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Subsection 442(c) is similar to the provision in P.L. 874 allowing the Commissioner some "discretion ... in the computation of the entitlement . in that it does allow the Commissioner to reduce the allotment for a given State in a given fiscal year by the amount "which the Commissioner determines will not be required for such fiscal year." Once that determination is made, however, subsection 442(c) provides a system for continuing reallotment of such reductions until the entire appropriation is allotted or until all States have reached the ceiling of their full allotment or full needs. As with P.L. 874, "whatever limited authority the Commissioner may have with respect to determining (allotments), (subsection 442(c)] does not appear to permit any exercise of discretion in the application of appropriated funds to the payment of [allotments]." 11
The conclusion that NDEA Title III allotments to States are mechanical and
allow the Commissioner very limited discretion is strengthened by the lanlo guage in section 443. Subsection 443(a) sets forth criteria for State plans to be
submitted to the Commissioner of Education by the State educational agency of any “State which desires to receive payments under this part ..." (Emphasis added.) The intent of Congress that all States complying with the statutory criteria should receive Title III NDEA funds is expressed succinctly in subsection (b): "The Commissioner shall approve any State plan and any modification thereof which complies with the provisions of subsection (a) ..." (Emphasis added.)
Section 444 is the conduit whereby States receive Title III funds for projects carried out under an approved plan."
The conclusion that sections 441 to 444 establish a system requiring expenditure of
appropriations is demonstrably evident when they are compared with the permissive and discretionary provisions of NDEA Title III. Section 445 states that the Commission is "authorized to make loans to private nonprofit" schools. (Emphasis added.) Not that he "shall”, but that he "may", if four criteria are satisfied.'* Section 453 (“Application of local educational agencies') is another explicit grant of discretion to the Commissioner. The use of the imperative "shall" is not a conclusive indication, standing alone, that an expenditure of appropriations is mandatory. However, the statutory formula grant mechanism of sections 441 to 444 allows the Commissioner little if any discretion, and this discretion is limited to a factual assessment of State needs. Moreover, where discretion is vested in the Commissioner with NDEA Title III, the Congress has done so in explicit language. The combination of the lack of explicit language allowing the exercise of discretion and the detailed statutory formulae to be applied demonstrate the mechanical nature of the process, the ministerial quality of the duty, and the mandatory character of the appropriation.
An analysis of the language and structure of sections 441 to 444 demonstrates that these sections require mandatory expenditure of appropriations by payment of allotments to States that have spent money on equipment and minor remodeling in projects carried out under an approved State plan. There is not, in short, within ...
"[sections 441 to 444 of NDEA Title], any statutory authority for the Commissioner in the exercise of his discretion to avoid applying to the (allotments] the full sum appropriated, and ... the provisions of [sections 441 to 444] are therefore mandatory in this respect.” 14 B. The Impoundment 188ue
In 1967 Ramsey Clark, then Acting Attorney General, issued an opinion on the power of the President to impound funds appropriated under the FederalAid Highway Act of 1956.15 Mr. Clark summarized his argument by stating ". . . the rule that an appropriation act in itself does not constitute a mandate to spend” and added that the "courts have recognized that appropriation acts are of a fiscal and permissive nature and do not in themselves impose upon the executive branch
19 See note 7 and accompanying text.
the Commissioner From a State's allotment for a fiscal year under section 442(a)
pay to such State an amount equal to one-half of the expenditures for projects for acquisition of equipment and minor remodeling . . . which are carried out under its State plan approved under section 443(b),
At least one of these criteria, paragraph (1) provides in part: then containing such information as may be deemed necessary by the Commissioner.: (Emphasis added.)
See Hearings, p. 281.
an affirmative duty to expend the funds.” 16 This is a succinct statement of one position in an on-going debate.
A less axiomatic position is that the organic or authorizing statute, together with an appropriation, can create a system mandating expenditure of appro priations. We have shown that the language and statutory system of $f 11 to 444 of NDEA Title III do create just such a mandate.
Careful analysis of Mr. Clark's opinion shows that it was “... based on the construction of the particular statute, rather than on the assertion of a broad constitutional principle of Executive authority." 17 Consequently, it is not now necessary to resolve the various levels of constitutional debate about the power of the President to impound appropriated funds."
Nor did Mr. Clark's opinion treat the ... limitation on the Federal-aid highway funds which (would) be obligated during the ... Fiscal year ..." as a direct clash between the Congress and the Executive. On the contrary, the limitation was interpreted to leave open the possibility of full compliance with "... the intent of Congress that the Interstate system be completed as nearis as practicable over the period of availability of the fifteen years' appropriation ..," expressed in 23 U.S.C. (101 (b)." Mr. Clark's explanation of how Congressional intent and impoundment could be reconciled clearly distinguishes his analysis of limitations of Federal-aid highway funds from current Administration treatment of NDEA Title III:
“Moreover, since the purpose of action here is not to reduce the total amount of the funds to be devoted to the Federal-aid highway program but merely to slow the program for a limited period, hopefully it will have no advene effect on the completion of the program “as nearly as practicable” by the end of the period envisaged in 23 U.S.C. 101 (b)." 20
The current treatment of NDEA Title III, i.e., refusing to release funds for projects and providing mere subsistence level funding to keep State and local administrative intact, will clearly (1) reduce the total amount of funds to be devoted to the program, (2) not merely slow but possibly cripple the program if continued beyond a limited period, and (3) have adverse effects on the program, if only by destroying the continuity which allows State planning and funding.
In conclusion, this formal legal opinion discussing impoundment of appropriated funds is clearly distinguishable on its facts from the budgetary situation of NDEA Title III and does not address the legal issue posed by Executive refusal to fund a Congressionally mandated program.
THE SECRETARY OF HEALTH, EDUCATION AND WELFARE,
Washington, D.C., November 27, 1972. Hon. WARREN G. MAGNUSON, Chairman, Subcommittee on Labor, and Health, Education, and Welfare, and
Related Ag ies, Committee on Appropriations, U.S. Senate, Washington,
D.C. DEAR SENATOR MAGNUSON: This is in response to your letter of November 9 requesting information on Departmental procedures pertaining to operations under in Continuing Resolution, P.L. 92–334, amended by P.L. 92–390, 92-446, and 92–571).
Since July 1, the Department has been operating under interim spending rules pending enactment of a Labor-HEW appropriation bill. Briefly, the general ruling we have been following is this:
16 Ibid., p. 4 (slip opinion). 17 Hearings, p. 283.
18 See, e.g.. Louis Fisher. “The Politics of Impounded Funds," 15 Administrative Science Quarterly 361 (Sept. 1970), printed in Hearings, pp. 103-119, focusing on two key areas of Presidential Congressional conflict : defense priorities and anti-inflation policy, Louis Fisher, “Funds Impounded by the President: The Constitutional Issue". 38 The George Washington Law Review 1969 (1969) (concluding that “presidential impoundment of funds. remains a political, not a constitutional, problem."). Hearings, pp. 120-133 : Church, Hon. Frank. "Impoundment of Appropriated Funds : The Decline of Congressional Control over Executive Discretion". 22 Stanford Law Reriero 1240 (1970). Hearings, pp. 364–377; and Miller. Arthur Selwyn, “Presidential Power to Impound Appropriated Funds : An Exercise in Constitutional Decision-Making,” 43 North Carolina Law Rerier 502 (1965), Hearing8, pp. 315-360 (A scholarly and thoughtful article which concludes that the "answer (to) ... the constitutional question of presidential impounding of appropriated funds is not to be deduced from the Constitution itself but is to be decided on the grounds of policy.” Hearings. pp. 345–346.)
19 Ope. Atty. Gen., Vol. 42, Op. No. 32, p. 8 (slip opinion). 20 Ibid., pp. 8–9 (slip opinion).
All HEW activities for which funds were requested in the Labor-HEW appropriations bill may be continued at a rate of operations not in excess of the 1972 rate, the 1973 budget request, or the House or Senate allowance, whichever is lower. This ruling applies to both discretionary funds and formula grants.
As you pointed out in your letter, both Titles III of the NDEA and VI of the HEA are covered under Section 101 (d) of the Continuing Resolution which makes funds available not in excess of the fiscal year 1972 annual rate. The Department did not request funds under these programs for fiscal year 1973. We feel it is extremely important that we do not close off any options in the event that the final enacted bill appropriates funds for these programs at the level of the President's budget. For this reason, we are only providing States with funds to continue administrative expenses of the State education agency during the interim period awaiting final appropriation decisions concerning NDEA III and HEA VI. With kindest regards, Sincerely,
ELLIOT L. RICHARDSON,
Seoretary. HARVARD UNIVERSITY,
Cambridge, Mass., August 25,'1971. The Senator SAM J. ERVIN, Jr., por Chairman, Subcommittee on the Separation of Powers, Senate Committee on the
Judiciary, Washington, D.C. DEAR SENATOR: Mr. Edmisten has asked me to comment on two aspects of your proposed bill on Executive impoundment of funds. As I am leaving almost immediately for a brief vacation, I have not had time to consider these matters as carefully as I should like. Will you, therefore, please consider this letter as rough notes.
(1) The role of the Appropriations Committees. I think it very important that the Appropriations Committees be included in the procedure for Congressional review of Presidential impoundment orders, and this for several reasons. As a
general proposition Congressional action will be ineffective where there has not 102 been careful preparatory work by its committees. Thus to include the committees
is to strengthen. and to exclude them, to weaken, the hand of Congress vis-a-vis El come the Executive. Only the Appropriations Committees can provide the whole house
with intelligent information on the relation of a proposed impoundment to the priorities of Congress and those of the Executive, where they differ. When the President requests supplemental funds, these requests go to the Appropriations Committees, not directly to the floor of either House. The same should be true of Presidential requests to impound funds. For either House of Congress to take up, without review and report by its Appropriations Committee, a Member's bill relating to
Presidential impoundment order would be an exercise in frustration, I should think.
Also, am I not correct in believing that the chance for passing your legislation,
certainly in the House, will be slim if it is opposed by the Appropriations Comsmittees, which surely it will be if they are cut out of the action?
(2) Affirmative or negative action by Congress. I understand that you are presently redrafting the bill to provide that impounded funds must be released by the Executive branch, if Congress does not approve each impoundment within a period of sixty days. This is equivalent to saying that the President may initiate, or propose, legislation to rescind certain appropriations (just as he makes legislative proposals to supplement certain appropriations) ; but in the former case he may hold in reserve for no more than 60 days the appropriations that he wants rescinded, while awaiting the results of Congress's action on his request. This may be all right, but for several reasons I prefer the negative formn, under which Congress has 60 days in which to over-ride an impoundment of funds proposed by the Executive. The latter has greater flexibility for both the Executive and Congress flexibility that is probably necessary, given the complications of short-term authorization and appropriation of funds today. For example, if the affirmative form is followed, then it will be necessary for Fou to define more carefully than you have the forms and types of impoundments that are to be exempted from Congressional approval. Certainly you do not want Congress to have to pass legislation every time the President wants to impound funds because he can accomplish a job more efficiently with less
money than was appropriated.' Without the greater flexibility that is characteristic of the negative form, there will be greater encouragement for the Executive to develop means of circumventing the legislation.
I understand that one reason that has led you to view the affirmative for favorably is the question of timing, that the Senate in particular does not like to be under a time-gun on many matters. I should think that 60 days would be quite enough time in almost all cases, but if there may be situations where this is not the case, then you might want to follow a procedure similar to one I suggested some years ago when testifying before your Committee on the legislative veto. The law could provide that the period for action can be extended, within limits, by simple resolution of either House. Sincerely yours,
Washington, D.C., January 15, 1973.
DEAR SENATOR ERVIN: Enclosed are two letters which illustrate some of the adverse effects of recent Administration fiscal decisions. One, from Governor Tom Judge of Montana, deals with forest and watershed management. The other, from Manager Jim Grahl of Basin Electric, deals with electric power supply in the Northern Plains.
These letters illustrate the profound and dire effects of the Administration's actions, unless reversed. I hope that they will be helpful in your Committee's consideration of the matter. Very truly yours,
STATE OF MONTANA, OFFICE OF THE GOVERNOR,
Helena, Mont., January 3, 1973. Hon. LEI METCALF, U.S. Senate, Washington, D.C.
DEAR LEE: As you are aware, the Office of Management and Budget under instructions from the President, is withholding distribution of some $5,000,000 in Clarke-McNary, Section 2, funds appropriated by the Congress, and I understand $55,400 has been earmarked for the State of Montana. At a time of extensive resource demand and nationwide environmental concern, this action and the resulting; loss of resource protection are incomprehensible.
First, it seems obvious, even if only short term costs are considered, that a more prudent policy would be to release these funds to aid the states in establishing better on-the-ground firefighting forces. This should enable more effective suppression of smaller fires that might otherwise grow to disaster-level proportions, therein incurring far greater suppression costs and property damage.
Seconilly, the long term costs of failing to prevent extensive damage to watersheds from large fires should be recognized. Montana's clean water, recreation facilities, abundant wildlife, and economic well being are a few of the benefits derived from wise management and protection of our forest resources. All are threatened if adequate fire suppression capabilities are not available to the state.
In the past Montana has, with the assistance of CM-2 funds, taken aggressive action against wildfire problems. In recent years approximately 4 million acres of forest lands and 18 million acres of non-forest watershed lands have been included in a basic program of fire suppression. Without the C-2 funds, the program will be seriously curtailed.
Any assistance by your office to secure the immediate release of these funds by the Office of Management and Budget will be appreciated. Sincerely,
THOMAS L. JUDGE,
1 With the negative form, there is less need to try to draft legislation that makes such distinctions ; impoundment orders of the type mentioned simply would not be vetoed.
BASIN ELECTRIC POWER COOPERATIVE,
Bismarck, N. Dak., January 9, 1973. Senator LEE METCALF, Washington, D.C.
DEAR LEE: The Administration's termination of the REA 2% loan program occurred on the very day that REA Administrator Dave Hamil had promised to make Basin Electric a $25 million loan to help complete the financing for our 400,000 KW second unit and the 345 KV transmission lines into South Dakota, all of which we have under construction.
The end of the REA program is a massive blow to Basin Electric and its members and threatens a power shortage in eastern Montana and the rest of the region in the summer of 1975.
I'd like to review the background of these statements for your information. REA and Basin Electric have known for a long time that we needed additional financing for our power supply expansion program, to cover (1) the $33 million cost increase since the initial loan in 1968 due to a year's delay by this Administration and years of inflation; (2) a $7 million investment in our present plant to meet clean-air requirements; (3) $8.5 million for the Wyodak-New Underwood transmission; and (4) numerous lesser items.
Mr. Hamil promised us many times publicly and privately that REA would provide this additional financing, of about $51 million, out of REA loan funds because of long-standing REA policy that it completes the financing of a project on the same basis on which it began. At REA's request, we submitted a loan application in April, 1971 revised it several times and, finally, in March 1972 submitted final cost estimates.
REA promised us a loan in June, 1972. When June came, Mr. Hamil had to postpone it to October. Last fall, he postponed it again but categorically stated we would get a $25 million loan "on or about January 1, 1973", and the balance on July 1, 1973.
In the meantime, REA had told us to go ahead and award contracts for all of our major equipment and some of our construction. By February 15, we will have committed almost all of our loan funds but we still have major construction contracts to let in the immediate future.
As Mr. Hamil fully recognizes, we need additional financing in the next 30 days or we will have to delay awarding basic construction contracts. This will delay plant completion by more than any award delays, as well as increase our costs. This is a large and complicated construction program, and a delay on one key contract of only one month gives us multiple problems and delays with other interdependent contracts.
With the sudden death of the REA program, Mr. Hamil now says he will fulfill his commitment with the new 5% loan program. However, I don't think this is even in operation and doubt that we can get financing under that program without protracted delays and more large cost increases.
This project originally was scheduled for completion in 1974. Then, in November, 1969, the Bureau delayed it for a year, over our objections, by certifying that they would have plenty of hydro power. However, the Bureau told us on December 20 that they have committed all of their power, including some committed to us under contract, and urged us to have our plant and lines in operation on schedule.
Our plant and lines are scheduled to be ready for start-up and testing on April 1, 1975 and in full commercial operation no later than September 15, 1975. The Bureau now urges that we have the plant in operation as reliably as possible, even though on a test basis, on schedule because they foresee a tight power situation in the summer of 1975 (a peak demand period for the region).
We can have our project on the line on schedule, barring unforeseen problems, if we can get our financing (8 promised. Otherwise, if some people in Washington are going to whipsaw this project around, I don't see how we can control the project or know when it might be completed or how much it might cost.
The shift from a 2% to a 5% interest of course will increase power costs to the consumers. It will add another $1.5–$2 million to the capital cost due to higher interest cost during construction, and about $27 million in additional interest costs over the 35-year loan repayment period. We will have to increase our rates by about 10% just to cover the interest rate increase, plus other increases to cover other cost items. This apparently will "fight inflation”.
Our most urgent need is for Congress to persuade the Administration to release the REA 2% loan funds immediately so that REA Administrator Hamil