The Trump administration has engaged in systematic impoundment of congressionally appropriated funds throughout 2025 and 2026 — refusing to spend money that Congress directed be spent, in direct contravention of both the Impoundment Control Act of 1974 and the constitutional separation of powers.

Led by OMB Director Russell Vought – Director, Office of Management and Budget, who has publicly stated his belief that the Impoundment Control Act is unconstitutional, the administration has deployed a range of tactics including grant freezes, “pocket rescissions,” removal of apportionment data from public view, and outright refusal to disburse congressionally authorized funds.

By May 2026, the administration had withheld more than $2 billion in education funding alone and successfully used a pocket rescission to permanently eliminate $4.9 billion in foreign aid (Education Week, May 2026; Christian Science Monitor, May 2026).

This policy represents the most significant challenge to Congress’s “power of the purse” since the Nixon era — and the administration’s explicit goal is to overturn the legal framework that was established to prevent exactly this kind of executive overreach.

Legal and Constitutional Background

Article I, Section 9, Clause 7: “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” The Constitution assigns the power of the purse exclusively to Congress. The President’s constitutional duty, under the Take Care Clause (Art. II, § 3), is to “take Care that the Laws be faithfully executed” — including appropriations laws.

The Nixon Precedent: In the early 1970s, President Richard Nixon impounded billions in congressionally appropriated funds for programs he opposed, including clean water funding. The Supreme Court unanimously rejected Nixon’s authority to do so in Train v. City of New York, 420 U.S. 35 (1975), holding that the President lacks authority to withhold funds Congress has appropriated. Every impoundment case decided during the Nixon era reached the same conclusion (The Constitutional Observer, 2026).

The Impoundment Control Act of 1974: In direct response to Nixon’s impoundments, Congress passed the Congressional Budget and Impoundment Control Act of 1974 (Pub. L. No. 93-344, Title X). The law permits the President two narrow options:

• Rescission: The President may propose canceling appropriated funds, but Congress must affirmatively approve the cancellation within 45 days. If Congress does not act, the funds must be released.
• Deferral: The President may propose delaying the expenditure of funds, but Congress may override the deferral.
• What the ICA does not authorize is the unilateral, indefinite withholding of appropriated funds without following either statutory pathway (Lawfare, 2025; The Constitutional Observer, 2026).

The Administration’s Position: Russell Vought – Director, Office of Management and Budget and the Trump administration argue that the Impoundment Control Act is unconstitutional — that the President has inherent constitutional authority to refuse to spend appropriated funds. This position directly contradicts the unanimous Supreme Court precedent in Train and the subsequent ICA (The Dispatch, 2025).

Timeline of Key Actions

• 1974: Congress passes the Impoundment Control Act, codifying the prohibition on presidential impoundment.
• 1975: Supreme Court unanimously rules in Train v. City of New York that the President cannot withhold congressionally appropriated funds.
• 2024 Campaign: Trump pledges to “use the president’s long-recognized Impoundment Power to squeeze the bloated federal bureaucracy for massive savings” and to “restore executive branch impoundment authority” (The Dispatch, 2025).
• January 20, 2025: Trump signs executive order pausing disbursement of funds appropriated through the Inflation Reduction Act and the Infrastructure Investment and Jobs Act (The Dispatch, 2025).
• January 27, 2025: OMB Acting Director Matthew J. Vaeth issues Memorandum M-25-13 directing all federal agencies to immediately pause “all activities related to the obligation or disbursement of all Federal financial assistance” — covering every grant, loan, and loan guarantee government-wide, pending a compliance review against the President’s executive orders. The memo affects foreign aid, environmental programs, DEI initiatives, and a sweeping array of domestic programs.
• February 3, 2025: Judge Loren L. AliKhan of the U.S. District Court for the District of Columbia grants a temporary restraining order against M-25-13 in National Council of Nonprofits v. Office of Management and Budget, Civil Action No. 25-239 (LLA), finding plaintiffs likely to succeed on the merits. The grant freeze is partially rescinded before the order takes full effect. The case establishes that blanket fund holds violate the Administrative Procedure Act (National Council of Nonprofits v. OMB, D.D.C. 2025, https://www.courtlistener.com/opinion/10326239/national-council-of-nonprofits-v-office-of-management-and-budget/).
• 2025: OMB issues a revised Circular A-11 asserting greater power to “rescind, withhold, or delay” congressional appropriations. The circular states that amounts proposed for rescission may be withheld for 45 days “regardless of when during the fiscal year the rescission is proposed” — the foundation for the pocket rescission strategy (Lawfare, 2025).
• Mid-2025: OMB removes all apportionment documents from its website, eliminating public visibility into how appropriated funds are being distributed. Protect Democracy and other transparency advocates sue to restore access (Education Week, May 2026).
• August 2025: The administration submits a $4.9 billion rescission request for USAID funding with fewer than 45 days remaining in the fiscal year. Because the 45-day review period extends past the September 30 appropriation expiration, the funds are effectively frozen until they lapse — a “pocket rescission” that converts the ICA’s congressional-review mechanism into an executive-veto mechanism (The Constitutional Observer, 2026; Lawfare, 2025; Christian Science Monitor, May 2026).
• August 13, 2025: In a landmark ruling, the U.S. Court of Appeals for the D.C. Circuit issues its decision in Global Health Council v. Donald J. Trump, No. 25-5097 (D.C. Cir.), in a 2-1 opinion authored by Circuit Judge Karen LeCraft Henderson (joined by Judge Katsas; Judge Pan dissenting). The court vacates the district court’s preliminary injunction on the impoundment claims, holding that private plaintiffs have no cause of action to enforce the Impoundment Control Act. The majority applies Dalton v. Specter, 511 U.S. 462 (1994), to hold that violations of the ICA cannot be recast as constitutional separation-of-powers claims. It further holds that APA review is precluded by the ICA’s own enforcement mechanism, and that private plaintiffs cannot reframe the dispute as an ultra vires claim. Only the Comptroller General of the United States — the head of the GAO — is “expressly empowered” by the ICA to sue the Executive to compel the release of appropriated funds. The ruling is reissued as an amended opinion on August 28, 2025 (Global Health Council v. Trump, D.C. Cir. 2025, https://www.courtlistener.com/opinion/10652999/global-health-council-v-donald-j-trump/).
• September 3–5, 2025: Even after the D.C. Circuit’s ruling, Judge Amir H. Ali of the U.S. District Court for the District of Columbia grants a new TRO and preliminary injunction in Global Health Council v. Donald J. Trump, Civil Action Nos. 25-00400 and 25-00402 (AHA), ordering the government to obligate expiring USAID funds by the September 30 fiscal-year-end deadline. Judge Ali denies the government’s stay motion, calling out the administration’s deliberate misreading of the ICA: “Defendants selectively quote language from the Impoundment Control Act to reverse its meaning,” omitting the word “unless” to invert the statute’s plain command that funds “shall be made available for obligation” unless Congress passes a rescission bill (Global Health Council v. Trump, D.D.C. Sept. 5, 2025, https://www.courtlistener.com/opinion/10666993/global-health-council-v-donald-j-trump/).
• September 2025: The GAO concludes that the pocket rescission maneuver is unlawful. Senator Susan Collins (R-ME), chair of the Senate Appropriations Committee, states that the pocket rescission violates the ICA and Article I of the Constitution (The Constitutional Observer, 2026).
• Fall 2025: The Supreme Court allows the pocket rescissions to proceed with a preliminary ruling that the plaintiffs (foreign assistance organizations) did not have standing to sue. The unsigned ruling states it “should not be read as a final determination on the merits” (Lawfare, 2025). [NEEDS VERIFICATION: docket number and court]
• Fall 2025: A court orders OMB to resume publishing apportionment documents and the spending plans it requires from agencies (Education Week, May 2026).
• February 2026: Congress belatedly approves a fiscal 2026 budget for the Department of Education. OMB fails to “apportion” (release) more than $2 billion in education funding that Congress approved (Education Week, May 2026).
• May 2026: More than $1 billion in unapportioned Education Department funds will expire and return to the Treasury if OMB does not release them within four months — likely constituting a violation of the Impoundment Control Act (Education Week, May 2026).
• 2026 (Ongoing): During a DHS shutdown, the administration pays employees using funds with a “reasonable and logical nexus” to DHS functions — giving the executive branch, not Congress, wide discretion to define which funds can be used for which purposes (Christian Science Monitor, May 2026).

Key Actors

• Russell Vought – Director, Office of Management and Budget — OMB Director. Co-author of Project 2025. Has publicly stated his belief that the Impoundment Control Act is unconstitutional and that the administration has “not impounded a single thing.” Architect of the pocket rescission strategy and the OMB circulars asserting expanded executive authority over appropriations (Education Week, May 2026; The Dispatch, 2025).
• Donald Trump — 45th and 47th President of the United States — Issued the inaugural-day executive order pausing disbursement of Inflation Reduction Act and Infrastructure Act funds. Campaigned on restoring “executive branch impoundment authority.”
• Senator Susan Collins (R-ME) — Chair of the Senate Appropriations Committee. One of the few Republican voices publicly stating that the pocket rescission violates the ICA and Article I (The Constitutional Observer, 2026).
• Protect Democracy — Filed lawsuits to restore public access to OMB apportionment data and challenged the pocket rescission strategy.
• GAO (Government Accountability Office) / Comptroller General — Concluded that the pocket rescission maneuver is unlawful under the ICA. The D.C. Circuit’s August 2025 ruling in Global Health Council identified the Comptroller General as the only entity “expressly empowered” by the ICA (2 U.S.C. § 687) to compel the executive branch to release impounded funds — making the GAO Comptroller General the linchpin of ICA enforcement. As of August 2026, the Comptroller General has not exercised that authority.
• Circuit Judge Karen LeCraft Henderson — D.C. Circuit judge whose majority opinion in Global Health Council v. Trump (No. 25-5097) foreclosed private causes of action to enforce the ICA, significantly narrowing the judicial enforcement avenues available to challengers of executive impoundment.
• Circuit Judge Florence Pan — Dissented in Global Health Council v. Trump, disagreeing with the majority’s holding that private plaintiffs lack any cause of action to press impoundment claims.

Legal Challenges

**Grant Freeze Litigation (National Council of Nonprofits v. OMB, D.D.C. 2025):** When OMB issued Memorandum M-25-13 on January 27, 2025 — pausing ALL federal grants, loans, and financial assistance — a coalition of nonprofit organizations immediately sued. Judge Loren L. AliKhan granted a TRO on February 3, 2025 (Civil Action No. 25-239 (LLA)), finding the blanket freeze likely unlawful under the APA. The administration partially rescinded M-25-13 before the order could be fully enforced. This was the earliest judicial check on the administration’s impoundment tactics. (CourtListener)

**USAID Foreign Aid Litigation (Global Health Council v. Trump, D.C. Cir. 2025):** The most significant impoundment litigation of 2025 arose from the administration’s January 20 executive order freezing foreign aid. Aid organizations sued under the APA and the Constitution. After the district court (Judge Ali) granted a preliminary injunction ordering full release of appropriated funds — citing Train v. City of New York and holding that Trump’s power was at its “lowest ebb” under Youngstown‘s third category — the D.C. Circuit reversed the impoundment portion. In a 2-1 decision authored by Circuit Judge Karen LeCraft Henderson (joined by Judge Katsas; Judge Pan dissenting), the court held on August 13, 2025 that private plaintiffs have no cause of action to enforce the ICA. The ruling applied three holdings:

1. Under Dalton v. Specter, 511 U.S. 462 (1994), violations of the ICA cannot be recast as constitutional separation-of-powers claims — a statutory dispute remains statutory.
2. APA review is precluded because the ICA provides its own exclusive enforcement mechanism.
3. Private plaintiffs cannot bring an ultra vires claim for the same reason.

The court held that the ICA’s enforcement mechanism channels exclusively through the Comptroller General (GAO), who is “expressly empowered” by 2 U.S.C. § 687 to sue to compel release of appropriated funds — but only after filing an explanatory statement with Congress and waiting 25 days. (CourtListener)

Continued District Court Resistance: Despite the D.C. Circuit’s ruling, Judge Ali declined to abandon the merits. On September 3, 2025, he granted a new TRO requiring the government to obligate expiring USAID appropriations before the September 30 fiscal-year deadline. Denying a stay, Judge Ali rebuked the government’s argument that the administration could simply let funds lapse by proposing a rescission: “Defendants selectively quote language from the Impoundment Control Act to reverse its meaning,” omitting the word “unless” to invert the statute’s command that funds “shall be made available for obligation” unless Congress acts. The court cited Train v. City of New York, 420 U.S. 35 (1975), as directly foreclosing the administration’s position. (CourtListener)

Note on the Supreme Court’s February 2025 Intervention: Early in the USAID litigation, the Supreme Court rejected the government’s emergency request to vacate the TRO enforcement order: Dep’t of State v. AIDS Vaccine Advoc. Coal., 145 S. Ct. 753 (2025) (mem.). This was an early procedural loss for the administration. The Court’s later fall 2025 ruling allowing pocket rescissions to proceed — cited in the Lawfare analysis — involves the separate question of the $4.9 billion rescission request; the specific docket for that ruling [NEEDS VERIFICATION].

Pocket Rescission Litigation (Supreme Court): Foreign assistance organizations also challenged the $4.9 billion pocket rescission of USAID funds. The Supreme Court allowed the rescissions to proceed with a preliminary ruling that the plaintiffs could not demonstrate sufficient injury, without ruling on the merits. The unsigned ruling stated it “should not be read as a final determination on the merits” of pocket rescissions (Lawfare, 2025). [NEEDS VERIFICATION: docket number]

OMB Apportionment Transparency (D.D.C.): Protect Democracy and transparency advocates sued after OMB removed apportionment documents from its website. The court ordered OMB to continue publishing apportionment documents and the spending plans it requires from agencies (Education Week, May 2026).

The Enforcement Gap — Now Wider: The D.C. Circuit’s Global Health Council ruling has significantly deepened the constitutional crisis. The question is no longer merely about standing — it is whether any private party can ever force the executive branch to spend appropriated funds at all. Under the court’s ruling, the only entity with statutory authority to compel the release of impounded funds is the Comptroller General. Congress, which created the ICA to protect itself, would need to direct the Comptroller General to act — a step that requires political will the Republican-majority Congress has so far declined to exercise. If Congress will not enforce its own spending commands, and private parties cannot sue to enforce them, the constitutional prohibition on impoundment may become practically unenforceable.

Constitutional Challenge to the ICA: While no court has ruled the Impoundment Control Act unconstitutional, the administration has explicitly invited such a ruling. The legal precedent (Train v. City of New York, 1975) is strong: the Supreme Court unanimously held that the President cannot withhold appropriated funds. However, the current Court has shown willingness to reconsider long-standing precedents.

Impact Assessment

Education: More than $2 billion in congressionally approved education funding withheld by OMB as of May 2026, affecting Title I grants for low-income schools, IDEA special education funding, career and technical education programs, and other programs (Education Week, May 2026).

Foreign Aid: $4.9 billion in USAID funding permanently eliminated through the pocket rescission strategy, affecting humanitarian operations worldwide (The Constitutional Observer, 2026).

Infrastructure: Funds appropriated through the Inflation Reduction Act and Infrastructure Investment and Jobs Act paused on inauguration day, delaying climate, clean energy, and infrastructure projects across the country.

Separation of Powers: The fundamental constitutional issue is whether the executive branch can unilaterally decide not to spend money that Congress has directed be spent. If the answer is yes, Congress’s “power of the purse” — described by James Madison as the “most complete and effectual weapon with which any constitution can arm the immediate representatives of the people” (Federalist No. 58) — becomes meaningless.

Historical Parallel: Trump’s first impeachment (2019) centered on withholding congressionally appropriated military aid to Ukraine as leverage to extract a political favor. The principle at issue was the same: the President cannot condition the release of congressionally appropriated funds on compliance with his personal political objectives.

State-Level Responses

• States have been directly affected by the withholding of education, infrastructure, and environmental funds appropriated by Congress.
• State attorneys general have participated in lawsuits challenging grant freezes and impoundment actions.
• The downstream effects of withheld federal funds include delayed infrastructure projects, reduced school funding, and disrupted health and social service programs at the state and local level.

For Trump Supporters: Questions Worth Considering

The Founders gave Congress the power of the purse because they did not trust any single person — not even the President — to decide alone how the people’s money is spent. If this president can refuse to spend money Congress appropriated for programs you don’t like, the next president can refuse to spend money Congress appropriated for programs you do like — border security, military readiness, veterans’ services. The question is not whether you agree with how Congress spends money. The question is whether you want any president to have the unilateral power to override Congress’s spending decisions without any check or oversight.

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Sources

1. Education Week, “White House Blocks $2 Billion for Education: See All the Affected Programs,” May 2026. https://www.edweek.org/policy-politics/white-house-blocks-2-billion-for-education-see-all-the-affected-programs/2026/05
2. The Constitutional Observer, “The Executive as Legislature: Constitutional Structure and the Second Trump Administration’s Systematic Displacement of Congressional Authority,” 2026. https://the-constitutional-observer.ghost.io/the-executive-as-legislature-constitutional-structure-and-the-second-trump-administrations-systematic-displacement-of-congressional-authority/
3. The Dispatch, “Shattering the Separation of Powers,” Jessica Riedl, 2025. https://thedispatch.com/article/trump-spending-impoundement-congress-unconstitutional/
4. Lawfare, “Trump Is Usurping Congress’s Power of the Purse,” 2025. https://www.lawfaremedia.org/article/trump-is-usurping-congress-s-power-of-the-purse
5. Christian Science Monitor, “In Washington, a profound shift in how taxpayer money is spent. Will it last?” May 28, 2026. https://www.csmonitor.com/USA/Politics/2026/0528/trump-congress-spending-authority
6. Train v. City of New York, 420 U.S. 35 (1975).
7. Congressional Budget and Impoundment Control Act of 1974, Pub. L. No. 93-344, Title X, 88 Stat. 332.
8. U.S. Const., Art. I, § 9, cl. 7.
9. U.S. Const., Art. II, § 3 (Take Care Clause).
10. Federalist No. 58 (James Madison).
11. National Council of Nonprofits v. Office of Management and Budget, Civil Action No. 25-239 (LLA), U.S. District Court for the District of Columbia (Feb. 3, 2025). https://www.courtlistener.com/opinion/10326239/national-council-of-nonprofits-v-office-of-management-and-budget/
12. Global Health Council v. Donald J. Trump, No. 25-5097, U.S. Court of Appeals for the D.C. Circuit, argued July 7, 2025, decided Aug. 13, 2025, reissued Aug. 28, 2025 (Henderson, J., majority; Pan, J., dissenting). https://www.courtlistener.com/opinion/10652999/global-health-council-v-donald-j-trump/
13. Global Health Council v. Donald J. Trump, Civil Action No. 25-00402 (AHA), U.S. District Court for the District of Columbia (Sept. 5, 2025) (Ali, J., denying stay). https://www.courtlistener.com/opinion/10666993/global-health-council-v-donald-j-trump/
14. Department of State v. AIDS Vaccine Advocacy Coalition, 145 S. Ct. 753 (2025) (mem.) (Supreme Court rejecting government’s emergency request to vacate TRO enforcement order).