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is my view that the President has substantial latitude to refuse to spend or to defer spending for general fiscal reasons.
Authority to pursue such goals flows not merely from congressional intent revealed as above indicated and from historical practice but, more fundamentally, from the dilemma in which modern Presidents have frequently been placed by the Congress. Despite the statutory policy and fiscal necessity to protect purchasing power by avoiding intolerable inflation, the structure of Congress does not enable it to assume the executive responsibility for achieving this end. The harsh reality is that time and time again Congress has passed swollen appropriation acts and failed to levy the taxes necessary to avoid inflation. No President has been willing to accept the full consequences of this chronic tendency of Congress. Rather, they have been forced to resort to their veto power and, ultimately, to impounding of appropriations.
While some critics of impounding may question the President's authority to impound funds for general fiscal reasons, even with respect to permissively worded spending program statutes, I believe that question must be resolved in the President's favor. It must be recognized, howerer, that the question is a much closer one when Congress has explicitly directed that President to spend the amount appropriated.
Although the Congress has been keenly aware of executive impounding actions for many years, there have been only a very few Federal statutes in which the Congress has expressed an unequivocal intention to mandate spending for a particular program. This history compels the conclusion that if the Congress wishes to mandate fuil spending for a particular program, it must do so in unmistakably clear terms.
Enactment of a spending mandate raises an important and presently unresolved constitutional question: does Congress have the authority to require the President to spend substantially all funds appropriated for a particular program?
As to the Congress, the most relevant constitutional provisions are article I, section 1 and section 9, clause 7. These provisions vest all legislative powers in the Congress and give it the appropriations power. As a general proposition, therefore, Congress has the primary responsibility for establishing general national policy, at least in the domestic area, and the power of the purse to implement those policies. As to the President, the most relevant constitutional provisions are article II, sections 1 and 3. These provisions vest executive power in the President and require him to take care that the laws be faith fully executed.
Although there is no judicial precedent squarely in point, Kendall v. United States, 12 Pet. 524 (1838), frequently is cited for the proposition that the Executive must comply with a congressional mandate to spend appropriated sums. The case is distinguishable in several respects.
Indeed, in that case, the President had sent a message to Congress concerning Kendall's claim in which he took no position on its merits. Finally, the context in which present issues are being discussed is far
different from that in which kendall arose. Today's context is one in which the powers of Congress and the President must be accommodated to the inexorable necessities of national fiscal policy. To extend the teaching of Kendall to deprive the President of this power ignores these enormous contextual differences.
A few other decisions are sometimes cited for the proposition that Congress can mandate spending by the executive branch, such as Inited States v. Price. 116 U.S. 13 (1885), and Miquel v. JcCarl. 291 U.S. 142 (1934). Both cases were essentially similar to Kendall. In Price, the court held that the Secretary of the Treasury was required to pay a claimant for services previously rendered to the Government, as specified in a private bill. In Miguel, the court set aside the Comptroller General's determination that a particular person was not entitled to a veteran's pension under general pension legislation. Like Kendall, these cases contribute little to the current debate.
Even if it be concluded, however, that Kendall holds that Congress can mandate spending if it explicitly expresses an intention to override the Anti-Deficiency Act and all other direct and indirect statutory sources of Presidential spending control, it is clear that any such mandate is subject to at least two important qualifications. The President las substantial authority to control spending in the areas of national defense and foreign relations. Such authority flows from the President's constitutional role as Commander in Chief of the Armed Forces and from his relatively broad constitutional authority in the field of foreign affairs.
PROPOSED S. 373
I turn now to S. 373, the bill before the subcommittee. The bill in its essentials would require the President to notify the Congress of each impoundment made at his direction or with his approval, within 10 days after such action. It would require the cessation of impoundment after 60 days of continuous session of Congress, unless both IIouses within that time approved it in the form of a concurrent resolution.
As I view it, the practical effect of S. 373 would be to require the President to spend virtually all sums appropriated by the Congress. The definition of impounding is sweeping; it eradicates any differences between permissive and mandatory appropriation acts; it appears to repeal existing impounding authority provided by the Anti-Deficiency Act to establish reserves and effectuate economies made possible by developments subsequent to appropriations; and it embraces impoundments necessary to remain within statutory debt limits as well as those designed to protect purchasing power. In practice, the provision for approvals of individual actions of impounding by concurrent resolution would be largely illusory. Under the bill's broad definition of impounding, thousands of individual impounding actions will occur each year. Given the pressures of more important matters, it would be realistically impossible for the Congress to give any worthwhile consideration to thousands of impounding actions, each year. In short, the bill seeks to prohibit impounding by the President altogether.
In my judgment, S. 373 is wholly impractical, profoundly unwise. and of very doubtful constitutionality. The basic objections to the bill should be readily apparent from what has already been said. Accordingly, I will outline briefly the principal policy and constitutional problems to be found in its overall purpose and effect.
To begin with, the bill seeks to reverse 170 years of Presidential practice. It would be well to ponder the practical needs of Government underlying that history, before they are cast aside.
The bill would very substantially undercut the President's existing authority to combat inflation, unemployment and a wide range of economic ills. Indeed, in many circumstances, it would compel him to add fuel to the fire.
The mechanism of S. 373 would place the burden on Congress to insure reasonably balanced budgets, control inflation, and provide against a host of volatile economic problems. I submit to you that the Congress has not demonstrated a capacity for exercising full and comprehensive control of these issues. Ours is not a parliamentary system. Congress represents many interests and, at times, speaks for each of them. This is as it should be. But the correlative weakness of this strength is its frequent inability to pursue integrated fiscal policies which will keep taxes in proper step with expenditures. Our Nation needs the impounding authority vested in the President to check this otherwise ruinous tendency of Congress. The exercise of this authority by the President to promote fiscal stability is not usurpation; rather it is in the great tradition of checks and balances upon which our Constitution is based.
As I said earlier, there is doubt whether Congress can legislate against impoundment even in the domestic area when to do so results in substantially increasing the rate of inflation. To admit the existence of such power deprives the President of a substantial portion of the "executive power vested in him by the Constitution. Herein lies a major constitutional flaw of legislation like S. 373. The President has the duty to administer the national budget which, in turn, inescapably imposes on him a heavy responsibility to avoid fiscal instability. $. 373 attempts to reduce the scope of his budgetary duties enormously. I question whether Congress has the power to convert the Chief Executive into "Chief Clerk," a position which he has never held under our Constitution.
Constitutional questions under the bill would perhaps be greatest in the areas of national defense and foreign relations. There, as I have said, the President's constitutional responsibilities find their source not only in his duty to take care that the laws shall be faithfully executed, but also in his status and responsibilities derived from his express status as Commander in Chief of the Nation's Armed Forces, and as the sole organ of the Nation in the conduct of its foreign affairs. I do not believe that Congress is constitutionally empowered in those areas to compel the President to spend willy-nilly, as S. 373 purports to do.
In conclusion, Mr. Chairman, the Department of Justice and the administration vigorously oppose enactment of S. 373. The President's constitutional authority as Chief Executive and his statutory authority flowing from such enactments as the Anti-Deficiency Act and the Employment Act of 1946 give him broad discretion to act in the national interest against fiscal instability, including the power to impound in appropriate circumstances. Broad legislative incursions into the area are constitutionally suspect and plainly unwarranted as a matter of policy. Thank you, Mr. Chairman. (The full prepared statement of Mr. Sneed follows:)
PREPARED STATEMENT OF Hon. JOSEPH T. SNEED, DEPUTY ATTORNEY GENERAL
OF THE UNITED STATES Mr. Chairman and members of the subcommittee, I am pleased to have this opportunity to present to this Subcommittee the views of the Department of Justice and the Administration concerning the general topic of Presidential authority to impound appropriated funds and, more specifically, concerning S. 373, the bill recently introduced by you, Mr. Chairman, with the cosponsorship of other Senators, including Senators Burdick and Mathias of the Subcommittee. Impounding of funds by the Executive branch is a relatively complex and currently much debated subject. It involves profoundly important and sometimes conflicting considerations of policy, and, in certain of its aspects, novel questions of constitutional law. Two years ago, hearings before this Subcommittee raised and explored many of the issues in the impounding area, and helped to determine many aspects of the current debate." I believe there is much upon which we can agree. It seems fair to say, however, that several very important questions of policy and law are presently unresolved. I am confident that this Subconimittee's work will sharpen the focus of debate and contribute to a wise accommodation of competing interests.
In my testimony today, I will begin with a description of the mechanics of impounding funds and a brief sketch of historical developments. I will outline what are believed to be generally accepted principles in the impounding area, and go on to discuss unresolved issues on the matter. Within that frame of reference, I will discuss the policy and constitutional questions raised by S. 373.
METHOD OF IMPOUNDING FUNDS The term “impound” is an inclusive term as generally used in this context. The result of “impounding" funds--not spending money—can be achieved in various ways and at various levels in the Executive branch. In some cases, impounding means that funds appropriated for one fiscal year are simply not spent in that year. When that happens, the appropriation generally lapses. This technique is probably the most accurate use of the word “impound," under its normal connotation. Another technique is to defer expenditure of funds appropriated or otherwise a vailable for one fiscal year until the next or a later fiscal year. In that situation, the funds will not lapse if the authorizing or appropriating statute so provides, or if the money comes from a statutory trust fund, but the expenditures is effectively postponed. Essentially this technique was used, for example, by President Johnson in 1967 with respect to money otherwise available in the trust fund established by the Federal-Aid Highway Act.? A third method of controlling expenditures, somewhat inaccurately referred to as “impounding," involves a refusal to commit obligational authority. Under an obligational authority statutory scheme, the federal government is authorized to commit itself by contract to expenditures up to an amount specified in the authorizing statute, and appropriations to the amount of commitments actually made are enacted later. This last spending control technique was used by President Nixon recently with respect to obligational authority provided in the Federal Water Pollution Control Act Amendments of 1972.3
Depending upon the particular statute involved, delegations of authority within the Executive branch, and the purpose of impounding, funds may be impounded by the action of a departmental official, the Office of Management and Budget, or the President himself. For example, the recent impounding of obligational authority for water pollution control projects was accomplished, as a technical matter, by the action of Environmental Protection Agency Administrator Ruckelshaus in alloting to the States less than the full amounts authorized by the 1972 amendments. However, his action in that instance was expressly directed by the President. Most imounding actions are taken by or at the direction of the Office of Management and Budget, subject to the President's overall supervision. Ultimately, the power-and the responsibility to impound funds rests with the President.
1 Hearings before the Subcommittee on Separation of Powers, Senate Judiciary Committee, 92d Cong., 1st Sess., on Executive Impoundment of Appropriated Funds,
2 23 U'.S.C. 101. et seq. See 42 Op. A.G. No. 32 (1967). 3 P.L, 92-500, S6 Stat $16.
The practice of impounding funds, through various techniques and for various reasons, reaches back as far as President Jefferson, who declined to spend an appropriation for gunboats in 1803. As he stated in his annual message to the Congress: "The favorable and peaceful turn of affairs on the Mississippi rendered an immediate execution of that law unnecessary, and time was desirable in order that the institution of that branch of our force might begin on models the most approved by experience.”.
A general statutory basis for impounding was first enacted in the AntiDeficiency Act of 1905. Formal administrative procedures for impounding were first established during the Harding Administration, following enactment of the Budget and Accounting Act of 1921.
President Franklin Roosevelt was the first to make extensive use of impounding devices to control total government spending, inflation, and related economic effects, particularly during World War II. A wide variety of funded programs, notably public works projects unrelated to the war effort, were shelved for the duration of the war.” Succeeding Administrations have continued the practice. For example, in 1919, President Truman impounded over 700 million dollars appropriated for expanding the Air Force partly in order to avoid “too great a strain on the domestic economy. In the latter part of his Administration, President Eisenhower impounded funds for Nike-Zeus missile development." During the Kennedy Administration, appropriations almost double the amount requested by the Administration for development of the B-70 bomber were impounded.16
These and numerous other examples of impounding by the Executive branch, particularly during the last thirty years, are contained in the 1971 hearings before this Subcommittee. Such a long-continued Executive practice, in which Congress has generally acquiesced, carries with it a strong presumption of legality.
GENERAL PRINCIPLES CONCERNING IMPOUNDING The Constitution does not speak irectly to the matter of impounding funds. The phenomena of massive government spendling, mounting public debt, and heary involvement of the national government in the management of an interdependent industrial and service economy were unknown to the Framers. Until Fery recently, the judicially-developed doctrines of sovereign immunity, standing, judiciability and political question have largely foreclosed judicial consideration of iinpounding questions.
In pounding disputes, when they have arisen, have traditionally been resolved in the political arena, and for good reason. It has long been recognized that“The interference of the courts with the performance of the ordinary duties of the executive departments of the government, would be productive of nothing but mischief; and we are quite satisfied that such a power was never intended to be given to them, Decatur v. Paulding, 11 Pet. 197, 516 (1810).”
Decisions to impound inevitably involve policy judgments concerning changing national needs and highly technical predictions about their effect upon the economy. Significant impounding actions can rarely be taken to alleviate one problem, without aggravating anoiher. These “trade-offs” involve delicate adjustments peculiarly within the competence and constitutional authority of the Executive hraneh. Judges do not make economic policy under our system. Nor are they technically competent to review such economic decisions. For beyond the fundamental question of legitimacy, there is a "lack of judicially discoverable and mana sealle standards for resoiving" these essentially political questions. Baker v. Carr, 369 C.S. 186, 217 (1902).
In accordance with this principle, a federal district court recently dismissel a challenge to an impounding action partly on political question grounds." Despite
• 1 Richardson, "Messages and Papers of the Presidents," pp. 360–361. 533 Stat. 1237.
* 4% Stat. 20. See Fisher, "The Politics of Impounded Funds.” 15 Administrative Science Quarterly 361, reproduced in Hearings, supra at 104.
: Fisher, op. cit. 106-107. * Fisher, op. cit. 108-109. » Fisher, op. cit. 110-111. 20 Fisher, op. cit. 111.
11 Houring Authority of San Francisco v. Department of Housing and Urban Development, Civil Action C-71-1135 ÓJC (N.D. Cal. 1972).