A Third Federal Judge Rejects Russ Vought's "$0" CFPB Funding Theory
A federal judge in Oregon ruled on Friday, September 25, that OMB Director Russ Vought's refusal to request funding for the Consumer Financial Protection Bureau (CFPB) violated the constitutional separation of powers. She is the third federal judge to reject his theory that the amount legally available for the CFPB was "$0." For federal employees, the 40-page opinion is a clear statement about who controls federal spending, and it arrived on the same day the White House tried a different move to cancel money Congress had already approved.
Vought once said, "We want the bureaucrats to be traumatically affected." Many federal employees have felt the weight of that statement over the past year. This ruling is a reminder that the Constitution sets limits on what any official can do with the budget.
How the CFPB Funding Fight Got Here
The CFPB draws its funding from the Federal Reserve. Vought's first attempt to stop that funding was blocked in a case brought by NTEU, the union that represents CFPB employees. After that loss, he obtained a Justice Department memo taking the position that if the Federal Reserve had no profits, there was no money for the CFPB.
According to page 23 of the opinion, he then told the President and Congress that the amount he could request was "legally $0." The problem with that theory is that the Federal Reserve is not designed to make a profit, and it was willing to pay.
What the Court Held
On page 35, the court quoted then-Judge Brett Kavanaugh: "even the President does not have unilateral authority to refuse to spend the funds."
On page 37, the court stated its holding: Vought "has arrogated to himself the 'power of the purse,' which belongs exclusively to Congress." In plain English, "arrogated" means he claimed a power that was never his.
If you want to read the decision yourself, it is State of New York v. Vought, No. 6:25-cv-02384 (D. Or.), ECF No. 86, filed September 25, 2026. It is available for free on CourtListener.
The Same-Day Pocket Rescission
The same day, President Trump told Congress he had canceled almost $1 billion in funding that Congress had already passed, using what is called a pocket rescission. Sen. Susan Collins, the Senate's top Republican appropriator, has called the move illegal.
The Impoundment Control Act says that unless Congress votes to cancel funds, the money "shall be made available." A pocket rescission flips that default: if Congress does nothing, the money dies. As Shaun Southworth puts it, that works like a line-item veto with a stopwatch, and the Supreme Court struck down the line-item veto in 1998.
Neither Is the Final Word
Neither development settles the issue. The earlier CFPB rulings are on appeal, and the administration has signaled it will return to its funding theory if it wins there. Congress also still has the ability to undo the pocket rescission.
What This Means for Federal Employees
If you work at the CFPB or at any agency whose funding has been caught up in these fights, the practical lesson is to follow the primary sources rather than the headlines. Court opinions and statutes like the Impoundment Control Act are public, and they often say something different from the political messaging around them. The Constitution gives the power of the purse to Congress, not to the President and not to his budget director.
Keep copies of any notices you receive about your position, funding, or status, and pay attention to deadlines in those notices. When funding decisions start affecting individual jobs, the details of your notice and your rights matter.
Legal Disclaimer: This content is for general informational purposes only and does not constitute legal advice. Federal employment situations are fact-specific and time-sensitive. Please consult a qualified federal employment attorney about your specific situation. You can contact Southworth PC at attorneysforfederalemployees.com.