housing to be built. New industries, hospitals and community facilities are being located in the new communities, which employ some people who will be unable to afford the housing to be built unless they get HUD assistance. In order to carry out the new community program and comply with all applicable Federal laws and contracts, HUD must be able to issue commitments for the housing assistance which is needed to reach those of low and moderate incomes.

(d) In local urban renewal programs, plans have often been made and approved for the development of a larger area in which smaller neighborhood development programs are located from time to time. The owners of properties in the area, as well as the residents, have all acted in anticipation of, and reliance upon, the completion of the total urban renewal program approved by the city and other public agencies. The failure to complete the urban renewal plan will create serious problems. To avoid these problems and hardships, HUD must be able to issue commitments to carry out the urban renewal program as initially planned.

(e) The President's Budget does not contemplate that any funds would be made available under the proposed special revenue sharing for community development until fiscal 1975. The needs of local communities for the funding of these programs during fiscal 1974 is urgent. It is imperative that all of the categorical grant programs be continued until the enactment of the requested legislation for block grants for community development programs.

6. SECTION 235 AND 236 PROGRAMS HAVE GENERALLY BEEN EFFECTIVE

Studies show that the Section 235 and 236 programs have generally been effective in meeting their objectives and that their continuance is imperative to provide housing which is urgently needed by those of moderate incomes. Most of the complaints and criticisms about these programs did not involve new construction or rehabilitation of housing under Sections 235 and 236. They primarily involved existing housing-much of it under unsubsidized programswhere there were instances of overcharging and failure to meet proper standards.

The adoption of the consumer amendments in H.R. 16704-as reported last year by the House Banking & Currency Committee-will assure that past abuses and difficulties in these HUD programs will be avoided. We support those amendments which provide that all housing receiving HUD assistance or mortgage insurance must be of good quality and at reasonable prices and rents. We also support the other amendments which were in the Housing and Urban Development Bill of 1972 that passed the Senate last year, but did not reach the House Floor for action last year.

The proper procedure for the reevaluation of HUD-assisted programs is through the legislative process, including Committee hearings and Congressional debates, with Presidential action on the Bill as it passes the Congress. It is hoped that the Administration will present its proposals to Congress and that other witnesses will have an opportunity to respond to them. We believe that the HUD-assisted programs will be continued by the Congress with modifying amendments which will improve them. Pending such Congressional modifications, these programs should be continued in force to avoid the disastrous results which would result from their present suspension or termination by the President.

7. THE WIDESPREAD PRESIDENTIAL IMPOUNDMENTS AND SUSPENSIONS AND TERMINATIONS OF PROGRAMS ARE CONTRARY TO THE CONSTITUTION AND LAWS OF THE UNITED STATES

(a) The widespread actions taken by the President in impounding appropriated funds and contract authority and suspending and terminating programs are contrary to the Constitution and the laws of the United States. They infringe upon the legislative powers vested in the Congress. They violate the Constitutional provision that the President "shall take care that the laws be faithfully executed." For the reasons set forth below, we agree with the following statement in the 1969 memorandum of William H. Rehnquist when he was an Assistant Attorney General:

"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 nor precedent."

(b) The housing and community development programs which the President has suspended or terminated were enacted by laws which passed the Congress

after customary committee hearings and congressional votes and were either signed by the President or enacted into law by overriding a veto of the President. After enactment of the substantive legislation, a separate appropriation law was likewise enacted by the Congress and signed by the President which included the appropriation of funds or contract authority to implement the legislative authorizations.

(c) Following the passage of the legislative and appropriation acts, the Executive Branch took action to implement the programs and promulgate the necessary regulations, directives, and procedures. Those intended to participate in the programs then acted in reliance upon the laws so enacted and implemented by the Execution action. Often this entailed large investments by public or private developers or changes of plans by consumers who properly expected, and relied upon, the assistance being made available as provided by law.

(d) Without any action being taken to repeal or modify the laws in a manner prescribed by the Constitution, the President unilaterally took action to stop any further commitments or actions to carry out all of the HUD-assisted housing and community development programs listed above, each of which was authorized by a Federal law and appropriation.

(e) This action did not involve merely a cut in the level of each of these programs by some portion of the funds or contract authority available for commitment. Instead, the President completely suspended or terminated these programs from and after designated dates. The net effect of the Presidential action was equivalent to the repeal of the Federal laws relating to each of these programs. Clearly, the President does not have the power unilaterally to repeal all these laws, because the repeal of a law requires the same type of action as its initial enactment. It is equally clear that the President cannot, by indirection, accomplish the same purpose through a unilateral suspension or ter mination of all further commitments under the programs established by these Federal laws.

(f) The Administration has cited some historical precedents for impoundings by Presidents. However, these generally related to delaying or curtailing expenditures. Instead of a partial reduction in the level of commitments and expenditures, there is a complete stoppage of further activity in a large number of programs through their suspension or termination. There have been some isolated historical instances where an individual authorization of funds was wholly impounded. However, we know of no historical precedent for such a complete stoppage by Presidential action of so many programs covered by so many laws enacted by the Congress. These Presidential impoundings are part of a broad pattern covering the stoppage of most of the social, housing, health and welfare programs of the Federal Government, with particular deprivation among the underprivileged who most need help.

(g) It happens that all of the stoppages are occurring in programs involving housing programs intended to benefit people of lower income, along with other social, health and welfare programs. Such actions represent major decisions of national policy concerning the priorities which should be followed in allocating Federal funds and resources for commitment and expenditure within the Budget. Surely this is a matter which has so great an impact upon the Nation that it must be determined not by the Executive Branch alone, but by action through legislation.

CONCLUSION

To better enable Congress to exercise its proper constitutional powers and responsibilities concerning legislation and appropriations, we urge the enactment of Senate Bill 373. This should make it possible to continue operations under existing Federal laws relating to the HUD-assisted housing and community development programs listed above unless and until the Congress concurs in program impoundings after 60 days notice from the President. For all of the reasons set forth in our testimony, it is necessary that these HUD programs be continued in operation during the period until modified or new programs become effective pursuant to legislative enactments.

STATEMENT OF SENATOR FRANK E. Moss (D-UTAH)

Mr. Chairman, I am deeply concerned with the subject of "Executive Impoundment of Appropriated Funds" and the impact such action has both on programs and the structure of our government.

The need for Congress to reestablish its position in this matter is a pressing one and should have been dealt with long ago to continue the very important separation of powers doctrine. The whole purpose of hearings before the Congress and our deliberations on both authorization and appropriations bills are to set priorities within the fund limitations as established in the President's budget. We are not here concerned with reserves established for reasons of routine financial administration or with funds withheld in accordance with provisions of the Anti Deficiency Act (31 USC 665), but rather with impoundments by the Executive for reasons other than routine financial administration.

As Chairman of the Senate Committee on Aeronautical and Space Sciences and as a Senator for the State of Utah, I recognize the gravity of our responsibility for fiscal integrity and responsibility. I feel the impact of the impoundment action by the President is of such far-reaching importance that the Congress must find some way to deal with the issue in a most positive manner. The bill introduced by the Senator from North Carolina has my full support as a means to protect the legislative function of our government and to prescribe the proper roles of the Congress and of the Executive.

I have not been involved in Committee action on previous NASA authorizations which were not used, and my support of this bill is not because I have any personal animosity toward the problem. I just feel it is a sound principle of good government in consideration of the constitutional ramifications of the impoundment practice.

As Chairman of the Senate Committee on Aeronautical and Space Sciences, I have asked NASA to provide an historical listing of the instances in which funds have been withheld, and it is attached.

Mr. Chairman, the subject of impoundment of funds is so serious in its implications and so far reaching in its ultimate effects that I hope the delicate balance of governmental authority so necessary to our continued success can be quickly reestablished.

OMB IMPOUNDMENT OF FUNDS

1967: In the fiscal year 1967, $60,000,000 of NASA's research and development funds were placed in reserve by the Office of Management and Budget. This represented NASA's share of a Government-wide anti-inflationary effort by reducing expenditures. In the fiscal year 1968 the funds were released to NASA and applied to the Apollo program for that year. The action taken reduced by $60,000,000 the amount of new appropriations needed to fund NASA's total fiscal year 1968 program.

1969: In fiscal year 1969, $117,473,000 was withheld from the Research and Development apportionment as part of the actions taken pursuant to the Revenue and Expenditure Control Act of 1968 (PL 90-364). These funds were subsequently applied to the 1970 Space Flight Operations program as reflected in the President's budget for 1970.

1971: Research and Development funds in the amount of $6,400,000 were withheld from apportionment. This amount is a balance of $15,000,000 programmed for Space Station Studies and was applied to R&D program requirements in 1972.

1972: The Research and Development appropriation act (PL 92-78) specified that $39,000,000 was available only for the NERVA program in 1972. OMB impounded $21,914,000 of this amount which subsequently lapsed at the end of the fiscal year.

Research and Program Management funds in the amount of $2,000,000 was withheld from apportionment and transferred to finance a portion of the Economic Stabilization Activities pursuant to the second supplemental appropriations act, 1972 (PL 92-184).

1973: The fiscal year 1974 budget request for Research and Development provides for the application of $91,000,000 of fiscal year 1973 funds to the 1974 program. Currently, $30,000,000 of this amount (for QUESTOL and TIROS-N) is withheld from apportionment by OMB.

INDIANAPOLIS, IND.,
February 6, 1973.

Senator SAM J. ERVIN, Jr.,
Russell Senate Office Building,

Washington, D.C.

DEAR SENATOR ERVIN: Enclosed is a short statement which I have prepared on S. 373. I think that S. 373 is a very important measure, particularly in view of some of the President's most recent statements concerning his "constitutional right" to impound funds.

It is my understanding that your Subcommittee on the Separation of Powers has been holding hearings on S. 373, and I hope that you might share my statement with your colleagues-perhaps by having it inserted into the hearings and/or the Congressional Record. If you do elect to share my statement with others, I think that it might be appropriate to call attention to the fact that a revised version of the statement will be published in Vol. 6, No. 3, of the Indiana Law Review as a "Recent Revelopment." (I am on the Board of Editors.)

Sincerely,

Enclosure.

NILE STANTON.

AN OVERVIEW OF IMPOUNDMENT AND THE NEED FOR S. 373-STATEMENT OF NILE STANTON OF INDIANAPOLIS, IND.

Each year since first assuming office, President Nixon has, usually through the Office of Management and Budget, impounded 17-20% of controllable funds (1) appropriated by Congress; and it is the President's view that his "constitutional right" to do so is "absolutely clear." (2) On January 19, 1971, the President "permanently impounded" funds which were appropriated to complete the Cross-Florida Barge Canal, which was then one-third completed and on which $50 million had been spent. (3) Over $70 million of HUD's “312" housing rehabilitation loan program funds have been impounded within the past two years. (4) Hundreds of millions of dollars which were appropriated for urban renewal, public housing, higher education, medical research, and myriad other programs have been impounded. (5) After Congress passed the Water Quality Act Amendments of 1972 over his veto, President Nixon impounded $6 billion which was to be spent for water pollution control. (6) Approximately $6 billion of funds appropriated for the building of highways has also been impounded. (7) Numerous efforts have been made by the Congress to partially ameliorate this problem. (8) Most recently, on January 16, 1973, Senator Ervin of North Carolina and 45 other Senators, including Indiana Senators Bayh and Hartke, introduced S. 373-a bill carefully drafted to insure a proper balance in the separation powers vis-à-vis executive impoundment of appropriated funds. (9)

Believing that use of the funds was unnecessary, in 1803 President Jefferson refused to spend $50,000 appropriated by Congress. (10) Although various Presidents impounded funds in the interim, neither Congress nor the general public thought the matter to be of much concern until the latter part of World War II. (11) The Anti-Deficiency Act of 1905 and 1906 (12) provided a technique to prevent undue expenditures in one portion of a year that could require deficiency or additional appropriations and stipulated that expenditure of appropriated funds could be waived in the event of some extraordinary emergency or circumstances which could not be foreseen at the time appropriations were made. After passage of the Budget and Accounting Act of 1921, (13) the Harding Administration formalized procedures for impounding funds pursuant to the Anti-Deficiency Acts; and President Roosevelt withheld expenditure of funds, mainly in order to cope with the emergencies of economic depression and war. (14)

In the early 1940's, however, clamor of some magnitude developed when Budget Director Smith ordered the impoundment of amounts ranging from $1.6 million to $95 million which had been appropriated for civilian pilot training, the CCC's surplus labor force, the Surplus Marketing Corporation, and numerous civil and military efforts which the War Department could not complete because the projects did not have priority ratings to obtain scarce resources; but the public cry and political fighting was greatest when funds appropriated for a flood control reservoir at Markham Ferry, Oklahoma, and a flood control levee on the Arkansas River at Tulsa were impounded. (15) The 1940-41 squeeze on funds appropriated for these public works projects set the stage for first strong congressional opposition to impoundment policies. In mid-1943, Senator McKellar

managed to slightly curtail the authority of the Budget Bureau to impound funds; (16) but, on December 16, 1943, a powerfully worded anti-impoundment rider to the First Supplemental National Defense Appropriation Bill (17) was defeated 283-13 in the House after passing the Senate by voice vote eight days earlier. (18)

It is noteworthy that at no time during the congressional debates on Senator McKellar's proposed rider to the Defense Appropriation Bill was it ever suggested that the rider might detract from any alleged inherent constitutional power of the President to impound funds. Objections to section 305 were almost exclusively based on the ground that the provision would interfere with President Roosevelt's power as Commander-in-Chief to develop priorities which would prevent waste and allow the energetic and successful prosecution of war efforts. (19) And when subsequent Presidents refused to spend funds earmarked for military projects, constitutional crises were routinely avoided by Congress. (20) The avoidance of a court challenge has probably been wise: Most authorities tend not to disagree much with the view that the President may, in his capacity as Commander-in-Chief, impound funds which reasonably relate to war efforts. (21) However, as indicated by the recent case of Missouri Highway Commission v. Volpe, (22) it is highly doubtful that the President has any other inherent authority to impound funds. (23)

The recently proposed bill S. 373 (24) would greatly enhance the "sharing of power;" (25) and, particularly in view of the fact that the last decade has seen impoundment used more often and for more reasons than ever before, the passage of such a measure would seem to be a necessary step toward redressing and safeguarding the system of constitutional checks and balances.

Section 1 of S. 373 sets out disclosure requirements. The section would require the President to submit a special message to both Houses of Congress within ten days after he impounds, or approves another person to impound, any funds appropriated or otherwise obligated. The special message, which must simultaneously be sent to the Comptroller General, is to specify the amount impounded, the date funds were ordered impounded and the date they actually were impounded, and the account to which the funds would be available except for the impoundment action. Additionally, the first section of S. 373 would require the President to announce the period of time during which the funds would be withheld, the reasons for the action, and the probable fiscal, economic, and budgetary effects of the impoundment. (26)

Indubitably the most important proviso of S. 373 is section 2. (27) This section stipulates that, absent the approval of Congress within 60 calendar days of continuous session (28) after receipt of the special impoundment message, the withholding of funds must cease. The crux of section 2 is to eliminate, or rather limit, what the President was never supposed to have an item veto. (29) With the passage of S. 373, or a similar impoundment control measure, the President of the United States would no longer be able to completely defeat the will of Congress, viz. the President would not have discretionary and abatement authority over controllable appropriations.

S. 373 could not, of course, alter the constitutional powers of either Congress or the President, and it is not designed to have that effect. The measure is merely aimed at restoring a viable sharing of control over expenditures. And the President should welcome this carefully drafted measure: It would afford to the President an opportunity to avoid later, highly probable, head-on collisions with Congress over impoundments (30)—an opportunity of no small consequence since the federal courts might not be persuaded to allow as much deference to presidential inclinations as Congress may be willing to by statute.

REFERENCES

1. The amount impounded at a given time ranged from $9.5 billion to nearly $15 billion. Compare OMB figures in Hearings on Executive Impoundment of Appropriated Funds Before the Subcomm. on Separation of Powers of the Senate Comm. on the Judiciary, 92d Cong., 1st Sess. 7-18 (1971) [hereinafter cited as 1971 Impoundment Hearings], with Boggs, Executive Impoundment of Congressional Appropriated Funds, 24 U. FLA. L. REV. 221, 226 (1972). According to figures by the White House on February 5, 1973, the "reserve" of released appropriated funds totaled $14.7 billion. Indianapolis Star, Feb. 6, 1973, at 3, col. 3.

2. Indianapolis Star. Feb. 1, 1973, at 1, col. 4. President Nixon asserted that: "The constitutional right for the President of the United States to impound