Chaos and uncertainty are rampant throughout the federal government because President Trump, through Elon Musk’s “Department of Government Efficiency,” has upended the obligation and expenditure of appropriations made by Congress, in the name of curtailing wasteful and inefficient government spending.

Some of these decisions have already wound up in federal court, and some will almost certainly have to be decided by the Supreme Court. But in general, it is useful to take a step back and look at how the appropriations process is supposed to work.

The U.S. Government Accountability Office publishes a multi-volume reference work, Principles of Federal Appropriations Law (nicknamed the Red Book because it used to come in three red 3-ring binders, back when hard copies were a thing). The Red Book reminds us that a law dating back to 1809 requires that all “Appropriations shall be applied only to the objects for which the appropriations were made except as otherwise provided by law.” (31 U.S.C. §1301(a))

Every appropriation has an object – the money is appropriated by Congress “for” something. And while 19^th Century appropriations were often quite specific, naming the specific salaries of most government employees on an individual basis each year and making procurements with degrees of specificity like “For procuring manure, tools, fuel, purchasing trees and shrubs, and for labor and materials in connection with repairs and improvements to Botanic Garden, under direction of the Joint Library Committee of Congress, five thousand dollars.” Today, most appropriations simply say “For necessary expenses for [OBJECT], $xxx,xxx,xxx.” (And the Red Book has a whole long chapter defining what “necessary expenses” are.)

Legally, the amount of the appropriation is a ceiling, not a floor, on the amount of money that can be drawn from the Treasury in pursuit of the object of the appropriation. But fulfilling the purpose of the appropriation does not always require the entire amount of money.

If a law were to be enacted appropriating $50 million to build a federal courthouse in downtown Wichita, and building said courthouse only takes $48.5 million, then once the courthouse is built, no one argues that the federal government still has to spend the remaining $1.5 million. Holding back that $1.5 million, and then either letting it lapse or hold it back in hopes that Congress will rescind it entirely, is not an impoundment because the object, or purpose, of the appropriation has already been fulfilled.

If, however, such a law is enacted and the President, believing that Wichita does not need a new courthouse at all, refuses to spend any of the money, that is an impoundment because the President is preventing the object/purpose of the appropriation from being fulfilled.

Between those two points is a lot of gray area, which the Trump Administration is seeking to occupy as rapidly as possible. In some cases, Congress has made it easy for them through inaction or delegation.

For example, many people have asked, “how can Trump possibly shut down the Agency for International Development without permission from Congress?” The USAID budget comes from its last enacted appropriation, for fiscal 2024 (as extended through next week), which appropriates $1.7 billion “For necessary expenses to carry out the provisions of section 667 of the Foreign Assistance Act of 1961…”

So then you look up section 667 of the FAA and it says “There is authorized to be appropriated to the President…$387 million for the fiscal year 1986 and $387 million for the fiscal year 1987 for necessary operating expenses of [AID]…” Because Congress has not been able to agree on a foreign aid reauthorization bill for the last 40 years, by law, the stated purpose of the entire USAID operating budget appropriation was fulfilled 38 years ago, giving the Trump Administration an advantage in its arguments that it can stop spending the USAID appropriation.

Fortunately, all of the authorization laws for Department of Transportation appropriations are up to date except for the Pipeline and Hazardous Materials Safety Administration (lapsed in 2023).

Congress is free to be as specific as it wants in an appropriations act. For example, the FY 1989 DOT Appropriations Act says “For the purpose of carrying out the Nashua River Bridge and Broad Street Parkway project in Nashua, New Hampshire, that crosses the Nashua River, there is hereby appropriated $3,763,000…” No wiggle room for interpretation there.

In the 1990s, the mass transit “new starts” appropriation was routinely earmarked in the law – the FY 1995 law said “there shall be available for new fixed guideway systems, $646,670,000, to be available as follows:” followed by a list of 32 projects and amounts.

Moving forward, Congress can be as specific as it wants to be when writing appropriations laws, and can leave the Administration with as little legal wiggle room as they want. (Republicans on the Appropriations Committees are said to be denying Democratic efforts to put more specific requirements into the pending fiscal 2025 appropriations package.) But at some point, the Administration’s stated desire for ever-more-efficiency in government spending, and Congress’s own ideas of what is and is not wasteful, will come into conflict.

As an intellectual exercise, imagine this: Congress enacts a law appropriating $10 million to the Secretary of the Treasury, with the instructions that “On July 4, 2025, the Secretary shall withdraw from the Treasury $10 million in paper currency of the United States and shall douse the full amount in gasoline and set it on fire on the steps of the 15^th Street NW entrance to the Treasury Building, taking care that the fire continues until the entirety of the paper currency is consumed.” (That way you could see the fire from Old Ebbitt Grill.)

This would be the worst imaginable waste of taxpayer money, but it would also be a very specific appropriation with very specific instructions. Failure to make appropriations available on a date certain for a specific purpose is as clear-cut an example of an impoundment as you can get. How would a court decide?