Such interruptions are known as impoundments. An impoundment is any action or inaction that precludes federal funds from being obligated or spent, either temporarily or permanently. To date, most of the Trump administration’s impoundments have been unlawful.
The Constitution charges presidents with faithfully executing the laws. This means they must carry out spending laws, unless those laws explicitly grant discretion to not carry them out. The Trump administration, which includes Elon Musk, has four routes to break spending law:
- Imposing holds at the agency/bureau level
- Imposing holds at the Office of Management and Budget (OMB)
- Refusing to process payments in the Treasury payment system
- Clawing back funds after disbursement
1. Imposing holds at the agency/bureau level
The Constitution provides that Congress appropriates funding, which allows federal agencies and bureaus to incur budgetary obligations on behalf of the U.S. government. While illegal except in specific circumstances, mechanically, an agency can stop obligating funds.
Nearly all of Trump’s unlawful impoundments so far have occurred at this level. This includes his actions such as pausing most of the work that the U.S. Agency for International Development (USAID) performs and pausing many of the grants made by the National Institutes of Health (NIH) and other research institutions, as well as other agency pauses. To the extent that the Trump administration intends to leave vacant the positions of all the employees it’s terminating, the impoundments also include those terminations.
2. Imposing holds at the OMB
Even when a law instructs an agency to spend money, a technical step must be taken before the agency is allowed to begin obligating those funds: The OMB must apportion funding. This step comes from the Antideficiency Act of 1870 as amended and serves to ensure that funding is prudently obligated. Consider a program that receives funding every year: In order to make sure funding lasts the whole year and none is left over, the OMB apportions funding, typically releasing it in quarterly traunches.
While this step is intended to ensure funds are prudently obligated, it can be illegally abused to prevent funds from being obligated at all if the OMB puts holds on its apportionments. Without an apportionment allowing funds to be obligated, it is illegal under the Antideficiency Act for an agency to do so, even if appropriation requires them to use the funds.
There is an asymmetry to the enforcement of spending procedures: While it is illegal to not obligate or spend appropriated funding—to impound those funds—no penalty is associated with this violation. But there is a potential criminal penalty for an officer or employee convicted of willfully and knowingly violating the law.
Abuse of the apportionment process takes power away not only from Congress but also from the agencies. Even if an agency wanted to carry out spending law in defiance of orders from President Trump or Elon Musk, it would be illegal for it to do so, with the staff at the agencies attempting to carry out the law potentially facing criminal penalties if they willfully and knowingly violated the law. A hold by the OMB was the method the Trump administration used to illegally impound funds for Ukraine in 2019.
Trump’s illegal impoundment of funds for Ukraine
Near the end of fiscal year 2019, the OMB under the first Trump administration illegally impounded more than $200 million of funding to help Ukraine protect itself against a potential future Russian invasion. Trump originally signed that funding into law the previous September but instructed the U.S. Department of Defense (DOD) to put an informal hold on it. Shortly after Ukrainian President Volodymyr Zelenskyy took office in 2019, he and Trump had a meeting in which Zelenskyy asked Trump to release the funds. In response, Trump said, “I would like you to do us a favor though.” That favor was to create a sham investigation into Joe Biden, Trump’s political opponent, and his son Hunter Biden.
Later that day, Trump’s OMB, led by Russ Vought—Trump’s then and current OMB director—changed the apportionment to formally prevent the DOD from obligating those funds. This apportionment was formally modified by one of Trump’s political appointees to the OMB.
At this point, even if the DOD had wanted to follow the law, its staff would have faced criminal penalties for carrying out the congressional mandate to spend the money. Abusing apportionments takes power away from both Congress and the agencies and centers it in the White House political appointees.
As time went on, the DOD began raising flags to the OMB, worried that it would not be able to obligate all the funds before the fiscal year ran out and the funds lapsed. Nonetheless, the OMB refused to release any further funds until a whistleblower complaint was filed.
The U.S. Government Accountability Office (GAO), which is tasked with determining whether an impoundment in violation of the Impoundment Control Act has occurred, confirmed that the impoundment violated the Impoundment Control Act.
Traditionally, apportionment is conducted by career civil servants within the OMB known as the deputy associate directors (DADs). During his first term, Trump switched apportionment to instead be signed by the program associate directors (PADs), who are political appointees. During his administration, President Biden switched apportionment back to the DADs.
However, the section of Project 2025 written by OMB Director Vought calls for apportionments to once again be signed by the PADs—and for the PADs to “aggressive[ly]” use apportionments to reshape federal spending away from congressional intent and toward the president’s agenda. In mid-February 2025, the Trump administration did just that.
Some of Trump’s executive actions have directly called for funding to be paused by changing apportionments. This is a likely next step, particularly if the desires of the agencies and the White House begin to conflict and the White House begins to illegally exert maximum control.
A 2022 law, made permanent in 2023, requires that apportionments be publicly noticed. Based on publicly available data, the Trump administration in its second term does not yet seem to have abused apportionment to impound.
3. Refusing to process payments in the Treasury payment system
After OMB apportions funds and the agencies obligate them, payment orders are sent to the Treasury to be processed. Recently, Elon Musk’s Department of Government Efficiency (DOGE) team got access to the Treasury payment system. While there is no evidence so far of the Treasury not processing payment orders due to political pressure, access to the payment system should be viewed in the same light as the holds at the OMB or at an agency—another way to break spending law and illegally impound funds.
4. Clawing back funds after disbursement
In at least one instance, the Trump administration appears to have withdrawn funds directly from the recipient’s bank accounts. After providing $80 million to reimburse New York City for helping shelter asylum seekers via a federal appropriation for that purpose, the Trump administration a week later allegedly removed those funds from the city’s bank accounts.
The Trump administration’s illegal actions are unlikely to save money in the long run and will likely impose future costs
Federal judges have halted most of these actions, though federal compliance has been somewhat scattershot. As the cases work their way through the courts and are decided on the merits, judges will likely rule that the Trump administration must follow funding and authorizations laws, as well as the Impoundment Control Act (ICA). When former President Richard Nixon illegally impounded funds, under pre-ICA law, he lost every case that was decided on the merits, including one unanimously decided by the U.S. Supreme Court.*
As a result, most of these funds will eventually be paid out. Additionally, for broken contracts, the federal government will still be forced to cover the cost of resources already used, in addition to spending resources on costly legal battles. And future contracts will also likely be more expensive as contractors’ bids reflect higher-risk premiums.
Conclusion
Even if most of these actions are likely to fail in the courts, they cause real harm along the way as lifesaving aid and research on new cancer treatments are paused and wildfires increase in size and frequency in the absence of funding for the U.S. Forest Service. As the deadline to fund the government—March 14—nears, Congress should consider ways of weakening Trump’s ability to unlawfully impound funds without undermining any of the ongoing court cases.
* Authors’ note: This analysis was conducted by the authors using 1974 research from the Congressional Research Service. Full sources are on file with the authors.