The Empire Review
Welcome to the Empire Review, the legal series that gives you a front row seat inside the courtrooms shaping New York.
The Empire Review
The Presidential Power Struggle: Trump's Spending Freeze Challenged
A pivotal legal battle has unfolded in federal court, with profound implications for executive power and constitutional boundaries. When President Trump directed the Office of Management and Budget to freeze federal spending for programs related to foreign aid, diversity initiatives, and environmental causes, he triggered an immediate showdown over the separation of powers that define our government.
The judge's injunction against this freeze cuts to the heart of our constitutional structure. Congress alone holds the "power of the purse" through the Appropriations Clause, and presidents who wish to impound funds must follow specific procedures established after Nixon's similar attempts in the 1970s. Trump's administration bypassed these requirements completely, leading the court to find his actions likely unconstitutional and "arbitrary and capricious" under administrative law.
What makes this case particularly significant is how it exemplifies the tension between presidential authority and constitutional constraints. The administration's transparent attempt to escape judicial review – technically rescinding the memo while publicly declaring the freeze remained "in full force" – failed to convince the judge. Meanwhile, real organizations faced immediate layoffs and financial hardships as a result of this constitutional power struggle.
The case resonates with Francis Fukuyama's observation that even the most authoritarian systems require some principle of legitimacy beyond raw power. As our democracy navigates these challenges, the courts remain the primary institutional check against potential overreach – but for how long? This battle over federal funding reveals the fragility of our system when founding principles face determined challenges.
Have you considered what happens when presidents test the boundaries of their constitutional authority? Follow along as we examine more pivotal cases shaping our democracy.
Welcome to the Empire Review, the series that gives you a front row seat at the courtrooms shaping New York. I'm Jonathan Arias. The year has started off strong, to say the least, with the last two weeks feeling like six months. Every day there seems to be a new fire, another emergency. In this segment, I explain a federal court's injunction, a President Trump's attempt to freeze federal spending. On January 27th, the Office of Management and Budget, short for OMB, issued a memo directing all federal agencies to examine all federal financial assistance programs to identify which ones may be affected by all of the president's executive orders. Notably, the memo said that federal agencies quote must temporarily pause all activities related to dispersing financial assistance and that it must stop funding for organizations involved in foreign aid, dei, woke gender ideology and the Green New Deal.
Speaker 1:The next day, a group of non-profit organizations sued the OMB in federal court and asked for what's known as a temporary restraining order. Roughly speaking, a temporary restraining order stops a defendant from doing something. In this case, a restraining order will tell the OMB hey, cut your shit and cut those checks. Now, when a judge decides whether to issue this type of order, she considers whether a plaintiff is likely to win her case after both sides have fully argued their points. This sort of hearing is like a movie trailer it only gives a preview of what's to come, but it gives the judge just enough information to decide if the defendant should be stopped. In addition, the judge also considers whether not issuing this order would cause the plaintiffs what's known as irreparable harm. Irreparable harm is a type of injury that can't be fixed with monetary compensation. Now for this question. The judge is asking if I don't issue this order, will plaintiffs ever recover from the harm that they'll experience? Here's one more piece of important background information.
Speaker 1:On January 29th, the day after the organizations sued the OMB, the OMB issued a new memo indicating that the previous memo, the one that started the freeze, had been rescinded. Shortly after this so-called rescission, the White House press secretary posted on Twitter that the new memo was quote not a rescission of the federal funding freeze, and that it was simply a rescission of the OMB memo. She then finished the post by saying that the purpose of the rescission was to end any confusion by the court's injunction and, importantly, that the president's funding freeze was in full force. The significance of this will be clear soon when someone brings an action in federal court, or any court for that matter, they have to first demonstrate that the court has jurisdiction or the power to hear the case. By law, courts will only entertain live controversies. Now, the Constitution created this limit so that judges and lawyers don't waste their time with disputes that have no practical importance. Courts will not consider something moot that's spelled M-O-O-T. When the OMB rescinded the freezing memo following the lawsuit, it basically attempted to moot the case out of court. In other words, they tried to strip the court of its authority to resolve the dispute, tried to strip the court of its authority to resolve the dispute, but this didn't work in their favor. Because after the rescission, you'll recall that the White House press secretary tweeted that the funding freeze was still in full force. Simply put, the rescission was a mere formality with absolutely no substance. The White House clearly maintained that the plan to freeze funding was in full force. The court therefore had its jurisdiction. Now I'll explain what I think is the most important part of this decision Whether the Constitution gives the president the power to freeze spending in this manner.
Speaker 1:In sum, the judge found that this freeze likely violates the Appropriations Clause of the Constitution, which says no money shall be drawn from the treasury but in consequence of appropriations made by law. In plain English, this clause grants Congress exclusive power over federal spending. Congress has the power of the purse. When a president attempts to block congressionally approved funding, this is called impoundment. Now, throughout history, presidents, dating back to Thomas Jefferson, have attempted to halt spending in some fashion, but the most notable incident occurred when Richard Nixon withheld federal funds for water pollution treatment programs, funds that were appropriated by Congress under the Federal Water Pollution Control Act.
Speaker 1:Now it's important to know that presidents can actually withhold funding, but they must follow a specific procedure. That procedure is outlined in the Congressional Budget and Impoundment Control Act of 1974. Of 1974. Under this law, the president can temporarily defer payments or actually rescind them, but only with Congress's approval. Now here the president didn't follow that procedure, or even pretend to. He issued the executive orders and told the OMB to freeze all payments. So, having not followed this procedure, the judge previewed that the president likely violated the appropriations clause.
Speaker 1:Looking forward, it's likely that the president will challenge this all the way up to the Supreme Court and once there, he'll ask them to invalidate the Empowerment Control Act as unconstitutional. In the Constitution there's a section that says the president must take care that the laws be faithfully executed. So the argument will be something along the lines of I'm the president and we're spending too much money wastefully. The Empowerment Act is therefore unconstitutional. The judge also found that this freeze was arbitrary and impulsive, violating the Administrative Procedure Act. Under this law, a court must invalidate an agency's action if it is arbitrary, capricious and abuse of discretion or otherwise not in accordance with law. In other words, the law requires that there be a rational connection between the facts, the agency's rationale and the ultimate decision.
Speaker 1:Here the judge found that the OMB failed to explain why it needed to freeze all funding, not just some. All funding were less than 24 hours notice. Now, in defending its position, the OMB argued that there was nothing irrational about a temporary pause to ensure that agencies comply with the president's priorities. They also argued that payments made directly to individuals were not frozen. But the judge didn't buy this argument because she saw it as the OMB writing a sort of blank check for herself from the president to do what it wanted without following any procedure. In a way, the judge is basically saying that the administration was careless. Here's what she wrote. Rather than taking a measured approach to identify purportedly wasteful spending, the administration cut the fuel supply to a vast, complicated nationwide machine, seemingly without any consideration for the consequences of that decision. Now, leading up to this decision, the consequences have already been felt. One organization in the lawsuit declared that it was forced to lay off two employees the day after the memo because they couldn't access its grant funds that day. A health care center declared that it couldn't afford to delay payments to its employees because some of them live paycheck to paycheck, like most people in this country, and several other organizations declared that they'd had to cut their expenses drastically.
Speaker 1:When the president was elected, people feared that our so-called democracy if we even have one would collapse. They feared that he would do whatever he wanted, completely ignoring the constitution and even breaking it, since he was very clear about what he would do, and yet millions of people voted him in. It's fair to say that people are entirely okay with this. Right now, the only thing holding him back is the courts that part of the Constitution that remains, but who knows how long that'll last. I want to finish off by reading a line from a book that helps me see what's happening. The book is by Francis Fukuyama and it's called the End of History and the Last man.
Speaker 1:All regimes capable of effective action must be based on some principle of legitimacy.
Speaker 1:There is no such thing as a dictator who rules purely by force, as is commonly said, for instance, of Hitler. A tyrant can rule his children, old men or perhaps his wife by force if he is physically stronger than them, but he is not likely to be able to rule more than two or three people in this fashion, and certainly not a nation of millions. Now, when we say that a dictator like Hitler ruled by force, what we mean is that Hitler's supporters, including the Nazi party and the Gestapo, were able to physically intimidate the larger population. But what made these supporters loyal to Hitler? Well, certainly not his ability to intimidate them physically. Ultimately, it rested upon their belief in his legitimate authority. Security apparatuses can themselves be controlled by intimidation, but at some point in the system the dictator must have loyal subordinates who believe in his legitimate authority. As Socrates explains in Plato's Republic, even among a band of robbers, there must be some principle of justice that permits them to divide their spoils. Legitimacy is thus crucial to even the most unjust and bloody dictatorship.