Executive Order 14169: Can the President unilaterally shutter agencies and divert funding created and appropriated by Congress?

“Mo’ Money, Mo’ Problems” applies to everyone, including the President.

Feb 27, 2025

Background

On January 20, President Trump issued Executive Order 14169, instructing agencies to begin a 90-day pause on all financial aid given to foreign nations. Pursuant to the executive order, numerous administration officials (including Elon Musk of the newly created Department of Government Efficiency) have taken steps to shutter the US Agency for International Development (USAID), an executive agency exclusively dedicated to distributing foreign, humanitarian aid. The cited reason for this decision was the Administration’s ongoing efforts to reduce government spending.

So far, thousands of USAID employees have been fired or placed on indefinite leave, millions of dollars worth of government payments toward humanitarian programs have been halted, and multiple Administration officials have zeroed in on the agency as the first of many such efforts within other executive agencies. President Trump himself has called USAID’s activities “a fraud,” claiming that billions of dollars of government funds have been stolen and that he has the power to close down the agency all by himself.

Much has been made about the Administration’s decisions. For many, the importance of this issue might feel politically inflated. After all, USAID is a relatively minor governmental agency, with only around 0.7-1.4% of the government’s annual budget at its disposal. Nor does USAID’s activity impact the lives of the average American, because the agency’s jurisdiction is limited to foreign relations. So, why all the fuss?

The answer has to do with how much power the President has under our system of governance. Whether the President has unilateral authority to reshape agencies and reallocate funding has enormous implications for the system of separation of powers set up under the Constitution. In short, more discretion for the President means more power for the Executive Branch, at the expense of Congress and the Judiciary. If upheld, Trump’s unilateral actions will have far-reaching implications.

Legal Basis

To see if the President can take the above steps, let’s look at a subtle yet vital aspect of Executive Power: the “Take Care Clause.” Art. II Sec. 3 of the Constitution imposes an obligation on the President to “take care that the Laws be faithfully executed.” It’s a short clause, but it does a lot of work. The Take Care Clause has long been interpreted to mean that the Executive must follow the laws that Congress passes, with certain allowances for discretion dependent on the language of the authorizing statute.

All agencies, USAID included, are created by Congress. Through the Take Care Clause, legislation informs what the Executive must do and what it can do regarding a given agency. In USAID’s case, 22 U.S.C. § 6563 states that, unless reorganized in accordance with other statutory provisions, USAID must exist as an executive agency. If the President opts to reorganize USAID, he can, but only pursuant to the terms of the statute. 22 U.S.C. § 6601 limited the reorganization window to 60-days after the initial passage of the law. That time has long since elapsed.

Further, under Art. I Sec. 8 of the Constitution, Congress is given what is often referred to as “the power of the purse,” i.e. the power to appropriate funds for the Government to spend. As the Constitution specifically allocates that power to Congress alone, the President does not have a say in how taxpayer money is spent, beyond exercising the constitutional veto power, and beyond discretion that Congress provides.

The current spending bills, which govern the current allocation of funds among government agencies, are the Consolidated Appropriations Act of 2024 and the Further Consolidated Appropriations Act of 2024. At over 500 pages in length, these Acts cover everything the government spends money on, from big ticket priorities down to operational minutiae. In USAID’s case, Congress gave the agency an operating budget of $1.7 billion. In doing so, they gave the Executive some discretion: up to 20% of that budget can be transferred, but it has to be transferred to some other foreign-assistance-related project. Congress’s goal here is likely to give the executive flexibility in case some international crisis requires additional attention. Seeing as the actions taken here do not serve that goal, and the pause applied to all USAID spending, there are legitimate questions as to whether the President has complied with Congress’s requirements.

State of the Action

Three separate lawsuits challenging the legality of the actions taken by the Administration have been initiated so far. The first, brought by the American Federation of Government Employees (AFGE), a labor union representing Government workers, challenges the decision to place many USAID employees on indefinite leave on grounds that the mass firings violate Congress’s Appropriations Bills. While District Judge Carl J. Nichols—a Trump appointee—initially granted a partial temporary restraining order (TRO) ordering the temporary restoration of employment status for the dismissed employees while the court gathered more facts, Judge Nichols later denied Plaintiffs’ request for a preliminary injunction, finding that the high standard for injunctive relief against the Government had not been met. This has allowed the Administration to resume dismissing or placing USAID employees on indefinite leave.

The other two suits have been consolidated into one action before District Judge Amir Ali, a Biden Appointee. The Plaintiffs, The Aids Vaccine Advocacy Coalition and the Global Health Council, make substantially the same argument: that the executive order halting foreign aid violates the Constitution, the Administrative Procedure Act, and the 2024 Congressional Appropriation Bills. Without ruling on those issues, Judge Ali issued a partial order granting temporary injunctive relief on February 13. Judge Ali has thus ordered the Administration to comply with his order by resuming funding for USAID projects. However, his decision has been appealed, and on February 26, the Supreme Court temporarily halted the injunction. Having only been filed early this February, and with the near-certainty of multiple appeals throughout the process, neither of these cases are close to reaching a result on the merits.

Will it Stand?

At this stage in the litigation, it’s hard to say. While the orders regarding injunctive relief might telegraph to some degree how the district courts will ultimately rule on the merits, Plaintiffs faced an uphill battle on injunctive relief that they might not have at later stages of the litigation.

The standard for preliminary injunctive relief—i.e., an order halting government action prior to discovery, trial, and the rigors of litigation—is a showing of “irreparable harm” to the Plaintiffs by the government action at issue. The burden of proof is very high, and for good reason: in general, the judiciary is cautious about upsetting the separation of powers by ordering around other co-equal branches of government. So, a Court ordering the Executive Branch to behave in a certain way, especially so early in a case, is an extraordinary event that requires extraordinary circumstances to be a proportionate form of Court-ordered relief. Because the standard is so high, Judge Ali granted only a partial injunction. The high legal standard involved may have also played a role in Chief Justice Roberts’s decision to pause Judge Ali’s injunction.

While the rulings thus far are likely not predictive of the ultimate outcome, there are strong arguments that what the Administration has done here is unlawful. The Appropriations Bills do not come close to granting the President broad authority to pause and reallocate funds on a whim, which the Executive Order purports to instruct. In fact, the Appropriations Bills plainly forbid these actions, by not allowing funds to “be used to implement a reorganization [or] redesign of” any government agency, USAID included. Crucially, this prohibition extends to reorganization by downsizing an agency’s workforce, which provides the basis for AFGE’s claim. Nor does the legislation which created USAID in the first place allow for such unilateral action, as the window provided for reorganizing USAID closed decades ago.

Because the President must “take care that the Laws be faithfully executed” by following the laws Congress passes, he violates both the laws and his Constitutional duties by undertaking unilateral reorganization, against Congress’ explicit instructions. In granting the initial TRO, Judge Nichols found that Plaintiffs’ had “a substantial likelihood of success on the merits.” So, as it stands, there is a strong likelihood that both the Executive Order and the mass firings are struck down.

The problem here is that, even though the Administration’s actions will likely be found to violate either the Appropriations Bills or USAID’s original statute, it may only delay their efforts. For instance, Congress can decide to give the Administration greater discretion in their next spending bill, which seems probable given the fact that Republicans also control both houses of Congress. Just this week, Congressional Republicans began taking steps to do just that. They could also go further, and endorse the abolition of USAID and other agencies by repealing the acts that created them in the first place. In short, Congress could effectively legalize the President’s actions through legislation, and pull the rug out from any claims that these plaintiffs or others might have by granting the President more power over USAID’s budget. Then, the President would not be usurping Congress’s power, but instead acting in accordance with their instructions.

Only time will tell whether Congress will ultimately endorse the Administration's actions. But until they do, the President and his administrators have likely exceeded their authority in unilaterally reshaping, reforming, and reallocating all agency resources; resources that are only at the Administration’s disposal because Congress gave it to them in the first place, and which should be used for their congressionally-sanctioned purposes.

(Executive) Order in the Court

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