3.1.2 – Key features of the US Constitution
3.1.3 – The main characteristics of US Federalism
3.2.2.3 – Oversight
In April 2025, Russell Vought, Director of the Office of Management and Budget and a principal architect of the Project 2025 blueprint, appeared before the Senate Budget Committee to defend the Trump administration’s approach to federal spending. Democratic senators pressed Vought on the administration’s practice of withholding congressionally appropriated funds from Democratic-led states, a pattern that had already generated a wave of legal challenges.
The confrontation crystallised one of the most significant constitutional disputes of Trump’s second term: whether the executive branch may lawfully refuse to disburse money that Congress has already voted to spend.
The administration’s actions had been sweeping. In January 2025, it withheld social safety net funds from five Democratic-led states, citing fraud concerns, a move immediately challenged in the courts. It also cancelled $7.6 billion in clean energy grants for states that had voted for Kamala Harris in 2024, a decision a federal judge subsequently ruled illegal. In both cases, funds that Congress had already appropriated were being used as a political lever, withheld not because the money had run out, but because the executive disagreed with how states were governing themselves.
The constitutional issue at stake is fundamental. Article I of the Constitution grants Congress the power of the purse, meaning only the legislature may authorise and direct federal expenditure. The Impoundment Control Act of 1974, passed after President Nixon refused to spend congressionally approved funds, further strengthened this by requiring the executive to seek congressional approval before withholding money. Vought’s position challenges this directly, arguing that the president retains inherent authority over disbursement. Federal courts have consistently rejected this argument, issuing blocks on multiple withholding attempts across childcare, public health, and infrastructure funding.
What makes this story especially significant for students of federalism is the role of block grants and conditional federal funding. States rely heavily on federal transfers to fund programmes tackling poverty, housing, and public health, and Washington has long used funding conditions to nudge state policy in particular directions. What the Vought episode reveals is how far the executive can push this dependency as a coercive tool, bypassing Congress entirely. It is a sharp illustration of how checks and balances can be tested not through dramatic confrontation, but through the quiet, powerful act of simply not releasing the money.