Officials in the Trump administration are considering contentious measures to potentially block federal funds, previously approved by Congress, without needing lawmakers’ consent.
Flussel Vault, the White House Budget Chief, mentioned that a strategy dubbed “Pocket Resignation” is among the options under review as the administration seeks to trim federal expenditures.
However, even some Republicans express skepticism regarding this approach and its legality.
Here’s what you should understand about this concept.
What is Pocket Relief?
For years, Congress has withdrawn federal funds using approaches like the Annual Government Expenditure Bill. Still, the president also has the authority to initiate a specialized process to reclaim previously allocated funds, although this typically requires Congressional approval.
This month, Trump uniquely succeeded in securing such funds, with Congressional Republicans cutting approximately $9 billion from foreign aid and public broadcasting.
The Water Storage Management Act (ICA) stipulates rules for this process, enabling the administration to momentarily withhold funds for up to 45 days while Congress assesses the request. If Congress does not approve it, the funds must be released.
With the introduction of Pocket Relief, the president will issue a similar request to Congress within 45 days after the fiscal year’s end on September 30.
Essentially, some targeted funds can be held until they expire.
“At the end of the fiscal year, the money will vanish,” noted Vought, director of the Office of Management and Budget (OMB).
He further stated that “the withdrawal of the pocket is similar to a typical withdrawal, aside from the timing.”
How do they work?
Experts argue that this strategy could allow the administration to reduce funds available to various institutions without Congressional consent.
Bobby Kogan, a former Senate budget aide and senior director at the Left-Level Center for American Progress, shared an example where a program was allocated $10 billion to use by fiscal year 2025, but the administration managed to withhold some funds later in the year through this process.
“It’s illegal to deliberately lapse an entire bundle of it,” he stated. “While it might not be easy, if you do it, the consequences often arrive too late.”
Kogan also highlighted that in such situations, new funds can still be allocated as part of the budget agreements made to keep the government functioning. Often, Congress opts to maintain funds at current levels, allowing time for larger funding plans to be approved.
However, he added that the StopGup could allow for an additional $10 billion to be added to the program, though it still “lost money by 2025.”
Is it legal?
Some experts deem this tactic an “illegal reservoir,” while others see it as a “loophole” in existing budget regulations.
Richard Stern, a previous parliamentary employee and director at the Conservative Heritage Foundation, indicated that the legality of this approach is debated but acknowledged few courts have ruling on it.
“The whole process is relatively new in the legal landscape,” he commented.
Stern continued, “What people on the left see as unclear remains a battleground for court challenges.” However, he asserted that if the administration suspects fraud, it has the right to take action to address it.
Vought has included Pocket Resignation as a viable option in attempts to reduce federal spending, although he mentioned that the administration isn’t committed to employing it at this moment, continuing normal operations with Congress.
Critics, including Democrats, label this tactic as illegal, insisting that the ICA’s goals are clear. The Government Accountability Office (GAO) stated in 2018 that the ICA “does not permit withholding of funds due to expiration dates.”
“The law doesn’t suggest you can send special messages early in the year,” Kogan remarked, insisting this interpretation undermines the law’s purpose.
“What the administration is doing is finding ways to obtain funding against Congressional intent,” he asserted.
“Ultimately, the situation is that pocket rescinding is essentially an illegal reservoir,” he concluded.
What can Congress do?
If the administration decides to move forward with Pocket Resignation, experts observe that Congress might respond by targeting specific programs in the government funding bill or subsequent measures to keep the government operational after September.
Experts emphasize that further actions are necessary to restore funding for the programs impacted by this strategy.
Meanwhile, lawmakers are raising eyebrows concerning the legality of this approach. Other experts warn that such tactics could threaten Congress’s financial authority.
“If Congress prioritizes its spending power, they must actively seek to control how funds are disbursed, rather than permit the administration’s Office of Management and Budget to dictate how funds are utilized,” Kogan remarked.
“Many lawmakers likely want to resolve this behind the scenes before it escalates,” he noted. “However, billions’ worth of funding through pocket relief could lead to open conflict if the budget remains highly relevant.”
