President Trump’s hiring freeze is likely illegal. In an effort to reduce the size of the federal workforce, President Trump instituted a general hiring freeze on new federal workers. Subsequently, President Trump issued a memo instructing agencies to “begin taking immediate actions to achieve near-term workforce reductions and cost savings, including planning for funding levels in the President’s Fiscal Year (FY) 2018 Budget Blueprint.”
Included in the instructions, President Trump told agencies to develop “Agency Reform Plans,” which would include “progress on near-term workforce reduction actions.” Although the Office of Management and Budget publicly categorized the general hiring freeze as ending, the memo appears to continue the hiring freeze for agencies President Trump wishes to cut. As such, several agencies have decided to keep the hiring freeze or only resume limited hiring. However, these hiring freezes are likely illegal because the Impoundment Control Act of 1974 requires agencies to spend money that Congress appropriates.
As I explained in an earlier post, the President and federal agencies do not have unilateral authority to refuse to spend appropriated funds, known as “rescinding” funds. Congress is the one that sets spending levels. Under the Impoundment Control Act of 1974, to rescind even a portion of appropriated funds the President must (i) send a message to Congress informing it of the President’s desire to rescind funding and (ii) print the message in the Federal Register. The President must spend the funds if Congress does not affirmatively approve the rescission within 45 days.
Thus, the agencies must spend the money appropriated to them under current appropriations, which generally rejected the draconian cuts in the Budget Blueprint. Assuming for the sake of argument that President Trump’s fiscal year 2018 budget is not dead on arrival, even the anticipation of future reductions in spending does not allow an agencies to ignore Congress’ appropriation levels. As the D.C. Circuit has held, “an agency may not rely on political guesswork about future congressional appropriations as a basis for violating existing legal mandates.”
Nevertheless, just because agencies have continued a hiring freeze does not necessarily mean that they are breaking the law. Appropriated funds, absent a specific congressional directive, may be spent by the agency consistent with its mission. Thus, agencies could use the savings from a hiring freeze on other spending. At a basic level, a nominally flat budget would require reductions in employees because individual employees would become more expensive due to the 2.1% cost of living adjustment. Likewise, an agency could use savings from a hiring freeze for upfront costly reductions in the workforce such as buyouts or severance packages. Similarly, the agency could replace federal workers with contractors that could be more easily fired in a reduced budgetary climate. The agency could even spend the money on non-workforce expenses such as grants.
However, an agency cannot simply ignore the levels that Congress has set for spending and refuse to hire new federal employees because the spending levels conflict with President Trump’s proposed budget. Only Congress can set spending levels.
Sam Wice is a former analyst at the Congressional Budget Office and a former Council member of the American Bar Association’s Section of Administrative Law and Regulatory Practice. He may be reached at sam.wice[at]outlook.com.