As the fiscal year (FY) 2026 appropriations process gets underway, all eyes are on how Congress will respond to President Donald Trump’s recent decisions to freeze and cancel numerous Federal grants – a move that legal experts warn may be testing the boundaries of the 1974 Impoundment Control Act (ICA).
President Trump and the White House Office of Management and Budget (OMB) Director Russell Vought argue that the 1974 law is unconstitutional, stirring a debate over which branch controls the Federal purse strings.
At an event hosted by the Brookings Institution on April 16, legal scholars and appropriations experts explained that the future of the ICA – and the power of the purse – may hinge not just on the courts, but on whether Congress is willing to reassert its constitutional role.
“An appropriation is a law, just like any other law,” said Michael McConnell, a former Federal judge and the director of the Constitutional Law Center at Stanford Law School. “Once Congress decides that its appropriations are actually commands to spend money, in my opinion, the president is constitutionally obligated to carry out Congress’s wishes.”
The ICA restricts a president from cutting Federal funding without the approval of Congress. Under the law, the president can sometimes delay or withhold funding – not cancel it – but it requires that the president notify Congress before doing so.
However, the legal experts explained that those delays, or deferrals, cannot be based on policy disagreements.
“The whole business about the impoundment stuff is going to be, it seems to me, determined on: Is this a refusal to spend money because of a policy disagreement?” said Keith Kennedy, the former staff director of the Senate Appropriations Committee.
“The executive branch has lots of reasons not to spend money that are perfectly appropriate, but when Congress appropriates $2.9 billion for a Corps of Engineers construction, you better spend that money,” Kennedy stressed. “If the president says, ‘No, I’m not going to do it. I’m only going to spend a billion,’ that seems to me as a policy difference, and that’s arguable and actionable.”
Eloise Pasachoff, a professor at Georgetown University Law Center and a leading scholar on Federal government spending, said that she will be watching to see what Congress does in the FY2026 appropriations process.
“The question is, are they going to come back in any kind of meaningful way to hold the administration accountable for the spending problems that have just been taking place in this fiscal year?” Pasachoff said.
For example, she continued, “Are they going to are they going to put more limitations in? Are they going to tighten up restrictions? Are they going to take away money for the secretary’s office? So, there are various tricks to sort of make sure that we mean it for this program, but we are going to place limits on the secretary in different ways.”
If in fact, Congress does that, Pasachoff said the follow-up question will be: “Will the administration follow it?”
McConnell explained that, so far, “it’s not clear” if the Trump administration has impounded any funds. The president has “substantial discretion” to cancel individual grants, but McConnell said, “What he can’t do is cancel the overall spending.”
Looking ahead, McConnell predicted that a “test case” is coming from the Trump administration in which it publicly and formally asserts an impoundment authority. “And I think they’ll lose,” McConnell said.
Notably, the Government Accountability Office (GAO) has said it’s ready to take the Trump administration to court over the ICA if need be.
“We’ve already sent letters to the administration asking them to explain their legal position to us, and we will be making rulings as to whether or not these issues violated the Impoundment Control Act or not,” Comptroller General Gene Dodaro told lawmakers in late February.
“We need to be careful and thorough because the next step for us is to go to court ourselves,” Dodaro added. “When I go there, I want to win.”