Legally, slashing federal payrolls won’t save us any money

A recent Washington Post analysis of federal personnel data found that President Trump has succeeded in greatly reducing the size of the federal bureaucracy.

Although the Office of Management and Budget (OMB) said that the general hiring freeze is over, most Cabinet-level departments have decided to keep the hiring freeze or to only resume limited hiring, with Cabinet-level departments reducing staffing by up to 7.5 percent.

{mosads}The Trump administration claims that these cuts to the federal workforce are necessary to control the deficit, which the administration just increased by $1.5 trillion to pay for tax cuts to the wealthy and corporations. The Impoundment Control Act of 1974, however, prohibits this reduction in staffing levels from saving any money.

President Trump does not have unilateral authority to refuse to spend appropriated funds. Congress and President Trump must agree to jointly set spending levels through the annual appropriations process.

Under the Impoundment Control Act of 1974, to rescind even a portion of appropriated funds, President Trump must (i) send a message to Congress informing it of his desire to rescind funding and (ii) print the message in the Federal Register.

President Trump must spend the funds if Congress does not affirmatively approve the rescission within 45 days. So far, President Trump has not taken any actions under the Impoundment Control Act of 1974 to rescind funding.

Do not just take my word for it. President Reagan agreed with my view. When advising the Reagan administration regarding how to administer the Reagan hiring freeze, President Reagan’s OMB stated that “where personnel reductions result in withholding of appropriations from obligation, the reporting requirements prescribed by the Impoundment Control Act of 1974 apply.”

Thus, the Trump administration must spend the money appropriated to it under current appropriations, which generally rejected the draconian cuts in President Trump’s Budget Blueprint.

Assuming for the sake of argument that President Trump’s Budget Blueprint is adopted in this year’s appropriations, even the anticipation of future reductions in spending does not allow the government to ignore existing appropriation levels.

As the D.C. Circuit has held, “An agency may not rely on political guesswork about future congressional appropriations as a basis for violating existing legal mandates.”

Nevertheless, just because the Trump administration has reduced the federal workforce does not necessarily mean that it is breaking the law. Even with a nominally flat budget, the government would need to reduce the federal workforce because the 2018 cost-of-living adjustment will make individual employees 1.9-percent more expensive.

Further, appropriated funds, absent a specific congressional directive, may be spent by an agency consistent with its mission. Therefore, the government could use the savings from a hiring freeze on other spending.

The government could use savings from a hiring freeze for upfront costly reductions in the workforce, such as buyouts or severance packages. Similarly, it could replace federal workers with contractors who could be more easily fired in a reduced budgetary climate. The government could even spend the money on non-workforce expenses, such as grants.

However, the Trump administration cannot simply reduce the federal workforce because spending levels conflict with President Trump’s proposed budget. It is not clear that President Trump has taken any effort to ensure that reductions in the federal workforce do not reduce spending below the appropriation levels to which President Trump and Congress have already agreed.

To ensure that the Trump administration is complying with the legally set appropriations levels, the Impoundment Control Act of 1974 empowers nonpartisan career staff in Congress to enforce the law. Specifically, the Government Accountability Office (GAO) may investigate whether President Trump is violating the law.

If it determines that he is violating the law, it may bring a suit against the administration. Short of changing the Impoundment Control Act of 1974 with a filibuster-proof majority, congressional Republicans could not prevent a GAO lawsuit.

With mounting evidence of President Trump violating the Impoundment Control Act of 1974, I encourage GAO to investigate the Trump administration and ensure compliance with the appropriation levels to which President Trump has already agreed. 

Sam Wice is a former analyst at the Congressional Budget Office and a former council member of the American Bar Association’s Section of Administrative Law and Regulatory Practice.