Last Thursday, in a letter to Speaker Johnson, President Trump declared his intent to save taxpayers approximately $5 billion by rescinding funds appropriated for – but not yet spent by – the State Department and the U.S. Agency for International Development (USAID).
In his “Primer: A Pocket Rescission Strategy to Cut Spending,” Wade Miller of the Center for Renewing America drives home an important fact: the Impoundment Control Act of 1974, also known as the ICA, equips the president with two levers to curb unnecessary budget authority – temporary deferrals, and rescissions. The rescission option allows the president to submit a special message to Congress identifying spending he deems unnecessary, along with his rationale and the fiscal details of each individual proposed cut, triggering an expedited 45-day review process.
Then the ball is in the Congress’ court. Both houses must affirm a president’s rescission request within 45 session days (that is, not days on the calendar, but days when the Congress is in session). If only one of them acts affirmatively, or neither of them does, then the funds must be obligated (read: spent) as originally intended by the Congress. But if both houses affirmatively vote within 45 session days to agree to the president’s request, then the funds are rescinded, and the money remains unspent.
But – and this is a very important “but” – if the fiscal year ends during the 45-day period, and Congress has not acted affirmatively to block the proposed rescission, then the funds expire as part of the normal budgetary process, because in general, unobligated funds at the end of a fiscal year lose their budget authority (that is, their authority to be spent).
(That’s why lots of people who get paid by the federal government – including members of Congress – get new phones and computers in the last few weeks of September, as the end of the fiscal year approaches.)
To review, if the executive branch has made it through most of the fiscal year and still has pots of unobligated funds lying around, and the president submits a rescission request regarding some (or all) of those pots of unobligated funds just days before the end of the fiscal year, and the Congress does not take affirmative action before the end of the fiscal year to deny his rescission request, then the budget authority for the unobligated funds lapses, and the “pocket” rescission stands.
Importantly, the ICA attaches no prohibition on the timing of the president’s submission of his rescissions request to Congress.
Miller is clear: “If the executive branch decides to use this process, the deployment of a rescission with fewer than 45 days remaining in the fiscal year is a statutorily and constitutionally valid strategy.”
Helpfully, Miller offers an example from history – in fact, from the days almost immediately following the enactment of the ICA in 1974. The very next year, President Gerald Ford submitted proposed rescissions to the Congress shortly before the end of the fiscal year, and the Congress did not act to block his proposed rescission of all of them before the end of the fiscal year arrived. In a December 1975 letter to the Speaker of the House and the President of the Senate, the Government Accountability Office (GAO) confirmed that two proposed rescissions totaling $10 million had lapsed and then provided a detailed explanation of the budgetary nuances surrounding Ford’s late-session rescission request, which has since come to be known as a “pocket” rescission. The GAO saw the pocket rescission as a “major deficiency” in the statutory language of the ICA and offered the top congressional leaders its thoughts on how to fix what it saw as a flaw.
Critics, including the Center for Budget and Policy Priorities, label this “major deficiency” a “loophole.” But even GAO concedes that it’s a legislative shortcoming, not an executive overreach. Congress has had half a century to close this so-called “loophole.” That it has failed to do so speaks volumes.
Let’s be clear: a pocket rescission isn’t a lawless power grab. Rather, it embodies an underutilized, lawful provision of the ICA. Just because no president since Ford has used the power doesn’t mean Trump can’t use it now. It just means the ax may be a bit rusty.
Of course, using the pocket rescission is politically bold. But so is delivering on promises to “drain the swamp.” In the face of a deluge of entrenched, agency-backed spending, the pocket rescission is one of the few tools left – sharply targeted, constitutionally sound, and politically achievable.
The time has come to bring fiscal discipline back. If Congress can’t – or won’t – act, President Trump will. Using the pocket rescission is legal, smart, and exactly the fiscally responsible move voters expect.
Jenny Beth Martin is Honorary Chairman of Tea Party Patriots Action.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
(Featured Image Media Credit: Screen Capture/PBS NewsHour)
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