The Power of the Purse I: Inter-Branch Transformations

David Super

     Charles I of England did not call Parliament into session because he desired its company or because he valued its counsel.  He called Parliament into session because he desperately needed money and because, under the Stuart Constitution, he had no other means of obtaining it.  This requirement eventually led to the ultimate check on his royal powers. 

     How remarkable it would be if the contemporary U.S. Constitution gave the President more financial autonomy than an English constitution resting on a far more absolutist, and overtly royalist, ideology.  This would be all the more remarkable in an era where Originalism is ascendant:  very few of the Framers were royalists, and even fewer allowed royalism to slip into their public communications.  President Trump has not yet reached the point where his powers clearly exceed those of Charles I, but the degree to which he has wrested the Power of the Purse away from Congress, and the scale of the changes within each branch of government in how fiscal prerogatives are exercised, are quite remarkable.  As someone once said in a somewhat different context, if we wish to understand true power in Washington, we must follow the money.  This post discusses how the President has wrested the Power of the Purse away from Congress.  Tomorrow I will analyze how changes within each branch have facilitated these changes. 

     Logically, the Power of the Purse has four components:  the power to say what revenues will be collected, the power to say what revenues will not be collected, the power to say what funds will be spent, and the power to say what funds will not be spent.  President Trump has significantly expanded presidential power in all four areas. 

     His most conspicuous revenue expansion has been his unilateral tariffs.  The Supreme Court struck down his sweeping “Liberation Day” tariffs on much of the world after they had been collected for ten months.  After defiantly blasting the Court, including his own appointees, President Trump then imposed another sweeping set of tariffs under a different legal rationale.  These, too, have been held unlawful in a lower court, but the President seems intent on imposing a new set of tariffs whenever he is prevented from imposing an old one. 

     Beyond this, the President has obtained ostensibly “voluntary” contributions from numerous entities outside of the federal government to fund his agenda.  Companies seeking regulatory concessions from the Administration, for example, have contributed heavily to building the President’s desired grand ballroom.  When state or local governments leverage regulatory approvals to obtain costly concessions from private businesses, the Supreme Court has called them “exactions” and struck them down as unconstitutional takings of private property without just compensation.  These are revenues.  And under the Miscellaneous Receipts Act, they must be – but apparently have not been – deposited in the Treasury and made subject to congressional appropriation.  The Act specifically prohibits depositing such funds in a bank. 

     President Trump also used the taxpayer-funded U.S. armed forces to replace Venezuela’s president with one who allows him to take a large share of the country’s oil revenues and place them in an account controlled only by the President.  Again, the Miscellaneous Receipts Act applies.

     Charles I had little desire to forego revenues, but President Trump inherited a government with a much stronger fisc – and seems quite indifferent to the fiscal position he leaves to his successor.  He therefore has sought to reduce taxes on his affluent allies.  Congressional Republicans shared this agenda and enacted the One Big Beautiful Bill Act last summer.  Although profoundly unwise, the Act raises no sweeping challenges to the constitutional order.  But President Trump has gone farther by preventing the Internal Revenue Service from enforcing revenue laws still on the books.  Part of has come through slashing IRS’s enforcement staff, leaving the agency hopelessly outmatched against wealthy individuals and corporations with complex tax situations.  This operates not very differently from the repeal of many Code provisions designed to curb upper-income tax abuse.  Although the Code prohibits the President and his entourage from influencing tax enforcement actions, news reports suggest that the Administration may be contemplating the grant of audit exemptions under the guise of settling litigation.   

     Quite apart from the public funds he has kept outside the Treasury, President Trump has repeatedly spent large sums from the Treasury contrary to law.  No apparent principle limits his willingness to disregard limitations on appropriations. 

     His cases against the federal government, which a federal judge flagged as potentially collusive, provide another means of accessing large amounts of Treasury dollars without going through Congress.  As I explained earlier, the “settlement agreement” negotiated between Trump-controlled plaintiffs’ lawyers and Trump-controlled defendants’ lawyers holds the distinction of disregarding parts of each of the first three articles of the Constitution (the Appropriations Clause, the Take Care Clause, and the Case and Controversy Requirement) as well as one of the amendments (section 4 of the Fourteenth).  The Justice Department’s press release says Acting Attorney General Todd Blanche has chosen to provide $1.776 billion to this fund for paying the President’s political allies without their proving any of the facts that Congress has required for claims against the federal government.  But nothing stops the President from directing Mr. Blanche to provide more funds without congressional appropriation or to expand the purposes for which they may be spent.

     Although the decisions to go to war with Iran and to take military action against Venezuela, Cuba, and others are commonly discussed in terms of international relations, they are also huge fiscal decisions.  By giving Congress exclusive authority to declare war, the Constitution ensures its comprehensive control over the nation’s finances.  President Trump’s disregard of this power further arrogates the Power of the Purse.  At some point, Congress will have little practical choice but to pay for the wars that were started without its authority.  The cost likely would be sufficient to reverse the devastating cuts to Medicaid and food assistance in last summer’s One Big Beautiful Bill Act, to establish a national child care subsidy program, or to make meaningful progress in shifting our energy infrastructure away from carbon. 

     The final component of President Trump’s claiming Congress’s Power of the Purse, impounding funds appropriated by Congress.  This may be best-known but least-understood of the Administration’s fiscal efforts.  OMB Director Russell Vought returned to office asserting presidential powers unheard of since the Supreme Court unanimously rejected President Nixon’s impoundments.  He followed that up by freezing funding for many domestic programs.  This global freeze was enjoin, withdrawn, and replaced by numerous more targeted, if no more justified or lawful, freezes on particular programs. 

     The picture at this writing is complex and confused.  A few programs did indeed suffer devastating unilateral, lawless impoundments, notably the U.S. Agency for International Development and the Minority Business Development Agency.  Others suffered narrower but still significant impoundments.  For still others, the Administration reported funds obligated but found a wide variety of gimmicks to keep the money from reaching its intended beneficiaries.  Some programs have seen their funds have been diverted to the Administration’s priorities.  For others, OMB has imposed practically unmeetable conditions that must be met before the funds are spent.  For still others, OMB has delayed spending without clearly stating that it intends the delay to be permanent.  And in a wide range of programs, the Administration has leveraged the threat of impoundments to coerce state and local governments and private grantees in ways not authorized by law. 

     Litigation’s results have been mixed.  The Supreme Court has sharply curtailed the ability to bring effective litigation but has not completely shut down potential recipients’ ability to sue.  The procedural obstacles it has placed in the way of litigants, and its resistance to allowing preliminary relief in funding cases, has left the Administration a relatively free hand for now.  But the Court has not clearly repudiated its prior decisions limiting presidents’ ability to arrogate spending powers to themselves.   

     The Power of the Purse has by no means fully passed from Congress to the President.  But the President’s actions suggest few obvious limits to his seizures of prerogatives the Constitution assigns to Congress.  It is difficult to identify a significant fiscal policy that the Administration has desired that it has been prevented from implementing.  So far, at least, Charles I would be most envious.

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