The topic of this episode is, “Why should we care about Congress’s power of the purse?”
Well, we are just getting through the FY2026 budget process, which Congress was supposed to finish nearly half a year ago. And the next budget process has begun.
During the second administration of Donald Trump, we have seen an escalation of the longstanding battle between the executive branch and the legislative branch over federal revenue-raising and federal spending. Mr. Trump famously unleashed the Department of Government Efficiency, and he has refused to spend money appropriated by Congress. In other cases, he has repurposed money appropriated for one purpose to another purpose. And this is to say nothing of some of the peculiar revenue-raising maneuvers he has made, such as seizing oil from Venezuela, selling it, and then tucking the money in an overseas bank account.
Should we be bothered by any of these doings? Should we really care whether Congress or the president exerts more or less power over the federal purse?
To discuss these questions, I have with me Shalanda Young, who has an extraordinary amount of expertise and experience in federal budgeting matters. Ms. Young presently is a Distinguished Scholar in Residence and Adjunct Professor of Law at New York University’s law school.
Previously, Ms. Young was the Director of the U.S. Office of Management and Budget from 2021 to 2025. In that position, she also led the development of all four of President Joseph Biden’s budgets and presented them before Congress each year. She was also a lead negotiator for the Fiscal Responsibility Act of 2023 that averted a first-ever debt default and lifted the Nation’s debt ceiling. Ms. Young came to the executive branch with a load of legislative branch experience. She worked for the House Appropriations Committee for nearly 15 years and served the Committee as the Staff Director.
So who better to discuss Congress’s power of the purse?
Kevin Kosar:
Welcome to Understanding Congress, a podcast about the first branch of government. Congress is a notoriously complex institution, and few Americans think well of it. But Congress is essential to our republic. It is a place where our pluralistic society is supposed to work out its differences and come to agreement about what our laws should be.
And that is why we are here: to discuss our national legislature and to think about ways to upgrade it so it can better serve our nation. I am your host, Kevin Kosar, and I’m a resident scholar at the American Enterprise Institute, a think tank in Washington, DC.
Shalanda Young, welcome to the program.
Shalanda Young:
Thanks, Kevin.
Kevin Kosar:
You recently published an essay, which I very much enjoyed the title of: The Power of the Purse, A Symptom of a Larger Institutional Decline. What prompted you to write that essay?
Shalanda Young:
NYU has a Democracy Project, and their idea was to put out a hundred ideas from more than a hundred people. And they really gave you carte blanche to write about whatever you believed was the most pressing issue in our democracy. Some people wrote about service, getting more young people to participate in our democracy. As a former student who loved civics class that spoke to me, when I tried to think out of the box in that way, not shockingly, I came back to what I knew best and what I worked on, which is government funding. And not shockingly, anyone listening to this has heard about shutdowns, how big the debt is, and you’ve heard about threats to default over the years, so it doesn’t sound like a particularly functioning part of the government. That might be an understatement.
But it’s not the only thing that’s messed up, which is why you get that second part of the title, “A Symptom of a Larger… Decline.”
It’s one of the last things that started to fail with regard to Congress, which is our Article One branch of the government, the first thing the founders wrote about when they put this democracy together. So I feel very strongly tied to Congress, even though I ended my federal career in the executive branch. I have a lot of love for that branch. I think it’s the closest to the people, especially the House of Representatives, for which I worked for nearly 15 years. So not surprisingly, I would talk about the budget, and then in talking about the budget and its issues, it led me to ponder the other things that have faltered. And maybe because the budget is so important and so close to their constituents, it also might be the thing that saves Congress and can bring back their ability to flex their powers and push back the executive branch, not just this administration, but any administration.
Kevin Kosar:
Yes, there are many problems with our politics and governance system, and there are many troubles within a portion of it that we both care so much about, the US Congress. Right at the heart of that is the appropriations process. This is a process wherein revenue is flowing in from people, companies, etc., and decisions are being made as to where to put that. And that is essential to the functioning of a democratic republic, and it should reflect the public’s desires.
It was interesting. In recent weeks, we have gotten appropriations, belatedly passed, some of which carried a whole lot of congressionally directed spending, which we often call earmarks. And so we are seeing the process wherein the desires of folks back in districts and states are being translated into policy and spending outputs. So the patient, our dear Congress, is not dead yet.
Nonetheless, we certainly have seen both during the first and second Trump administrations, the president and his people seize some of Congress’s spending and revenue-raising powers: impoundments, tariffs, etc. But listeners might find it interesting that there’s a long history of fighting between the branches over control of revenue raising and spending.
Executive usurpation of Congress’s power of the purse is not new, right?
Shalanda Young:
If you’ve ever been in a room with a president, and you have to communicate to him or her that the executive branch can’t do something because Congress hasn’t given it the authority to do it, they all bristle a little, even if they served in Congress, which my boss did for a long time. They’ve been elected by over 70 million Americans. It’s a tough pill to swallow when they hear this. Their entire life had built up to this moment, so every president has that reaction. I think it’s become more intense, certainly since the Clinton administration, where you do see executives who feel a sense of urgency in getting the agenda they told the American people they were going to do when they were elected.
But it’s not that simple. I think that the media pressures that have come with the 24-hour news cycle and the way presidents communicate with people more directly and closely to them, there are expectations from the American people, who may not accept the idea that the president has to wait on Congress to do something. So that’s no small thing that presidents are facing. And I feel for them. I felt for my boss. So a lot of them have found workarounds. You’ve seen a buildup to this. Elena Kagan, when she was still at Harvard, long before she was a Justice on the Supreme Court, wrote about this phenomenon of executive branch administrations looking for tools to be more directive, using the regulatory agenda, using executive orders, and starting to make announcements about things that used to go through process first. So this is a long road, and now we’ve gotten to where we are today, where people think, ‘This administration is withholding funds that Congress intended to be used.’ The one sure thing in this town is that if you do a little of it, you will eventually do a lot of it. So this has been a buildup. Some would say slow, some would say fast, but part of it goes back to our branch of government, Kevin, that we both love so much. Presidents are also facing this pressure of needing to deliver. We’ve had COVID, we’ve had the Great Recession—if we have a Congress unwilling or unable to find ways to rise to the occasion to answer large and complicated policy issues, we are going to see more of this from presidents.
So I go back to how do we get Congress to find ways to answer these big questions and to legislate together. The biggest legislations have been reconciliation bills that require votes from one party. That doesn’t pass a policy agenda on housing, for example, and to deal with affordability. That needs both parties. You can’t do most of it in reconciliation. So it’s been a long road coming with presidents taking more and more power, but Congress has to own some of that dysfunction because some of the biggest issues can’t wait nine months while they yell at each other and try to find solutions.
And so the easiest thing for presidents or people in my former position at OMB is to look for old laws that can be looked at differently. It’s not illegal to do that, but does it usurp some the power of Congress? Absolutely. But Congress has got to decide they don’t like that, and they’ve got to come together in a bipartisan way to put forth a solution and show the president that they are willing to act on this.
Kevin Kosar:
It’s a truism of our tripartite system that if someone is not using a power, that power is probably going to flow to one or more branches. That’s right.
And I take your point that certainly, presidents are under a lot of pressure to get things done. How many presidents come in and they may briefly have their party in control of both the House and the Senate, but they know a comeuppance is happening. You just don’t get unified party government for eight-year stretches. Control just keeps bouncing back and forth. So that really does put the pressure on the president to get as much done in the first couple of years, and not surprisingly, it probably incentivizes a lot of actions like you’ve described, going and turning to emergency authorities or to laws that have been forgotten about, or just coming up with clever things like a pocket rescission—
Shalanda Young:
—Oh, that term, Kevin.
I tell people to describe a pocket rescission to me—you wait until the end of the fiscal year and send up a rescissions package, but you don’t give Congress the legislative 45 days that the law says you should, and then it lapses. That just sounds like a straight impoundment to me.
And my guess is Congress will figure out a way to come together. My guess is that they won’t do it for this president. When these things tend to get fixed, fixes typically happen when there is a Democratic president and a Democratic majority, Democratic members of Congress are willing to do it. And that is what happened with apportionments. If you remember, during the first Trump administration, there was a withholding of funds for Ukraine that you saw bipartisan screeching about in ways you don’t see this term when this kind of stuff happens. And we, in a bipartisan way, in the appropriations process, tried to get some transparency around apportionments because you knew nothing about them because they really had not been used that way before. We could not get it done in the first Trump administration, even though that’s where the problem we believe was happening.
And guess when it happened? It happened when Joe Biden was elected and Shalanda Young had moved from the Congress over to be OMB Director. And my former colleagues on the Hill were like, “Here we go. You believed in this transparency before. Now we’re going to make you do it.” And so, while I wish to see some of the corrections to this now, I think you’ll see it later with a subsequent president’s administration.
Kevin Kosar:
Yes, I think that’s right.
Now I do want to ask you, since you have a long view of the budgeting process and have seen it from both the legislative and executive sides, is there anything qualitatively different about the Trump administration’s various efforts to direct fiscal policy? Or does it appear to be more of a kind of evolution along the same trajectory that things have been happening for a lot of years, or something else?
Shalanda Young:
It seems like a leap. If everybody else was a slow creep, this is meant to come in and be disruptive and game-changing. And I think that that’s the intention. They had an unusual benefit here. If one wants to come in and be game-changing in this way, they had the perfect scenario where they had four years in, four years out, and then to come back in. Usually, two terms are sequential, so you are drinking out of a fire hose. No one has time to think of legal theories in which to work around Congress. They had that. And I think they use that time to come up with their theories and did some creative lawyering to think through how the power of the purse was owned more by the executive branch than the legislative branch.
This theory that Congress sets a number and it’s a ceiling, that you can go down to zero, is laughable to most 10th-grade civic students. If Congress intended to set a ceiling, they’d write it that way. They do. If you look at appropriations bills, they give a lot of flexibility to some things. They’ll say, this thing is funded up to $10. That provides a ceiling of $10. So they have a way to do that if that’s what they intended. This administration has said, no matter if they write it that way, or if they just say “X shall be provided $10” without this up to language as flexibility, sometimes Congress says “No less than…” and they set a floor of $10. This administration ignores the flexibility that Congress has to write laws and authorize money based on what the situation for that activity is, and just says they have the authority to go all the way down to zero.
That makes no logical sense, and to show you it’s on shaky legal ground, if you read most or all of these cases that have made it to court, they don’t use that legal theory because they’d be laughed out of the court. They talk about that in public, but they don’t use it in court. This is not to say judges can’t go read online to see that’s what they’re saying, but the DOJ lawyers obviously don’t feel comfortable using that theory when they defend these rescissions that are pending in the courts.
So I think they have intended for this to be a complete rewrite of the rules of budgeting in this town. I don’t think they would really hide that. You see the same kind of leaping with regard to making it easier to get rid of federal workers. These are supposed to be huge changing functions of the government, not some of the slow creep you’ve seen over the decades that presidents have done. This is not akin to George Bush using signing statements, which people were outraged with at the time. That seemed to me creep, not great, in looking for workarounds of bills that Congress did.
This seems bigger and more consequential, but the more troubling thing is that it seems something that’s not lasting. And the thing that I’ve told people worries me the most is what our allies overseas are supposed to do when our presidents are so far apart on foreign policy. Given this whiplash, who will ever agree to be partners with us? I feel that way domestically. If every rule is rewritten every four to eight years, how are we supposed to function as a country? I’ve never seen this level of whiplash. This polarization has made it outside of our politics and into our policy, in very destructive ways. If you’re a civil servant, do you come in when there’s a Democratic president who you think likes civil servants and leave when there’s a Republican who doesn’t? So I think this is game-changing, but it’s game-changing in a troubling way. It is hard to see how that’s not disruptive to the work of this country.
Kevin Kosar:
So some listeners might be thinking, ‘What’s so wrong with a president refusing to spend money appropriated by Congress if he trimmed some of it back?’ And, ‘What’s wrong with a president not raising our taxes, but instead getting corporate donations to build the White House, or seizing some Venezuelan oil and selling it?’ Everybody knows America has lots of deficits and debt, so why do we care if the president is grabbing revenue-raising and spending authorities away from Congress and just wielding them?
If Congress itself can’t get it together, should we be worried?
Shalanda Young:
You have got to play these things honestly. If you wouldn’t be okay with a Democratic president doing it, it’s not okay for a Republican president to do it. We have got to be honest and call balls and strikes, as some people like to say, on these issues of constitutional integrity.
On tariffs, I disagree with tariffs. I think that is a regressive tax on the middle class and lower-income people in this country. However, he is using legal theory. He’s explained why he believes he has the legal authority to do it based on longstanding laws that have been used in tariffs. Whether he wins in the Supreme Court, I don’t think it’s an outrageous case to bring in front of the courts. That seems to me to be in the realm of what presidents do: they test the legal bounds of these things. I think it’s pretty clear. However, when the Constitution says, “No money shall be drawn from the Treasury” other than by Congress, and when Congress writes, X amount shall be spent on this, and the President chooses not to do it, that feels unconstitutional to me.
So we do have to be honest. You can disagree with everything Donald Trump does on policy, but there are some things that are illegal or unconstitutional. We have to start discussing those things without the hyperbole because then people tune out. I think there’s a difference between having a policy disagreement and things that will work their way through the courts, that the courts are going to deem unconstitutional or illegal. That is not okay to have a president of the United States who is doing those things. If he wants to cut back on things Congress has done, he has to work through Congress to do that. He did that successfully during the rescissions package, where, for example, public television and public radio were cut. I disagree with those choices, but that went through a legal process. He went to Congress, and Congress passed that on a party-line vote. Again, I disagree with that policy choice, but he used the process in law. He chose not to do that when he sent up a package that cut foreign aid with less time for Congress to act on that than was required by law.
And that case is still working its way through. So there are levels to this. Each case is different, which is why the courts are tied up. And these cases are going to take years to work through because each of them is different and is undertaken under different circumstances.
Kevin Kosar:
And whether we’re talking about raising revenue or spending it, you’re going to be making policy either way. And the question is, do presidents get to unilaterally make policy? If so, to what degree? Or do you want the people’s representatives in the form of a legislature to do it? It looks very different if you spend money in a particular way, but if you did it because large majorities in the House and Senate voted for a bill, and the president signed it. They’re all saying, let’s do this.
Shalanda Young:
And again, each circumstance is different. Congress writes these programs differently. They use different methodologies.
So I’ve tried to be careful to not say that every action is illegal because you have to look at how each program is funded. Administrations do have flexibility. We use flexibility where there was—not to stop it necessarily, but maybe—to do things that weren’t intended but that our lawyers said were allowed. There is natural flexibility written. We tried to look at intent, but often we utilize the opinions of our DOJ and OMB lawyers. So each of these things has to be looked at on its own merits. And that’s why you won’t have one global impoundment case. Each of these is going to have to be litigated, little by little. That’s the concerning part. Some of these things will be declared illegal. But they’re not going to be declared illegal until three or four years after the action, and by then it’s really too late, but the next president is going to have boundaries on what they can and cannot do because we’re going to have court precedent on these things in ways we haven’t before because presidents have not dare tested Congress in this way because who would have dared to think that you could tell an Appropriations chair, “No, thank you. I’m not doing this, that your member spent nine months developing.” That’s a good way for a secretary to find himself or herself without assistance because Congress would be sure to use the power of the purse to be punitive.
I call that soft power, and it turns out that was very effective. Courts didn’t really have to get in the middle of this because Congress had defended itself through actions that were related to these spending fights. But they do it to get directly at the decision makers. I remember very vividly, one of the Obama administration’s agencies didn’t want to pay for travel for my Republican colleague. And I told them that I would not be going if he’s not going, because the rules of the game are you send both of us in a bipartisan way, and whatever they choose to do to remind you of that, they will have our full support.
That kind of soft power is essential, and I hope Congress starts to use more of that in a bipartisan way.
Kevin Kosar:
We are nearly out of time, but I cannot let you go without asking you—and you brought this up in your essay. What would you advise Congress to do to strengthen its power over the purse?
Shalanda Young:
The more powerful the committee, the smaller it is. One of my recommendations is to increase the size and have more members involved in the process, because a lot of these bills tend not to make it to the House or Senate floors, so the real action is in committee. And if that’s the case, it frustrates members who are not on those committees. I’m not just talking about Appropriations, I’m talking about Ways and Means, Senate Finance—have more rather than fewer members involved.
Another thing I feel very strongly about is the staffing. They’re working on 1940 staffing levels. And if there’s going to be this tension where the executive branch is not going to play ball, like not provide documents, not provide witnesses, not provide information with regard to the executive branch actions, the legislative branch has to have more firing power. Look at how big the Office of Management and Budget is. We were small compared to Department of Defense’s budget personnel. The Appropriations Committee is like the size of an ant compared to the executive branch that it oversees. I had gallbladder surgery one time when I did EPA’s budget. And we literally couldn’t finish the negotiation until I was well enough a couple of days later to finish. Those are the margins they’re dealing with, and I just don’t think in a modern-day context where Congress needs to get its power back, that’s sufficient. I think they need to staff themselves up in the committees and the personal staff, and I think that’s essential to this policymaking we’re talking about. People like to say lobbyists are bad words. I’m not one of those people who believe in that because given the lack of staff in Congress, they are trying to pull information from various sources. It’s not surprising to see them leaning on outside forces to help understand complex issues.
And the idea that’s probably the least popular is to give House members more time in the House. Four years. Think about this DHS funding fight they’re going through. Now, we have midterms coming up. Raise your hand if you think in the year of a midterm, they’re going to find a compromise on immigration. So this idea is built into give members more time in which to focus on policy and not just getting reelected every two years. It made sense when they didn’t have to fundraise and have $2 million in the bank for House races. My first boss maybe had $150,000 in the bank. For House races every two years now, I talked to a Republican member who’s in a R+27 district, meaning a Republican’s going to win that district every time. To feel comfortable, he needs $2 million. He has to fundraise all the time. When is there time to do policy? Certainly, when is there time to reach across the aisle and do something maybe unpopular today, but is the right thing for tomorrow?
So I think there are a lot of moving parts. You can’t just look at the budget. I do think it’s a symptom of a larger problem, which is why a lot of my recommendations don’t just focus on the budget process itself, but how we create room for members, a lot of whom I talk to who want to do the right thing, but if you go on social media, you’ll see why a lot of them can’t.
Kevin Kosar:
All true, all true. We are out of time, but let me thank you, Shalanda Young, for helping us better understand the importance of Congress’s control over the purse, how it is seeped away, and ways that the situation could be made better.
Shalanda Young:
Thank you very much.
Kevin Kosar:
Thank you for listening to Understanding Congress, a podcast of the American Enterprise Institute. This program was produced by Jaehun Lee and hosted by Kevin Kosar. You can subscribe to Understanding Congress via Stitcher, iTunes, Google Podcasts, and TuneIn. We hope you will share this podcast with others and tell us what you think about it by posting your thoughts and questions on X.com and tagging @AEI. Once again, thank you for listening, and have a great day.
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