US President Donald Trump has initiated the cancellation of nearly $5 billion in congressionally approved foreign aid and peacekeeping funds, employing a rare budgetary maneuver known as a “pocket rescission,” according to The New York Post.

This tactic, which has not been attempted in 48 years, was formally communicated to Congress on Thursday night after the funds were released from a court-ordered hold earlier that day.

A pocket rescission allows the president to request the return of funds so late in the fiscal year,  which ends on September 30, that the process moves forward regardless of Congressional approval.

Scope of the rescission

The proposed measure would claw back:

• $3.2 billion in USAID development assistance

• $322 million from the USAID-State Department Democracy Fund

• $521 million in State Department contributions to international organizations

• $393 million in State Department peacekeeping contributions

• $445 million in separately allocated peacekeeping aid

The targeted funds, originally designated for various nonprofits and foreign governments, were initially paused by the White House Office of Management and Budget (OMB) and later tied up in a lawsuit filed by the Global Health Council. On Thursday, the DC Circuit Court of Appeals lifted the injunction, allowing Trump to proceed with the rescission.

Targeted spending and controversial allocations

The administration has identified several spending items it deems wasteful. These include:

• $24.6 million for “climate resilience” programs in Honduras

• $2.7 million to the South African Democracy Works Foundation, which published articles described as "racially charged."

• $3.9 million to promote democracy in the Western Balkans

• $1.5 million for marketing Ukrainian women’s paintings

Approximately $838 million in peacekeeping funds are also targeted for cancellation. These include support for UN missions in regions such as the Democratic Republic of Congo, where the administration recently brokered a peace deal with Rwanda and the Central African Republic.

Specific allocations flagged for elimination include:

• $11 million to equip Uruguay’s peacekeepers with armored personnel carriers

• $4 million for a training center in Zambia

• $3 million for barracks for Kazakhstani peacekeepers

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Trump’s rescission does not affect US support for the Multinational Force and Observers mission along the Egyptian-Palestinian border.

Legal controversy surrounding pocket rescissions

The legality of pocket rescissions remains a contentious issue, with few court precedents, as per the report. While the Government Accountability Office (GAO) considers the practice illegal, the Trump administration’s OMB disagrees.

The Impoundment Control Act of 1974 limits the president’s authority over appropriated funds and mandates a 45-day window for Congress to approve any proposed rescissions. The Trump administration has previously used the standard rescission process, including attempts to cut $1 billion from NPR and PBS, and $8 billion from USAID last month.

OMB Director Russ Vought and General Counsel Mark Paoletta have defended the legality of pocket rescissions, citing historical precedents from the 1970s.

“Carter sent several rescission proposals to Congress in July of 1977. Funds from two of those proposals lapsed on September 30, 1977, in one case prior to the expiration of the 45-day ICA withholding period, and in another case five days after the withholding period ended,” Paoletta wrote in a 2018 letter to the GAO. “GAO noted the lapse without objection.”

Paoletta has also pointed to a 1975 GAO opinion that permitted the practice, claiming on X earlier this month that the agency later reversed its position due to what he termed “Trump Derangement Syndrome.”

The GAO is uniquely positioned to challenge the Trump administration’s pocket rescission, especially after the DC Circuit Court of Appeals ruled that private litigants cannot enforce the Impoundment Control Act. However, it remains unclear whether the GAO will pursue action, amid speculation about the constitutionality of its current comptroller general, Eugene Louis Dodaro.