Trump Rescission Proposal Builds on Illegal Impoundments, Would Undermine Future Funding Deals

The Senate is expected to vote soon on President Trump’s proposal to rescind $9.4 billion in previously approved spending, which narrowly passed the House on June 12.^[1] Congress is considering the spending cuts package under rules established by the Impoundment Control Act of 1974 (ICA), which provides an expedited process for Congress to consider cuts to existing programs — and, critically, requires only a simple majority to pass the Senate.^[2] That process allows the administration to temporarily pause spending of these funds while Congress considers the proposal; however, after 45 days the funds must be used consistent with existing appropriations law if a rescission is not approved.

The proposed cuts would significantly damage life-saving global health programs, peacekeeping efforts, and economic development abroad, and would hurt domestic community TV and radio stations supported by the Public Broadcasting Service (PBS) and National Public Radio (NPR) — raising concerns among some Republican as well as Democratic senators.^[3] More fundamentally, the cuts represent the latest salvo in the Administration’s unprecedented efforts to block funding enacted into law for programs and entities it disfavors.

Congressional approval of the Administration proposal would mark the first successful presidentially proposed rescissions under the ICA authority since fiscal year 1999 and the largest such rescissions enacted in over four decades. Under normal circumstances, weighing the potential harm from the proposed cuts against the cost savings might be the only consideration.

But this rescission package did not come to Congress under normal circumstances. The Administration illegally impounded the funds at issue for months before proposing the package. Moreover, the Administration is unlawfully withholding much larger amounts of funding that it has not proposed for rescission, and Office of Management and Budget (OMB) Director Russell Vought has indicated an intention to ignore existing spending directives in the future “without having to get an affirmative vote [from Congress].”^[4] In short, this rescission package is part of a broader Administration effort that threatens to fundamentally upend Congress’s spending power under the Constitution and undermine lawmakers’ ability to negotiate future spending deals in good faith.

Cuts Would Undo Recent Appropriations to Achieve Long-Standing Trump Policy Goals

Although the Administration has framed the rescission package as an effort to codify budget cuts identified by its DOGE initiative,^[5] the Administration’s interest in cutting these programs does not appear to originate from new information uncovered since March, when President Trump signed a full-year funding resolution for fiscal year 2025 that appropriated much of this funding. Instead, these are programs the President has long targeted for cuts or elimination.

Roughly half of the identified rescissions ($4.7 billion) in the package come from accounts the first Trump Administration proposed to eliminate in its very first budget, eight years ago. And more than $3 billion of the other proposed rescissions are from accounts where the Administration requested significant cuts in that same budget proposal.

The Administration has also claimed that some of the proposed cuts are justified by specific questionable or controversial foreign aid projects from past years. However, Senate Appropriations Chair Susan Collins has said the rescission package “has nothing to do” with those past projects, and thus these past projects “cannot be used to justify the proposed rescissions.”^[6]

The Administration’s use of the ICA to request these rescissions is in one sense surprising, given that Director Vought asserted at his confirmation hearing that both he and the President believe the ICA is unconstitutional.^[7] However, employing the ICA allows for expedited consideration of a proposal to revise the recently enacted funding law and implement long-desired Trump Administration policy by relying on the ICA’s lower vote threshold in the Senate. In fact, without this lower vote threshold, the rescission request would likely be dead on arrival, since well fewer than 60 senators are expected to support it.^[8]

Administration Illegally Impounded Same Funds Prior to Rescission Request

Transmitting the proposed rescission package to Congress is one of the few arguably lawful avenues the Administration has pursued to prevent the spending of congressionally appropriated funding.^[9]

In fact, prior to its submission, the Administration illegally impounded the very same foreign aid funds included in the request.^[10] Rather than lawfully sending the rescission package to Congress for consideration back in January, President Trump issued a day-one executive order directing a 90-day “pause” of congressionally appropriated foreign-assistance funding, while the State Department and the U.S. Agency for International Development halted award-making, ordered currently funded grantees to stop work, and began a mass termination of existing awards.^[11]

Under the ICA and the terms of appropriations and authorization law, such purported “pauses” (or “deferrals”) in spending lawfully provided funds are only allowed in narrow circumstances that do not apply here.^[12] And even in those cases, the Administration is required to transmit a special message to Congress describing the accounts for which funding was being deferred, which the Trump Administration never did.

Further, the Administration outlined its planned rescission proposal in a memo to congressional Republicans in mid-April; the delay in formally submitting it to Congress reportedly reflected the Administration’s search for the best political timing during negotiations over its massive tax and spending reconciliation package.^[13] Had the Administration transmitted its formal rescission proposal to Congress in mid-April, the 45 days for consideration of the package would have elapsed before the Administration finally submitted the package on June 3. In other words, the Administration had already paused the foreign aid assistance in the rescission proposal for longer than the ICA allows even before formally transmitting the rescission proposal to Congress.

So even as the Administration prepared to use the ICA’s legal pathway for requesting a rescission of funds, it continued to illegally hold back funding for those programs to accommodate a politically motivated delay in submitting the request to Congress.

Administration Also Pursuing Illegal Strategies to Stop Legally Required Spending

The Administration’s rescission proposal is just one of several pathways it is pursuing to stop congressionally directed spending. Other actions the Administration has pursued or is reportedly considering include:

• Funding freezes. To date, the Administration’s primary strategy has simply been to illegally impound funds — by announcing a “funding freeze” or “programmatic review” or with no public notice at all — and force those harmed by the impoundments to pursue relief in court.^[14] As described above, this is what the Administration was doing to the foreign aid funds it is now proposing to rescind, before the rescission package was formally submitted. Examples of funds that have been unlawfully impounded and are not in the rescission package include funding for the National Electric Vehicle Infrastructure Formula Program, Greenhouse Gas Reduction Fund, and programs funded by the Department of Education, National Institutes of Health, National Science Foundation, and Institute of Museum and Library Services.^[15]

  The Administration has coupled this tactic with illegally hiding apportionment information that might help Congress, the Government Accountability Office (GAO), and the public to determine when an illegal impoundment is occurring at OMB’s direction.^[16] At the same time, OMB has been directing federal agencies not to cooperate with GAO in its statutory responsibility of investigating instances of illegal impoundment and even to ignore GAO determinations that the Administration is illegally impounding funds.^[17]

  The result has been widespread disruption and damage to programs and services paid for with taxpayer dollars, as the Administration forces grantees, contractors, and beneficiaries to sue the government to reverse the illegal cancellation or withholding of federal funds, or to prevent cuts to agency staffing below levels where appropriated activities or purposes can be carried out. Notably, while Director Vought has publicly claimed that the ICA is unconstitutional and that impounding funds was legal before the ICA, the Administration has yet to make these arguments in court when its illegal funding actions have been challenged.^[18] Instead, it has claimed that it is not actually impounding funds in specific cases (despite evidence showing otherwise) or that the ICA allows it to withhold funds.^[19]

• “Pocket rescissions.” Director Vought described the Administration’s June 3 rescission package as “the first of many rescissions bills” but stipulated that some of the rescission bills “may not actually have to get . . . Congress to pass.”^[20] Since Congress is required to pass a law in order to rescind funds, this likely refers to a potential plan to engage in illegal so-called “pocket rescissions”: transmitting a rescission proposal to Congress so late in the fiscal year that the funding would likely expire (i.e., no longer be legally available for obligation) before Congress can act.^[21]

  As Director Vought outlined in a 2021 letter to Congress, OMB considered pursuing such pocket rescissions in the first Trump Administration despite a GAO ruling in 2018 that “the ICA does not permit the withholding of funds through their date of expiration.”^[22] GAO’s analysis found that “the statutory text and legislative history of the ICA, Supreme Court case law, and the overarching constitutional framework of the legislative and executive powers provide no basis” to suggest such a practice is allowable.^[23] Other legal experts have similarly determined that the pocket rescission is a “legal fantasy” and a “vacuous” concept.^[24]

  The ICA was enacted to curb illegal impoundments, not to create a secret pathway for presidents to bypass congressional approval and impound funds if they are willing to wait until the last 45 days of a fiscal year to do so.

  Notably, as researchers at Protect Democracy have found, any rescission proposal at this point in the fiscal year regarding funding that expires in 2025 would be the latest that such a proposal has been delivered under the ICA in over four decades, and would strongly indicate that funds were being illegally impounded before the transmission occurred.^[25]

• Deferred spending under the ICA. Press reports indicate that the Administration may soon look to “defer” — pause obligation or spending of funds under rules established in the ICA — more than $30 billion, or more than three times as much funding as it has thus far proposed to rescind. The agencies and departments targeted reportedly include “the Environmental Protection Agency, the National Oceanic and Atmospheric Administration, the National Science Foundation and the departments of Interior and Health and Human Services.” ^[26] The ICA allows a President not only to propose rescissions but also to pause spending for a short time after providing a special message to Congress, as long as the funds are still spent within the same fiscal year and the deferrals are based on one of a specific set of reasons, which do not include policy reasons.^[27]

Since the Administration has transmitted no such message to Congress to date and little time remains in the fiscal year to spend paused funds, a hypothetical Trump Administration deferral proposal coming in the summer of 2025 likely would not be legal under the ICA. This approach would be even more concerning given the Administration’s stated interest in illegally impounding funds while delaying rescission requests until it is close enough to the end of the fiscal year to pursue a pocket rescission strategy.

All of these strategies would have the same goal: preventing funding that was lawfully provided by Congress — and, in most cases, agreed to by President Trump in the March appropriations deal — from being spent.

Taken together, the Administration’s attempts to circumvent Congress are not just creating harm for those who have been directly affected to date. They also are creating deep uncertainty for all recipients of federal funds over potential future illegal actions by the Administration that could affect them, and they are undermining Congress’s constitutional spending authority.

Rescission Proposal, Impoundments Might Break Appropriations Process

Even beyond the impacts from the specific cuts in the current rescission package and from partially codifying the Administration’s freeze on foreign aid funding, enacting the package could damage appropriations negotiations on an ongoing basis by signaling Republicans’ willingness to sabotage a bipartisan funding deal.

Enacting the March agreement between Congress and the President providing full-year funding for fiscal year 2025 required at least eight Democratic senators to join with 52 Republican senators to invoke cloture. Enactment of the Administration’s rescission package would show that Republicans could quickly revise, with merely 51 Senate votes, a bipartisan agreement reached only a few months earlier that required 60 votes, even as Republicans remain unwilling to prevent or end the Administration’s ongoing illegal impoundments.

Enacting appropriations for fiscal year 2026, which starts October 1, will require Democratic senators to join with Republicans to reach the needed 60-vote threshold. This Democratic support may not materialize if Democrats are concerned that any agreement could later be undone if the Administration proposes a rescission package under the ICA that at least 50 Republican senators agree to. Senate Appropriations Vice Chair Patty Murray has said it will “prove very difficult, and maybe even impossible,” to agree to bipartisan agreements in the future if they could be quickly amended by partisan rescissions under the ICA.^[28]

If the rescission bill passes, then, combined with the Administration’s broader ongoing attempts to impound funds — and Vice President Vance’s reported assurance to House Republicans in March that the Administration would continue pursuing the impoundment of funds^[29] — Democratic senators would have little reason to trust that the funding levels they agree to in an appropriations bill would be protected from rescission or impoundment, undermining the basis for future appropriations agreements. As a result, it would be far more difficult to reach the bipartisan agreements necessary to fund the government on time and with the resources required to appropriately serve the country’s needs.