The term “pocket rescission” doesn’t make headlines often—but it should. This little-known budget tactic could quietly cancel millions in congressionally approved funds before they’re ever spent. In fiscal year 2025, it’s shaping up to be a real threat for ocean, coastal, and science programs.
What Is a Pocket Rescission?
A pocket rescission refers to a controversial and rarely used (last use was 1983) budget maneuver where the President proposes canceling previously appropriated funds late in the fiscal year. Under the Congressional Budget and Impoundment Control Act of 1974 (more info here), when a rescission is proposed, the funds are temporarily suspended and Congress has 45 days to approve the cut, or else the funds are restored.
This is the process Congress recently followed to rescind $9 billion in previously allocated funds for public broadcasting and foreign aid. Now here’s the pocket rescission “trick:” if a rescission proposal is submitted by the White House less than 45 days before the end of the fiscal year, the targeted funds expire* before Congress has time to act, effectively allowing the President to rescind funds without congressional approval.
This tactic uses the calendar as a tool. If the rescission proposal is submitted close enough to September 30, the funds in question can expire before Congress finishes reviewing them. In practice, this allows the Executive Branch to cut funding without an up-or-down vote.
This practice is widely viewed as controversial and potentially unlawful. The Government Accountability Office has stated that pocket rescissions violate the intent of the Impoundment Control Act and should be considered illegal impoundments. Budget experts have also compared the tactic to an unconstitutional item veto, since it allows the President to unilaterally block spending decisions made by Congress through the standard appropriations process.
*A note on funds “expiring:” most operational money provided through annual appropriations “expire” and can’t be used if they are not obligated* by September 30, the end of the fiscal year. Obligated unspent funds can still be used to pay bills after the deadline. Unobligated funds generally revert to the Treasury or require Congressional action to repurpose.
**”obligated” means legally committed through contracts, grants, or agreements.
A Strategic Move by the Trump Administration
Bipartisan Members of Congress have expressed strong opposition. Senator Susan Collins (R-ME), Chair of the Appropriations Committee, voiced concerns about transparency and the constitutional implications of unilateral budget cuts—concerns echoed by both Republicans and Democrats.
Since taking office in early 2025, White House Office of Management and Budget (OMB) Director Russell Vought has openly discussed using pocket rescissions as a budget tool. Vought testified before Congress in June that the administration is considering withholding funds at the end of this fiscal year even if Congress does not approve a rescissions package.
Why This Matters in FY25
The FY25 funding process has been unusually slow. Although a full-year continuing resolution passed in March, many programs still haven’t received their full allocations. In some cases, the funding is arriving in small, unpredictable increments. In others, it hasn’t shown up at all. The roadblock here is often OMB, which has to approve program-level spend plans before the funds can be spent.
That’s a problem for programs that need to plan ahead, like competitive grants, research fieldwork, ocean observing, and coastal resilience efforts. These programs now face a race to obligate funds before the September 30 deadline. If the money doesn’t arrive soon, or if the delays continue, programs may not be able to spend it in time.
Bipartisan Members of Congress have expressed frustration over this apparent lack of cooperation from the administration. The right phone call to the White House or Department leadership from the right person can shake things loose, but it’s a game of whack-a-mole, and for programs that don’t have advocates fighting for them on Capitol Hill, it’s easy to get lost in the shuffle.
Once the fiscal year ends, any unobligated funds revert to the Treasury. That creates an opening for pocket rescissions and plain old expiration of funding allocations—both of which can strip away critical resources.
What Can Be Done
Congress can act to block pocket rescissions by passing a law that requires that any proposed cuts remain available for the full 45-day review period, even if it stretches into the next fiscal year. Oversight committees can also request greater transparency from OMB and federal agencies about funding flows, obligation rates, and delays.
Advocates should keep a close watch on programmatic and grant fund distribution in the weeks ahead. Elevating delay of funding concerns to appropriators or Members of Congress with an open line of communication to the administration, especially when backed by real-world impacts, can make a difference. Right now, even small programs with strong bipartisan support can be overlooked if no one’s pushing to move the funds out the door.
What’s Ahead
Pocket rescissions threaten more than this year’s bottom line. They undermine Congress’ ‘power of the purse,’ slow down implementation, and weaken public trust in the budget process. In FY25, they could quietly wipe out funding for programs that are already navigating uncertainty.
With the clock ticking, now is the time to act. If your program hasn’t received its full funding, or has but can’t spend it fast enough, you’re not alone. ESP Advisors is tracking this issue closely and offering strategic support to programs at risk.
Reach out for a free consultation.
