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How Trump Could Circumvent Congress On Spending By Impounding Funds

An old imperial pretension at the White House may be rising from its grave. The Trump administration is sending signals that it may leave key Congressional appropriations, particularly for the State Department, unspent – in other works, conduct "impoundments" – triggering a battle royale with Congress and the public.

For example, the Trump administration had proposed a budget with a huge one-third cut for the State Department and the Agency for International Development. Congress largely ignored Trump's first-year budget proposal. It was too late, too unjustified, and unrealistic as an allocation of funds. Congress voted the necessary funds for State and AID to do their job.

But, now, it looks like the Trump administration may decide to ignore what Congress voted to fund on a broad and bipartisan basis and not spend all the money. As Senator Ben Cardin, ranking Democrat on the Senate Foreign Relations Committee, told Politico, "We've seen just too many instances these past five months ... where there is clear congressional intent and funds provided yet an unwillingness or inability to act."

The Trump administration has tried to promote the notion that it just wanted to see more spending at home rather than overseas. But, that appears to be just a cover for manipulating settled congressional appropriations to align with Trump's objectives. For example, there has been criticism of Secretary of State Rex Tillerson for failing to spend $80 million allocated by Congress to fight Russian and terrorist propaganda -- not a surprise given the Trump administration's relaxed attitude about Russia compared to a Congress that enacted more sanctions against Russia and restricted Trump's ability to relax the sanctions.

Another of the Trump administration's aims has been to cut AID spending, which they contend would free up money for reconstruction at home. But, many of AID's projects are, for example, in Afghanistan, where they serve a vital function alongside our military investment of lives. I went to Afghanistan as a Commissioner on the federal Commission on Wartime Contracting in Iraq and Afghanistan, and saw the vital uses of those funds, from bringing electricity to neglected areas, to the struggle to hold down opium production.

There are two ways for the Trump administration to subvert Congress's intent in appropriating. Trump could announce that he will leave congressionally appropriated funds unspent, a move that we have ti go back more than forty years to the Nixon administration to make sense of. Trump will be tempted to go this "express" route for the propaganda value of contrasting himself with the big bad allegedly "spendthrift" Congress. Moreover, from his perspective, by doing this loudly and expressly, he will direct attention to his asserted overall goal of making savings, rather than just toward his personal ideological goals of starving particular programs for funds.

However, President Nixon totally lost the battle of impoundments, creating a binding precedent. After Nixon announced the impoundments, Congress fought back by insisting on the appropriations. Nixon lost a pivotal Supreme Court case, Train v. United States. And, Congress enacted the Congressional Budget and Impoundment Control Act. This Act required him to submit any proposals for impoundments, defined as "rescissions" and "deferrals," for Congressional votes. This is a statutory framework that has worked well for forty years. If Trump uses it, he will win few of those necessary votes. If Trump does not use it, he is operating outside the very well-established law.

The second way is for Trump not to announce his cuts expressly, but to sneak them in by diverse ways. For keeping money unspent, the key agency is the Office of Management and Budget (OMB), and the management officials under OMB in each agency. The OMB Director, Mick Mulvaney, is a very savvy veteran of budget issues, and he will have management officials in important agencies who implement his directions. For this approach, the key is sophisticated work in the shadows. It includes taking heed of nuances between whether the appropriation provides that the funds "shall" be spent or just "may" be spent and asserting the power not to spend funds saying "may" because they are discretionary.

Another method is to "transfer" funds from one appropriation item to another one, which can be a big change that puts a whole program out of business. It may include "reprogramming" funds within an appropriation item, more fine-tuned than transfer, moving funding from one activity (allocation) to another. While this is a smaller change it can still starve some program that is out of favor.

In sum, a whole new chapter may be beginning in the friction between the Trump administration, Congress, and the public.

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Wednesday, 12 December 2018
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