The debate over impoundment, the president’s refusal to spend money appropriated by Congress, has become prominent in our political discourse. Critics call it a dangerous power grab, while supporters hail it as a necessary tool for fiscal discipline.
One thing is certain: Impoundment isn’t new. Previous U.S. presidents exercised impoundment as a matter of course. Franklin D. Roosevelt, Harry S. Truman, and Dwight D. Eisenhower all impounded funds when they deemed it appropriate. Even Thomas Jefferson employed the practice.
Richard Nixon’s aggressive impoundment prompted Congress to pass the Congressional Budget and Impoundment Control Act of 1974, effectively stripping the executive branch of this authority. Further complicating the issue, the U.S. Supreme Court ruled in Train v. City of New York (1975) that the impoundment power cannot be used to frustrate the will of Congress.
The act created the procedural structure by which the executive reports impoundments, Congress then considers and reviews impoundments, and it issues approvals or disapprovals. It will be interesting to see whether the federal courts feel that the Trump administration’s cuts are consistent with those procedures and with the Train v. City of New York decision.
Unfortunately, we are now faced with record deficits and ballooning debt, so arguably it is time to reconsider impoundment. After all, in nearly every other sector — business, state governments, even household budgets — spending below an allocated amount is seen as responsible stewardship, not a radical act. This applies to both chief executives and further down the chain of management.
Supporters of reviving impoundment point out that in the private sector, unnecessary or wasteful spending will often lead to changes in management. Although “firing” a president, governor, or agency head is not so easy to accomplish, political accountability remains a primary tenet of government.
Mitch Daniels, who was known as “The Blade” for his cost-cutting as head of former President George W. Bush’s Office of Management and Budget, offers a compelling example. As governor of Indiana, he aggressively employed “allotment” (impoundment by another name) to keep Indiana’s budget balanced. This authority was tied to changing circumstances and program effectiveness, and ultimately, Daniels was able to restore the state’s financial health and secure a coveted AAA credit rating.
Interestingly, he points out that many legislators who decry impoundment in principle might find it politically convenient in practice. A legislator can publicly support high spending levels to satisfy interest groups while relying on the executive branch to make appropriate cuts: a political win-win.
Critics of impoundment argue that it diminishes Congress’s “power of the purse.” They fear that presidents would refuse to fund programs they oppose for political reasons while funneling money toward their own priorities. Furthermore, they argue, impoundment could create uncertainty and instability, particularly in areas such as infrastructure, healthcare, and social services, where predictable funding is critical. Certainly, wielding impoundment recklessly could validate these fears.
Daniels proposed adjustments that could make impoundment more palatable and workable. One is to allow Congress to veto any impoundment. Another is a trial period, allowing lawmakers to assess the effects of impoundment before deciding whether to extend it. Other alternatives could include authorizing impoundment for a limited period — for example, until a deficit reaches a specified goal — or explicitly exempting certain limited spending categories.
At the heart of the impoundment debate is a broader question: How can Congress possibly be highly specific about how to spend a budget of $6.7 trillion? Vast sums are allotted to governmental agencies with very limited visibility into how well they will be spent. Too much ends up going to non-governmental entities and the construction of “bridges to nowhere.”
INSIDE THE ESOTERIC CONSTITUTIONAL DISPUTE THAT COULD COMPLETELY TRANSFORM THE FEDERAL GOVERNMENT
Generally, only the most senior officials at agencies or departments have even the remotest sense of how well their budgets and expenditures are suited to their mission. Determining this balance is, by definition, an executive function. The Founding Fathers could never have envisioned the challenges to today’s congressional role in exercising the power of the purse.
Whether impoundment makes a comeback or not, one thing is clear: Ignoring the issue of runaway government spending that results from political horse-trading to fund pet projects is not sustainable. Impoundment, applied judiciously, seems a viable solution.
Henry I. Miller, a physician and molecular biologist, is the Glenn Swogger distinguished fellow at the American Council on Science and Health. Andrew I. Fillat spent his career in technology venture capital and information technology companies. They were undergraduates together at M.I.T.