pocket rescission

WASHINGTON — A president looking to seize power beyond the executive branch. A Congress controlled by Republican lawmakers unwilling to directly defy him. And a minority party looking for any way to fight back.

The dynamic left Washington in a stalemate Thursday — the ninth day of the government shutdown — and lawmakers openly venting their frustration as they tried to gain traction without the trust that is typically the foundation of any bipartisan deal.

“To have good-faith conversations, you have to have trust. There’s a real challenge of trust,” said Rep. Brad Schneider, chair of the New Democratic Coalition, a pragmatic group of House Democrats.

Groups of lawmakers — huddled over dinners, on phone calls, and in private meetings — have tried to brainstorm ways out of the standoff that has shuttered government offices, kept hundreds of thousands of federal employees at home and threatened to leave them without a scheduled payday. But lawmakers have found themselves running up against the reality that the relationship between the two parties is badly broken.

The frustration was evident this week as House Speaker Mike Johnson and House Democratic leader Hakeem Jeffries, on separate occasions, engaged in tense exchanges in the Capitol hallways with members of the opposing party.

“We’re in an environment where we need more than a handshake,” said Sen. Chris Coons, a Delaware Democrat who has engaged in talks with Republicans.

President Trump and Republicans have so far held to the stance that they will only negotiate on Democratic demands around health care benefits after they vote to reopen the government. They also say Senate Democratic leader Charles E. Schumer is beholden to the left wing of his party and only staging the shutdown fight to stave off a primary challenge.

Schumer, a New York Democrat, told Punchbowl News in an interview that Democrats were winning the shutdown fight, saying, “Every day gets better for us.”

Republicans quickly seized on those comments, arguing it showed that Schumer is approaching the shutdown with purely political motives.

Senate Majority Leader John Thune stood on the Senate floor flanked by a poster printed with Schumer’s words.

“This isn’t a political game. Democrats might feel that way, but I don’t know anybody else that does,” said Thune, a South Dakota Republican. “The longer this goes on, the more the American people realize that Democrats own this shutdown.”

Schumer, in his own floor speech, responded that it was Trump and Republicans who are “playing with people’s lives.”

“Every day that Republicans refuse to negotiate to end this shutdown, the worse it gets for Americans and the clearer it becomes who is fighting for them,” said the New York senator.

When a handshake deal is not enough

Democrats have insisted they can’t take Trump at his word and therefore need more than a verbal commitment for any deal.

Conflicts over spending power had already been raging before the shutdown as the White House pushed to assert maximum power over congressionally approved budgets. The White House budget office had canceled scores of government contracts, including cutting out the legislative branch entirely with a $4.9 billion cut to foreign aid in August through a legally dubious process known as a “pocket rescission.”

That enraged Democrats — and disturbed some Republicans who criticized it as executive overreach.

“I hate rescissions, to be honest with you, unless they’re congressionally approved,” said Sen. Thom Tillis, a North Carolina Republican.

Matt Glassman, a fellow at the Government Affairs Institute at Georgetown University, said the president’s use of rescissions was “blowing up the underlying dynamic of the bargaining” because it inserts intense partisanship into the budget appropriations process that otherwise requires compromise, particularly in the Senate.

Then, as the government entered a shutdown, Trump’s budget director Russ Vought laid out arguments that the president would have even more power to lay off workers and even cancel pay due to furloughed federal workers once the funding lapse is solved. Vought has also announced that the administration was withholding billions of dollars for infrastructure projects in states with Democratic senators who have voted for the shutdown.

Trump has cast Vought’s actions as the consequences of Democratic obstruction, even sharing a video that depicted him as the grim reaper. But on Capitol Hill, there has been an acknowledgment that the hardball tactics are making it harder to negotiate.

“I think with senators, carrots work better than sticks,” said Sen. Kevin Cramer, a North Dakota Republican.

One Democratic idea may win GOP support

Before they vote to reopen the government, Democrats’ main demand is that Congress take up an extension of tax credits for health plans offered on Affordable Care Act marketplaces. Trump has sounded open to a deal, saying that he wants “great health care” for Americans.

What’s received less attention is that Democrats also want new safeguards in the law limiting the White House’s ability to claw back, or rescind, funding already approved by Congress. While final appropriations bills are still being worked out, Republicans have been open to the idea.

“When you end the shutdown and get back to regular order within the appropriations bills, there’s very clear language about how we feel about rescissions,” said Sen. Mike Rounds, a Republican on the Senate Appropriations Committee. “I think you’ll find hard, solid support from Republicans to see that what we agree to will be executed on.”

In the meantime, the main sticking point for lawmakers this week has been finding any agreement on extending the health care subsidies.

The consequences of an extended shutdown

As the shutdown drags on without sign of significant progress to ending the impasse, lawmakers are looking ahead to the dates when federal employees will miss a payday.

Active-duty military troops would miss a paycheck on Oct. 15. Some lawmakers are getting nervous about both the financial implications for the troops and the political blowback of allowing soldiers to go without pay.

As House Speaker Mike Johnson fielded questions on C-SPAN Thursday morning, one caller pleaded with him to pass legislation that would allow the military to get paid during the government shutdown.

The woman, identified as Samantha, said her husband serves in the military and that they “live paycheck to paycheck.”

She pleaded with Johnson to call the House back to Washington, saying, “You could stop this.”

Johnson said he was sorry to hear about her situation, blamed Democrats for refusing to pass a stop-gap spending bill and added, “I am angry because of situations just like yours.”

Groves, Jalonick and Brown write for the Associated Press. AP writers Lisa Mascaro, Kevin Freking and Joey Cappelletti contributed to this report.

WASHINGTON — President Trump has seized on the government shutdown as an opportunity to reshape the federal workforce and punish detractors, meeting with budget director Russ Vought on Thursday to talk through “temporary or permanent” spending cuts that could set up a lose-lose dynamic for Democratic lawmakers.

Trump announced the meeting on social media Thursday morning, saying he and Vought would determine “which of the many Democrat Agencies” would be cut — continuing their efforts to slash federal spending by threatening mass firings of workers and suggesting “irreversible” cuts to Democratic priorities.

“I can’t believe the Radical Left Democrats gave me this unprecedented opportunity,” Trump wrote on his social media account. “They are not stupid people, so maybe this is their way of wanting to, quietly and quickly, MAKE AMERICA GREAT AGAIN!”

The post was notable in its explicit embrace of Project 2025, a controversial policy blueprint drafted by the Heritage Foundation that Trump distanced himself from during his reelection campaign. The effort aimed to reshape the federal government around right-wing policies, and Democrats repeatedly pointed to its goals to warn of the consequences of a second Trump administration.

Vought on Wednesday offered an opening salvo of the pressure he hoped to put on Democrats. He announced he was withholding $18 billion for the Hudson River rail tunnel and Second Avenue subway line in New York City that have been championed by both Democratic leaders, Senate Democratic leader Chuck Schumer and House Democratic leader Hakeem Jeffries, in their home state. Vought is also canceling $8 billion in green energy projects in states with Democratic senators.

Meanwhile, the White House is preparing for mass firings of federal workers, rather than simply furloughing as is the usual practice during a shutdown. White House press secretary Karoline Leavitt said earlier this week that layoffs were “imminent.”

“If they don’t want further harm on their constituents back home, then they need to reopen the government,” Leavitt said Thursday said of Democrats.

A starring role for Russ Vought

The bespectacled and bearded Vought has emerged as a central figure in the shutdown — promising possible layoffs of government workers that would be a show of strength by the Trump administration as well as a possible liability given the weakening job market and existing voter unhappiness over the economy.

The strategic goal is to increase the political pressure on Democratic lawmakers as agencies tasked with environmental protection, racial equity and addressing poverty, among other things, could be gutted over the course of the shutdown.

But Democratic lawmakers also see Vought as the architect of a strategy to refuse to spend congressionally approved funds, using a tool known as a “pocket rescission” in which the administration submits plans to return unspent money to Congress just before the end of the fiscal year, causing that money to lapse.

All of this means that Democratic spending priorities might be in jeopardy regardless of whether they want to keep the government open or partially closed.

Ahead of the end of the fiscal year in September, Vought used the pocket rescission to block the spending of $4.9 billion in foreign aid.

White House officials refused to speculate on the future use of pocket rescissions after rolling them out in late August. But one of Vought’s former colleagues, insisting on anonymity to discuss the budget director’s plans, said that future pocket rescissions could be 20 times higher.

Shutdown continues with no endgame in sight

Thursday was Day 2 of the shutdown, and already the dial is turned high. The aggressive approach coming from the Trump administration is what certain lawmakers and budget observers feared if Congress, which has the responsibility to pass legislation to fund government, failed to do its work and relinquished control to the White House.

Vought, in a private conference call with House GOP lawmakers Wednesday, told them of layoffs starting in the next day or two. It’s an extension of the Department of Government Efficiency work under Elon Musk that slashed through the federal government at the start of the year.

“These are all things that the Trump administration has been doing since January 20th,” said Jeffries, referring to the president’s first day in office. “The cruelty is the point.”

House Speaker Mike Johnson (R-La.) underscored Thursday that the shutdown gives Trump and Vought vast power over the federal government. He blamed Democrats and said “they have effectively turned off the legislative branch” and “handed it over to the president.”

Still, Johnson said that Trump and Vought take “no pleasure in this.”

Trump and the congressional leaders are not expected to meet again soon. Congress has no action scheduled Thursday in observance of the Jewish holy day, with senators due back Friday. The House is set to resume session next week.

The Democrats are holding fast to their demands to preserve health care funding and refusing to back a bill that fails to do so, warning of price spikes for millions of Americans nationwide.

The shutdown is likely to harm the economy

With no easy endgame at hand, the standoff risks dragging deeper into October, when federal workers who remain on the job will begin missing paychecks. The nonpartisan Congressional Budget Office has estimated roughly 750,000 federal workers would be furloughed on any given day during the shutdown, a loss of $400 million daily in wages.

The economic effects could spill over into the broader economy. Past shutdowns saw “reduced aggregate demand in the private sector for goods and services, pushing down GDP,” the CBO said.

“Stalled federal spending on goods and services led to a loss of private-sector income that further reduced demand for other goods and services in the economy,” it said. Overall CBO said there was a “dampening of economic output,” but that reversed once people returned to work.

How Trump and Vought can reshape the federal government

With Congress as a standstill, the Trump administration has taken advantage of new levers to determine how to shape the federal government.

The Trump administration can tap into funds to pay workers at the Defense Department and Homeland Security from what’s commonly called the “One Big Beautiful Bill” that was signed into law this summer, according to the CBO.

That would ensure Trump’s immigration enforcement and mass deportation agenda is uninterrupted. But employees who remain on the job at many other agencies will have to wait for government to reopen before they get a paycheck.

Mascaro, Boak and Kim write for the Associated Press. AP writers Chris Megerian, Stephen Groves, Joey Cappelletti, Matt Brown, Kevin Freking, and Mary Clare Jalonick contributed to this report.

WASHINGTON — President Trump has told House Speaker Mike Johnson that he won’t be spending $4.9 billion in congressionally approved foreign aid, effectively cutting the budget without going through the legislative branch.

Trump, who sent a letter to Johnson, R-La., on Thursday, is using what’s known as a pocket rescission — when a president submits a request to Congress to not spend approved funds toward the end of the fiscal year, so that Congress cannot act on the request in the 45-day timeframe and the money goes unspent as a result. It’s the first time in nearly 50 years a president has used one. The fiscal year draws to a close at the end of September.

The letter was posted Friday morning on the X account of the White House Office of Management and Budget. It said the funding would be cut from the State Department and the U.S. Agency for International Development, or USAID, an early target of Trump’s efforts to cut foreign aid.

The last pocket rescission was in 1977 by then-President Jimmy Carter, and the Trump administration argues that it’s a legally permissible tool. But such a move, if standardized by the White House, could effectively bypass Congress on key spending choices and potentially wrest some control over spending from the House and the Senate.

The 1974 Impoundment Control Act gives the president the authority to propose canceling funds approved by Congress. Congress can vote on pulling back the funds or sustaining them, but by proposing the rescission so close to Sept. 30 the White House ensures that the money won’t be spent and the funding lapses.

Trump had previously sought to get congressional backing for rescissions and succeeded in doing so in July when the House and the Senate approved $9 billion worth of cuts. Those rescissions clawed back funding for public broadcasting and foreign aid.

The Trump administration has made deep reductions to foreign aid one of its hallmark policies, despite the relatively meager savings relative to the deficit and possible damage to America’s reputation abroad as foreign populations lose access to food supplies and development programs.

In February, the administration said it would eliminate almost all of USAID’s foreign aid contracts and $60 billion in overall assistance abroad. USAID has since been dismantled, and its few remaining programs have been placed under State Department control.

The Trump administration on Wednesday appealed to the Supreme Court to stop lower court decisions that have preserved foreign aid, including for global health and HIV and AIDS programs, that Trump has tried to freeze.

The New York Post first reported the pocket rescission.

Boak writes for the Associated Press.