Pocket Rescissions Are Not Illegal

President Trump’s pocket rescission has generated a lot of controversy. Trump asked lawmakers at the end of August to use the rescission process to cancel approximately $5 billion in foreign aid programs administered by the United States Agency for International Development (USAID) and the Department of State. And he is withholding that funding temporarily while Congress considers his request.

The Government Accountability Office (GAO) claims that pocket rescissions like Trump’s are illegal and unconstitutional. Specifically, GAO argues that Trump’s decision to withhold federal funding temporarily while Congress considers his pocket rescission request violates the Congressional Budget and Impoundment Control Act of 1974 (Public Law 93-344; the ICA) and usurps Congress’s constitutional power of the purse. However, a detailed review of GAO’s case against pocket rescissions suggests that the practice is legal and constitutional.

What is a pocket rescission?

A pocket rescission is a recession request that the president sends to Congress less than 45 days before the end of the fiscal year. The maneuver is controversial because it allows the president to withhold funding until it expires and is no longer available to be spent, even if Congress has not approved his request.

Congress created the rescission process in the ICA to empower the president to ask lawmakers to rescind - or cancel - appropriated dollars before executive-branch officials spend them. The process begins when the president sends a special message - or rescission request - to the House and Senate detailing specific appropriations that he wants lawmakers to cancel. Congress then has 45 days to approve the president’s request to permanently cancel the funding in question. During that period, the ICA empowers the president to temporarily withhold funding associated with his recession request. But the law requires the president to spend the money as originally directed if Congress does not approve a rescission bill codifying the proposed cuts.

Why does GAO claim pocket rescissions are illegal?

GAO claims pocket rescissions are illegal and contrary to the Constitution. The agency details its reasoning in a 2018 letter to the chairman and ranking member of the House Budget Committee in which it considers the president’s power to withhold funding in the rescission process. GAO concludes “that the ICA does not permit the withholding of funds through their date of expiration.” And it argues that “a withholding of this nature would be an aversion both to the constitutional process for enacting federal law and to Congress’s constitutional power of the purse.”

The agency concedes the ICA empowers the president to withhold funding temporarily while Congress considers his recession request. But it notes that the law also requires the president to release that funding after 45 days if Congress has not approved his proposed cuts.

Citing the ICA’s mandate that the president must allocate funding absent congressional approval, GAO reasons that the power to withhold appropriated dollars temporarily does not apply to situations in which that money expires before the end of the law’s 45-day review period. This is because the president can’t spend expired funds. Therefore, the president can’t withhold funding temporarily while Congress considers his pocket rescission request. According to GAO, “the requirement to make amounts available for obligation in this situation prevails over the privilege to temporarily withhold the amounts.”

In addition to the ICA’s prohibition on pocket rescissions, GAO argues that the Constitution precludes the president from using a pocket rescission to effectuate the permanent cancellation of appropriated dollars without Congress’s approval. To support its argument, the agency cites the Constitution’s Appropriations Clause (Article I, section 9, clause 7), which stipulates, “No money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” GAO also cites the Constitution’s Take Care Clause (Article II, section 3), which requires the president to faithfully execute the law, including appropriations laws. And it cites the Supreme Court’s decision in Clinton v. New York to note that “the Constitution does not authorize the President to enact, amend, or to repeal statutes.”

GAO concludes that the president must follow congressional directives included in appropriations bills. According to its analysis, pocket rescissions are illegal and unconstitutional because they enable the president to effectively change appropriations laws before executive branch officials implement them.

Are pocket rescissions illegal?

Pocket rescissions are legal and constitutional. GAO’s claims to the contrary are not supported by the ICA’s text or the Constitution. The ICA gives the president clear statutory power to withhold funding temporarily while Congress considers his rescission request. And the Constitution empowers Congress - not the president - to determine when appropriated dollars expire.

The Constitution gives Congress the power of the purse and authorizes it to “make all Laws which shall be necessary and proper” for executing that power. In its 2018 letter, GAO acknowledges that Congress has used its constitutional powers to “enact several statutes that govern the use of appropriations.” The ICA is one of those statutes.

When Congress approved the ICA, it empowered the president to withhold federal funding for a limited period of time (i.e., 45 days) pending congressional approval of his rescission request. GAO is correct when it notes that section 1012(b) of the ICA stipulates that those funds “shall be made available for obligation unless, within the prescribed 45-day period, the Congress has completed action on a rescission bill rescinding all or part of the amount proposed to be rescinded.” But the section does not otherwise limit the president’s power to withhold funding during that period.

The omission of time-based limitations in section 1012(b) is significant given other ICA provisions that address timing questions. For example, section 1011(5) stipulates that the 45-day period resets at the start of a new two-year Congress whenever the previous Congress adjourns sine die before it ends. And section 1013 bars the president from deferring funding (i.e., from delaying it) “for any period of time extending beyond the end of the fiscal year.” But sections 1011(5) and 1011 do not limit the president’s withholding power when used in conjunction with a pocket rescission. Section 1013(c) states explicitly, “The provisions of this section do not apply to any budget authority to be proposed to be rescinded.”

Barring the president from withholding funding temporarily would, in GAO’s words, “frustrate the design of the ICA.” This is because the recession process would not work if the president spent the money he asked Congress to cancel. If he did, Congress would not have anything to rescind.

The fact that a pocket rescission empowers the president to withhold funding until it expires does not make it unconstitutional. The Constitution gives Congress the power of the purse. And Congress uses that power when it sets expiration dates for appropriated dollars.

In practice, Congress appropriates federal funding for one fiscal year. For example, section 1106 of the Full-Year Continuing Appropriations Act (Public Law 119-4; Full Year CR) stipulates, “Unless otherwise provided for…appropriations and funds made available and authority granted pursuant to this division shall be available through September 30, 2025.” Congress could have easily changed that expiration date before it approved the measure by specifying a different date.

Lawmakers could have also exempted specific funding from the ICA’s rescission process - or otherwise modify it to limit the president’s power to withhold funding temporarily. For example, section 1108 of the Full-Year CR exempts some of its funding from the requirements in the State Department Basic Authorities Act of 1956, Foreign Relations Act, and the National Security Act of 1947. Congress could have similarly exempted some - or all - of the law’s funding from section 1012(a) of the ICA.

The Takeaway 

Pocket rescissions are not illegal. And they do not violate the Constitution. The ICA empowers the president to withhold funding temporarily while Congress considers his rescission request. And the Constitution empowers Congress - not the president - to determine when appropriated dollars expire.

The rescission process would be unworkable if the president was required to spend money that he is asking Congress to cancel. Claiming that the expiration of that funding during the ICA’s 45-day window limits the president’s power to withhold funding temporarily rewrites the ICA to prohibit end-of-year rescissions.