Presidential Impoundment of Congressionally Apporpriated Funds: an Analysis of Recent Federal Court Decisions

The purpose of this report is to analyze the great number of Federal court decisions touching upon the ability of the executive branch to impound funds which Congress has appropriated through Federal statutes. The period of time covered by these cases is between 1971 and 1974, during which nearly all of the important decisions were handed down.

Although there has as yet been no definitive ruling by the Supreme Court, and there will not be until the decisions in Train v. Campaign Clean Water, Inc. and Train v. City of New York, scheduled for argument in October 1974, a few generalities may be distilled from the well over 50 cases decided so far.

First, there is no commonly accepted definition of the word "impoundment" by the Congress, the executive branch, or the courts. However, the courts seem willing to try any case in which there has been an apparent retardation of a congressionally enacted program by an executive branch officer, whether through failure of that officer to obligate congressionally appropriated funds; to allot congressionally appropriated funds; or to accept, process, or approve applications for funds under congressionally enacted spending programs.

Second, there has been little judicial acceptance of the theory propounded by the President that he has implied constitutional authority as the Chief Executive Officer to superimpose his own spending priorities over those of the Congress in order to control inflation, regulate the economy, or pursue any other national objectives. In all except a half dozen cases, the courts have focused upon each statutory program under litigation for the purpose of determining the exact scope of statutory discretion granted the Executive Officer charged with the execution of that program, and they have found that discretion to be limited. Generally, it may be said that where the word "shall" appears in a statutory provision delineating the dimensions of Executive discretion under a Federal spending program, that provision mandates the execution of the program, including allotment of funds, spending of funds, or properly processing applications for funds under the program.

Finally, since the Supreme Court may decide that the crucial issue in any impoundment litigation turns upon the language of the statute in question, it is important for the Congress, in protecting its legislative priorities in the future, to make itself aware of the full legal effect of the statutory language that it uses in appropriations acts.

I. BACKGROUND

Since President Nixon announced his policy of withholding funds appropriated by the Congress for various welfare, antipollution, education, housing, and highway programs, for the stated purpose of holding down Federal spending and relieving inflationary pressures on the economy of the United States, the question of the President's power to do so has been the subject of more than 50 Federal court decisions. This paper will attempt to analyze these decisions, both in terms of their present effect upon the President's announced policy, and their implications with regard to future decisions and congressional

enactments.

Although these cases have been classified under the rubric "impoundment" cases, this classification is for many reasons inappropriate, in that the term "impoundment" has conjured up a babel of definitions and heated rhetoric, but little coherent or constructive discussion. For example, the executive branch, in complying with the requirements of impoundment reporting legislation in the Humphrey amendment to the Public Debt Limitation Act of 19721 and Congress in proposing other "impoundment" control legislation, have each adopted their own differing definitions of the term. To compound this dilemma, one cannot define impoundment as the improper withholding of congressionally appropriated funds because such a definition prejudges the issue.

Further, not every withholding of money may be considered improper: funds may properly be withheld from an ineligible applicant or from programs which have become unnecessary; and fund may be allocated to reserves to effect savings, pursuant to the Antideficiency Act. 2 Occasionally, the President or an executive_agency may be directed by statute to withhold funds, as when the Department of Health, Education, and Welfare withholds Federal money from school districts which fail to desegregate. Actually few of the so-called impoundment cases directly involve the withholding of funds; most concern the cessation or reduction of congressionally enacted programs at a point well before the actual disbursement of money. For instance, reduction of the allotments to the States under the Federal-Aid Highway Act or the Water Pollution Control Act, the issue in numerous cases, merely reduces the amount of Federal funds on which States may base their highway or antipollution planning. These acts do not allow obligation of these funds until detailed specifications are approved by the appropriate executive department administrator. Likewise, refusal to accept or process applications for grants or loans under the Economic Opportunity Act, the Disaster Relief Act, or various housing acts has also been the subject of substantial litigation, yet the actions questioned occur quite early in the

1 P.L. 92-599, 86 Stat. 1324.

2 31 U.S.C. § 665 (1970).

3 Civil Rights Act of 1964, title VI, 42 U.S.C. § 2000d-1 et seq. (1970).

statutorily specified chain of events preceding the writing of checks against the Federal Treasury.

The writer would suggest at this point that the "impoundment" cases do not directly concern the issues of withholding by the executive branch of money appropriated by the Congress. Nor do the cases attempt to resolve a conflict between Presidential and congressional priorities, although such a conflict comprises a major aspect of the political context in which the impoundment controversy has arisen. Neither have the cases resulted directly in a determination of the scope of the President's alleged constitutional power implicit in article II, sections 1 and 3, designating him Chief Executive Officer and mandating him to "take care that the laws be faithfully executed." Rather, the thread running through all the cases is that each deals with an issue of statutory construction; that is, within the statute under litigation, how much discretion and how many duties does the statute confer on the executive officer, and has he overstepped that discretion or violated those duties in the administration or retardation of the relevant program? Because the cases largely construe the "law of the land" statutes enacted by the Congress and signed by the President, or passed over his veto-for the purposes of this report we will define the term "impoundment" to mean any executive retardation of a Federal program created and funded by statute.

It is difficult to provide an up-to-date statistical summary of the holdings of the cases because the list grows daily. Suffice it to say that of the more than 50 cases that have been decided as of this date, less than half a dozen have upheld the President in any way, either in his claim that he possesses the implied constitutional power to control Federal spending for reasons related to the status of the national economy and the need to control inflation, or that the statute in question grants him or his officers the requisite discretion. The vast majority of the cases thus far hold that the Congress has mandated the execution of programs: the allotment of funds to the States on which to base highway and water pollution control programs; the acceptance and processing of applications for OEO community action agencies, low income housing mortgage loan interest subsidies and rent subsidies, and agricultural emergency loans; and finally, the obligation of moneys to applicants who have met the prescribed statutory criteria for such funds. When litigation begins so close to the end of the fiscal year that the appropriated funds are in danger of lapsing into the general fund, courts have ordered appropriate executive officers to record appropriated funds as an obligation of the United States before the end of the fiscal year so that the money will not so lapse, pending final resolution of the litigation on the merits. In short, the President has an obligation to execute the law of the land as the courts construe it.

The remainder of this paper will deal with the holdings of the recent cases, briefly discussing the constitutional issues involved, and concentrating upon the manner in which the courts have construed the statutes. Following that will be an examination of certain crucial constitutional and statutory limits to Federal court jurisdiction, viz., the issue of standing to bring suit, the doctrine of sovereign immunity and the political question doctrine-which arguably would prevent the courts from accepting cases challenging acts by the executive branch.

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Presidential Impoundment of Congressionally Apporpriated Funds: an Analysis ...