Legal ruling on withheld Ukraine aid could shake up impeachment trial

Paul M. Krawzak, CQ-Roll Call on

Published in Political News

The 1974 law gives presidents two options to avoid spending appropriated funds. They must ask for a "rescission," or cancellation, which triggers a congressional vote to approve the request, or a "deferral," which allows a funding pause under certain specific circumstances, as long as lawmakers are notified.

Critics charge the Ukraine aid hold neither met any of the law's criteria, nor was accompanied by the required notification to Congress. A deferral also needs to end in time to "prudently" obligate the funds before they expire, which did not occur in the case of the Pentagon aid.

White House officials dispute the allegations. In a Dec. 11 letter, OMB General Counsel Mark R. Paoletta wrote to GAO that the "pause in obligations of the Ukraine funds" was a "programmatic delay," not an illegal deferment. An administration official said that while some budget officers questioned the holds, they were approved as legal by the general counsels at both OMB and the Pentagon.

Congress passed the 1974 law after a fight with President Richard M. Nixon over his refusal to spend billions of dollars appropriated under the Clean Water Act to help build wastewater treatment plants. But for all the law's initial drama, it was written to provide Congress with the tools to "control" impoundments and free up withheld funds rather than to punish the president or executive branch employees for illegal withholding, experts on the law who spoke on condition of not being identified said.

If the GAO finds a violation, the most it can do is sue the administration to release the funds. But that has only happened once, in 1975, when the GAO filed a lawsuit that was later dismissed after parties to the suit agreed the funds in dispute had been released.

Over the years, the GAO has reported periodic illegal impoundments, including during the Trump administration and others during the presidencies of George H.W. Bush, Bill Clinton and George W. Bush. Typically, the funds were released for obligation, making a lawsuit unnecessary.

Two other avenues exist for responding to illegal withholding. Parties that claim they are entitled to the funds under the law can sue in federal court to obtain the money if they can demonstrate legal standing, experts said. Lawmakers also can respond to impoundments through legislation, such as extending the availability of Ukraine aid in the fiscal 2020 stopgap law.

In the most recent example of an illegal deferral, the GAO in December 2018 cited the Department of Homeland Security for withholding $95 million that had been appropriated for a Coast Guard national security cutter. The 418-foot cutters support homeland security and defense missions including interdiction of drugs smuggled out of Colombia. DHS said it delayed obligating the funds while it was reviewing the potential impact of a proposed rescission of the funds passed by the House but not enacted into law in that form. GAO said the withholding was illegal because the president did not transmit the special message. The GAO took no further action because by that time the funds had been obligated.


The White House might also push back against a GAO finding on constitutional grounds. In a memorandum to agency general counsels Nov. 5, OMB's Paoletta wrote that when an agency of the legislative branch interprets a law differently, the executive branch is not bound by its views due to the separation of powers principle. The memorandum related to GAO findings on a separate law that bars spending money that has not been appropriated, but a similar argument could be applied to the impoundment law.

Some lawmakers want to add stronger provisions to the impoundment law. Van Hollen, for example, offered an amendment that was adopted by the Senate Budget Committee Nov. 6 when the panel approved a budget process overhaul bill.

The amendment would codify a GAO opinion that OMB cannot withhold funds until they expire without congressional approval, and require the budget office to publicly post apportionment documents and make other information available to the Budget and Appropriations committees to provide an early warning of withholding. It's unclear what chance the Senate Budget Committee bill has of making it to the Senate floor.

Van Hollen said he plans to introduce a stand-alone bill with similar provisions within weeks and will seek to implement his proposals through fiscal 2021 appropriations legislation. House Budget Chairman John Yarmuth, D-Ky., intends to introduce legislation with a similar purpose in the next couple of months that he said in a statement will "directly focus on restoring and protecting Congress' power of the purse, increasing accountability and transparency of the Executive Branch, and addressing the unprecedented overreach of this Administration."

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