“The official definition of “impoundment,” per the Government Accountability Office (GAO) that oversees the practice, is “any action or inaction by an officer or employee of the federal government that precludes obligation or expenditure of budget authority.” In other words: any time someone in the federal government doesn’t spend money that Congress has ordered it to spend.
This takes two forms: rescission, and deferral. In rescission, the spending is simply canceled, while in deferral it is withheld temporarily, in theory to be spent in the future. Under the Impoundment Control Act, passed in 1974, both rescissions and deferrals can be passed by Congress at any time, and they can also be requested by the president. But any presidential requests have to be approved by Congress to take effect, and that has happened quite rarely.”
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“The GAO has also recognized a practice called “programmatic delay,” which it views as not technically impoundment but which is closely related. Programmatic delays occur when the government is trying to spend money Congress has instructed it to spend, but factors outside their control preclude this. The GAO has offered as an example a program in which the government is supposed to provide a certain amount of money in loans, but where there are few applicants so the program simply cannot lend out the total amount Congress has set aside for this purpose.
Another more recent example was Biden’s executive order upon taking office instructing a pause in the construction of border walls and fences with Mexico. While Congress had appropriated money specifically for border barriers, the GAO ruled that the Biden administration was merely “programmatically delaying” the project, because the delays were chalked up to environmental reviews and other hurdles that it was legally required to clear before continuing construction.
Programmatic delay does offer the executive branch some flexibility in spending, but only a bit. Otherwise, the Impoundment Control Act is very clear: The president cannot refuse to spend money that Congress has told him to spend. The GAO is empowered to challenge the president if it sees this limitation being contradicted, as it did when Trump withheld funds from Ukraine in 2019. In that case, the funds were eventually released and the incident led to Trump’s impeachment.”
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“The power becomes truly interesting, however, if Trump insists upon cuts that Congress will not approve. One could imagine a repeat of the 2017 fight to repeal Obamacare, except, when enough Republicans defect to doom the effort in Congress, Trump and Vought opt to simply impound funds for the Medicaid expansion and Affordable Care Act premium subsidies unilaterally. This would inevitably provoke a legal challenge that could make its way to the Supreme Court.”
https://www.vox.com/politics/388393/donald-trump-congress-impoundment-budget-supreme-court