Lawfare Daily: The Impoundment Crisis, One Month In

[Intro]

Eloise Pasachoff: For me, this is like a whole soup to nuts money thing. It's like refusing to spend, spending however you want in violation of law. And then also what, no matter what the law says, I'm just going to impose conditions based on what I think the right policy answer should be. I think that's super dangerous.

Quinta Jurecic: It's the Lawfare Podcast. I'm senior editor Quinta Jurecic with Eloise Pasachoff, a professor at the Georgetown University Law Center and Brookings senior fellow and Lawfare senior editor Molly Reynolds.

Molly Reynolds: We really are seeing just a full-scale assault on Congress's appropriations authority and then the various ways that that flows through federal operations and eventually into the hands of people who deliver needed services to the American people.

Quinta Jurecic: Today, we're catching up on the ongoing crisis over the Trump administration's impoundment of congressionally appropriated funds.

[Main podcast]

Eloise, you came on the podcast at the end of January to talk with me about what was then a burgeoning crisis over impoundments. I think we're now well past burgeoning and into whatever the next few stages are. And so I wanted to ask you back, along with, of course, Molly, because the crisis has continued to develop.

And I think listeners are probably more familiar with the idea of impoundment this time around than they might have been last time. But before we get too deep in the weeds, could you just give a brief overview of what impoundment is and why we're talking about it?

Eloise Pasachoff: Impoundment is the argument that the president has the right to not spend money that Congress has appropriated and that a president has signed into law. So that's the most basic theory.

We're talking about it now because the president and his team at OMB have come into office pushing a really aggressive and pretty novel theory that the president has a constitutional right to impound, kind of for any reason at any time that he wants to. So we've never seen this kind of move before, not even in the, the Nixon administration, which was the last time we were talking about impoundment a lot.

So I'm really glad we're here today focusing on all of the developments since the new administration came into office because the impoundment story is a big one, and it's, I think, only getting deeper.

Quinta Jurecic: Molly, I want to turn to you and put you in the hot seat to give an overview of what on earth has been happening over the last month—which I realize is kind of an insane ask—but what, why are, why are we talking about this now? And how has the ground shifted since the end of January?

Molly Reynolds: Sure. So I'm gonna I think lay out kind of three basic categories of things that have happened since the last time Eloise was on the podcast.

And right before the last time listeners were treated to a discussion of impoundment, we had this directive, a very broad directive that came from the Office of Management and Budget that placed a very broad freeze on many forms of federal spending. So I'm going to refer to this as the OMB funding freeze. And this basically told lots of agencies and then downstream from those agencies, lots of state and local governments, nonprofit organizations who rely on flows of federal funds, that that funding was, was on pause.

We have seen two sort of major cases pushing back against that funding freeze. One was brought by a coalition of nonprofit organizations that last week on Feb. 25, there was a preliminary injunction issued in that case saying that, you know, OMB could not, in fact, pause the funding to which these various nonprofits and other plaintiffs were entitled.

And the other major case was brought by a set of state attorneys general from Democratic led states. That case had a temporary restraining order issued at the end of January. And there have been, particularly in that case, a number of subsequent motions around issues related to whether the government is actually complying with the court's order to basically turn back on the money.

And we can talk more about the way in which I think we are seeing issues with the enforcement of actions by the courts crop up, but those are sort of the two big cases about the broad OMB funding freeze.

There's a number of other lines of litigation that I want to kind of touch on briefly because they're related to this question of congressional power, of spending power, even if they're not directly about the kind of biggest and most egregious effort by the executive branch to put a pause on federal funds.

So we have these lines of litigation that involve the administration's attempt to dismantle both the U.S. Agency for International Development, USAID and the administration's attempt to dismantle the Consumer Financial Protection Bureau, CFPB. So they're both cases where, you know, Congress has acted to create these agencies and the Trump administration is trying in various ways to dismantle them. In the case of USAID, try to take some of USAID's functions, move them to the State Department; in the case of the CFPB, it seems to just sort of is dismantling it all together.

And so there are again, these cases, while they're not directly on, kind of, can the president impound funds for any reason at any time, they bear on this question of sort of congressional power and decisions made by Congress as part of the appropriations process.

Because, you know, the last time Congress passed a large appropriations bill, which is a continuing resolution at the end of December 2024, you know, they kept funding USAID and, and the CFPB. There is, there's money that Congress has said is supposed to be spent on these agencies.

There's also a set of litigation broadly involving actions by DOGE, the so called Department of Government Efficiency. A number of these cases involve DOGE’s attempts to access particular streams of federal data and particular federal systems, including one involving the ability of DOGE to access the Treasury payment systems. And I raised this because if, when we think about the question of how can the executive branch, like brass tax effectuate the ability to pause funding, it interacts with these systems, both at individual agencies to generate payment files, send those payment files to the Treasury Department, and then the Treasury Department effectuates them. So, sort of, also worth putting that on the table.

And then the last thing that I'll say is we've also seen at individual agencies of various kinds the attempts to cancel individual federal grants and federal contracts. And so this is happening at the Department of Education. It's happening at the National Institutes of Health. It's happening any number of other places, you know. Much of my social network is in higher education, so you might imagine that those are, those are the ones that have risen to the top of, of, of my awareness. But the, we have agencies attempting to do this and then in some cases litigation around those as well.

That was a lot but just put that on the table in terms of what's happened in the last month.

Eloise Pasachoff: Can I intervene just on one thing? So I generally agree that those are the big categories. So it's the overall OMB funding freeze; it's the effort to dismantle agencies; it's the, issue of the DOGE payments, control of the payment systems; and it's then individual agencies going in and individually canceling things.

The one sort of addition I would maybe make on the USAID issue is that I think there is one of the USAID cases is not just about dismantling the agency, but actually is, I would call, squarely in the impoundment universe. And that's the combined DDC, cases in the district, for the District of Columbia that are against the day one executive order that immediately ordered a pause in all foreign assistance. And so as that's being worked out and there's a whole bunch of, you know, there was a TRO and then there are a whole bunch of follow-on orders to actually unpause the money and actually, you know, pay the money.

It's actually now pending at the Supreme Court. There's an administrative stay in place on part of the order, but I do take that one to be squarely in the impoundment category and possibly even more complicated in some ways than the OMB blanket funding freeze because while the president and his OMB team are developing this broad constitutional theory in support of a presidential power to impound based on general Article II ability to do what they want, the funding freeze in the foreign aids space has an additional component, which is a claim that the president has additional authority over foreign affairs, and so that there's even more heft to that argument.

So, so I don't wanna lose sight of the dismantling agencies. I do actually take to be an impoundment question, you know, firing employees and doing reduction in force—I, I take that to be impoundment. But the foreign aid spending is, I think, you know, really an important one that is, that's squarely up there with the, with the overall OMB funding freeze.

Molly Reynolds: Yeah, I  completely agree. And I think another thing to mention that the USAID case really illustrates well is that there, some of the USAID-related litigation is also over the idea that the government has stopped payment for services already rendered.

And so this idea that—and again folks who listened to Eloise's previous appearance on the podcast will recall that one of the things that ends up being really important in a lot of these cases is the exact sort of functional form of the agency and what it does and how it spends and its underlying authority. And so the idea that in the USAID case, because of the way USAID functions, a lot of what's at, or some amount of what's at stake is this question of, oh, we ask overseas partners to do X, Y, and Z, and then we pay them for it after they've done X, Y, and Z. And that is, that's sort of one model of how the federal government does things that's different than some of these other cases where we're talking about sort of grants that have yet to be dispersed that are also being canceled and paused.

And so, again, I, I bring this up just to illustrate that at the end of the day, we can have, we are having a big picture conversation and it's really important to sort of keep the big picture story, but a lot of in the individual cases of what's going to happen comes down to particular features of agencies, how they work and what their statutory authority looks like.

Eloise Pasachoff: That's great, and so I'll just put one more, crystallize one implication of all of that is that in a way the TROs, the temporary restraining order, preliminary injunction action going on in the overall OMB funding freeze space are almost all I think about forward looking actions.

So it's kind of like the states are and nonprofits currently have funding that is due to them in an ongoing way in the future and so the idea is that it is, it's a TRO based on sort of funding that needs to be put in place in the future, whereas the USAID stuff is all about being paid for backwards looking things.

And so the order in that case involves, did you owe this money as of Jan. 19, the day before the inauguration? Because if you did, that’s what the order is about.

Quinta Jurecic: So we have a lot of court cases, a lot of restraining orders and preliminary injunctions.

Eloise, I want to ask you how you think the courts have, have done. Give us a, you know, a, how many stars out of 10 would you give them in terms of handling this if we think of it as, you know, not just a lot of really naughty legal questions about whether the administration has, you know, the specific authority to withhold funding on X issue, but also a sort of question of separation of powers clash. How are they holding up?

Eloise Pasachoff: So I think they're overall doing a really good job. I think they are acting sort of in a good combination of slow and fast where they need be, and they're also not, I think, always blanket giving the plaintiffs everything they ask for. So they're sort of operating in a sense of fairness and equities to all parties, including the government who's making particular kinds of claims.

So, they're moving fast, for example, and sometimes issuing an administrative stay even before they can get to the TRO if there's going to be irreparable harm with immediate funding cutoffs. But then they're moving fast in terms of the defendants, they will let speed up the pace at which the filings happens that we can make sure that we actually are moving to resolve this pretty quickly.

So that's an example of you know, kind of fast, but they're also moving slowly in terms of trying to think through all of the arguments, and they're not, you know, sometimes they're—in fact, you know, there was supposed to be an argument that resolved a preliminary injunction this week, but they pushed it to next week because the parties needed more time to, you know, sort through exactly what the filings were going to be, so there's that kind of thing.

And then just in terms of not always granting the plaintiffs everything they want, there's all sorts of modifications of proposed preliminary injunctions based on, well, the defendants are claiming that this is in case. And so we're, we're actually not going to make them do that because we'll wait to see at the next stage.

So I think overall, I think there's been a real careful attempt to take quite seriously what's been going on and then to take also seriously when plaintiffs are coming back and saying, actually, no, there's noncompliance, I think that's another additional layer. of effort that the courts are making while, again, still trying to be respectful of the executive branch's prerogative.

So, for example, they haven't granted certain requests to hold defendants in contempt but are rather saying, no, we'll just give you a two day extension to sort of put this in place. So, overall, I think, I think there's really a lot of excellent work going on.

Molly Reynolds: I just, I have a question for Eloise to sort of follow up to temporarily usurp the hosting ability from Quinta. But, so for those of us who aren't lawyers, aren't sort of familiar with how this could unfold can you talk a little bit more about this idea of how the cases like the ones we’re seeing, the court can enforce its directive in the event in the event of noncompliance?

Because again, I think that particularly in some of the, in the OMB funding freeze case that involves the states, we have seen the states come back and say, you know, the court said you were supposed to do X, it does not seem, federal government, that you have done X. And then sort of what avenues are available to the, to the judge, to the courts at that point, in a case like the ones that we're dealing with?

Eloise Pasachoff: So I'm going to start by saying that one of the things that we learned in the first Trump administration is how much of our system of law and rule of law actually just requires a norm and norms and respect for coordinate and equal branches. So that's my way of saying, I don't think the courts actually have a ton of great options to enforce compliance.

So here I'm going to shout out a wonderful law review article written by a colleague of mine named Nicholas Parrillo, who's at Yale. He wrote a law review article, I don't know, five or six years ago. called something like “The Endgame of Administrative Law,” where he did a deep dive study into kind of non compliance with court orders and looking at the array of things that courts do.

And he basically concludes that courts go out of their way to try to not hold entities and government officials in contempt, but it preserves the ability possibly to, for that to be done. So along with contempt findings come, you know, the potential for individual fines and I think possibly even some criminal contempt sanctions, but some of those require enforcement by the U.S. Marshals. The U.S. Marshals are, of course, controlled, I think, in the executive branch. So it's sort of like a circular problem here.

So I'll just go back then to what I said at the beginning, which is that so much of our system of rule of law actually requires on respect for branches and norms of internally held law compliance. And when you kind of are coming up against a, an effort to thwart some of that or to usurp some of the role of the other two coordinate branches by the executive branch, I think you see a lot of complicated and not great options.

If I may throw in a little pitch for Article I here—since we've just been talking about Article III is what are the courts doing—I want to just say that, you know, another feature of our system is that the first branch of government, Article I, Congress, is actually supposed to play a really important role here. And that this isn't all supposed to be just thrown to the courts, and that the courts really aren't the arena where all of this is supposed to happen. In the ordinary course of things, Congress is supposed to resolve a lot of this through kind of the ordinary course of politics.

So here I will also throw out another great Law Review article written by Daryl Levinson and Rick Pildes called “The Separation of Parties, not Powers,” which theorizes that a lot of what the framers understood to be the case, that separation of powers would really be protected by the, you know, conflict, ambition, countering the ambition among the branches has been taken over by the idea of separation of parties instead.

And when you have unified government, as we currently do—unified government, kind of, no matter whether it's unified Republican or unified Democrat—the idea is that separation of powers itself sometimes works less well.  So if you were asking me to ask me to give Congress a score here on how well they are handling the usurpation of their powers, I would not give them a particularly high score.

Quinta Jurecic: Negative 10 stars.

Molly Reynolds: F minus, as one of my high school teachers used to say.

Quinta Jurecic: Exactly. But so, but before I, before I fully toss it to you, I want to lead in a little bit by kind of building off what you're saying, Eloise.

I think that, you know, as you say, the courts, the district courts, at least, have been as far as I can tell, doing a really good job. But there is a lot of frustration in the public—certainly I've seen it voiced that, you know, why aren't they moving faster? Why haven't they, you know, already hit the Justice Department with contempt orders? So on and so forth.

And my perspective, at least, has been to some extent that just the speed at which everything is moving is just not compatible with the normal requirements of the judicial process, that you really need to have, you know, you need time to write all these briefs to have all these hearings and the sort of urgency with which, you know, these, these groups that aren't getting their funding that they need this to be resolved is just, doesn't quite work with the timeframe of a court, which is exactly why the remedy for this is a political remedy and Article I, which has been doing basically nothing I think is, is fair to say.

So Molly, when we started this impoundment discussion in late January, I think there was this question of, will the Republican controlled Congress push back at all? In the intervening month or so, we've seen the confirmation of Russ Vought, —who's sort of the architect of this impoundment scheme, as the head of the Office of Management and Budget—which, I certainly read as a discouraging sign in terms of the willingness of congressional Republicans, at least, to really assert the power of the purse on their end.

At the same time, we have seen some Republicans maybe start to voice some kind of discontent, whether, you know, on Twitter posts, comments on background to political reporters. How, how do you gauge the sort of willingness at this point of Congress to push back as an entity? And has it increased at all over the course of the last month or so?

Molly Reynolds: Yeah, it's a, it's a great question. And as Quinta, Eloise, really anyone who's ever listened to me talk would say, I am an eternal optimist when it comes to the U.S. Congress, but they have, they have not performed especially well in this, in this context over the past month or so.

And so, Quinta, you're right to, to note that we had, we did see the confirmation of Russ Vought. And I think it's, it's worth noting that like Russ Vought is a true believer in what is happening here; that when Eloise started sort of talking about the idea that the executive should be able to impound at any time for any reason. You know, I think Russ Vought is, is a true believer in that theory of executive power.

And so, and then I think we also have folks who are involved in decision making here who are sort of less in it for a belief in that kind of expansive view of executive power and are more in it because they have, particularly on the Republican side of the aisle, kind of just an ideological opposition to, to things the federal government does. And it's less necessarily about the idea that this is an inherent power of the executive branch and more sort of in persecution of a particular or in prosecution, I should say, of a particular political agenda.

So you're right, Quinta, that we have seen some Republicans kind of come out and say, oh, I don't like that this particular piece or flow of federal funding that affects the people in my state or district in this particular way. We have seen a little bit of that. What we haven't really seen is a like full-throated vigorous defense of the power of Congress to write appropriations laws that are then faithfully executed by the executive branch.

And we are, we're recording this on March 4, the continuing resolution that funds discretionary operations across the federal government expires next Friday on March 14 and congressional negotiators are deep in negotiations to try and avoid a partial shutdown of the federal government at that point. Sort of talk more about that in a little bit.

And so I will say there's a little bit of, even if you were Tom Cole, who's the chairman of the Appropriations Committee in the House, or even if you were Susan Collins, who's the chairman of the Appropriations Committee in the Senate, and you did really want to push back, like maybe, maybe we're not, you're doing that and you're not talking about it. I'm not actually confident that that's happening, but I wanna, I wanna put that possibility on the table.

But yeah, I mean, I do think that we just aren't, we aren't seeing the kind of vigorous defense from Republicans in a broad based way of Congress's appropriations power. And, you know, for a long time, folks who've watched Congress have sort of described Congress as having three parties, the Democrats, the Republicans, and the appropriators. And the appropriators are sort of not standing up for their institutional interests in a way that they, I actually think, have for a long time.

Again, we'll sort of see how that develops, but that, that's, it's been quite notable to me, again as a person who's usually kind of a vigorous defender of the possibilities of the legislative branch.

Eloise Pasachoff: One of the most shocking things that I saw that Tom Cole was reported to have said, again, republican chair of the House Appropriations Committee, is he was quoted as saying something like, appropriations aren't law, they're just a directive of Congress.

I thought that was a really startling thing to say for a long time member of the Appropriations Committee and now chair. It is quite clearly a law, right? Appropriations has, have force of law. They, they go through both part, both houses of Congress, they are signed into law by the president, they receive a public law designation—there's just not a universe in which these aren't law.

And so I want to just be really clear that one can have, you know, vigorous disagreements about the policies in place and the merits of any individual amount of money. And you can really think that USAID is terrible and that foreign aid is a bad idea, and nonetheless think that actually it's Congress's job to make those decisions. And so that I think is an important point. And I, you know, that it's possible to have policy views against a thing, but also believe in kind of rule of law and the way the Constitution requires us to operate.

The other thing I'd say is that there's another famous—this is not a large article, it's a piece of political science—but another famous article called “Congress is a ‘They,’ not an ‘It’”. And so I do want to say that if you kind of disaggregate, you know, Congress as a whole into its constituents parts, I do actually think that the Democratic ranking member on the House and the vice chair in the Senate of the Appropriations Committees are actually standing up for institutional interest. Now, of course, there's political opposition as well embedded in that, but it is true that they are both talking about Congress's appropriations power and the rule of law.

And on that note, I'll also just say that when Biden was president and the Democrats controlled House and Senate, there was a new transparency requirement put in place on OMB in their requirement to disclose what's called their apportionments, which is the final legal step that needs to happen before agencies can have access to their appropriations that Congress has made. So there is recent precedent, even for the appropriators acting across party lines to hold you know, OMB and a member of the president to account for spending decisions.

So I, too, am an eternal optimist and I really want to believe the best in, you know, the capacity of our government officials to make good decisions, so I guess I still haven't totally given up hope because this seems like such a no brainer to me that your policy preferences are different from your rule of law values. I mean, I, I do this all the time when I teach my classes, right? It's not like about what I think about the merits of any individual policy, it's about let's talk about the different legal arguments. So, anyway, I did just want to say that.

Molly Reynolds: I should be clear that when I was, when I was giving Congress a bad grade, I was largely giving Congressional Republicans a bad grade.

And that I also think it's worth noting that it does seem like in the negotiations over how to avoid a possible shutdown, number one, that they've reached a point where it's actually not about the number, as best I can tell, anymore. They are mostly in agreement or close to an agreement on, like, how much should we be spending? That would be consistent with, again, like, even in recent highly partisan, highly polarized times, the ability of appropriators on both sides of the aisle to figure it out, to, like, come to some, some sort of eventual agreement on what it looks like, how much we should be spending on the discretionary budget.

The thing that's gotten them tied up—and it remains to be seen how they will get out of this, we can talk more about this—is a demand, I think a reasonable one, from Democrats that if they're going to vote for a continuing resolution, and in the Senate will need Democratic votes because of the filibuster threshold. In the House, it will almost certainly need Democratic votes because House Republicans do not have the votes within their own conference to pass a bill that spends, I would say, really any money from the federal treasury. Like at this point, there is a, there is a, there's a block in the House Republican conference who is just categorically unwilling to vote for any kind of spending bill that could possibly clear the Senate.

So they're going to need Democratic votes in the House. And so Democrats have been sort of demanding that a deal to keep the government open is going to need to, in some way, address what has been happening in the executive branch in terms of efforts to impound funds efforts to do whatever DOGE is doing all that kind of stuff.

And then we sort of get to two questions. One is a political question about whether Republicans are willing to, to do that or whether they are going to sort of dig in on the side of President Trump and say, no, I'm not willing to do that.

And then a sort of in some ways harder question ,is how do you actually write a restriction into a deal to keep the government open that would bind the executive branch, given everything we've just spent the first part of this podcast talking about in terms of the executive branches brazen willingness to disregard previously enacted congressional appropriations decisions.

Quinta Jurecic: Right. So I want to, I want to talk about what that leverage could potentially look like, because it has been confusing to me in trying to kind of game this out.

As you say, if the whole problem is that Trump isn't doing what Congress tells him to do, then how can you use an act of Congress to make him do things? And it's really not obvious to me what the answer is beyond some kind of commitment from congressional Republicans that they will take action if he breaches those commitments, which then again, it's not totally clear to me how you would enforce that either.

So not to say, you know, time for some game theory, but what, what are the options here? Like if, if you are in Hakeem Jeffries's seat, what is it that you can negotiate for?

Eloise Pasachoff: So I'll start, but Molly, I'm really curious what you have to say too.

So obviously, I think you're bargaining for your Republican colleagues to actually say that, you know, the deal is a deal and you can't do it. So that's one thing.

The second thing is, historically, there's been efforts to target kind of perks of executive branch leaders, you know, for non compliance. So it's sort of like head of blah, blah agency can't have, no funding can be used for the cell phone if blah, blah, blah, blah, blah is not in place. Or, you know, you can't use the money on the you know, the reception benefits or something like that. Like there'll be targeted limits on what the secretary's office can do. So that's another example of what might be put in place.

A third kind of example of what I think might be put in place is—so typically, it's really hard to sue directly over appropriations provisions, often because there's no clear person who has standing to enforce those restrictions. So I think what you'd want to do is be designing, both rights to sue and also constructing the language in a way that made individual recipients of funds eligible to sue.

Again, that just throws it to Article 3, though, and that has all of the problems that, you know, that I think are inherent in that. But those are some examples, I think, of the kinds of things that you'd want to be bargaining over.

Molly Reynolds: No, I completely agree. I think those are all possibilities.

I think another sort of thing that I put on the table is the possibility of trying to sort of to the extent that Democrats want to tie the broader impoundment questions to kind of what is what DOGE is doing, and as we were saying before, sort of what DOGE is doing is and is not directly related to these impoundment questions.

But there's also sort of the possibility of trying to kind of categorically defund the pot of money that the DOGE has sort of taken from in this kind of zombie way from the U.S. Digital Service. So that would be another place to try and kind of cut off one piece of what's happening.

That would be, I think that would be an interesting tactic in that again, kind of, Elon Musk's role in this overall, overall disruption in the flow of federal funds has its own political valence that's like a little bit different than this question of just broadly of executive power. And so that, that's the other kind of thing that I would I would put on the table.

I think on some level, the question is also about, it is about kind of what should Democrats be demanding, what could Democrats be demanding. It's also about if you make those demands and Republicans don't meet them, don't accept your demands, don't put any of these things in a measure to keep the government open then, you know, do you go over the cliff? Do you withhold your votes in a way that engineers a government shutdown?

And I think this is a hard question. I think it's a hard question for a couple of reasons. Number one, ideologically, the Democratic party is oriented towards a functioning federal government and functioning federal operations in the way that the Republican party is not.

And so, much like, you know—we're going to get to talk later this year a lot about the debt limit. When we get to that point, we'll get to talk about how there are in the Republican conference members who don't believe it would be such a bad thing to breach the debt limit. Similarly, there are plenty of Republican members who don't believe it would be such a bad thing to have a government shutdown in a way that's just very different than how Democratic members of Congress, and I think Democrats in the public, think about what the federal government does. So I think that's sort of one political challenge.

I think, secondly, there's a question of, like, if you shut down the government, what kind of deal would you make to turn it back on, to reopen the government? That's always a hard question in the case of shutdowns. And usually, in the case of a shutdown, at least in, in recent history, or has often involved the party that kind of engineered the shutdown having to fold or having to kind of find some outlet that makes them, that allows them to save a little bit of face.

Thinking here about the long government shutdown at the end of 2018 and the beginning of 2019, which was over funding for a border wall. Eventually they Trump got to sort of declare a national emergency on the southern border that spawned its whole own set of appropriations law questions that we could, we could do a whole other podcast on, but politically like that's what unlocked the ability to reach a deal to, to reopen the government is his ability to get to say he was doing this this thing. And so.

And then the third thing, and this is—I would love to get Eloise's thoughts on this—is this question of if there is a shutdown, how would the Trump administration actually approach a government shutdown? Eloise can talk about the Antideficiency Act, can talk about what generally constrains federal operations in the event of a government shutdown or of a lapse in appropriations if we're, if we're being technical about it. But I think there are real questions about what the Trump administration would actually do in that situation.

Quinta Jurecic: Yeah, and just to set this up for you, Eloise, you know, we've been talking this whole time about the problem of what happens when the executive branch is not doing what Congress says when it comes to the money. Until now, we've been talking about it in terms of the executive branch withholding money.

Now, to flip it on its head, we're going to talk about what happens if Congress has said there's not any money, or Congress has failed to provide a deal for there to be money, and the executive branch maybe spends it anyway. So, Eloise, let me kick it to you. What do you think might happen?

Eloise Pasachoff: Sure. That's exactly right. So let me set up a little bit about the legal framework, and then I can talk a little bit about what happened during that last shutdown that Molly was just talking about in 2018, 2019.

So the Appropriations Clause of the Constitution says that no money shall be drawn from the Treasury but in consequence of appropriations made by law. And so the Antideficiency Act is an act that dates from more than 100 years ago. dates all the way back to 1870. And Congress put that law in place to make sure that agencies weren't spending money that they hadn't been appropriated.

So the Antideficiency Act makes it impermissible for an individual officer or employee—it's done at that level. It's not about the agency level. It's at the individual person level. So it's impermissible for an officer or employee to commit in advance of an appropriation, any spending, or to commit in excess of an appropriation any spending. So the law also provides that there's an exception for emergencies involving the safety of human life or protection of property.

So in ordinary parlance—if there's can be such a thing as ordinary shutdown parlance, which maybe is a very D.C. kind of thing to say—but this is known as the, sometimes it's known as the essential employee standard, but it's really the accepted employee standard. So if you have ever flown and had been in an airport and have gone through security during a shutdown, the TSA agents are working, and that's because they're deemed essential, or they're deemed accepted under this exception for emergencies involving the safety of human life or property.

But the law also clarifies that that exception doesn't involve, and here I'm quoting, ongoing regular functions of government, the suspension of which would not immediately threaten the safety of human life or the protection of property. Okay, that's the quotation.

So here, let me just remind you what I said at the top of our conversation together, which is that the president has been developing this theory along with the, his team at OMB that, you know, it's the prerogative of the president to spend money in any way at any time that he wants to. And so we saw versions of this even in the first Trump administration.

So during that 2018/2019 shutdown, which I think was 35 days, which is the longest shutdown we've ever had, the executive branch made a lot of decisions—it's usually OMB who makes these determinations of who's accepted and what, what functions are accepted—and the, the administration did a lot of things that the Government Accountability Office, GAO, which kind of oversees appropriations law and issues appropriations law decisions about what the executive branch is doing.

So GAO ended up making a number of findings that the Trump administration's agencies had, had violated the ADA again and again. So for example, they conducted review of regulations during a shutdown, even though there was no sort of exception for human life or the protection of property. The National Park Service, GAO also said they kept some of that open beyond the scope of what the ADA would allow. IRS was processing tax returns and refunds, even though that has nothing to do necessarily with the, you know, protection of human life. There were a bunch of things like this that was part of the, the Department of Agriculture that kept things functioning for farmers and things like that.

So one, there were some allegations that the things that the administration were keeping open seemed partisan. They seem to be serving constituents that kind of were more favorable to them. And, you know, this was in part against the backdrop of some comments about how they didn't really care, the president didn't really care that there was a shutdown because, you know, the workers were all Democrats, things like that.

So GAO said that they violated it. And then, when GAO told the agencies that they were in violation, part of the Antideficiency Act then is that the agencies are then supposed to report to Congress that there's been Antideficiency Act violations.

And at that point, OMB during the Trump administration came in and said, we're just not going to report to Congress. So we don't think that those were Antideficiency Act violations. We have our own interpretations, interpretations that they never actually made public. So that's, you know, one question.

So it was kind of both a violation on the front end and on the back end, a violation keeping the government open in certain ways and then not reporting to Congress. But so what's the remedy for that? Well, again, the remedy is supposed to be a political remedy. So this is all supposed to be information to Congress to go back to adjust authorities or to, you know, punish the administration in the next budget round.

And this is why I think it's so dangerous, quite frankly, the administration's goal to say that the president has the inherent right to kind of do whatever he wants to do with spending—whether it's impound on, on the not spending side or to spend on the, on the, you know, going beyond the Anti Deficiency Act side— because once you're sort of, you know, flouting Congress on both ends. Plus, we haven't even talked about, because it's not really relevant to this episode, but I'll just say they're, they're sort of purporting to put all kinds of conditions in place on federal funding that is like—based on what statute can you put that in place?

Molly Reynolds: We didn't even talk about that piece of the litigation, because in a number of these cases, in addition to plaintiffs saying, you know, the executive branch does not have the power to, to stop this funding under its powers to execute congressional appropriations decision, it's, there are, in some of these cases, they're also arguing that the conditions that are being placed on federal funding are in violation of other things like the First Amendment.

So there's a set of, there's one of these cases, I think it's the non-profits case has at least one religious plaintiff who—a religious organization plaintiff—who said that this is a First Amendment violation and that sort of thing.

Eloise Pasachoff: That's exactly right, but it's also like a violation on the speech side-

Molly Reynolds: Yes, yes.

Eloise Pasachoff: -so regardless of the religious component, it's like, can you kind of this whole thing about, like, limiting to woke ideologies and transgenderism, and, you know, are there sort of First Amendment speech things wrapped up in that? So that's exactly right.

But there's a whole slew of other cases that, again, we haven't actually talked about, about can the executive branch just willy nilly kind of impose conditions?  And so, for me, this is like a whole soup to nuts money thing. It's like refusing to spend, spending however you want in violation of law, and then also what, no matter what the law says, I'm just going to impose conditions based on what I think the right policy answer should be.

I think that's super dangerous, and I don't really think, you know, I don't think courts can stop all of that. So that's, that's, again, why I go back to the, the kind of the Article I question.

Molly Reynolds: Yeah, and again, it just, when we think about kind of the structural forces that shape how Congress negotiates over appropriations choices in the contemporary Congress, we always have this threat of a shutdown as the thing that usually forces Congress to an agreement because in general, they view the costs of shutting down the government—and there I don't mean sort of the, I mean, there are monetary costs in preparing for and executing a shutdown.

But the sort of political costs, the cost to actual people of ceasing the delivery of various federal services—the costs outweigh the benefits that one side or the other might gain from, from engineering a shutdown. You're, you're not going to win more in the negotiations that come when the government is shut down.

We have seen shutdowns in in recent years; they have usually been, because some faction within one of the parties, usually within the Republican Party, is so dug in on a position and feels the need to really be seen as fighting for that position to the point that they go over the cliff, take us into a shutdown world.

But the executive branch's current behavior really upends all of these dynamics. It makes it much harder for Congress to reach an agreement because no one can trust that the executive branch is going to effectuate whatever agreement they reach. And it also fundamentally, this possibility of kind of further gamesmanship with what's excepted, what functions can continue in the event of a shutdown, kind of that looming possibility, also alters the calculus on the costs and benefits of engineering a shutdown.

And so, as someone who, who kind of tries to make sense of these sorts of things for a living, it's, it's very disorienting. And that's obviously before we get to the substantive consequences of possibly having a shutdown, what that would mean for individuals who rely on all of the things that the federal government does.

Eloise Pasachoff: Can I highlight a couple of other things that I'm watching that are in this space?

So, I've kind of so far been talking about the impoundment-y kinds of things, and we've been talking about the Antideficiency Act spending. We've also, you know, recently been talking about the conditions.

But there's a couple of other developments that I think are also really troubling and worth watching. And so, and they're a little bit DOGE related, but they're not entirely all DOGE related.

So last week, the week before maybe, New York City filed a lawsuit against FEMA for going into New York City's bank accounts and pulling out $80 million overnight. And it was basically on an allegation, you know, some sort of deep state collusion in kind of putting up migrants in luxury hotels. That was basically the X, the claims made on X that was going on.

And then the next day, 80 million was gone and there was no process and there was no going through the ordinary course of, you know, there's regulations in place that are supposed to be, that agencies are supposed to follow. So I think that's a really, really troublesome thing to watch. That if the government is now going to start maybe more broadly than FEMA—I don't know, this is the only example of this particular kind of thing that I've heard—but that is, I think, a new ballgame and very dangerous and really important to watch.

A second thing I'm watching is this kind of new development over the last couple of weeks where a private bank, Citibank, has frozen the bank accounts that are holding money from Inflation Reduction Act, EPA associated programs.  And the recipients, they're already all awarded, right? Citibank is holding that money because the money has been awarded.

And so the recipients are supposed to be in a place to be making further awards, subawards out of that money. And this private entity has basically apparently been directed to freeze the money. A senior federal prosecutor in DOJ resigned over that because she refused to open a criminal investigation because she said there was no probable cause of any crime in those accounts.

But this is another really dangerous, I think, elevation of the situation because now we're not even targeting, you know, the federal payment system, we're not targeting the recipient's payment system, you know, own accounts, but we're freezing their overall accounts that may hold other monies as well. And so I think that's really dangerous. That's not in litigation yet, but I can't but imagine that that is going to go to litigation.

Then the last thing I'll say is that a brand new development of last week is that there's a new executive order that's called implementing the DOGE’s Cost Efficiency Initiative that does two things as far as I can understand it. It requires each agency to build a system to record every payment made under a grant or contract, along with a brief written justification for that payment, and that has to be publicly posted.

And then in addition, within 30 days, each agency head is supposed to review each grant and contract, and then where appropriate and consistent with law, terminate or modify, in conjunction to, on the one hand, promote efficiency, and on the other hand, to promote the policies of the administration. And so that's supposed to all be done within 30 days. So, again, I can't but imagine that's not going to be litigated within 30 days, because that's a whole additional thing that's going on there.

There, one little minor thing is, there are already all, all sorts of payment systems that require this. So this a little bit seems inefficient to me. You know, what about USAspending.gov? This seems like a pretty serious duplication of effort in some way.

But again, I think it's just sort of this like perpetual consistent, yes, we know we're in litigation here, but no, the clawing back of FEMA doesn't affect that funding freeze thing, it's totally different. And yes, this cost efficiency thing is not connected to that because it's totally different, but it is just persistent and ongoing. And I think these are kind of three really big areas that are kind of the next frontier to watch

Molly Reynolds: I think just one thing to sort of like recap what Eloise has just said to take us back to the kind of the beginning of our conversation is I think on some level, the breadth is the point. That we really are seeing just a full-scale assault on, you know, Congress's appropriations authority, and then the various ways that that flows through federal operations and eventually into the hands of people who deliver needed services to the American people.

And so, you know, we've talked a lot about a lot of different things and I just want to sort of bring us back up to an even higher level and say that the fact that we've talked about so many different things, the fact that Eloise just put three things on the table, the last one of which I hadn't paid very much attention to, and like, I pay a lot of attention to this stuff, is just an illustration, I think, of the idea that to the extent that there is some strategy here, it really is a flood the zone strategy. How, how many different things can we get moving at the same time in order to be maximally disruptive?

Quinta Jurecic: Well, let's leave it there and then we can reconvene in a month or two and figure out where, where on earth things have gone. Eloise, Molly, thank you so much.

Molly Reynolds: Thank you.

Eloise Pasachoff: Great to be here. Thank you.

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