How funding the federal government works

How federal funding is supposed to work

Step 1: Congressional Appropriations Process 

During a regular appropriations process, Congress passes 12 government funding bills each year (one from each Appropriations subcommittee) with funds available to be spent during a single fiscal year. If the process is delayed, Congress combines all or some of its 12 regular appropriations bills into a single “omnibus” (or “consolidated”) appropriations measure. Within these appropriations bills, Congress provides funding to federal programs with varying degrees of specificity and conditions.

If Congress fails to pass funding bills by the end of the fiscal year (September 30), a continuing resolution can be used to fund the government and avert a shutdown. A continuing resolution or “CR” typically provides agencies with the same funding levels enacted under the most recently passed appropriations law — under the same conditions — and lasts a specific period of time. In the fiscal year 2025, the government was funded entirely via multiple continuing resolutions. 

Step 2: Apportionments & the Office of Management and Budget 

After Congress passes appropriations or other spending laws, agencies must receive an apportionment from the Office of Management and Budget (OMB) before they can spend funds. The apportionment process is a way for the president, charged with faithful execution of laws passed by Congress, to ensure that agencies don’t spend more than they are supposed to by giving them only a portion of their yearly budget at a time. 

Apportionments are legally binding plans that tell agencies how and when they may spend appropriated funds over a certain period of time — sort of like an allowance that agencies get from the president a little at a time that helps ensure they stick to their budgets. These apportionments may also include additional conditions from OMB, like requiring an agency to send OMB their plan for spending the money before they can spend it. These requirements are enforceable under the same law Congress uses to make sure agencies don’t spend more funds than they are given — the Antideficiency Act. 

What’s actually happening 

1. Illegal Impoundments 

Presidents are charged with implementing the laws, including the appropriations laws. In the past, presidents of both parties have abused this authority, undermining Congress’s power of the purse by attempting to spend less than what Congress provided in order to advance their own agendas. Most notably, President Nixon attempted to withhold — or “impound” — billions of dollars in funds from programs he disagreed with. 

In response, Congress passed the Impoundment Control Act in 1974 which clarifies a president cannot unilaterally decide to cut funds Congress has spent, but created a process for presidents to propose cuts for Congress to consider. 

Herein lies the problem: President Trump and his OMB Director Russ Vought assert that the president has an inherent constitutional power to impound congressionally appropriated funds rendering the Impoundment Control Act unconstitutional. They make this assertion despite neither the Constitution, federal case law, nor American history supporting their claim of an inherent presidential power to impound.

Trump’s OMB has also claimed the power to use apportionments to delay funding for agencies, or put additional conditions on agency spending that could prevent funds from being spent the way Congress directed. You may recall President Trump’s refusal to spend money appropriated for Ukraine played a key part in his first impeachment. He’s abusing the same process now to delay or withhold funds.

Example Impoundment: 

Congress passed a law that appropriated $324 million for the Community Development Financial Institution (CDFI) for fiscal year 2025. To date, OMB has apportioned only $35 million — leaving $289 million in limbo. As a result, none of the institutions that expected this federal funding have received it this year, even though Congress said it should be spent before September 30, 2025. 

2. Pocket Rescissions 

For 50 years, the Impoundment Control Act has given presidents three choices when it comes to implementing appropriations laws: they can spend the money, or they can send a special message to Congress either deferring the spending or proposing to cut the funding for good. Withholding or delaying spending outside of this framework constitutes an unlawful impoundment.

When presidents want to propose cutting funds, they must send a special message to Congress providing detailed information about which funds they are proposing to cut. The laws that Congress passes to repeal or cancel said funding are called “rescissions.” Just as it takes passing a law for the government to spend money, it takes a law to take that money away. 

When the president submits a rescission proposal, they generally may withhold the funds in question for 45 days of continuous session of Congress as lawmakers consider whether to act. If Congress does not pass a bill making the cuts, the president must spend the funds.

A so-called “pocket rescission” is when the president proposes a funding cut so late in the fiscal year that the funds are scheduled to expire before Congress has the full 45 days of session to consider the proposed cut. The Trump OMB argues that pocket rescissions are a legal loophole that should let the president make unilateral cuts without Congress’s consent. But the Government Accountability Office, law professors, members of Congress, and former staff from appropriations committees and OMB across administrations all agree that this interpretation of the law is wrong, and pocket rescissions are just unlawful impoundments by a different name. 

Example Pocket Rescission: 

Congress appropriated $4.9 billion in funding for the Department of State and the USAID for development assistance, peacekeeping missions, and the State Department Democracy Fund. President Trump notified Congress at the end of August that he was deploying a “pocket rescission” and OMB would not apportion the money for distribution. 

Actions you can take

1. Explore the Impact Project maps to find out more about funding cuts in your community and consider sharing your story with them if you have been directly impacted by funding cuts
2. Write a letter to the editor in your local paper sharing some of the info you learned here and the impact of funding cuts in your community.