On Jan. 27, President Donald Trump issued a memo that called for a temporary pause on funding for all federal financial assistance to programs associated with “foreign aid, nongovernmental organizations, DEI, woke gender ideology and the green new deal,” the memo reads.
This is just one of several measures the Trump administration has taken to pause and redirect federal funds, but it is also one of many that have been suspended.
Just two days later, the order was blocked by a federal judge and the White House rescinded the memo. But this instance begged the question: What exactly stopped Trump?
The answer lies in legislation that dates back to 1974.
The Impoundment Control Act
The Impoundment Control Act essentially prevents the president from outrightly withholding or impounding funds that have already been appropriated by Congress without approval. Rather than completely denying the president fiscal oversight, the act outlines two ways for the president to impound funds.
The president may issue a deferral to temporarily hold allocated funds with the intent to spend them later. Deferrals tend to be unrelated to the president’s political agenda, but congress can overturn them.
“The executive branch has a tremendous amount of power, and so if they also were to take on the power of the purse, then what else is there, really?” -Matthew Hitt, professor
But if the president wishes to withhold funds for agenda-related reasons, he can issue a rescission. The process involves sending a letter to the House and Senate appropriations committees with the order, to which they must then ignore, deny or approve. If the order is ignored or approved, the request moves to Congress, which then has 45 days to consider it.
Trump did not pursue either of these avenues prior to ordering a freeze on federal funds.
“You cannot just do a blanket pause of all federal outlays,” said Matthew Hitt, a Colorado State University political science professor. “The ICA is not nearly that broad.”
The 1975 United States Supreme Court case Train v. City of New York further established that the president does not have the power to withhold funding. Although the case does not have explicit constitutional grounding and does not specifically concern the ICA, Hitt noted that the ruling is in line with U.S. history.
“The Federalist Papers are very clear on this point.” Hitt said. “The executive does not have the power to levy taxes and appropriate funds, and to decline to spend a congressional appropriation is just that power in reverse. The power to not spend is the power to destroy.”
While historical precedent limits the executive branch’s power to withhold funds, Trump’s broader fiscal agenda, particularly in higher education, suggests that he may continue to test these boundaries.
How could Trump’s fiscal policy impact CSU?
Trump has indicated throughout his campaign and presidency thus far that he intends to reform higher education, which he said is “dominated by Marxist maniacs and lunatics.”
Aid that is sent directly to students, such as Pell Grants, is likely safe. Republican lawmakers proposed that cuts be made but have not made any changes so far.
“That would be an extremely radical move that would be, politically, really difficult for an administration to pull off,” Hitt said.
Instead, federal research grants appear to be at the forefront of federal assistance rollbacks. Trump’s executive order that restricts aid to any institution practicing diversity, equity and inclusion presents the most immediate challenge to CSU.
“If (a) grant has an explicit diversity, equity and inclusion component, some researchers on this campus might receive a stop-work order, which basically says, ‘Stop doing this research; stop spending money,’” Hitt said. “That can be really disruptive.”
Stop-work orders could impact the quality of education CSU students receive, as many professors could lose their ability to publish research and become tenured, Hitt noted.
“That has implications for the kind of expertise we have in the faculty and the kind of courses and research and knowledge that we’re able to offer,” Hitt said.
In a Feb. 8 update, Vice President for Research Cassandra Moseley said that some CSU research projects are currently under stop-work orders. But the university does not have to comply, according to a temporary restraining order issued by a U.S. District Court.
“Federal agencies are not permitted to block or terminate funding for grants, contracts or cooperative agreements based on the Office of Management and Budget directive or recently issued executive orders,” the statement reads.
While CSU will continue to receive funding for now, Trump’s plans for the ICA could be a major determining factor for the future of federal aid as a whole.
Future of Impoundment Control Act
Impoundment is not new to the Trump administration. During his first term, Trump allegedly attempted to withhold military aid from Ukraine, an issue that, subsequently, became central to his first impeachment.
Russell Vought, Trump’s former and current head of the U.S. Office of Management and Budget, founded the Center for Renewing America, which advocates for repealing the ICA. Vought continued his support for impoundment even after Trump’s first term, tweeting “Making Impoundment Great Again!” in 2023.
Vought was once again confirmed as the head of the OMB earlier this week and indicated during his confirmation hearing that he is still against the ICA. Hitt speculated that the OMB might try to repeal the ICA through the Supreme Court.
“The movement might be to try and force a case up to the U.S. Supreme Court, where they would then presumably try and overturn some of those precedents and say, in fact, that the executive does have this unilateral authority to decline to spend money that’s been appropriated by congress,” Hitt said.
According to confidential documents obtained by The Huffington Post, this is likely the case. The obtained OMB documents outlined a plan to impound funds and “seek legal precedent to affirm the President’s Article II powers under the Take Care Clause and Executive Vesting Clause.”
Should the Trump administration successfully reverse the precedent set in Train v. City of New York and consider impoundment to be permitted under Article II, Hitt said the executive branch would become the most powerful branch of government.
“The executive branch has a tremendous amount of power, and so if they also were to take on the power of the purse, then what else is there, really?” Hitt said. “Then the executive is the government.”
Roadblocks to Trump’s agenda
Until then, Trump is still subject to congressional approval, which Hitt said is uncertain.
“Doing things all by unilateral executive action is something a president does when they do not have the public approval and the political capital and the votes in Congress to do big, lasting, durable things,” Hitt said.
Hitt used the example of shutting down the Department of Education, something Trump said he would like to do.
“You need to get it through the House of Representatives, where the Republican Party, functionally, day-to-day basis, only has a few seat majority,” Hitt said. “Then you have to get every Republican on board, assuming all the Democrats would oppose it, and then you have a 53-47 margin in the Senate.”
From there, Hitt said Congress would likely try to attach the proposal to a reconciliation bill, which only needs a simple majority to pass in the Senate. If they could not use reconciliation, the disbandment of the DOE would need to pass with a 60% majority, a margin republicans do not have in the senate.
Furthermore, Hitt noted that some Republican members of Congress might prioritize their reelection over passing Trump’s policies.
“There are definitely some new Republican members of Congress who represent districts that are not solidly Republican or Democratic, who might have to make that calculation,” Hitt said.
For now, the future of federal funding remains unclear, as Trump has become the center of a much larger debate surrounding the power that the executive should be able to wield in federal budgetary decision making. If Trump’s legal challenge succeeds, it could redefine presidential power for future administrations, regardless of party.
Reach Chloe Waskey at news@collegian.com or on social media @CSUCollegian.
