Background on Unlawful Impoundment in President Trump’s Executive Orders
Impoundment—unilateral action taken by the executive branch to delay or cancel appropriations enacted into law—has always been unlawful.
As our fact sheet lays out, the Government Accountability Office, the Department of Justice Office of Legal Counsel (including in an opinion written by future Chief Justice of the Supreme Court William H. Rehnquist), and the Supreme Court of the United States, have all disavowed the notion of some “inherent Presidential power to impound,” as some in the Trump orbit have tried to argue without legal or textual basis.
Not only is there no inherent Presidential power in the Constitution to impound, but there have been several bedrock fiscal statutes enacted to protect Congress’s constitutional power of the purse and prevent unlawful executive overreach, including the Antideficiency Act and the Impoundment Control Act of 1974 (ICA).
With this constitutional and statutory background in mind, and building off of the definitions in the ICA, a simple workable definition of impoundment is:
Any action—or inaction—that precludes federal funds from being obligated or spent, either temporarily or permanently.
It is important to note that there are legally available processes in place for the President to propose to Congress their desire to permanently cancel funding—for Congress’s consideration, including through the annual President’s budget request and the special procedures under section 1012 of the Impoundment Control Act. In addition, the special procedures in section 1013 of the Impoundment Control Act also allow for the temporary delay, known as a “deferral”, of certain funding during a fiscal year if one of three narrow conditions is met and the President transmits a special message notifying Congress of such a deferral. However, given the limited purposes for which deferrals are allowed under these Impoundment Control Act procedures, no President has pursued the deferral procedures under the ICA since President Clinton.
Nevertheless, at least three Day 1 Executive Orders call for unilateral action to delay the obligation or expenditure of enacted appropriations—that is, they call for unlawful impoundment, or put more specifically, they call for unlawful deferrals, which if withheld long enough can turn into unlawful cancellations—in violation of the Impoundment Control Act and Congress’s constitutional power of the purse. Ranking Member DeLauro put out a statement addressing the first two actions listed below, with a heavy emphasis on how the actions seek to centralize power at OMB over the authority of the relevant cabinet officials across the Federal government, and how these unlawful freezes create huge uncertainty for anybody that works with the Federal government.
1) Executive Order 14154 on “Unleashing American Energy”.
Among many policies ordered in the document related to the development of domestic energy resources, this Executive Order freezes all funding provided in the Bipartisan Infrastructure Law (“Infrastructure Investment and Jobs Act”) and the Inflation Reduction Act of 2022:
Sec. 7. Terminating the Green New Deal. (a) All agencies shall immediately pause the disbursement of funds appropriated through the Inflation Reduction Act of 2022 (Public Law 117-169) or the Infrastructure Investment and Jobs Act (Public Law 117-58), including but not limited to funds for electric vehicle charging stations made available through the National Electric Vehicle Infrastructure Formula Program and the Charging and Fueling Infrastructure Discretionary Grant Program, and shall review their processes, policies, and programs for issuing grants, loans, contracts, or any other financial disbursements of such appropriated funds for consistency with the law and the policy outlined in section 2 of this order. Within 90 days of the date of this order, all agency heads shall submit a report to the Director of the NEC and Director of OMB that details the findings of this review, including recommendations to enhance their alignment with the policy set forth in section 2. No funds identified in this subsection (a) shall be disbursed by a given agency until the Director of OMB and Assistant to the President for Economic Policy have determined that such disbursements are consistent with any review recommendations they have chosen to adopt.
The order tries to mask its own broad-reaching effect by focusing on electric vehicles in particular, but the reach of the freeze in funding encompassed all funding appropriated in either Act. In other words, on the face of the order, it would be accurate to say that:
This executive order freezes all funding provided in the Inflation Reduction Act or Bipartisan Infrastructure Law until the Director of OMB (the position to which Russ Vought has been nominated) and another White House political appointee decide otherwise.
By prohibiting the “expenditures”—also known as a payment or outlay—of any of these funds, this freeze applies not only to all relevant funding that has been appropriated but also to the subset of that funding that has already been obligated—i.e., the funding for which there already exists a legal liability on behalf of the United States Government to make a future payment (see GAO definition of disbursements, here). Even if a private company, nonprofit entity, State, city, or county has done work for the Federal government to carry out these laws, the President’s Executive Order essentially says “do not pay them until OMB says so.” The Executive Order says they may review this over the next 90 days, but this order does not automatically unfreeze the funding at any point.
The broad reach of this order was seen on day 1, with mass confusion both across the Federal government and among stakeholders that engage with it. We heard confirmation from State Departments of Transportation that Federal reimbursements for work conducted with Highway Trust Fund dollars was temporarily frozen under this Executive Order, before being reversed hours later. Subsequently, OMB had to publish a Memorandum (OMB M-25-11) purporting to narrow the effect of the President’s unlawful freeze—we are aware, however, that this does not, in reality, clarify what Federal programs and funds are safe or at risk, maintaining the high degree of uncertainty that faces every company, nonprofit organization, and state and local government that has any stake in either of those laws and in many cases is likely to already be legally owed funding from those laws, including for services already provided.
2) Executive Order on “Reevaluating and Realigning United States Foreign Aid”.
Like the Executive Order above, and like the unlawful freeze on funding for the Ukraine Security Assistance Initiative in 2019, this executive order calls for an unlawful freeze on all “foreign development assistance” for an executive branch review of “consistency with United States foreign policy.” This freeze is ordered by the President to be carried out through the Office of Management and Budget’s apportionment process.
Congress assigned the responsibility to the President, which has been delegated to OMB, to apportion enacted appropriations to agencies to prevent deficiencies and to protect Congress’s power of the purse, not to cede it to the executive branch. Apportionments are legally binding budget decisions issued by OMB under title 31 of the U.S. Code. Officials responsible for violating an apportionment may be subject to administrative discipline, including suspension without pay and termination, and the knowing and willful violation of an apportionment carries with it criminal penalties under the Antideficiency Act. Even when an apportionment issued to an agency is itself ultra vires—i.e., unlawful—because it, for example, unlawfully impounds funds from an agency, agency budget and program officials then each face a decision between (i) following the apportionment directive and participating in unlawful impoundment and (ii) disregarding the apportionment (because it is ultra vires) and prudently using the funds consistent with the law, thereby risking that they will be referred, by OMB officials or others, to the criminal division of the Department of Justice for violating an apportionment. And, it is critical to note that this is precisely the reason that apportionments are Russ Vought’s favorite tool for unlawful impoundment and is what he meant in Project 2025 when he stated that apportionments were an indispensable tool for overriding agencies and the only tool powerful enough to do so. Unlawful apportionments put agency officials between a rock and a hard place personally and professionally, and Russ Vought believes that this should be exploited fully and completely to take unilateral action without regard to Congress, the Constitution, and our rule of law system.
Sec. 3. (a) 90-day pause in United States foreign development assistance for assessment of programmatic efficiencies and consistency with United States foreign policy. All department and agency heads with responsibility for United States foreign development assistance programs shall immediately pause new obligations and disbursements of development assistance funds to foreign countries and implementing non-governmental organizations, international organizations, and contractors pending reviews of such programs for programmatic efficiency and consistency with United States foreign policy, to be conducted within 90 days of this order. The Office of Management and Budget (OMB) shall enforce this pause through its apportionment authority.
(b) Reviews of United States foreign assistance programs. Reviews of each foreign assistance program shall be ordered by the responsible department and agency heads under guidelines provided by the Secretary of State, in consultation with the Director of OMB.
(c) Determinations. The responsible department and agency heads, in consultation with the Director of OMB, will make determinations within 90 days of this order on whether to continue, modify, or cease each foreign assistance program based upon the review recommendations, with the concurrence of the Secretary of State.
(d) Resumption of paused development assistance funding. New obligations and disbursements of foreign development assistance funds may resume for a program prior to the end of the 90-day period if a review is conducted, and the Secretary of State or his designee, in consultation with the Director of OMB, decide to continue the program in the same or modified form. Additionally, any other new foreign assistance programs and obligations must be approved by the Secretary of State or his designee, in consultation with the Director of OMB.
(e) Waiver. The Secretary of State may waive the pause in Section 3(a) for specific programs.
To summarize: this order, like the first one above, takes all funding decisions for foreign development assistance out of the hands of State and USAID, and instead places them under the purview of OMB. The President explicitly directs that OMB take steps to make these decisions appear legally binding on career officials (which means [uscode.house.gov] threatening them with potential referral to the Department of Justice’s criminal division if they push back, as described in more detail above).
Further, note the “Waiver” authority in section (e) above. It contends that the Secretary of State may waive the unlawful freeze. However, the Secretary of State is not an apportionment official, and so a waiver from them would not be able to countermand an apportionment action from OMB, as described above. Again, another example of promoting the Director of OMB over the head of the Secretary of State in the operation of his own programs.
In addition, like the unlawful Executive Order on the bipartisan infrastructure law and Inflation Reduction Act, the broad reach of this foreign development assistance freeze is not well understood, and is potentially vast. Tuesday evening, January 21, the Acting Administrator of the United States Agency for International Development sent out instructions to “immediately pause all new…commitments and new or incremental obligates.” The Administrator’s guidance further threatens the freeze of disbursements (again, payment for work that is already legally owed to somebody), and includes humanitarian assistance. The Administrator noted that program officials could request a waiver for emergency humanitarian assistance—it is unclear if any such waiver would be granted by the Administrator, but in any case, that waiver would be undercut by the same OMB-sized hurdle facing Secretary Rubio (as explained above).
One would be hard-pressed to imagine a more chaotic Day 1 retreat from the United States’ role as a global leader; freezing these international investments will lead our international partners to seek other funding partners – likely U.S. competitors and adversaries – to fill this hole and displace the United States’ influence the longer this unlawful impoundment continues.
3) Executive Order on “Protecting the American People Against Invasion” in particular section 17 and section 19:
Sec. 17. Sanctuary Jurisdictions. The Attorney General and the Secretary of Homeland Security shall, to the maximum extent possible under law, evaluate and undertake any lawful actions to ensure that so-called “sanctuary” jurisdictions, which seek to interfere with the lawful exercise of Federal law enforcement operations, do not receive access to Federal funds. Further, the Attorney General and the Secretary of Homeland Security shall evaluate and undertake any other lawful actions, criminal or civil, that they deem warranted based on any such jurisdiction’s practices that interfere with the enforcement of Federal law.
...
Sec. 19. Funding Review. The Attorney General and the Secretary of Homeland Security shall:
(a) Immediately review and, if appropriate, audit all contracts, grants, or other agreements providing Federal funding to non-governmental organizations supporting or providing services, either directly or indirectly, to removable or illegal aliens, to ensure that such agreements conform to applicable law and are free of waste, fraud, and abuse, and that they do not promote or facilitate violations of our immigration laws;
(b) Pause distribution of all further funds pursuant to such agreements pending the results of the review in subsection (a) of this section;
(c) Terminate all such agreements determined to be in violation of law or to be sources of waste, fraud, or abuse and prohibit any such future agreements;
(d) Coordinate with the Director of the Office of Management and Budget to ensure that no funding for agreements described in subsection (c) of this section is included in any appropriations request for the Department of Justice or the Department of Homeland Security; and
(e) Initiate clawback or recoupment procedures, if appropriate, for any agreements described in subsection (c) of this section.
Highlighting in particular subsections (b) and (e) above for a few reasons: this “pause” is similar to the unilateral pause on all foreign development assistance, though it differs from that pause in that this one doesn't explicitly direct OMB to execute the pause through the apportionment process. Nevertheless, we will be monitoring OpenOMB.org to see if OMB inserts itself further into the management of programs at other agencies across the Federal government through additional abuses of its apportionment authorities.
It is also important to note the bolded portions above, because they underscore how OMB and the Trump Administration is intent to unlawfully impound funding at all stages of the Federal funds management process, both before and after legally binding commitments have been made, directly undermining the rule of law in this country.