1972:

CHART 5A.-TOTAL DOLLAR AMOUNT FOR SUPPLEMENTALS-Continued

FISCAL YEARS 1964-721-Continued

Fiscal year and Public Law-Continued

92-141

92-184 92-256

(In conference)

Total

$270, 500, 000 3, 406, 385, 371 957, 476, 059 4,347, 698, 270

8, 982, 059, 700

1 These figures represent new budget-obligational-authority, not budget expendituresbudget outlays-which in addition to expenditures from new budget authority include billions of dollars of expenditures from carryover balances of appropriations made in previous years, and also expenditures from certain so-called permanent appropriations, such as interest on the public debt and a number of trust funds which Congress is not required to act upon at each session. Neither were release of reserves counted.

"

Source: Congressional Record-end-of-the-year tables titled "New Budget (Obligational) Authority in the Appropriation Bills, fiscal year and general discussion on the supplemental bills themselves.

The Federal Fiscal Responsibility Act provides for periodic reassessments during the year of the congressional expenditure limitation. The Director of the Office of Management and Budget is required to submit a report to Congress at the end of the second and third quarters which details his estimate of how well Federal spending policies are complying with the expenditures limitation. If the Director estimates that spending will be in excess of the limitation for the present fiscal year he can establish pro-rata reductions in all Federal departments and agencies to bring spending in line with the limitation. Upon submission of the Director's report Congress has 30 days to specify or exempt appropriations categories where the reductions shall be made. This allows the Congress an on-going responsibility in staying within its own spending limits. Previous congressional expenditures limitations have been exceeded because Congress did not continue to monitor spending levels after they had established their priorities. Several Members of Congress have introduced measures which would regulate executive impoundment of funds. The President has claimed the right not to spend appropriated funds since the time of Jefferson. The practice has become more widespread since the Dawes memorandum of 1921. Charles Dawes, the first Director of the Bureau of the Budget, stated that appropriations from the Congress were to be treated as ceilings on expenditures rather than as directives to spend the full amount." Louis Fisher, who has written extensively on the Federal budgetary process, comments that the passage of the Employment Act of 1946 broadened the President's role in determining economic policy. This has led all postwar Presidents toward the use of impoundment as one of their anti-inflationary tools.

The impoundment of funds has been hotly debated since the Dawes memorandum. It can be defined as the withholding or delaying of expenditure or obligation of appropriated funds.

There is some question as to what constitutes impoundment for appropriated funds which are made available on an "until expended basis." However, the President's use of impoundment is made more open to inquiry for funds which are appropriated on an annual basis. In a 1969 memorandum Assistant Attorney General Rehnquist questioned the practice of impoundment. He said:

With respect to the suggestion that the President has a constitutional power to decline to spend appropriated funds, we must conclude that existence of such a broad power is supported neither by reason or precedent.

He continued:

It may be argued that the spending of money is inherently an executive function, but the execution of any law is, by definition, an executive function and it seems an analogous proposition that because the executive branch is bound to execute the laws, it is free to decline to execute them.

Congress must use on-going evaluations as well as regulation of impoundment to insure that its appropriations acts will be carried out.

The Fiscal Responsibility Act establishes two types of impoundment. The first is a pro rata reduction across the board in any department or agency, If the President decides to impound on this basis he must notify Congress of his impoundment. Either House of Congress then has 60 days to disapprove of the

371

The President is allowed to establish variations of up to 10 percent -priations categories. This allows the President sufficient flexibility ut his economic policies while preserving congressional prerogaishing spending categories.

type of impoundment established in the bill is called special imn cases where the President decides that he wants to impound in tegory without regard to the prorata restrictions established under mpoundment procedure, he must come to Congress 30 days in adproposed impoundment. Either House of Congress then has 30 days of the proposed action. In cases of special impoundment Congress the opportunity to express its wishes on proposed cuts in a program mplementation. The most common reasons given for impoundment o economic considerations. When impoundment is carried out for considerations such as in impoundment which is targeted against a ogram or activity Congress should have the opportunity to review action taking into account the program goals established in the egislation.

to show the impact of impoundment on the Federal Budget Chart of a statement of budgetary reserves compiled by Caspar Wein-ril of this year.

BUDGETARY RESERVES, APRIL 1972

thority delegated by the President, the Office of Management and rates a system of apportioning the funds provided by the Congress. onments generally are for the current fiscal year and limits the agencies may obligate during specified periods.

è occasions when the amounts of available funds are not fully apport is, some amounts are either withheld from apportionment, or their orarily deferred. In these cases, the funds not apportioned are said to placed "in reserve." This practice is one of long standing and has been y both Republican and Democratic Administrations as a customary ncial management.

ons for withholding or deferring the apportionment of available funds e concerned with routine financial administration. They have to do ffective and prudent use of the financial resources made available by ss. Thus, specific apportionments sometimes await (1) development cted agencies of approved plans and specifications, (2) completion of the effective use of the funds, including necessary coordination with Federal and non-Federal parties that might be involved. (3) estabof a necessary organization and designation of accountable officers to e programs, (4) the arrival of certain contingencies under which the t by statute be made available (e.g., certain direct Federal credit aids ate sector loans are not available). In other cases the funds may be n accordance with provisions of the Anti-Deficiency Act (31 U.S.C. 665) reasons as a change in conditions since they were appropriated or to ntage of previously unforeseen opportunities for savings.

, attached, lists the items and amounts currently reserved for such nancial administration. They total $9.4 billion, which is a reduction of 1 $1 billion since January of this year. This reduction is indicative of the amounts are frequently released from reserve-and put to use during 1 year as plans. designs, specifications, studies, project approvals, and completed. As a result, the total amount held in reserve usually reaches it at the end of the fiscal year.

serves established for reasons of routine financial administration are d by all concerned to be temporary deferrals, and their need or wisdom 7 not questioned. In addition, however, there has been a long-standing istent practice in both Republican and Democratic Administrations to some-a much smaller amount of-reserves for reasons other than İnancial administration. It is these later reserves which have sometimes icized as "impoundments" of funds.

its being held in reserve for reasons other than routine financial adtion generally could be used (i.e., obligated) during the apportionment iod. They have not been apportioned from time to time for such reasons Executive's responsibility to (1) help keep total Government spending congressionally-imposed ceiling, (2) help meet a statutory limitation

on the outstanding public debt, (3) develop a governmentwide financial plan for the current year that synchronizes program-by-program with the budget being recommended by the President for the following year, or (4) otherwise carry out broad economic and program policy objectives.

Table B, attached, lists the items and amounts currently held in reserve for reasons other than routine financial administration. They total $1.6 billion, a reduction of almost $200 million from the amount so reserved in January of this

year.

The total of all current reserves (i.e., Tables A and B) is 4.6% of the total unified budget outlays estimated for fiscal 1972. The comparable percentage at the end of fiscal years 1959 through 1961 ranged from 7.5% to 8.7%. At the end of fiscal 1967, it stood at 6.7%, and a range in the neighborhood of 6% has been normal in recent years. The amount currently reserved is expected to decline still further during the remainder of the fiscal year.

Agency and account:

(In thousands of dollars)

Executive Office of the President:

Council on Environmental Quality and Offices of Environmental Quality--

Apportionment awaits development of proposals for contract studies of environment problems. National Security Council.

Amount

53

108

Apportionment awaits development by the agency of approved

682

plans.

Special Action Office for Drug Abuse Prevention___.

Apportionment represents the balance of appropriation which cannot be utilized by the Office in 1972 due to late enactment of legislation. Release will occur as needed in 1973 operations. Funds appropriated to the President:

Appalachian Regional Development Programs--

Apportionment awaits development of approved plans and specifications.

Economic Stabilization Activities___

A total of $100 thousand is reserved for subsequent use, as needed and anticipated, by the U.S. Courts in support of the Temporary Emergency Court of Appeals. The remainder is reserved for contingencies and will be apportioned as required. International Security Assistance:

Foreign military credit sales__.

Apportionment awaits development by affected agencies of coordinated plans and specifications.

International development assistance:

Apportionment awaits development by the agency of approved

Prototype desalting plant--

plans and specifications.

Inter-American Foundation___.

40, 000

300

98, 100

20,000

41, 642

TABLE A.-Budgetary reserve for routine financial administration, April 1972

[In thousands of dollars]

Amount represents balance of initial funding from AID transfer to cover first 4 years of the Foundation's operations. Apportionments will continue to be made annually as plans and specifications are developed.

Department of Agriculture:

Agricultural Research Service:
Construction

Represents residual amount of appropriation for planning
that is not required for that purpose. Apportionment awaits
additional appropriation for construction.

Scientific Activities Overseas (special foreign currency
program)

Amount shown here is in excess of current estimates of
1972 needs. If conditions change and the funds are needed,
apportionments will be made.

Amount

70

352