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Procedural Advantages for “Rescissions” Don’t Apply to Mandatory Programs

President Trump reportedly plans soon to propose cuts in “mandatory benefit programs” in a package of spending cuts known as “rescissions.” He’s surely free to do so. But the Congressional Research Service (CRS) and Government Accountability Office (GAO) agree that the special procedural advantages that rescission proposals have under the Impoundment Control Act (ICA) apply only to cuts in discretionary programs (those whose costs are determined by the level of funding in annual appropriations bills), not mandatory benefit programs.

That means that the President can’t use the ICA to cut mandatory benefit programs such as Medicaid, Medicare, or Social Security.

Under the ICA, a President may withhold, or “impound,” previously approved program funding for 45 days if he proposes certain types of cuts. And the Senate may consider these proposals under a special fast-track procedure, meaning they can pass the Senate with a simple majority rather than the 60 votes required to end a filibuster. But these two special ICA procedures — impoundment and Senate fast-track consideration — are off limits for proposed cuts of mandatory benefit programs.

As a 2010 CRS report stated: “The ICA . . . allows the President to request rescissions only of discretionary spending.”

Moreover, GAO has explained that the special ICA procedures are also off limits for formula grants to states or localities even if they’re in the discretionary part of the budget, such as the Child Care and Development Block Grant, Community Development Block Grant, and “Title I” grants for educating disadvantaged students. That’s because the authorizing law for these grants mandates the distribution of funds by a set formula once annual appropriations bills have determined the size of the grant. As a GAO report from last December states:

The Impoundment Control Act operates on the premise that when Congress appropriates money to the executive branch, the President is required to obligate the funds. . . . The law includes this disclaimer: “Nothing contained in this Act, or in any amendments made by this Act, shall be construed as . . . superseding any provision of law which requires the obligation of budget authority or the making of outlays thereunder.” 2 U.S.C. § 681(4). The Comptroller General and the federal courts have interpreted this disclaimer to mean that the President may not use the Impoundment Control Act to withhold funds for formula grants.

The report notes that GAO has held this interpretation since the early 1980s and cites a court case from 1980 supporting it.

In short, if the President proposes cuts to mandatory benefit programs or formula grants, he won’t have the authority to impound these funds while Congress considers his request, nor will his proposal enjoy special procedural advantages in the Senate.