Deferral Requests Would Be Another Tactic in the Trump Administration’s Illegal Strategy to Withhold Congressionally Approved Funding

The Trump Administration has been illegally withholding funds lawfully provided by Congress from its very first days in office.^[1] These unprecedented actions — clawing back already committed funds and unilaterally and illegally blocking spending for programs the Administration objects to — appear part of an Administration effort to usurp Congress’s constitutional spending powers. Through a presidentially proposed rescissions package — passed via a fully partisan vote for the first time ever in July — the Administration has also cut funding that had been previously enacted on a bipartisan basis.^[2]

Yet even as Republicans in Congress were working to advance the President’s $9 billion rescissions package, the Trump Administration was reportedly considering sending a separate request to Congress to temporarily “defer” $30 billion in planned spending.^[3] Press reports suggest that such a package could include funding that is currently being illegally frozen from “more than a dozen agencies,” including the Environmental Protection Agency, the National Oceanic and Atmospheric Administration, the National Science Foundation, the Interior Department, and the Department of Health and Human Services.^[4]

Under the Impoundment Control Act of 1974 (ICA), the President can propose temporarily pausing spending of funds (known as deferral) for a narrowly defined set of reasons without affirmative action from Congress.^[5] But the Trump Administration’s reported deferral strategy raises a number of concerns.

• The ICA does not allow deferrals for policy reasons, including any policy objections the Administration may have to legally required spending. Yet that would seem to be the most likely explanation for why the Administration would consider proposing deferrals, particularly because it is already illegally freezing many of the funds reportedly under consideration for deferral on policy, ideological, or politically motivated grounds.
• A deferral cannot extend beyond the period in which the funds are made available for use or cause funds to go unused. (See box below for more details). But given other illegal funding freeze strategies the Trump Administration has floated or implemented, the goal may be to do just that: give cover to attempts to run out the clock and avoid spending funds by the end of a fiscal year as lawfully required by Congress.
• Lastly, this effort to subvert congressional spending prerogatives would further jeopardize Congress’s ability to reach bipartisan funding deals this year and in the future. The broader efforts by the Administration to illegally withhold funding and congressional Republicans’ failure to challenge these actions could poison the well for future negotiations.^[6]

Any deferral proposals from the Trump Administration should be evaluated carefully for whether the funds proposed for deferral actually meet the limited criteria set forth in the ICA, if they were being illegally withheld before the request was made, and if the purpose of such a deferral is only to make the expiration of the funds more likely.

Trump Administration’s Illegal Funding Freezes Can’t Be Remedied Through a Deferral Request

While we do not yet know whether the Administration will ultimately send a deferral request to Congress, we do know that the Administration is currently illegally delaying billions of dollars in funding from both obligation and payment.^[7] Moreover, in many cases, these funds are explicitly being delayed for policy reasons. The Trump Administration has illegally sought to block:

• School support. In one recent example, the Trump Administration withheld billions in K-12 education funding intended to support critical school activities and services during the upcoming school year that was only weeks away from starting. The funds were provided in the final bipartisan spending law that President Trump signed in March and were legally required to have been made available for states to distribute to local school districts at the beginning of July. But the Office of Management of Budget (OMB) sat on the funds while it conducted what it described as “an ongoing programmatic review of education funding," despite neither education statutes nor the appropriations act providing any authority to withhold these funds for any such “programmatic review.”^[8] The withholding prompted ten Republican Senators to write to OMB Director Russell Vought noting that “withholding these funds will harm students, families, and local economies” and asking that he “faithfully implement” the budget enacted back in March.^[9] After facing backlash, OMB announced it would release the funds.^[10]
• Critical health research. In July, 14 Senate Republicans also wrote to OMB out of concern over the “slow disbursement rate” of funds provided to the National Institutes of Health (NIH) in the March budget agreement, warning that “whether formally withheld or functionally delayed…Americans’ ability to access better treatments” and “our nation’s leadership in biomedical science” was threatened.^[11] Less than a week later, it was reported that the Trump Administration had attempted to block remaining NIH funding for 2025 from being provided to non-federal researchers — restricting an estimated $15 billion from being awarded for new grants or grant renewals.^[12] After the reporting, OMB announced it had released the NIH funds and subsequently tried to justify the freeze as a “programmatic review.”^[13]
• Scientific advancements. The Trump Administration has been widely reported to be illegally bottling up research funding at the National Science Foundation (NSF) in the spring, cancelling over 1,600 existing grants, blocking new awards — even for awards already approved — and putting the agency on the slowest pace of awarding new funding in 35 years.^[14] The illegal deferral of funds came under the auspices of undertaking a “secondary” review to ensure awards would be consistent with the President’s priorities.^[15] In July, some NSF employees accused OMB of still restricting over $2 billion of the appropriations provided in March from NSF use.^[16]

In each of these instances, sending a deferral request to Congress would not have made the withholding of these funds legal — both because the funds were clearly not being withheld for any of the allowable reasons under the ICA and because the withholding of these funds violated the relevant appropriations act. And even when funds have subsequently been released, these illegal deferrals have proved damaging — causing uncertainty, disruption, and chaos that has harmed schools’ planning and preparation just as the return of students neared or threatened to derail or delay critical benefits from lifesaving health research or other scientific breakthroughs.^[17]

Deferral Requests May Be One Piece of the Administration’s Illegal Strategy to Let Lawfully Provided Funding Expire

The Trump Administration has already engaged in the illegal withholding of funds, including to prevent their use for months before the President finally proposed rescinding them in June and congressional Republicans accepted that proposal in July.^[18] More broadly, any deferrals may fit into the Trump Administration’s apparent goal to unlawfully impound some set of funds until they expire at the end of the fiscal year in September.

Indeed, the Trump Administration — and in particular OMB Director Vought — has not shied away from publicly suggesting that it can unilaterally impound funds because the ICA is unconstitutional and, contradictorily, that it has the power under the ICA to rescind funds even without Congressional approval, through the use of so-called “pocket rescissions.”^[19] A “pocket rescission” approach involves sending an ICA rescissions request to Congress with fewer than 45 legislative days before funds expire, and then withholding funds during that period up to the expiration date. This makes the funds unavailable to be spent and effectively rescinds them, regardless of any congressional vote. As a CBPP paper lays out, this strategy has no basis in the law and would, in fact, “bend the ICA to ends precisely opposite to those for which Congress enacted it.”^[20]

The Trump Administration’s reported consideration of sending a deferral proposal to Congress under the ICA, one likely to be contrary to the law, should be viewed in light of its broader goal to “run out the clock” on fiscal year 2025 funding by any means it can get away with — and just one of many strategies the Administration is illegally deploying. A similar dynamic is in play with the Administration’s possible attempts to execute a pocket rescission, which would only be made possible by effectively leveraging previous illegal deferrals to get to the point where there are fewer than 45 days remaining in the fiscal year.

Regardless of the form these illegal withholdings take, including in the absence of any request to Congress under the ICA to rescind or pause funds, they are all advancing the Administration’s illegal effort to prevent money from going out the door as Congress intended. These actions are troubling because they chip away at the constitutional separation of powers and violate the law. And if the Administration continues to illegally frustrate the spending laws passed by Congress, it will also break the existing appropriations process — making it nearly impossible for Congress to reach agreement on appropriations for fiscal year 2026, which starts October 1.

Such an agreement will require Democratic senators to join with Republicans to reach the needed 60-vote threshold. But Democratic support may not materialize if the Administration’s actions make clear it has no intention of honoring the terms of the agreement by selectively, unilaterally, and illegally withholding funds — especially if Republicans in Congress do not consistently stand up to the Administration to ensure that funds lawfully provided by Congress are faithfully spent on the purposes intended.