ARNOLD & PORTER 3 While there are few helpful legal precedents and little relevant statutory or constitutional authority dealing with the principal issue raised by the Department's action, it is our view that a strong case can be made for the proposition that the Department has exceeded its legal authority in taking that action. We find no constitutional basis for the Department's action and we are of the view that Congress has not delegated to the Department the discretion to take such action. The only statute we have found that might arguably constitute a delegation of authority to the Executive by Congress with respect to the abolition of a program is the Reorganization Act of 1949, but no effort has been made by the Department in this case to comply with the procedural requirements of that Act. In fact, the history of both the Reorganization Act and the spending limitation legislation of 1972 strongly negates the conclusion that Congress has by implication conferred authority on the President to terminate programs unilaterally. As to the procedural questions you have raised, it is our opinion that NRECA would have standing, as ARNOLD & PORTER 4 the representative of its members, to challenge the Department's action in court. Furthermore, while such an action would raise several questions of first impression, it is our opinion that the Department's action is judicially reviewable, and that sovereign immunity and lack of justiciability would not be meritorious defenses to such an action. Discussion The Department's press release characterizes its action as the "conversion" of the RE Act loan program to a new program authorized by the RDA of 1972, and nothing in the release indicates that two percent loans will ever again be made by REA under section 4 of the RE Act. In discussing the lawfulness of this action we have drawn on materials dealing with the general subject of Presidential "impoundment" of appropriated funds used to describe a variety of types of Executive action or inaction with respect to congressional appropriations. It is our view, however, that the Executive action in question here, while perhaps encompassed within a broad definition of the concept of "impoundment," is more - a term ARNOLD & PORTER - 5 accurately characterized as the termination of the RE Act program. This memorandum will discuss the legality of the Department's action, first, as an asserted exercise of constitutional prerogative by the Executive, and second, in the context of various legislative enactments that might be argued to confer authority for the action. In addition, it will set forth our conclusions with respect to the questions of standing, reviewability, sovereign immunity and justiciability that might be presented in the event legal action were to be undertaken. I. The Lawfulness of the Department's Analysis of the legality of the Department of Agriculture's termination of the RE Act two percent loan program must begin with the Supreme Court's decision in the Steel Seizure case, Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579 (1952), the leading case dealing with the constitutional division of power between the President and the Congress. ARNOLD & PORTER - 6 In 1952, after several months of unsuccessful ne gotation and mediation, the United Steelworkers called a nationwide strike against most of the country's steel mills. President Truman, believing that the strike would immediately curtail the Korean War effort and jeop- Mr. Justice Black, writing for a divided Court, held that, under our constitutional system of express delegation of powers to each branch of the federal government, authorization for the President's actions "must stem either from an act of Congress or from the Consti343 U.S. at 585. Finding that neither Congress nor the Constitution specifically authorized tution itself." 1/ Congress had, in at least two different statutes, authorized the President [footnote continued on next page] ARNOLD & PORTER - 7 the action, the Court declared the seizures unconstitu tional and affirmed the lower court's issuance of the injunction. The President attempted to justify his actions as being within his constitutional powers, pointing particularly to the provisions of Article II of the Constitution that "the executive Power shall be vested that the Laws be faithfully executed." However, the Court rejected the argument that power to make the contested seizure was inherent in the executive powers of the President: [Footnote continued from preceding page] to seize pri- |