White House Backs Down in Fight Over Foreign Aid Spending Cuts

The White House is no longer pursuing a plan to make last minute cuts to foreign aid spending, backing down to bipartisan pushback, avoiding a legal standoff and staving off a looming spending fight. 

The Office of Management and Budget was contemplating a rescission proposal between $2 billion and $4 billion at the State Department and the U.S. Agency for International Development, which could have blocked the agencies from spending the money before it expired. After facing outcry from members of both parties who said the move would have circumvented the congressional power of the purse and a legal decision that appeared to block the approach as illegal, however, Government Executive has learned President Trump decided not to move forward with the package. 

“The president has been clear that there is fat in our foreign assistance and we need to be wise about where U.S money is going,” a senior administration official said. “Which is why he asked the administration to look into options to doing just that.”

Ultimately, the official added, the White House determined, “It’s clear that there are those on the Hill who aren’t willing to join in curbing wasteful spending.”

The 1974 Impoundment Control Act allows the president to propose to rescind funding previously approved by Congress. Lawmakers have 45 days to consider the request and if they do not act to support the rescissions during that window, the request is denied. OMB can direct agencies not to spend the funding proposed for rescission for the entire 45-day period, regardless of when Congress acts.

With less than 45 days remaining in fiscal 2019, which will end Sept. 30, critics feared a rescission proposal would have enabled the administration to freeze out funds from ever being spent. The White House never made that request, but in a letter to both State and USAID earlier this month, OMB Associate Director for National Security Programs Michael Duffey asked for an accounting of more than a dozen accounts to determine how much in unobligated resources is still available. The letter temporarily froze spending on those accounts, which OMB subsequently lifted after reviewing the accounting data. The agencies were instructed to expend the funds from those accounts on a limited basis as OMB weighed a rescission proposal. 

The possibility of such a rescission was met with bipartisan and bicameral opposition, including from the top Democrats and Republicans in both the House and Senate Foreign Affairs Committees. House Speaker Nancy Pelosi, D-Calif., last week wrote to Treasury Secretary Steve Mncuchin to voice her opposition to the cuts and said it would violate the terms of a two-year budget deal she and the secretary had recently negotiated and Trump had signed into law. 

Also at issue was a legal opinion the Government Accountability Office put forward last year that found the president’s powers to rescind money to be “strictly limited.” The act’s legislative history, Supreme Court precedent and the constitutional framework of the legislative and executive branches “provide no basis to construe the ICA as a mechanism by which the president may, in effect, unilaterally shorten the availability of budget authority by transmitting rescission proposals shortly before amounts are due to expire,” GAO General Counsel Thomas Armstrong said. 

Armstrong added: “To dedicate such broad authority to the president would have required affirmative congressional action in legislation, not congressional silence.” He went on to say it would be an “abuse” of presidential power to place a new deadline on appropriations that differs from “the time period established by Congress in duly enacted appropriations legislation."

While OMB sent a letter to GAO to voice its disagreements with the agency’s findings and reiterate that it did have the authority to issue the rescission, the president ultimately opted not to engage in the fight. The White House floated a similar plan last year, but also opted not to follow through. 

Rep. Nita Lowey, D-N.Y., who chairs the House Appropriations Committee, said the White House could not have legally moved forward with the rescission.

"I am pleased that the Trump administration appears to be heeding bipartisan warnings of the potential devastating effects of rescinding congressionally approved foreign assistance," Lowey said. "This illegal proposal would have severely undermined American leadership, and it is good that it has been shelved."

Liz Schrayer, president of the U.S. Global Leadership Coalition, a group that has been out front on the fight against the White House’s rumored plans, also applauded the decision and specifically thanked State Secretary Mike Pompeo for standing up for his department. 

"After weeks of internal deliberations, smart policy has clearly won the day,” Schrayer said. “Americans can be pleased that the administration recognized the importance of these vital foreign assistance programs for keeping America safe and on the global playing field.”