California and six other states have filed a federal lawsuit challenging President Donald Trump’s cancellation of $810 million in congressionally approved spending.
The lawsuit was filed in the U.S. District Court for the Northern District of California by California, Maine, Maryland, Michigan, Nevada, New Mexico, and Oregon.
The states argue Trump’s use of a “pocket rescission” violates constitutional separation-of-powers protections and the Impoundment Control Act.
A pocket rescission occurs when a president asks Congress to cancel approved funding near the end of the fiscal year, effectively ensuring the money is never spent.
Trump notified Congress on September 25 that he proposed pulling back approximately $810 million through this mechanism, just days before the fiscal year closed on September 30.
The cancelled funding primarily targeted Health and Human Services programs serving immigrants without permanent legal status, unaccompanied children in court proceedings, refugee programs, diversity initiatives, and migrant education.
States contend the timing of Trump’s move prevented Congress from meaningfully considering the proposed cancellations before the funds expired, making the rescission effectively irreversible.
The U.S. Government Accountability Office also weighed in, reasserting that Trump’s pocket rescission was unlawful and violated the Impoundment Control Act.
GAO Comptroller General Perez wrote that Trump’s withholding of appropriated funds beyond the expiration date “subverts both the constitutional process for enacting federal law and Congress’s constitutional power of the purse.”
Perez added in his finding: “The President may not force the expiration of budget authority Congress has already enacted and did not rescind.”
Sen. Susan Collins (R-Maine) broke with the administration, stating: “The independent Government Accountability Office has concluded that pocket rescissions are unlawful and not permitted by the Impoundment Control Act. I will work with my colleagues to address these illegal actions.”
Senate Appropriations Committee Ranking Member Patty Murray (D-WA) and Senate Budget Committee Ranking Member Jeff Merkley (D-OR) attempted to fast-track legislation blocking the pocket rescission through unanimous consent.
That effort collapsed when Sen. Ron Johnson (R-WI) objected, a single objection being sufficient to derail a unanimous consent request entirely.
The legal battle echoes a prior confrontation from roughly a year ago, when Trump issued the first pocket rescission in nearly 50 years to cancel $4.9 billion in congressionally approved foreign aid.
The Supreme Court declined to block that earlier move, citing the president’s authority over foreign affairs, while allowing related litigation to continue through the courts.
