Unbiased

Trump's EPA moved to claw back $20 billion in climate grants. The older fight is whether a president must spend what Congress appropriated.

An en banc D.C. Circuit blocked the clawback 6-4, but rested on the Inflation Reduction Act's own spending mandate rather than the 1974 impoundment law, leaving the constitutional question where Nixon's defeat left it.

8 min read2026-08-07

What the court decided, and what it left open

On August 4, 2026, the full U.S. Court of Appeals for the D.C. Circuit voted 6-4 to keep the Environmental Protection Agency from clawing back roughly $20 billion in clean-energy grants that eight nonprofits already held in accounts at Citibank.¹ The money came from the Greenhouse Gas Reduction Fund, a program Congress created in the 2022 Inflation Reduction Act and paid out through two vehicles, the National Clean Investment Fund and the Clean Communities Investment Accelerator.² EPA moved in March 2025 to terminate the awards. Reversing a panel, the en banc court held that the agency, acting "based solely on a policy disagreement" with the statute, "likely contravened the IRA's mandatory appropriation."¹ Two independent accounts confirm the date, the vote, and that the judges treated the grantees as owners of funds already in their accounts rather than parties to a contract dispute.³⁴

Climate United Fund v. Citibank, N.A. D.C. Cir. (en banc) · No. 25-5122

Stage: Injunction against the clawback affirmed 6-4, Aug. 4, 2026
Question: May EPA terminate and claw back already-disbursed grants over a policy disagreement with the program?
Stakes: Roughly $20 billion in clean-energy grants held by eight nonprofits at Citibank

Read narrowly, that is all the case holds, and the majority was careful to hold no more. Its ground is the Inflation Reduction Act's own spending command, not the Impoundment Control Act of 1974, the statute that usually governs a president who declines to spend.¹ The court also split. Four judges would have dissolved the block because a 2025 law, the One Big Beautiful Bill Act, repealed the underlying program effective July 4, 2025; the section that funded it now reads "Repealed" in the U.S. Code.⁵ Chief Judge Srinivasan wrote that but for that repeal he too would affirm, so on the pre-repeal merits something closer to seven of the ten sitting judges saw the policy-based clawback as unlawful. The division was over what the repeal changes going forward, not over the power of the purse, and on EPA's authority after the repeal the court divided evenly and decided nothing.¹

Behind this one case sits an older, unsettled question: when Congress appropriates money, must the president spend it? The refusal to spend appropriated funds has a name, impoundment, and Congress tried to corral it in the 1974 Act. That statute leaves the president two narrow channels. A rescission cancels budget authority for good, but only Congress may grant one: the president sends a special message, and if Congress does not act within 45 days of continuous session the money "shall be made available for obligation."⁶ A deferral only delays spending, and the statute allows it "only" for contingencies, for savings, or where another law provides, and bars it for any other purpose.⁷ Withholding because the president dislikes the program is exactly what the statute does not permit.

Impoundment is also old, and both sides start from the same record of it. Presidents have declined to spend since the Republic's early decades; the fight is what that practice proves.

1803
Jefferson holds $50,000 for gunboats⁸

Told the boats were no longer needed, he declines to spend the appropriation, the episode the revival case treats as its first precedent.
1876
Grant declines half of a $5 million river-and-harbor appropriation⁸

He withholds the part he judges "purely private or local" in benefit.
1949-1961
Truman holds $735 million from the Air Force; Kennedy holds $180 million from the B-70 bomber⁸

Mid-century presidents withhold weapons money they consider unnecessary, the modern high-water mark of the practice.
1974
Congress passes the Impoundment Control Act⁶

After President Nixon claimed a constitutional power to impound and lost in court, Congress channels all withholding through rescission and deferral.⁹
1975
Train v. City of New York¹⁰

The Supreme Court holds, on the statute, that an administrator may not allot the states less than Congress required.
2025
GAO finds the NIH impounded appropriated funds¹¹

Congress's auditor rules the health agency withheld money without following the 1974 Act, one of several such findings that year.
2026
The en banc D.C. Circuit blocks the EPA clawback¹

A divided court reinstates the injunction protecting the clean-energy grants, on the Inflation Reduction Act's mandate.

Strip the doctrine to its frame. Is an appropriation a ceiling, an upper limit the president may spend up to but need not exhaust, or is it also a floor, a command to spend the sum in full? Almost no one denies it is at least a ceiling. The contest is whether these appropriations, and others like them, were also floors, and whether any power to decline survives an appropriation that plainly is one.

An appropriation is a ceiling

Congress may cap what the president spends, not compel him to spend it; the discretion to decline is old, and the 1974 Act intrudes on a power the executive already held.

The strongest evidence is practice. For two centuries presidents of both parties withheld money Congress had provided and defended it as an exercise of executive judgment, from Jefferson's gunboats to Kennedy's bomber.⁸ Hamilton had described the president as spending "for an object, to an extent, and out of a fund, which the laws have prescribed."⁸ On this reading the Appropriations Clause forbids spending Congress did not authorize. It does not command that every authorized dollar go out the door. The power Congress holds is a power to set ceilings, not floors.¹²

On this view the 1974 Act is itself a contestable intrusion on a power the executive already held, a claim of unconstitutionality no court has yet accepted.¹² The side grants a real limit: Nixon's blunt claim of a general constitutional power to impound lost in court and produced the statute.⁹ Its surviving claim is narrower and harder, that discretion remains for money Congress did not truly mandate. It reads the D.C. Circuit's own fracture as proof: once Congress repealed the greenhouse-gas program, even a judge ready to affirm saw the asserted violation fall away.¹

Mark Paoletta, general counsel of the Office of Management and Budget, puts the position plainly, writing with colleagues at the Center for Renewing America. An appropriation, he says, is "an authorization to spend, required by the Appropriations Clause, rather than a requirement to spend a particular sum."⁸

The power of the purse

Article I gives Congress control of spending; when an appropriation commands, the president must obey, and the 1974 Act routes any withholding back through Congress.

The one square Supreme Court holding runs this way. In Train v. City of New York (1975), decided on the statute rather than the Constitution, the Court held that the EPA administrator could not allot the states "less than the entire amounts authorized to be appropriated."¹⁰ Where Congress commands, the executive obligates. The 1974 Act then removed the discretion at issue here by name, permitting a deferral "only" for contingencies, savings, or as another law provides, and for no other purpose, which forecloses withholding over a policy disagreement.⁷

The executive's own lawyers have said as much. In 1969 the head of the Office of Legal Counsel, William H. Rehnquist, later Chief Justice, advised that a general presidential power to impound is "supported by neither reason nor precedent," and that it is "extremely difficult to formulate a constitutional theory to justify a refusal by the President to comply with a congressional directive to spend."¹³ Congress's auditor has found the current administration in violation more than once in 2025, on funds for the National Institutes of Health among others.¹¹ The scholarship points the same way. Louis Fisher's standard study argues that control of spending cannot rest on the appropriations stage alone.¹⁴ Zachary Price, reviewing the very episodes the revival case cites, reads most as exercises of statutory authority or interpretation, the judgment the appropriation's own words allowed.⁹ The lone president to claim a constitutional power to impound, he writes, was Nixon, who "did forcefully assert a constitutional impoundment prerogative," and lost.⁹

The position states its own limit. The Rehnquist memo concedes the other side's premise, that an appropriation "permits but does not require" spending, before answering that this is "basically a rule of construction" and cannot license defying a command to spend.¹³ So the honest dispute is narrower than the slogans: not whether every appropriation is a floor, but whether a given one commands, and whether any constitutional power to decline survives a clear command. On that last question no cited authority is dispositive. Train read a statute, the 1969 memo reasoned from construction, and the en banc court, splitting over the repeal, never reached it.¹

Government Accountability Office, Congress's auditor of how appropriated money is spent, found that the NIH "intended to withhold budget authority from obligation and expenditure without regard to the process provided for by the Impoundment Control Act."¹¹

What the court decided, and what it left open

Jefferson holds $50,000 for gunboats8

Grant declines half of a $5 million river-and-harbor appropriation8

Truman holds $735 million from the Air Force; Kennedy holds $180 million from the B-70 bomber8

Congress passes the Impoundment Control Act6

Train v. City of New York10

GAO finds the NIH impounded appropriated funds11

The en banc D.C. Circuit blocks the EPA clawback1

An appropriation is a ceiling

The power of the purse

Sources

Jefferson holds $50,000 for gunboats⁸

Grant declines half of a $5 million river-and-harbor appropriation⁸

Truman holds $735 million from the Air Force; Kennedy holds $180 million from the B-70 bomber⁸

Congress passes the Impoundment Control Act⁶

Train v. City of New York¹⁰

GAO finds the NIH impounded appropriated funds¹¹

The en banc D.C. Circuit blocks the EPA clawback¹