What is the Impoundment Control Act and What is GAO’s Role?
The Impoundment Control Act of 1974 is the main legal mechanism for the President to seek to delay or permanently cancel federal funding once it has been enacted by Congress.
Today’s WatchBlog post looks at what an impoundment is and GAO’s role under the Impoundment Control Act (ICA).
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What is impoundment?
When the President (or any officer or employee of the executive branch), through action or inaction, delays or withholds enacted funding, that is an impoundment.
Congress holds the power of the purse—approving a budget and appropriating funds. The President and executive branch agencies are responsible for administering those funds.
Occasionally, the President may wish to delay or avoid spending some of the funds appropriated by Congress. This may be for a variety of reasons—for cost savings, policy disagreements between the President and Congress, and changes in relevant circumstances, to name a few.
Is impoundment legal?
It depends on how funds are impounded, the reason for that action, and the types of funds being withheld.
The ICA provides the only legal mechanism for the President to delay or withhold funding, not cancel it. This law requires that the President notify Congress before delaying or withholding funds. That notification is called a “special message” and must contain information such as the reason for the impoundment along with the estimated fiscal, economic, and budgetary effects.
For some types of impoundments, there are only a few permissible reasons to delay or withhold funds. There are also limits on what types of funding may be impounded. For instance, the President may not withhold Social Security and Medicare funding.
Impoundment is only legal when the President adheres to the procedures and limitations in the ICA.
Has impoundment been used before?
Yes. Special messages have been sent from the President to Congress many times. The ICA was enacted by Congress in 1974 in response to President Nixon’s refusal to spend certain federal funds. Since then, there have been 243 special messages from presidents of both parties to impound funds.
- From 1975 until 1985, there were 156 special messages
- From 1985 until 2002, there were 83
- From 2002 through 2017, there were no special messages
- In 2018, President Trump sent three special messages
- President Biden sent one special message, withdrawing a previous special message sent by President Trump.
How could impoundment affect federal agencies’ spending?
In general, when Congress approves funds, federal agencies are required to spend it. The President cannot legally withhold funds unless he follows ICA procedures. For example, the President may not simply refuse to spend funds because he disagrees with Congress’s policy choices without sending a special message.
However, the ICA does not prevent the President from pursuing cost savings. For example, we recently concluded that the Department of Homeland Security did not impound funds when a contract came in under budget. In fact, we routinely recommend cost saving measures to federal agencies and maintain a database of these recommendations.
What’s GAO’s role?
GAO has several responsibilities under the ICA. First, we review all special messages to ensure that they comply with legal requirements. We also investigate and report to Congress when the President withholds funds without sending a special message. And we provide informal assistance and formal legal decisions on impoundment issues at the request of members of Congress and agency officials.
The ICA authorizes the head of GAO, known as the Comptroller General, to file a lawsuit if the President illegally impounds funds.
Where can I learn more?
For additional information, see our Impoundment Control Act Resources webpage. We have issued many legal decisions interpreting the Impoundment Control Act. See our 2021 testimony on this issue. Our Principles of Federal Appropriations Law (chapter 2) summarizes some of these decisions.
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