAO recently released an explainer on pocket rescissions. It bluntly stated that, “A pocket rescission is illegal,” and observed, “A pocket rescission could allow a president to avoid spending the money regardless of whether Congress approves the rescission request. This would cede Congress’s power of the purse by allowing a president to, in effect, change the law by shortening the period of availability for fixed-period funds. The Impoundment Control Act (ICA) does not provide that authority.”
In a more detailed consideration, GAO ruled in 2018 that pocket rescissions were not legal. In the opinion, GAO stated that, “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.” The report goes on to make the case that Congress must be allowed an opportunity to act before funds expire. Due to Congress’ Constitutional power of the purse, GAO stated, they are the only avenue through which a rescission can legally occur.
The GAO and many other budget process experts who believe that pocket rescissions have no Constitutional or statutory standing cite Clinton v. City of New York, 524 U.S. 417 (1998). In that case, the Supreme Court ruled that the President cannot issue a line item veto – even if Congress explicitly provides such an authority. In other words, the executive cannot decline specific provisions of a law passed by both chambers of Congress. The majority concluded that such a power was equivalent to a unilateral repeal or amendment of laws passed by Congress, violating the Presentment Clause of the U. S. Constitution (Article I, Section 7, Clause 2) – the lawmaking process set out by the Framers.
Similarly, the President canceling specific provisions of an appropriation law passed by Congress through a pocket rescission without the consent and concurrence of the House and Senate would be a clear violation of these principles. When Congress appropriates funds and the President signs the appropriations bill, that appropriation becomes law. The executive branch is constitutionally obligated to carry it out. Failing to do so is tantamount to refusing to enforce the law. As the Court stated in Clinton, “There is no provision in the Constitution that authorizes the President to enact, to amend, or to repeal statutes.” 524 U.S. at 438.
We commend efforts to reduce the deficit, but urge that such efforts are consistent with our Constitutional framework and statutory provisions. As President Trump tests the legality of the pocket rescission, all eyes will be on Congress and the GAO for a response before the fiscal year ends on September 30th.
