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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

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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

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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
Termination of the Rural Electrifi-
cation Act Loan Program

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.

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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-
ardize the national defense, ordered his Secretary of
Commerce to seize possession of the nation's steel mills
and to operate them on behalf of the United States. The
Secretary did so by calling upon the managers of the
seized companies to continue to operate them as agents
of the United States. The companies obeyed the order
but challenged the action by seeking injunctive relief
in the federal courts.

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/

1/ Congress had, in at least two different statutes, authorized the President [footnote continued on next page]

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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

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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-
vate property under certain emergency conditions, but
the President conceded that such conditions did not ex-
ist when he ordered the steel seizures. Moreover, in
enacting the Taft-Hartley Act to deal with labor dis-
putes of the sort involved in the Steel Seizure case,
Congress had specifically rejected amendments that would
have given the President authority to seize critical in-
dustries that were threatened by strikes. Therefore, as
Mr. Justice Jackson noted in a concurring opinion, "Con-
gress has not left seizure of private property an open
field," but has occupied it with specific legislation
outlining the circumstances under which the President
could act. "In choosing a different and inconsistent
way of his own, the President cannot claim that it is
necessitated or invited by failure of Congress to leg-
islate . .
Id. at 639.

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