The National Urban League and several local housing nonprofits nationwide challenged part of the Trump administration’s last-minute cancellation of congressionally appropriated funds. The lawsuit, filed Tuesday night in the U.S. District Court for the District of Columbia, focuses on one portion of the $810 million cancellation the Trump administration announced last week, a $56 million cut within the Department of Housing and Urban Development. The filing is the first of likely others over the sweeping cuts, which the Government Accountability Office has said are illegal. The complaint argues that cancellations to grants across housing and Comprehensive Housing Counseling programs violated both the 1974 Impoundment Control Act and the Constitution. The plaintiffs are the National Urban League as well as state and local housing groups, which provide counseling and housing grants for low- and moderate-income people. The administration has argued the 1974 budget law, which allows the president to propose rescissions of federal spending for congressional approval, effectively allows the president to cancel spending on his own by sending the proposal just before the funds expire. That includes the $56 million program cut at issue in Tuesday’s lawsuit. Tuesday’s complaint calls the administration’s argument “absurd” and said Congress never meant to allow the president to direct spending on his own. The groups liken the administration’s use of the ICA to the line-item veto that the Supreme Court said was unconstitutional. “This interpretation of the ICA deprives the statute of all practical effect,” the complaint states. Beyond the cancellations, the complaint alleges the administration generally slow-walked the grant awards under the program partially because of the administration’s bias against the housing programs. “There can be no doubt that the Administration’s decision to rescind the CHC program funding, thereby denying grant applicants access to a public benefit, was based upon its deep animus for the grant applicants’ particular viewpoint,” the complaint says. The complaint alleges the administration’s move violated the groups’ free speech rights, federal administrative law and the Constitution. The 1974 budget law allows a president to propose rescissions of congressionally passed appropriations, and hold on to those funds within a 45-day period for Congress to act on the proposal. On Friday, the administration sent a “special message” to Congress proposing rescissions of $810 million across multiple government programs, including those involved in Tuesday’s lawsuit. With five days left before the funds would expire and the House out of session until after the election, it would be virtually impossible for Congress to address the proposal. The administration has argued that because the funds expire during the 45-day review period, the spending is effectively canceled. The GAO sent a letter to lawmakers Tuesday arguing the maneuver was illegal. But the finding may have little practical effect unless the GAO takes the administration to court, which the agency did not do in past cases. Last year, the first version released of a majority decision by the U.S. Court of Appeals for the District of Columbia Circuit stated that only the comptroller general — the head of the GAO — could sue over impoundments. A later version of the opinion removed that statement and did not resolve who could sue under the ICA, aside from the GAO. The Supreme Court has not yet ruled on the legality of pocket rescissions, as the disputes over the Trump administration’s unilateral spending cuts are still working their way through the courts. When the “pocket rescissions” issue reached the justices as an emergency last fiscal year, they allowed the administration to withhold the funds. However, the justices did not rule on the merits of withholding those funds, and the legal fight over the cancellations last fiscal year are still pending at the U.S. Court of Appeals for the District of Columbia Circuit.
