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OMB's Shutdown Improvising Draws Fire from Budget and Legal Experts

Acting budget chief Vought has revived operations on tax refunds and food stamps.

President Trump’s temporary budget director, acting in the unprecedented role of piloting the government during a partial but now record-breaking shutdown, has directed federal agencies to take several actions to ease the pain of closures on citizenry. 

Russell Vought last week prompted both the Internal Revenue Service and the Agriculture Department to announce changes in their handling of key programs affected by the shutdown that has largely closed nine major departments.

Legal scholars and veterans of past shutdowns and budget stalemates interviewed by Government Executive are mostly crying foul.

Vought, a former Capitol Hill aide and conservative think tank operative, stepped up in mid-December after Senate-confirmed Budget Director Mick Mulvaney became Trump’s acting chief of staff. Vought recently said his instructions are “to make this shutdown as painless as possible, consistent with the law,” according to a Saturday Associated Press story. “We have built on past efforts within this administration not to have the shutdown be used to be weaponized against the American people.”

Vought has put that approach into action via conference calls with agency leaders during the shutdown, while also soliciting them for ideas on other ways to work around the appropriations lapse. Their selections of what is permissible have also spawned suspicions that the moves are political.

On Jan. 7, OMB announced that the IRS would be recalling idled staff to prepare to process tax returns when filing season begins late this month. On Jan. 9, the IRS went further, seeking to help citizens who need copies of past returns to obtain a mortgage or prove eligibility for disaster aid.

 “While the IRS remains closed during the partial government shutdown, the agency recognizes the immediate hardship incurred if information is not available through the Income Verification Express Service program as well as by taxpayers who have been unable to certify their residency in the United States for certain tax treaty benefits or by those who have been unable to obtain photocopies of tax returns,” the agency said. Following an extensive review, the IRS began processing requests on Jan. 7 for transcript information made through the Income Verification Express Service,” which is funded through user fees.

The Agriculture Department on Jan. 8 announced its own shutdown-mitigation steps. “At the direction of President Donald J. Trump, U.S. Secretary of Agriculture Sonny Perdue today announced a plan to ensure that low-income Americans have access to the nutrition they need, despite the inability of Congress to pass an appropriations bill that safely secures our borders,” said the announcement. Full benefits under the Supplemental Nutrition Assistance Program (commonly known as food stamps) would be funded for states for the month of February.

Though the program was already funded for January when the shutdown began on Dec. 21, the extension to February was possible, USDA said, by a “legally sound” reliance on a provision of the continuing resolution that expired on Dec. 21, “which provides an appropriation for programs like SNAP and child Nutrition to incur obligations for program operations within 30 days of the CR’s expiration.” States must apply by Jan. 20, the department said.

In a third step to ease pain, the Fish and Wildlife Service was directed to call back furloughed staff for 30 days to clean up wildlife refuges.

 “Both the administration and the individual department heads are playing with fire in acting as if they have open-ended discretion to operate whichever parts of the government they please,” said Georgetown University law professor David Super. “Their authority is limited to instances of threats to life and property, not public convenience. These terms have been carefully interpreted over several decades. Authorizing work for which no appropriation or other legal authority exists is a crime.”

The Agriculture Department, he further argued in a paper on food stamps during shutdowns, has appropriately interpreted the continuing resolution. “Contrary to the implication of USDA’s release, however, SNAP benefits (although not some other SNAP functions) should continue even if the partial shutdown extends into March. This is the result of the Food and Nutrition Act’s unique funding provisions, which impose a legal obligation on USDA to continue providing SNAP benefits unless Congress enacts reductions.”

Asked about the prohibitions on shutdown spending in the Anti-Deficiency Act, Super said once the Trump officials “start reopening functions based on questionable interpretations of the act, they make themselves vulnerable to legal challenges for not doing so sooner and for not opening other functions (such as food safety inspections) that have much stronger cases for being crucial to life or property.”

Sam Berger, who held several policy jobs at the Office of Management and Budget and is now a senior adviser for the Center for American Progress, welcomed the one-month extension of food stamp funding. But he added, “It's concerning that it took them two weeks into the shutdown to do so. Ultimately, the only way to truly protect these families is to end Trump's shutdown.”

Vought’s approach of recalling furloughed employees sounds permissible to attorney Tom Spiggle, founder of the Spiggle law firm specializing in employee rights. According to a handbook by the National Federation of Federal Employees, “Excepted” employees “include employees who are (1) performing emergency work involving the safety of human life or the protection of property, (2) performing minimal activities as necessary to execute an orderly suspension of agency operations related to non-excepted activities, or (3) performing certain other types of excepted work,” he wrote to Government Executive. “Agency legal counsels, working with senior agency managers, are determining which employees are designated to be handling 'excepted' and 'non-excepted' functions. Sounds like what is going on falls under 2 and 3.”

But the unusual moves such as recalling IRS employees do not pass muster with many former participants in past shutdowns.

“The decision to provide tax refunds during the shutdown is illegal,” Berger said. “IRS has repeatedly said that these payments cannot go out the door during a shutdown, including twice during the Trump administration. Now facing political pressure for Trump's disastrous temper tantrum, they have changed course–not because of the law, but because of politics,” he said.

Steve Bell, a veteran Republican Budget Committee aide who helped advise then-House Speaker Newt Gingrich during the 1995-1996 shutdowns and is now with the Bipartisan Policy Center, said during a Monday interview that the current approach “does not sound legal, and it is so transparent what they’re doing.” Government services such as tax refunds and food stamps “are the kinds of things that get on the front pages of local papers, or social, media, so [withholding them during a shutdown] would influence senators and congressmen in their home districts. It’s pretty obvious the entire agenda is political.”

During past shutdowns, Bell added, “none of this happened. You had to be essential to show up, and [no one else] worked.” The Trump team “has not asked for any reprogramming, and appears to be making it up as they go along,” he said. Unfortunately, the only way he sees the current impasse ending, Bell said, is for some “disastrous event that gets public attention,” such as an airplane falling or some kind of food contamination.

Paul Light, the professor of public service at New York University who has written widely on relations between the branches of government, said, “The search for funding opportunities feels like a reverse line-item veto. Can the president go through an agency's budget and pick items to fund while others are left unfunded?”

Norman Ornstein, a resident scholar at the American Enterprise Institute, distinguished between shutdown management and the power of the purse. “The president has some flexibility in determining which employees are essential and can be required to work without pay,” he said via email. “But if, besides bringing back more employees (and contractors), this involves spending money that has not been appropriated or required under law by formula in statute, it would violate the Anti-Deficiency Act.”

Larry Haas, an author who was an OMB press official during the 1995-1996 shutdowns, said, “OMB has pretty broad discretion in deeming certain people and certain activities to be essential. Any administration is going to have to balance its desire to end the shutdown by allowing real pain to be endured by people while moving the political process along,” he said, “and at same time easing the pain on people in case the shutdown continues.”

The politics of the current shutdown differ from those in the mid-1990s, with Bill Clinton in the White House and Republicans controlling Congress, Haas added. “Clinton had the luxury of knowing he was winning the public debate” over the Republicans’ desire to reduce the deficit through domestic spending cuts in popular programs. Trump’s desire for a southern border wall, by contrast, “is unpopular by significant margins, and Trump is going to have a hard time sustaining it,” Haas said.

But back in the 1990s, OMB had to balance things too, he said, “keeping the heat on the Republicans while at the same time ensuring that key constituencies were not being hurt so much that political blame would come back to haunt the president.”

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