New Trump memo claims authority to ignore Congress

On Monday, the Trump administration issued an extraordinary memo ordering federal agencies to indefinitely freeze the "disbursement of all Federal financial assistance." The freeze was scheduled to take effect at 5 PM on Tuesday, according to the memo, authored by the acting director of the Office of Management and Budget, Matthew J. Vaeth.

Each agency has until February 10 to provide detailed information about every grant, loan, or financial assistance program covered by the memo. Even after submitting this information, the freeze continues "until OMB has reviewed and provided guidance to your agency with respect to the information submitted." Essentially, agencies are prohibited from spending money on Congressionally authorized financial assistance programs until the Trump administration reviews and approves each program. (Financial assistance provided directly to individuals, such as Social Security and Medicare, are excluded from the new directive.)

The stated purpose of the freeze is to prevent the "use of Federal resources to advance Marxist equity, transgenderism, and green new deal social engineering policies," which the memo describes as "a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve." The memo suggests that federal agencies are prohibited from spending money for these purposes because of a series of executive orders, such as Ending Radical and Wasteful Government DEI Programs and Preferencing, issued by President Donald Trump in the first days of his presidency.

The first issue with the memo is that the articulated policy is hopelessly vague. The Green New Deal is a set of policies that were proposed but never enacted into law. Marxism is a political philosophy, not a category of financial assistance programs administered by the federal government. There is no explanation of how an agency could determine which programs include these supposedly prohibited concepts.

The second issue is the process described by the memo is illegal. Once Congress passes a law that includes a financial assistance program and the president signs the law, the executive branch must execute the law. There is no exception to this rule for programs that allegedly support Marxism, transgenderism, or the Green New Deal. If Trump opposes any financial assistance program that Congress has previously funded, the legal course of action is to convince Congress to rescind the funding.

The Impoundment Control Act of 1974 provides the only legal mechanism for an administration to temporarily withhold funding for a program. Under the law, Trump could delay funding a program for up to 45 days if he first sends a message to Congress explaining why he believes funding should be rescinded. But if Congress does not pass legislation rescinding the funds within 45 days, the administration must disperse the funds. Trump has not sent any such message to Congress. As a result, the freeze of funds is illegal.

Trump, however, has surrounded himself with a group of radical advisors who believe that the president has the Constitutional right to "impoundment." This is the theory that the president can cancel any federal program authorized by Congress by refusing to disperse the funds. As a result, Trump and his advisors believe the Impoundment Control Act of 1974 is unconstitutional.

Former President Richard Nixon was the last president to claim the authority to impound Congressionally-appropriated funds. In the 1970s, Nixon unilaterally canceled billions in spending "for highways, water pollution, environmental assistance, drug rehabilitation, public housing, and disaster relief." The courts repeatedly struck down Nixon's actions.

The late Justice Antonin Scalia, one of the most conservative justices in the court's history, summarized the Supreme Court's view on impoundment in his opinion in the 1998 case of Clinton v. City of New York:

President Nixon, the Mahatma Gandhi of all impounders, asserted at a press conference in 1973 that his "constitutional right" to impound appropriated funds was "absolutely clear"... Our decision two years later in Train v. City of New York (1975), proved him wrong.

As law professor Steve Vladeck notes, the Government Accountability Office and the Justice Department have also flatly rejected the idea that the president has the authority to impound funds. Vladeck explains that there is a legal consensus that "Congress’s power of the purse… brings with it broad power to specify the purposes for which appropriated funds are to be spent—and that a broad presidential impoundment power would be inconsistent with that constitutional authority."

The Trump administration seems determined to challenge this consensus. The legal process has already started. A group of non-profits filed a federal lawsuit against the Trump administration yesterday. A few minutes before the 5 PM deadline, a federal judge issued a temporary injunction, meaning the memo will not go into effect for at least a few days. The legal dispute may end up before the Supreme Court.

Even a temporary freeze will have major consequences

The memo did not specify precisely what programs will be affected, but it could impact billions of dollars in federal spending. Programs that could be affected by the freeze include the National School Lunch Program, which “feeds about 28 million American schoolchildren each month” and Meals on Wheels, which “delivers about 250 million meals each year to more than 2 million seniors.” Other programs that could lose funding include disaster relief aid, assistance for homeless shelters, housing assistance, and education programs.

Diane Yentel, the chief executive of The National Council of Nonprofits, released a statement expressing concern about programs researching “cures for childhood cancer,” offering “safety from domestic violence,” and running “suicide hotlines” losing funding. “The impact of even a short pause in funding could be devastating and cost lives,” Yentel said.

According to a White House fact sheet posted to X by Washington Post reporter Jeff Stein, programs that provide “direct benefits to Americans [are] explicitly excluded from the pause and exempted from this review process.” The fact sheet claims that Medicaid, SNAP, funds for small businesses, Pell Grants, Head Start, and rental assistance will not be impacted.

But despite the White House’s claims, the Head Start reimbursement system was shut down in Connecticut yesterday, according to Senator Chris Murphy (D-CT). Head Start, which provides low-income children with access to preschool, “served 778,000 children in 2023.” Murphy said that the White House fact sheet was inaccurate and preschools in his state "cannot pay staff and will need to start laying off staff very soon and sending little kids home.”

Senator Ron Wyden (D-OR) posted on X that his staff had “confirmed reports that Medicaid portals are down in all 50 states following last night’s federal funding freeze.” Wyden called it a "blatant attempt to rip away health insurance from millions of Americans overnight and will get people killed.”

The White House said that the Medicaid outage was simply a technical problem. White House Press Secretary Karoline Leavitt posted on X that they were “aware of the Medicaid website portal outage” and the portal was expected to “be back online shortly.” The Medicaid website, however, warned of delays due to “executive orders regarding potentially unallowable grant payments.”

Nearly “a fifth of all Americans” receive health insurance through Medicaid.

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