Another Win in Court, This Time Over Impounding Foreign Aid

An appeals court handed the Trump administration another win today, saying that foreign aid groups did not have the right to challenge the administration’s impoundment of funds.

A federal appeals court panel cleared the way on Wednesday for the Trump administration to continue refusing to spend billions of dollars in foreign aid, finding that aid organizations that had sued to recover the money lacked the legal right to bring the challenge.

The decision, which centered on President Trump’s authority to withhold funding already appropriated by Congress, handed the White House a significant legal victory…

But by a 2-to-1 vote, the appeals court panel ruled that under the Impoundment Control Act of 1974, only the Government Accountability Office, which serves as Congress’s independent watchdog, could challenge the president’s efforts to withhold foreign aid funding. The panel found that groups that receive government funding — in this instance, a number of global health nonprofits — do not have cause to challenge Mr. Trump’s funding cuts.

The backstory here is that President Trump essentially shut down USAID and attempted to stop spending that had already been appropriated by Congress. A lower court ruled against the administration and said it was required to continue paying the aid money while the case worked its way through court. The Trump administration even appealed to the Supreme Court but lost. SCOTUS chose not to overrule the lower court while the case was ongoing.

In the appeal settled today, the aid groups basically argued that the separation of powers meant the administration could not impound money already appropriated by Congress.

The challengers say the foreign aid freeze has created a global crisis, and that the money is critical for malaria prevention, to address child malnutrition and provide postnatal care for newborns. The groups argued that the president and agency leaders couldn’t defy Congress’ spending mandates and didn’t have discretion to decide that only some, let alone none, of the money appropriated by lawmakers should be paid.

The president can ask Congress to withdraw appropriations but can’t do it on his own, the challengers argued.

But the Justice Department’s counter-argument carried the day. They argued that congress had set up a specific way to enforce impoundment issues and it required that a lawsuit be brought by the General Accounting Office.

The court found on Wednesday that only the Comptroller General, which is part of the legislative branch of government in the Government Accountability Office, has the ability to sue the executive over alleged impoundment.

“Here, the (Impoundment Control Act) created a complex scheme of notification of the Congress, congressional action on a proposed rescission or deferral and suit by a specified legislative branch official if the executive branch violates its statutory expenditure obligations,” Henderson, a Reagan appointee, wrote in the opinion. “It does not make sense that the Congress would craft a complex scheme of interbranch dialogue but sub silentio also provide a backdoor for citizen suits at any time and without notice to the Congress of the alleged violation.”

So far, the GAO has not taken that step, though it still could.

On numerous occasions this year, the Government Accountability Office has found that the Trump administration illegally impounded funds authorized by Congress, including money meant for public infrastructure and early child education. By June, the legislative watchdog also had more than 40 additional investigations underway, with some of the impoundment inquiries focused on the government’s handling of foreign aid, according to documents previously viewed by The Times.

Under the law, the accountability office has the power to sue to force the release of impounded funds, but it has not done so thus far, letting lawsuits launched by outside groups play out. The agency’s leader, Comptroller General Gene Dodaro, previously described a legal challenge as a last resort.

For the moment, this is a clear win for the administration but this may not be over yet. The aid groups could still appeal to have this reheard by the entire appeals court (rather than a three-judge panel). That appears to be the next step.

Lauren Bateman of Public Citizen Litigation Group, as the lead attorney for some of the grantees that sued, said on Wednesday her organization would “seek further review from the court.”

Maybe they’ll have better luck with the full appeals court, but any contrary decision could then be appealed to the Supreme Court. So it’s possible this battle witll drag on for a while.