Five days before the fiscal year ended, the Trump administration moved to cancel $810 million that Congress had already approved. The cuts covered 11 accounts, including refugee assistance and housing counseling. The White House said the spending was wasteful or did not fit its priorities. Rather than wait for Congress to agree, the Office of Management and Budget held back the money as the deadline to spend it approached, using a maneuver called a “pocket rescission.”

The idea is to let the calendar do the work. Under the Impoundment Control Act, a president can ask Congress to cancel spending and temporarily hold the money while lawmakers consider the request. Congress gets 45 days of continuous session to decide. And if they vote and reject the president’s rescission request  – or don’t even hold a vote after 45 days – the money must be spent as it was approved. The trick here is the request comes just days before the funding deadline, and the administration argues it can hold the money until it expires at the end of the fiscal year.

That is not how the law works, according to the Government Accountability Office. In its September 29 review, GAO said the administration must make the money available before it expires unless Congress approves the cancellation. Republican Senator Susan Collins, who chairs the Senate Appropriations Committee, also called the move unlawful. The disagreement goes beyond whether these programs deserve funding. It is about whether the president must follow a spending law after signing it.

The pocket rescission is part of a larger fight over who controls federal spending. The Trump White House has sought to hold back money Congress approved. Agencies have also added requirements beyond those authorized by Congress, that recipients must meet to receive funding. The methods differ, but both give the administration more control over congressionally approved spending. How much can the administration change a spending decision that Congress has already made?

This week, GAO found that the Department of Health and Human Services illegally withheld more than $78 million in fiscal year 2025 funding for the Agency for Healthcare Research and Quality. Staff cuts, initiated by the administration, had slowed the agency’s grantmaking, but HHS had not sent a formal request asking Congress to cancel the money. GAO found that this was an unlawful withholding of funds, known as an impoundment. Congress had given it a pot of money to divide among activities allowed by law, rather than prescribing every grant. But the freedom to choose how to use the money did not include the freedom to leave it unused altogether.

Adding conditions to grants offers another way to control the money. A program can remain funded on paper while recipients face new hurdles to getting their share. Conditions are a normal part of federal grants, and Congress can give agencies room to write the details. Still, being put in charge of a program does not give an agency authority to write whatever rules it likes, or to write rules where it has not received congressional authority to do so.

In a 2025 case, a federal district court found that FEMA’s immigration-related requirements did not have a reasonable connection to grants for disaster relief, fire safety, dam safety, and emergency preparedness. The administration pointed to its broad homeland security mission as justification, but the court focused on what the grants were actually for as authorized by Congress. FEMA is now trying again. After it announced immigration-cooperation requirements for its 2026 grants, attorneys general from 21 states and the District of Columbia returned to court this week, asking a judge to block the requirements and arguing that FEMA was disregarding the earlier ruling.

The basic questions are straightforward. Did Congress give the agency authority to add the requirement? Does the condition reasonably relate to the program? Constitutional protections still apply, too. There are limits on pressuring states with threats to their funding. In the case of Obamacare, for example, the Supreme Court ruled that states could not be stripped of their existing Medicaid funding for refusing to expand the program.

As we like to point out, the Constitution gives Congress the power of the purse. Article I’s Spending Clause gives Congress the power to fund the “general Welfare,” and its Appropriations Clause says Treasury money can be spent only as authorized by law. Article II’s Take Care Clause requires the president to ensure those laws are “faithfully executed.” Agencies can fill in details where Congress gives them that authority, but running a program does not come with permission to rewrite its rules.

This has become a major battle as this White House seeks more control over spending Congress has already approved. The president can propose spending cuts and make the case for changing a program. Congress can agree and change the law. Until then, the administration must work within the authority Congress has provided. Simply calling something wasteful is not a constitutional permission slip.

To hear more about pocket rescissions, listen to TCS’s Budget Watchdog AF (All Federal) podcast.