WASHINGTON -- The White House budget office on Wednesday defended its temporary withholding of almost $400 million in Ukraine security-related funds earlier this year, saying the episode was in keeping with longstanding authorities that allow the executive branch to control the flow of appropriated funds.
"It was OMB's understanding that a brief period was needed, prior to the funds expiring, to engage in a policy process regarding those funds," says the nine-page Office of Management and Budget letter to the Government Accountability Office, which had inquired about the legality of the move. "OMB took appropriate action, in light of a pending policy process, to ensure that funds were not obligated prematurely in a manner that could conflict with the President's foreign policy."
OMB initially halted the obligation of a $250 million Ukraine Security Assistance Initiative funded in the fiscal 2019 Defense appropriations bill at the request of President Donald Trump. House Democrats are in the midst of efforts to impeach Trump over what they say was an effort to use the funding as a lever to try to get Ukraine to launch an investigation of former Vice President Joe Biden's son, Hunter, who was on the board of a Ukrainian gas company.
In the letter, OMB General Counsel Mark R. Paoletta said even with the temporary withholding, the Department of Defense was able to obligate about 84% of the $250 million before the end of the fiscal year on Sept. 30.
That's more than the 79% of appropriated security funds for Ukraine that were obligated in fiscal 2016 in the last year of the Obama administration, the letter said. More recently, 83% of Ukraine security assistance was obligated in fiscal 2018 and 91% in fiscal 2017.
However, in the most recent fiscal year, the administration had more time to spend the money Congress appropriated: The fiscal 2019 defense spending bill was enacted at the end of September 2018, on time for the first time in years. In the previous two years, final appropriations weren't enacted until late March and early May, well into the fiscal year, giving the Pentagon much less time to get the money out the door. In fiscal 2016, the funding was signed into law in mid-December.
White House budget officials also noted that in an earlier stopgap funding measure this year, in which about $35 million was "re-appropriated" to keep it from expiring after Sept. 30, about $20 million still hadn't been obligated by Nov. 29. That lag, the letter notes, is "longer than the period of the hold" which occurred between July 25 and Sept. 12, and is the subject of impeachment proceedings.
OMB wrote the letter in response to GAO's request on Nov. 25 for OMB's views on the withholding of the funds. The GAO letter is not public.
The budget office also said in the letter that Congress routinely withholds appropriated funding from agencies, sometimes for months at a time.
In fiscal years 2017 to 2019 alone, OMB said, congressional committees directed that billions of dollars in State and U.S. Agency for International Development funds be withheld for 10 days or more beyond a typically 15-day statutory notice period after Congress is notified of an intent to obligate funds.