Holding the purse strings: How Trump’s pocket rescission has turned $4 billion in foreign aid into a test of executive power
By: Hannah Kim
Edited by: Isabella Canales and Oscar Guzzino
For the first time since 1992, a President of the United States invoked the Impoundment Control Act (ICA) of 1974 to send a “special message” in the form of an Executive Order. “Reevaluating and Realigning United States Foreign Aid,” Exec. Order. No. 14169, 90 Fed. Reg. 8619 (herein referred to as Foreign Aid Executive Order) rescinded funds intended for foreign aid, leaving over $4 billion in congressionally appropriated foreign aid hanging in the balance. [1] Although the “special message” framed this as a temporary suspension of federal aid, the State Department and the Secretary of State, Marco Rubio, have stated that unnecessary spending has been “prevented” and that many organizations will not receive foreign funding assistance through their grants. As of Thursday, February 6th, roughly 800 awards and contracts administered through USAID were cancelled. [2]
What might otherwise seem like a budgetary semantic is rapidly devolving into a test of constitutionality and the limits of executive power. This case has drawn unprecedented questions about the power that the Impoundment Control Act (ICA) offers the executive branch over congressionally approved public expenditure and the legality of pocket rescissions. The ICA has rarely been cited and thus never been considered in any depth by the Supreme Court, so what new legal questions has this case brought forth?
Earlier this year, U.S. District Court for the District of Columbia issued injunctive relief on a lawsuit filed by numerous nonprofit organizations. AIDS Vaccine Advocacy Coalition (AVAC) and Journalism Development Network, Inc. (JDN) filed against the U.S. Department of State, U.S. Agency for International Development (USAID), the Secretary of State and Acting Administrator of USAID (Marco Rubio), the Office of Management and Budget (OMB), the Director of OMB (Russell Vought), and President Trump. [3] The District Court ruled that the Foreign Aid Executive Order exceeded President Trump’s “constitutional authority,” [4] and directed the executive branch to provide the $4 billion of foreign aid to the plaintiffs.
Plaintiff AVAC, which supports the development and delivery of HIV prevention options and receives funding through a Cooperative Agreement (U.S. President’s Emergency Plan For AIDS Relief) valid until June 2026 with USAID, [5] was forced to halt its HIV prevention research program in Africa and began layoffs of its 46-person staff. [6] Plaintiff JDN, a global investigative journalism network supported by State Department grants, received stop-work notices that disrupted ongoing projects. [7]
However, in the most recent iteration of Department of State, et al. v. AIDS Vaccine Advocacy Coalition, et al., on September 26th, the Supreme Court stayed the district court’s order, temporarily halting its enforcement and thereby allowing the funding freeze to remain in place. [8] Following the stay, employers furloughed and laid off workers, [9] officials grounded Colombian anti-narcotrafficking helicopters due to a lack of fuel, [10] and researchers paused pediatric tuberculosis clinical trials in Uganda. [11] “When programs like the ones run by our clients are abruptly shuttered, the impacts are felt throughout the world—with the most vulnerable people bearing the deadliest impact,” said Public Citizen lead attorney Lauren Bateman while filing on behalf of AVAC and JDN. [12]
The administration’s citation of the Impoundment Control Act creates questions about its usage and the limits of executive control. The Trump administration cited the ICA in this case because it authorizes the president to send a special message to Congress to request that funding be cancelled. Congress, which holds the power of the purse and provides funding through appropriation bills, typically has 45 days to respond. [13] However, a president can effectively bypass this process through a “pocket rescission,” which occurs when the president asks Congress to rescind funds close to the end of the fiscal year, allowing the funds to expire before agencies can obligate them for new purposes. [14] As a result, the foreign aid funds expired without congressional action.
Is this legal? A pocket rescission allows a president to avoid spending the money regardless of Congress’s decision on the rescission request, effectively bypassing their power of the purse. The OMB (The Office of Management and Budget) and GAO (the Government Accountability Office) have conflicting interpretations of this question. For the OMB, Section 1012 of the ICA does not expressly prohibit the President from sending a rescissions request at the end of a fiscal year. [15] In the GAO’s view, Section 1012(b) contains an explicit directive that funds proposed for rescission must be released before expiration, which is at the end of the fiscal year: [16] “Any amount of budget authority proposed to be rescinded…as set forth in such special message shall be made available for obligation.” [17] Congress has not rescinded appropriations for foreign aid funding and stated that the money will not be spent. Under the GAO’s interpretation, this is explicitly contrary to the ICA, which establishes that the president must “abide by the outcome of the congressional impoundment review process.” [18]
The Trump administration further claims that allowing 501(c)(3) organizations to sue as plaintiffs undermines the authority of the Comptroller General to sue over presidential impoundments, [19] but no text in the ICA prevents plaintiffs from suing. In the ICA Disclaimer, “Nothing contained in this Act…shall be construed” as “affecting in any way the claims or defenses of any party to litigation concerning any impoundment.” [20]
Further, the historical records of the United States cite very few examples of pocket rescissions as permitted by the ICA in the first place. This means that courts have not yet decided on their legality. According to the Supreme Court’s Justice Kagan, “deciding the question presented…requires the Court to work in uncharted territory.” [21] It is a question untouched by the Supreme Court or lower courts, and it raises questions about “a presidential usurpation of Congress’s power of the purse,” [22] a constitutional right of Congress to provide budget authority to government agencies.
As Justice Kagan stated in the Supreme Court’s dissent on September 26th, 2025, at the heart of this case is the “allocation of power between the Executive and Congress over the expenditure of public monies.” [23] This decision is an interim administrative stay, not a final decision and may evolve into a larger question of constitutionality and the limits of executive power on congressional power of the purse, pending further legal developments.
Notes:
1. Foreign Aid Executive Order, Exec. Order. No. 14169, 90 Fed. Reg. 8619.
2. Karoun Demirjian and Aishvarya Kavi, “Trump Administration to Lay Off Nearly All of U.S. Aid Agency’s Staff,” (N.Y. Times), February 6, 2025, https://www.nytimes.com/2025/02/06/us/politics/usaid-job-cuts.html.
3. Complaint for Declaratory and Injunctive Relief, Department of State, et al. v. AIDS Vaccine Advocacy Coalition, et al., 25A269, (2025), 2.
4. Complaint for Declaratory and Injunctive Relief, 2.
5. United States Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act of 2003, Public Law 108-25, 108 Cong., May 27, 2003, 117 Stat. 711.
6. AVAC, “Nonprofits Sue Trump Administration,” (AVAC), February 11, 2025, https://avac.org/blog/nonprofits-sue-trump-administration/.
7. Complaint for Declaratory and Injunctive Relief, 4.
8. Department of State, et al. v. AIDS Vaccine Advocacy Coalition, et al., 606 U.S. 1, (2025).
9. Sara Cook, et al., “Rubio foreign aid freeze leads to USAID staff suspensions and contractor terminations,” (CBS News), January 28, 2025, https://www.cbsnews.com/news/rubio-foreign-aid-freeze-leads-to-usaid-staff-suspensions-contractor-terminations/#:~:text=Termination%20letters%20sent%20to%20two,joke%2C%22%20the%20source%20said.
10. David Pilling, et al., “Donald Trump’s foreign aid freeze sparks global funding crisis,” (Financial Times), January 30, 2025, https://www.ft.com/content/59e008d2-ca81-4a31-9e4a-fa10f7497797/.
11. Stephanie Nolan, “Abandoned in the Middle of Clinical Trials, Because of a Trump Order,” (N.Y. Times), February 6, 2025, https://www.nytimes.com/2025/02/06/health/usaidclinical-trials-funding-trump.html.
12. AVAC, “Nonprofits Sue Trump Administration.”
13. Impoundment Control Act, 2 U.S. Code § 683, 1974.
14. Pocket Rescissions and the Impoundment Control Act: Legal Authority and Options for Congress (2025), https://www.congress.gov/crs-product/LSB11374.
15. Pocket Rescissions and the Impoundment Control Act: Background and History (2025), https://www.congress.gov/crs-product/LSB11373.
16. Government Accountability Office, Testimony before the House Committee on the Budget: Proposals to Reinforce Congress’s Constitutional Power of the Purse, GAO-21-538T (Washington, DC: April 29, 2021), https://www.gao.gov/assets/gao-21-538t.pdf.
17. Impoundment Control Act Disclaimer, 2 U.S. Code, Section 1012(b), 1974.
18. Government Accountability Office, Testimony before the House Committee on the Budget.
19. Department of State, et al. v. AIDS Vaccine Advocacy Coalition et al., 5.
20. Impoundment Control Act Disclaimer, 2 U.S. Code § 681, 1974.
21. Department of State, et al. v. AIDS Vaccine Advocacy Coalition, et al., 2.
22. Department of State, et al. v. AIDS Vaccine Advocacy Coalition, et al., 2.
23. Department of State, et al. v. AIDS Vaccine Advocacy Coalition, et al., 2.
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