There’s sort of a back-to-school vibe in Washington, D.C., today.
Just like America’s schoolchildren, our senators and representatives are returning from a summer break. They’ll be able to catch up with their friends and compare notes on what they missed.
And, of course, there’s always homework due the first weeks back. Maybe a book report or some math problems for the kids. For Congress: negotiating the U.S. government’s $1.8 trillion discretionary budget.1 No sweat!
Today is September 2, which means we are exactly four weeks — 28 days — from September 30, the last day for Congress to either extend government funding or plunge into a government shutdown.
If that doesn’t sound like much time, don’t forget that Congress also doesn’t work Fridays and is planning to take a week off for Rosh Hashanah in the middle of the month. That leaves 14 legislative days before the deadline.
In theory, before then, Congress is supposed to pass 12 different appropriations bills, which each outline government spending for different categories.2 But Congress hasn’t passed all 12 appropriations bills by October 1, the start of a new fiscal year, since 1997. Instead, lawmakers usually have to approve at least one continuing resolution (“CR”) to temporarily extend government funding at its current levels before the full appropriations bills can be hashed out.
The U.S. has been governing by CR for an entire year now. In September 2024, then-President Biden signed a stopgap bill to fund the government through December 20, kicking the can past that year’s elections. Then, as a lame-duck in December, Biden signed another CR extending funding through March 14. In March, President Trump signed a third CR to last until the end of the fiscal year. Not a single appropriations bill will have been enacted during Fiscal Year 2025, which ends on September 30.
Both appropriations bills and CRs are subject to the Senate filibuster, which means they require 60 votes — and bipartisan support — to advance in the upper chamber. During the most recent funding fight, Senate Minority Leader Chuck Schumer (D-NY) controversially ensured that the March CR would receive 60 votes, sparking fury from his fellow Democrats.
(Schumer’s reasoning was that a shutdown would further empower Trump to make unilateral decisions about government spending, a case that I comprehensively laid out shortly before the minority leader.)
All along, Democrats have made clear what would push them away from cooperating with Republicans again: if the GOP used the rescissions process to cancel previously agreed-upon funds by a party-line vote.
The rescissions process is codified in the Impoundment Control Act (ICA) of 1974, the Nixon-era statute that sought to ensure that presidents would spend appropriated funds exactly as Congress approved them. But the ICA included an exception: the president could submit a proposal, known as a rescissions package, requesting authority from Congress not to spend certain appropriated funds. The funds in question are then frozen for 45 days; if Congress approves the request during that time, the president doesn’t have to spend the funds. (But if 45 days expire without congressional action, the money has to be spent.)
Importantly, rescissions bills — like reconciliation packages — belong to the special category of bills that require only a simple majority to advance in the Senate. If we put all this together, that means: it takes 60 votes to approve spending (requiring bipartisanship), but only 51 to cancel it (which means Republicans can do so alone). Needless to say, that lopsided logic can lead to some skewed outcomes, whereby a majority party could agree to spend certain money as a concession to the minority in order to get an appropriations package across the finish line, but then use a rescissions bill to claw back that same spending in a party-line vote.
In July, Republicans passed a rescissions bill that did exactly that, rescinding $9.4 billion in spending for the State Department, U.S. Agency for International Development (USAID), and the Corporation for Public Broadcasting (CPB), which had been approved in the bipartisan string of CRs.
That has already pushed Democrats to the brink of calling for a shutdown. At the time, Schumer said it would be “absurd for [Republicans] to expect Democrats to act as business as usual and engage in a bipartisan appropriations process to fund the government, while they concurrently plot to pass a purely partisan rescissions bill to defund those same programs negotiated on a bipartisan basis behind the scenes.”
Just before Americans started tuning out for Labor Day weekend, Trump pushed the envelope even further.
It’s one thing to have congressional Republicans approve a rescissions package, which cuts Democrats out of the process but at least follows a path clearly defined by law. Trump has now upped the ante by using a tool known as a “pocket rescission.”
Remember before when I said that a rescissions request triggers a 45-day blackout period, during which the president isn’t required to spend the funds in question, while he waits to see if Congress will approve his request? Well, what if the president makes his request in the last 45 days of a fiscal year? If the fiscal year ends (marking the expiration of the funds), is the president freed from ever having to spend the money, even if Congress never OK’d the rescission?
A rescissions request in that final stretch, when the president legally doesn’t have to spend the funds for 45 days and then — oops! — the funds expire before the 45 days are up, is a pocket rescission.
Last Friday — with 32 days to go before the end of the fiscal year — Trump sent a rescissions request to the Hill. The White House didn’t even try to hide the fact that it wasn’t planning for Congress to take up the request. “Last night, President Trump CANCELLED $4.9 billion in America Last foreign aid using a pocket rescission,” the Office of Management and Budget wrote on X.
Not “asked Congress to cancel.” Canceled.
The Trump White House argues that a plain-text reading of the Impoundment Control Act says nothing to prevent pocket rescissions. It simply says a rescissions request freezes funds for 45 days. If the fiscal year ends, and those funds expire, during that period, well, what can the White House do? It was simply following the 45-day blackout period mandated by law.
The Government Accountability Office (GAO), the legislative watchdog agency charged with enforcing the ICA, says that pocket rescissions are illegal. Even if the text of the legislation doesn’t specifically prevent them, the GAO says, they run contrary to the spirit of the 1974 law (which was drafted to prevent unilateral presidential decisions on spending) and the broader constitutional notion of Congress wielding the power of the purse.
“The situation then, is a somewhat familiar one: A statute with a clear purpose was inartfully drafted, such that one of its provisions can be utilized to defeat its purpose,” the congressional scholar Phillip Wallach recently wrote.
A handful of congressional Republicans condemned Trump’s move, but only a handful. Senate Appropriations Committee Chair Susan Collins (R-ME) issued a statement calling the pocket rescission a “clear violation of the law,” although she didn’t lay out any plans to counteract it. Tellingly, her House counterpart Tom Cole (R-OK) has yet to respond to the pocket rescission, a stark reversal from decades of appropriators jealously guarding their terrain.
As is so often the case in the Trump era, the final decision will likely rest with the courts. A federal appeals court recently ruled that only the GAO can bring legal challenges over the ICA, raising the question of whether the congressional agency, which has called pocket rescissions “illegal,” would file a lawsuit to that effect. (Before you ask: the head of the GAO can only be removed by Congress, either through impeachment or joint resolution.)
For the moment, while the GAO mulls whether to sue (which it would, at least on paper, be doing on behalf of a Republican-led Congress which largely supports Trump’s move), the most immediate impact of the pocket rescission will be on the shutdown fight.
Back in March, Schumer described his decision to keep the government open as a “Hobson’s choice.” That is even truer today.
On one hand: Democrats could refuse to vote for a CR and march into a shutdown, during which Trump would have potentially unchecked power to decide which parts of the government stay open and which don’t (possibly without even the one saving grace Democrats have right: the ability to challenge his excesses in the courts).
On the other: Democrats would vote for a CR, and accept the fact that Trump can repeatedly undercut any spending agreement approved with bipartisan backing, using rescissions with the support of congressional Republicans and even waiting until the end of the fiscal year to use pocket rescissions by himself.
Neither route is very promising. Many Democratic lawmakers feel there isn’t much to be gained from a shutdown — but others feel there isn’t much point to having a minority party at all if it simply rolls over and lets Trump run roughshod over the federal budget without so much as a “nay” vote.
Over the next few weeks, Democrats will choose which of these paths to go down, either forcing a shutdown as a way to counter Trump’s (potentially illegal) fiscal maneuvers or voting to block one in hopes of avoiding the expanded trickery that could come with a funding lapse. It’s a lose-lose for Democrats — and a win-win for Trump.
Federal spending is split into two categories: discretionary and mandatory. Mandatory spending — mostly Medicare, Medicaid, and Social Security — rolls over from year to year, without Congress having to approve it annually. That makes up about two-thirds of the money the U.S. government spends each year. Discretionary spending is everything else.
Here are the 12 categories, which together make up the entirety of the government’s discretionary spending:
Agriculture, Rural Development, Food and Drug Administration, and Related Agencies
Commerce, Justice, Science, and Related Agencies
Defense
Energy and Water Development
Financial Services and General Government
Homeland Security
Interior, Environment, and Related Agencies
Labor, Health and Human Services, Education, and Related Agencies
Legislative Branch
Military Construction, Veterans Affairs, and Related Agencies
State, Foreign Operations, and Related Programs
Transportation, Housing and Urban Development, and Related Agencies
So, yes, the discretionary spending that Congress fights over every fall may only comprise one-third of what the government spends in a year — but I think you’d agree that the one-third includes some pretty important stuff!
Hi Gabe. Maybe the Senate Democrats could get a personal promise from four Republicans not to vote for rescissions. Then maybe a budget deal could be brokered. What do you think?
Oh....my.....goodness. Is this any way to run a country? Between my recent (much-belated) reading of PJ O'Rourke's very scary book, Parliament of Whores, and your close reading of government shenanigans, I am stunned that this country functions at all.