Former President Trump yesterday, in remarks laying out his economic plan for the country, pledged to rescind unspent funding appropriated by Congress in the Inflation Reduction Act (IRA). We do not see this as a serious threat to the IRA’s funding, as legal and procedural guardrails will almost certainly block his ability to unilaterally overturn legislative funding commitments.

• Trump has previously promised to “restore the Impoundment Power” to eliminate government waste, calling the Congressional Budget and Impoundment Control Act of 1974 “congressional usurpation of Executive Branch powers,” and we do not doubt his determination to try to use impoundment to circumvent congressional policies with which he disagrees. However, we do not believe Congress will approve any impoundment.

The Impound Control Act establishes that the president may only refuse to spend funding that Congress has approved if:

• The president sends a formal request to Congress that identifies:
  • the amount of the proposed rescission,
  • the reason for the request, and
  • the budgetary, economic, and practical effects of the cut.
• Once that request is sent to Congress, the president may withhold those specific funds for up to 45 legislative days. During those 45 days, Congress must then pass a law approving the rescission request (with a simple majority in the House and 60 votes in the Senate).
  • If Congress does not pass that law within 45 legislative days, the withheld funds become available (again) for spending, for their intended purpose.

Any request by Trump to impound IRA funding will not have the votes to pass in Congress.

• If (as is our base case) Democrats control the House, a bill approving impoundment will not pass.
• If (as is our base vase) Republicans control the Senate, it will be with a narrow margin and an impoundment bill will not gain 60 votes.
  • More to the point, the districts of many Republican legislators are benefiting from IRA funding, and even if they had the numbers, we believe many GOP lawmakers would vote to maintain most of not all of the IRA.

Trump could, theoretically, ignore the Impound Control Act and simply direct his agencies to refuse to spend the appropriated funding, and in fact may be emboldened to do so given the Supreme Court’s recent decision granting presidents broad immunity from liability for official acts.

• We expect that were he to do so, Republican Congressional leadership would strenuously object and push back, given the above-mentioned benefits of the IRA flowing to GOP districts, as well as the precedent Trump would be setting of a White House ignoring congressional wishes.
• More likely, as we have written, is that Trump will simply “slow-roll” the implementation of parts of the IRA that he dislikes, including electric vehicle, solar, and wind tax incentives.