HANNAH URÍA LABOVICK—On January 27, 2025, seven days into his second term as president, Donald Trump ordered the White House Office of Management and Budget (OMB) to issue Memorandum M-25-13, directing federal agencies to temporarily “pause all activities related to obligation or disbursement of Federal financial assistance.” Trump’s action ignited a firestorm of controversy, raising serious questions about executive authority and the separation of powers doctrine.
The directive, stemming from a flurry of executive orders followed by the OMB memo, was aimed at programs whose financial assistance had already been appropriated by Congress. While the order was rescinded two days later, Trump’s directive brings yet another question of the constitutionality of his actions to the forefront of the American dialogue.
Per Article I Sections 8 and 9 of the U.S. Constitution, Congress holds the power of the purse, i.e., Congress gets to make decisions about how much funding goes to whom and can direct how that funding should be used through appropriations bills. While the Constitution grants varied and vast authority to the President regarding other matters, the Constitution does not grant the President any power over money.
Further, the 1974 Impoundment Control Act (ICA) limits the President’s authority to withhold congressionally appropriated funds. This legislation was created specifically to close loopholes which previous presidents attempted to exploit to impound congressional spending. The ICA stems from Train v. City of New York, a case in which President Nixon attempted to prevent the Environmental Protection Agency (EPA) from spending its congressionally appropriated funds on projects fighting water pollution. The Supreme Court ultimately ruled the President had no power to overrule Congress by impounding funding.
On the eve before Trump’s freeze was set to take effect, U.S. District Judge Loren AliKhan issued a temporary restraining order (TRO) until February 3, which she then extended. A U.S. District Court Judge in Rhode Island, Judge John J. McConnell, Jr., also issued a TRO on the memo. Both judges’ decisions stem from at least two different lawsuits that have been filed by nonprofits and a collective of twenty-two states and the District of Columbia.
At their core, the legal issues in these cases include potential violations of constitutional powers and authority (including allegations of violating the separation of powers, the Spending, Presentment, Appropriations, and Take Care Clauses, and the First Amendment) as well as violating the Administrative Procedure Act.
The Founders created a separation of powers process because they did not believe one person should have discretionary authority over the entirety of the nation’s decisions, nonetheless its finances. James Madison warned that “the accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, self-appointed, or elective, may justly be pronounced the very definition of tyranny.” Trump’s recent actions have evaded Madison’s warning, challenging both the separation of powers doctrine and the greater institution of American democracy.
These cases will likely be appealed until they reach the Supreme Court. While the direct harms caused by the freeze attempt may be mitigated by the TROs and rescission of Memo M-25-13, concerns will turn toward the longer lasting implications of a Supreme Court decision that breaks from stare decisis and sets new limits, or a lack thereof, on presidential authority over federal spending. A Supreme Court decision from last spring may provide some insight on where the Justices will stand when it’s their turn to check the balance of power, with Justice Thomas’ opinion opening with “[t]he Constitution gives Congress control over the public fisc. . .” and continuing on to specify that “the principle of legislative supremacy over fiscal matters engendered little debate and created no disagreement.” But unfortunately, no one can predict how the highest court of the land will choose to interpret the Constitution under the new presidency.
The outcome of this legal battle could have far-reaching implications for executive power, congressional authority, and American democracy. As the courts grapple with these complex issues, the nation watches closely, aware that the resolution of this conflict could reshape the landscape of federal financial assistance and presidential authority for years to come.
