On June 3, President Donald Trump sent a package of $9.4 billion in rescissions to Congress for expedited consideration under Section 1017 of the Impoundment Control Act (ICA) of 1974. The House of Representatives reportedly plans to introduce, debate, and pass a bill to implement the President’s proposed rescissions as soon as next week. The Senate would have until mid-July to send the bill to the President for his signature.  While previous presidents have proposed rescissions, Congress has never fully deployed the ICA’s procedures to rescind appropriated funds.  Because the ICA provides a statutory limit on debate for rescissions bills in the Senate, the recissions process could be a powerful tool for a Congress and a President—when both chambers and the White House are under single-party control—to cut discretionary spending.

The Impoundment Control Act and Rescission Procedure

Congress adopted the ICA in 1974 to limit executive branch authority to decline to spend (“impound”) congressionally appropriated funds.  Until the Nixon Administration, presidents generally viewed appropriation levels as “ceilings” on permissible spending.  If a project came in under budget, an executive branch agency could simply return the leftover funds to the Treasury.  Presidents Truman and Nixon both used this impoundment power aggressively.  The ICA codified an assertion that spending of congressionally appropriated funds was not optional, requiring the president to send a “special message” to Congress specifying the amount of the proposed recission and the justification for why the funds should not be spent, before withholding funds. If Congress does not pass legislation to approve the President’s recommendation within 45 legislative days, the executive branch must then spend the funds and the President may not propose to rescind them again. 

The ICA specifically limits debate on rescissions bills on the Senate floor to 10 hours, meaning these measures are not subject to the Senate filibuster and may become law if passed by a simple majority vote in both chambers.  A rescissions bill can be amended, but amendments must be germane. If a rescissions measure passes through both chambers of Congress within 45 days of the president’s transmission of the special message, the president may impound the funds.

Congress has never in the 51-year history of the ICA deployed these procedures in full.  Instead, Congress can, and often does, rescind funding through ordinary legislation (including annual appropriations bills that are subject to the Senate filibuster, and budget reconciliation bills, which are not).  In several instances, the Senate has also approved rescission bills by unanimous consent, bypassing the filibuster but also skipping the ICA procedure.

History and Precedent

According to the Congressional Research Service, four presidents have submitted rescissions packages under Section 1017 of the ICA, but the procedure has never successfully been used on a partisan basis. Presidents Gerald Ford and Jimmy Carter used the rescission authority ten times, but those rescissions were not controversial and passed the Senate by unanimous consent. George H.W. Bush submitted $7.9 billion in rescissions in 1992, which also passed on an overwhelmingly bipartisan basis, with 404 votes in the House and 90 votes in the Senate. In his first term, President Trump proposed $15 billion in rescissions. The measure narrowly passed the House, 210 votes to 206, but failed in the Senate, 48 votes to 50. Consequently, Section 1017 has never successfully been used to rescind funds on a partisan basis. In current case, the President’s proposal would rescind funding from bills signed by his predecessor.

President Trump’s Rescissions Package

The President’s message recommends  $9.4 billion in rescissions, which White House Office of Management and Budget (OMB) Director Russell Vought has stated,  “would eliminate programs that are antithetical to American interests, such as funding the World Health Organization, LGBTQI+ activities, ‘equity’ programs, radical Green New Deal-type policies, and color revolutions in hostile places around the world. In addition, Federal spending on [the Corporation for Public Broadcasting (CPB)] subsidizes a public media system that is politically biased and is an unnecessary expense to the taxpayer.” 

Specifically, the proposed rescissions include:

Department of State

  • Contributions to International Organizations: $33,008,764
  • Contributions to International Organizations: $168,837,230
  • Contributions for International Peacekeeping Activities: $203,328,007
  • Contributions for International Peacekeeping Activities: $157,906,000
  • Global Health Programs: $500,000,000
  • Global Health Programs: $400,000,000
  • Migration and Refugee Assistance: $800,000,000
  • Complex Crises Fund: $43,000,000
  • Democracy Fund: $83,000,000

International Assistance Programs

  • Economic Support Fund: $1,650,000,000
  • Contributions to the Clean Technology Fund: $125,000,000
  • International Organizations and Programs: $436,920,000
  • Development Assistance: $2,500,000,000
  • Assistance for Europe, Eurasia and Central Asia: $460,000,000
  • International Disaster Assistance: $496,000,000
  • Operating Expenses: $125,000,000
  • Transition Initiatives: $57,000,000
  • Inter-American Foundation: $27,000,000
  • United States African Development Foundation: $22,000,000

United States Institute for Peace

  • (Pursuant to EO 14217): $15,000,000

Corporation for Public Broadcasting

  • FY2024 multi-year appropriation: $535,000,000
  • FY2025 multi-year appropriation: $535,000,000

Implications for the Federal Budget Process

If Congress successfully takes up and passes this rescissions package, the White House has promised there will be more to come. OMB Director Vought has also suggested the Administration may pursue “pocket rescissions”—freezing certain funds within 45 days of the end of the fiscal year.  Under this approach, the  budget authority would expire on September 30, whether or not Congress acts under the ICA.

In addition, while the rescissions process provides an expedited means of cutting spending without having to overcome a Senate filibuster, the ICA procedure is only available for discretionary spending. Mandatory spending, which constitutes the majority of federal outlays and is the prime driver of the federal debt, falls outside the scope of the ICA. The $9.4 billion in proposed rescissions is a small fraction of the $1.6 trillion appropriated for the current fiscal year. The limitations of the procedure were also pointed out by the Committee for a Responsible Federal Budget in 2018, when it noted that though President Trump had proposed $15 billion in rescissions, “because most of those funds would not have been spent anyway, the resulting reductions in actual spending would be just over $1 billion.”

However, past uses of Section 1017 are not representative of the tool’s potential. Despite the limitation on Senate debate, the ICA procedure has never been successfully used without broad bipartisan agreement. In the context of discretionary spending, it could be a very powerful tool for cutting federal spending in certain circumstances.  In the hands of an assertive president, whose party controls both chambers of Congress, the ICA allows Congress to repeal appropriations that passed a prior Congress, including spending passed with a 60-vote supermajority in the Senate, with simple majority support in both chambers.  This significantly empowers a party with unified single-party control to reject the spending decisions of their predecessors.  It may even be possible to appropriate and immediately rescind, replacing bipartisan appropriations with partisan ones. While it remains to be seen whether congressional Republicans have the votes within their own party to approve President Trump’s proposal, successful use of the ICA to cancel appropriations along party lines would mark an unprecedented approach to federal spending cuts and the birth of a novel tool for congressional majorities to leverage the threat of future rescissions in budget negotiations.

Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Gabe Neville Gabe Neville

Gabe Neville, a non-lawyer, helps clients navigate the complexities of federal policymaking and proactively engage the legislative and executive branches of government. Using an intimate knowledge of the government gained over thirty years in politics, Gabe helps clients understand policymakers, conservative politics, and…

Gabe Neville, a non-lawyer, helps clients navigate the complexities of federal policymaking and proactively engage the legislative and executive branches of government. Using an intimate knowledge of the government gained over thirty years in politics, Gabe helps clients understand policymakers, conservative politics, and the legislative and regulatory tools available to advance their agendas. He also advises on responding to congressional inquiries and invitations to testify.

Gabe supports clients in sectors as varied as mining, franchising, technology, and life sciences and has substantial experience advising on appropriations, critical minerals, energy, food regulation, health, human rights, intellectual property, labor, social media content moderation, telecommunications, tax, and international trade.

He joined Covington after nearly two decades as a senior congressional staffer and chief of staff to a senior Republican member of the House Energy & Commerce Committee. He previously worked as a Pennsylvania state legislative staffer, Republican campaign professional, and journalist.

Gabe has deep relationships in Republican politics and the conservative movement. As a congressional staffer he frequently chaired meetings of the Values Action Team (VAT) and attended weekly meetings of the Republican Study Committee (RSC). Gabe continues to work with these and other center-right organizations that constitute the base of the Republican Party and frequently drive its priorities.

Gabe was chief of staff to the chairman of the Energy & Commerce Health Subcommittee, which oversees a wide range of government health programs and issues, including public health; hospital construction; mental health and research; biomedical programs and health protection in general, including public and private health insurance; food and drugs; and drug abuse. The subcommittee has jurisdiction over federal agencies responsible for public health programs, regulation, and administration. They include the Department of Health and Human Services (HHS), the Food and Drug Administration (FDA), the National Institutes of Health (NIH), the Centers for Disease Control (CDC), the Centers for Medicare and Medicaid Services (CMS), and others.

At Covington, Gabe has prepared dozens of corporate executives, nonprofit leaders, academics, and nominees for congressional committee hearings. These range from routine policy hearings to high-stakes, high-profile congressional investigations.

He is the author of The Last Men Standing: The 8th Virginia Regiment in the American Revolution and many deeply researched articles on the Revolutionary War and the Founding Era.

Read more about Gabe NevilleEmail
Show more Show less
Photo of Matthew Shapanka Matthew Shapanka

Matthew Shapanka practices at the intersection of law, policy, and politics. He advises clients before Congress, state legislatures, and government agencies, helping businesses to navigate complex legislative, regulatory, and investigations matters, mitigate their legal, political, and reputational risks, and capture business opportunities.

Drawing…

Matthew Shapanka practices at the intersection of law, policy, and politics. He advises clients before Congress, state legislatures, and government agencies, helping businesses to navigate complex legislative, regulatory, and investigations matters, mitigate their legal, political, and reputational risks, and capture business opportunities.

Drawing on more than 15 years of experience on Capitol Hill and in private practice, state government, and political campaigns, Matt develops and executes complex, multifaceted public policy initiatives for clients seeking actions by Congress, state legislatures, and federal and state government agencies. He regularly counsels and represents businesses in legislative and regulatory matters involving intellectual property, national security, regulation of critical and emerging technologies like artificial intelligence, connected and autonomous vehicles, and other tech policy issues. He also represents clients facing congressional investigations or inquiries across a range of committees and subject matters.

Matt rejoined Covington after serving as Chief Counsel for the U.S. Senate Committee on Rules and Administration, where he advised Chairwoman Amy Klobuchar (D-MN) on all legal, policy, and oversight matters before the Committee, particularly federal election and campaign finance law, Federal Election Commission nominations, and oversight of the legislative branch. Most significantly, Matt led the Committee’s staff work on the Electoral Count Reform Act – a landmark bipartisan law that updates the procedures for certifying and counting votes in presidential elections—and the Committee’s bipartisan joint investigation (with the Homeland Security Committee) into the security planning and response to the January 6th attack.

Both in Congress and at Covington, Matt has prepared dozens of corporate and nonprofit executives, academics, government officials, and presidential nominees for testimony at congressional committee hearings and depositions. He is a skilled legislative drafter who has composed dozens of bills and amendments introduced in Congress and state legislatures, including several that have been enacted into law across multiple policy areas. Matt also leads the firm’s state policy practice, advising clients on complex multistate legislative and regulatory matters and managing state-level advocacy efforts.

In addition to his policy work, Matt advises and represents clients on the full range of political law compliance and enforcement matters involving federal election, campaign finance, lobbying, and government ethics laws, the Securities and Exchange Commission’s “Pay-to-Play” rule, and the election and political laws of states and municipalities across the country.

Before law school, Matt served in the administration of former Governor Deval Patrick (D-MA) as a research analyst in the Massachusetts Recovery & Reinvestment Office, where he worked on policy, communications, and compliance matters for federal economic recovery funding awarded to the state. He has also staffed federal, state, and local political candidates in Massachusetts and New Hampshire.

Read more about Matthew ShapankaEmail
Show more Show less