Cozen Currents: How Trump Trumps

“Besides disrupting policy in Washington, the Trump administration is looking to disrupt fundamentally how Washington operates. Thus, even as Trump’s team loses some prominent policy fights, it still sees value in the impact that its expansive use of executive power ultimately has on eroding the perceived ‘Deep State.’” — Howard Schweitzer, CEO, Cozen O’Connor Public Strategies

The Cozen Lens

• The Trump administration is stretching the limits of presidential power. Though the White House has hit some roadblocks, it is making progress in disrupting how the federal government works.
• Many of President Trump’s threatened tariffs are being used as leverage to achieve other policy goals. But some are the policy goals themselves and can’t be negotiated away.
• In an expansive interpretation of presidential power, the Trump administration previewed its plans to cut federal spending through budget impoundment in an Office of Management and Budget memo early last week.

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Testing the Boundaries of an Imperial Presidency

Disrupting Policies. President Trump has moved quickly to dramatically reshape federal policy.

• Trump signed 38 executive orders in his first nine days in office, a rate far above previous presidents. Topics include immigration, energy, freedom of speech online, and changes to the federal bureaucracy, among others.
• The White House has begun stretching the limits of presidential power to pursue its objectives. For example, Trump’s declaration of a national energy emergency (at a time when the United States is the biggest oil producer in the world) may unlock new executive authorities. He also fired 17 federal inspectors general, which appears to be in defiance of a federal law, as well as Democratic members of the National Labor Relations Board and Equal Employment Opportunity Commission.
• Trump’s success in implementing policy changes so far is mixed. His effort to end birthright citizenship has been put on hold in the courts, as has his federal spending freeze. The freeze also had unintended consequences, such as blocked access to Medicaid portals and a pause in foreign aid that funds prisons for ISIS affiliates. As in the first administration, there will be wins and losses. The law will not be on Trump’s side for all he tries to do. For example, birthright citizenship is protected by the Fourteenth Amendment, and the Supreme Court has previously ruled against budget impoundment. In other areas, however, Trump will likely have a freer hand to achieve policy goals, such as with tariffs.
• When assessing the Trump administration, it’s key to understand under what authority an action is being taken. Lack of precedent is not an automatic disqualifier. Just because it hasn’t been done, doesn’t mean it can’t be done. At the same time, just because Trump’s appointees say they can do it, doesn’t mean they can. Desire alone will not ensure a proposal is successfully implemented. It must be executed under the proper authority – and process – to survive legal challenges.

Disrupting the System. Regardless of wins on substance, the process of challenging norms can still be viewed as a win by the Trump White House.

• Even if Trump ultimately loses in court, his efforts can still succeed in disrupting business as usual in Washington, DC. Trump shows his supporters that he remains committed to fighting the bureaucracy he refers to as the “Deep State,” and he shifts the realm of the possible.
• Trump’s expansive view of executive authority seeks to erode the nonpolitical career civil service. By firing personnel or demoralizing civil servants enough to leave, Trump can reshape the federal bureaucracy in his image. As the saying goes, “personnel is policy.” If he can’t directly achieve policy changes in certain areas, he can replace the personnel and transform the “Deep State” as an indirect way to have a policy impact.
• The upshot is a fundamental change in how the federal government operates and a shift in the balance of power in the relationship between the White House and federal agencies.

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Tariffs as a Case Study

Tariffs’ Use Cases. President Trump’s love for tariffs is no secret, and his first couple of weeks in office have already highlighted how central the tool will be in his policy agenda. However, not all of Trump’s tariff proposals should be considered the same.

• One of Trump’s methods of negotiating policy issues, whether trade-related or not, is to use tariffs as a source of leverage. This was the case with the president’s threat of tariffs against Colombia. Often, these leverage tariffs are more narrowly motivated, and changes in policy from the other country will be enough for the president to back off his threats. This typically prevents these duties from ever taking effect; or if they do, they are often short-lived.
• Other tariffs will serve as the policy objectives themselves, such in the case of a universal baseline tariff promoting reshoring of manufacturing and expanded China tariffs intended to decouple the world’s two largest economies. An added benefit of these more durable tariffs is that Trump sees them as raising significant revenue that can be claimed to offset the deficit impact of other policy proposals. While the tariffs themselves are almost sure not to be included in the Republicans’ reconciliation bill, Trump and the GOP will nevertheless argue that the projected revenue raised from these tariffs will offset the deficit impact of the legislation.

Trump’s Tariff Authorities. Trump will likely rely solely on executive power to try to achieve his tariff plans, but some of the authorities he may claim have been little used, if at all, by his predecessors.

• Trump is most likely to push the limits of his authority on tariffs by using the power delegated to him under the International Emergency Economic Powers Act (IEEPA) to impose tariffs, as he did this weekend with the ones leveled against Canada, Mexico, and China. Such a move is unprecedented; although Trump threatened tariffs on Mexico under IEEPA in his first term, the duties were never imposed. One of the notable aspects of using this authority is the speed with which the duties can take effect.
• Not all of the authorities Trump is expected to tap will be novel, as he will likely still use Section 232 (national security) and Section 301 (country-specific trade agreement violations) tariffs, as he did with respect to steel and aluminum and China, respectively, during his first term. These pathways are well-defined, but a downside for the president is the length of these processes. In both instances, months-long investigations are required before the tariffs can take effect. However, the upside is that tariffs under these authorities are legally on more stable footing.

Trump’s Tariffs’ Vulnerabilities. While Trump and his advisors believe they have the authority to enact many of these tariffs through executive power, potential vulnerabilities could hamper his plans.

• Given its unprecedented nature with respect to tariffs, Trump’s reliance on IEEPA will surely face legal challenges. Opponents could also challenge the underlying emergencies that Trump has declared under the National Emergencies Act, which are needed to access IEEPA authority. However, the Supreme Court has previously given the president wide discretion under both laws.
• Trump’s plans will also face pushback from some Republicans in Congress and the business community. While it is doubtful that Trump will walk back tariffs because he believes they are economically positive for the US, a sustained adverse equities market reaction could lead to exemptions from the tariffs being offered or expanded after the fact to calm the markets and to reduce some of the potentially unintended consequences.

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Budget Impoundment as a Case Study

The Power of the Purse. The Trump administration last week challenged Congress’ power of the purse with a memo halting the disbursement of trillions in congressionally-appropriated funds.

• The Monday night memo from the Office of Management and Budget (OMB), which has since been withdrawn, stated that “to the extent permissible under applicable law, Federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance.” The edict drew on a long-running and controversial presidential claim to the authority to unilaterally impound federal funds. The memo made good on a Trump campaign promise to “…use the president’s long-recognized Impoundment Power to squeeze the bloated federal bureaucracy for massive savings.”
• While the administration is required by law to spend the funds Congress appropriates, Trump’s OMB director-designate, Russel Vought, and OMB General Counsel Mark Paoletta, both believe that the president has the right to view appropriations as a ceiling, allowing the administration to spend less, or none, of the funding Congress provides. According to a November op-ed by Paoletta, “Article II of the Constitution vests the president with authority to decline to spend the full amount of an appropriation.” The two OMB leaders were the architects behind Trump’s first forays into impoundment during his last term, a move that led to his first impeachment.
• Despite the certainty of Vought and Paoletta, legal scholars expect the administration to lose the impoundment fight in court, even if the issue is ultimately appealed to the Supreme Court. Congress’ power of the purse was written into the Spending Clause of the Constitution, something the Supreme Court upheld in its 1975 9-0 ruling against the Nixon administration’s use of impoundment. The 1974 Impoundment Control Act further clarifies that the executive branch cannot impound funds based on a policy disagreement with Congress, something the Trump administration’s memo explicitly stated it was doing.

Impoundment Lite. While the administration’s attempt at a blanket freeze of federal spending faces political and legal resistance, other more subtle efforts to unilaterally reduce the size of the government continue behind the scenes.

• Last Friday, the Washington Post reported that David Lebryk, the highest-ranking non-political official at the Treasury Department, left the agency following a fight with Elon Musk over access to Treasury’s payment systems. Control of those payment systems, which a handful of officials at the Department of Government Efficiency (DOGE) now have, gives them the ability to withhold Social Security payments, Medicare payments, tax refunds, and more. Musk hinted at the idea in a Saturday social media post, explaining that the disagreement with Treasury officials arose because “They literally never denied a payment in their entire career.”
• In a related move, Reuters reports that DOGE officials at the Office of Personnel Management (OPM) have frozen career employees out of computer systems that contain sensitive data on members of the federal workforce. Those same DOGE employees, which include former Tesla, SpaceX, and Boring Company personnel, helped author OPM’s buyout offer to federal employees that the administration hopes will help shrink the size of the federal workforce. The legal foundations of the buyout offer have been questioned by labor lawyers in part due to the fact that the government is only funded through March. The offer promises to pay employees through September, well beyond current appropriations.

The most aggressive effort to downsize federal employment and freeze funding is playing out at the US Agency for International Development (USAID) which the Trump administration is reportedly considering folding into the State Department. According to NBC, “hundreds of USAID employees and contractors have been fired or furloughed, almost 60 senior career leaders at the agency have been sidelined and U.S. foreign missions have been brought to a standstill.” Given its status as an independent agency, lawmakers have noted that any effort to restructure USAID without Congress would draw a lawsuit that could prove difficult to win.

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