Short answer: Yes.
Here's the deal. The Federal budget is law. It is a bill, passed by the legislature, signed by the president which makes it a law. You cannot spend money in defiance of that law without facing a court case that you will most certainly lose.
However ...
However, modern budgets, or, to be more precise, monstrous continuing resolutions, do not typically call out specific items. As Mark Steyn pithily put it in his analysis of ObamaCare in his book, America Alone, the bill gave the HHS Secretary insane levels of discretion to direct not just spending, but regulations. From an interview he gave Hugh Hewitt, Mark's description of the leeway given the Secretary of HHS:
The secretary shall determine this, the secretary may determine that, the secretary may, shall and determine anything she wants off the top of her pretty little head.
Modern continuing resolutions are rife with that sort of thing.
The budget, such as it is, gives large blobs of money with only moderate direction to the agencies which then spend it in pursuance of the intent of the law, more or less. Watching what DOGE has uncovered about the way USAID spent its money, sometimes the agencies lean towards the "very much less" end of the more or less scale. Here's where it gets fun.
The new administration can come in and cut any spending not expressly protected by the law which is the budget. If USAID is given $50B to further American interests across the globe with not much more direction than that, the new administration can burn all of the existing projects to the ground without any fear of legal reprisals. That's an extreme example, but you get the idea. The budget is indeed law, but if it's not explicit, the agencies can change direction any time they want and still be in compliance with the law.
Also, it is not against the law to not spend all the money you get. According to ChatGPT:
Many federal agencies receive funding through annual appropriations, meaning the money is only available to spend during that fiscal year. If the funds are not used, they typically expire and return to the U.S. Treasury.
Emphasis mine. That jives with my recollections from the dim past.
We can use the vagueness of the budgetary laws to cut the deficit. That's what DOGE is doing right now.
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| Thank goodness! |
The strategy for cutting the deficit is simple. While it is illegal to spend more than you were allocated and it is illegal to not spend on items expressly called out by budgetary law, there is no reason you have to spend the rest of the money. Any money not spent goes back to the treasury, lowering the deficit.
Pithier Summary
If there’s an explicit statutory authorization for an outlay to a third party, they can go to court and get their money
— Will Chamberlain (@willchamberlain) February 4, 2025
But if you’re a third party that was given a discretionary award/grant by an agency? ZAP!
2 comments:
I expect that it is not as simple as that. This sounds to me like it would be considered "impoundment", where the President refuses to spend appropriated money, and the law is that he can only do that if Congress gives him permission to do so.
https://bipartisanpolicy.org/explainer/budget-impoundment/
Granted, Congress is currently controlled by the Republicans, so they may very well give him that permission. But I have not seen any indication that he has even asked them yet.
I've been involved in organizations that got government funding, but did not spend all of the money allotted. Nothing happened except that the excess funding was returned to the treasury.
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