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tionable for yet another reason. Prior to President Nixon's veto of the LaborHEW-OEO appropriation bill, Congress had passed a continuing appropriation bill. It contained the following provision: (27)

"... in the case of activities for which appropriations would be available to the Office of Education under the Act making appropriations for the Departments of Labor, and Health, Education, and Welfare for the fiscal year 1970, as passed by the House, the amount available for each such activity shall be the amount provided therefor by the House action."

Although this continuing resolution was signed into law by the President, there is no indication that the Administrtaion treated the House-passed funds for education as mandatory. After the veto, Representatives Carl D. Perkins (D-Ky.) and Robert H. Michel (R-Ill.) discussed this point: (28)

"Mr. Perkins: Is it not a fact that the President was put on notice, by mandatory language, when we passed the Joelson resolution, which is more than $400 million in exess of the figures before the Committee today, and the school districts throughout the Nation had the right-and it was their duty-to rely on language that we sent to the President when the President signed the continuing resolution containing the Joelson amendment level of funding?

"Why has not the President of the United States been spending the funds in accordance with the mandatory language that we sent to him back last October? "Mr. Michel. Well, of course, there is still a difference in many people's minds. You can get one lawyer to argue one way, to say it is definitely mandatory, and has to be spent, and you can get another lawyer who will make the point that under the traditional prerogatives, the President of the United States has the power to withhold if he see fit, that the Congress cannot make the Executive spend."

Here is a situation where the President, in a veto message, refers to certain appropriations as unquestionably mandatory. And yet the following month, after the veto has been sustained, a member of his own party acknowledges that legal questions are not yet resolved as to whether Congress can force the President to spend unwanted funds. Similar ambiguities prevailed during congressional debates in 1968 on Section 406 of a vocational education bill, and in 1970 on Section C01 of a medical facilities construction bill.

(a). Section 406. In 1968, when House and Senate conferees reported out the Vocational Education Amendments bill, it contained the following section: (29) "Notwithstanding any other provision of law, unless expressly in limitation of the provisions of this title, funds appropriated for any fiscal year to carry out any of the programs to which this title is applicable shall remain available for obligation until the end of such fiscal year."

The significance of Section 406 is not at all self-evident. Funds are always available for obligation until the end of a fiscal year (unless the money is multiyear or no-year, in which case funds remain available for obligation for even longer periods). The conference report did not explain the meaning and purpose of this section. Not until the conference report was debated on the floor did Memhers of the House and Senate come to understand that Section 406 was meant to prevent the President from impounding any education funds. The Revenue and Expenditure Control Act of 1968 had directed the President to reduce expenditures by $6 million. Supporters of Section 406 wanted to exempt education funds from this expenditure control.

Whether Section 406 actually mandated the expenditure of education funds is quite another matter. Senator Wayne Morse, second-ranking member on the Committee on Labor and Public Welfare, explained that the section "would override any statutory authority the President might have to prevent by affirmative act the obligation of fiscal year 1969 appropriations. This section does not challenge whatever authority the President may have constitutionally with respect to his refusal to expend appropriated funds." (30) In short, while the President would have no statutory authority to impound money, his constitutional powers would be left intact. This point was hit squarely in the following exchange: (31) "Mr. Dominick. It is my understanding that this provision simply provides that no statutory authority shall be used to cut down the amount of appropriations which may be later made under this authorization. . . . The President, under his constitutional authority, could still refuse to spend that amount if he felt so inclined. Is that correct?"

Mr. Yarborough. The Senator is correct.

Senator Yarborough was third-ranking member on the Committee on Education and Public Welfare.

During debate on the House side, the chairman of the Appropriations Committee, George H. Mahon, sought to clarify the meaning and scope of Section 406. He asked Carl D. Perkins, chairman of the Education and Labor Committee. whether the President's "power and responsibility and prerogatives" were such that he would not necessarily be compelled to spend all of the funds referred to in Section 406. Perkins replied that "insofar as the President is concerned, we do not touch his constitutional powers. The exemption here does not apply to the constitutional powers of the President to impound funds." The dialogue continued: (32)

"Mr. Mahon. Would it not be a fair assumption to say that you do not in this language undertake to repeal the law which permits the executive branch of the Government, including the Director of the Bureau of the Budget, to withhold expenditure of the funds?

"Mr. Perkins. I will answer the gentleman's question this way: The President. if he directs the Bureau of the Budget to withhold funds from any governmental agency, we do not touch any constitutional prerogative of the President to take such action. We do not have the authority and I do not know in my judgment how we could get to that. The President in my judgment would not be able to operate an efficient form of Government if we tried to take this power away from him. I do not believe we have the right to take that power away from him, but we do have the right to say that programs operated by a Federal agency shall be exempt from legislation requiring a reduction in obligation of appropriated funds."

(b). Section 601. On June 22, 1970, President Nixon vetoed the Medical Facilities Construction and Modernization Amendments of 1970. The bill au thorized direct grants which were more than $350 million in excess of his budzet requests. He particularly singled out Section 601 as one of the most “unacceptable provisions" of the bill. According to the President's veto message, Congress "insists that funds appropriated for any fiscal year through 1973 to carry ent the programs must be spent." (33) The actual language of Section 601 was as follows: (34)

"Notwithstanding any other provisions of law, unless enacted after the enactment of this Act expressly in limitation of the provisions of this section. funds appropriated for any fiscal year ending prior to July 1, 1973, to carry out any program for which appropriations are authorized by the Public Health Service Act (Public Law 410. Seventy-eighth Congress, as amended or the Mental Retardation Facilities and Community Mental Health Centers Construction Act of 1963 (Public Law 88-164, as amended) shall remain available for obligation and expenditure until the end of such fiscal year."

The House overrode the veto on June 25; the Senate on June 30. (35)

The President's statement is substantially different from the statutory lan guage. The President said that the funds "must be spent whereas Section 601 says that the funds "shall remain available" until the end of fiscal 1973. The mere fact that funds remain available does not mean that they must be spent. Is there anything in the legislative history of Section 601 to support the Presi dent's interpretation?

The conference report explained that the purpose of Section 601 was "to prevent administratively imposed freezes, reductions, and rollbacks from applying to health programs authorized under these acts." (36) During the debate on wherther to override the President's veto, Senator Edward M. Kennedy added: "I wish to make it extremely clear that it is my interpretation that seetion 601 requires that all funds appropriated for programs covered by section 601 must be spent." (37)

There are several reasons, however, for doubting the mandatory nature of Section 601. Since it begins by saying that "Notwithstanding any other provision of law. . ." it is therefore directed at removing any statutory basis for inpoundment. In particular, the section was meant to exempt certain health programs from any spending ceiling enacted by Congress. As Senator Jacob K. Javits remarked: "if I were the President's counsel. I would interpret this provision, section 601 of H.R. 11102, to mean an advance exemption from the expenditure ceiling." (38) But if Congress deprives the President of statutory grounds for withholding funds, does he not have independent constitutional pow ers at his disposal? This question was pursued by Senator Robert J. Dole." (39) "Mr. Dole. I am wondering about the general questions. Does Congress have the right to say to any President. "You must spend a number of dollars, but you have no flexibility, no discretion"?

"Mr. Yarborough. The Constitution, in my opinion, gives Congress the exclusive power to levy and then to appropriate the money.

"Mr. Dole. We have the right to appropriate, but does that mean that the President must spend the amount appropriated?

"Mr. Yarborough. I think that Congress has to reassert its constitutional power...."

Senator Yarborough eventually admitted that Section 601 raised "a constitutional question, and people will differ on what the Constitution means." (40) Senator Warren G. Magnuson covered the same point by asking "do we have a right to make it mandatory? Well, we have the right, but we have no enforcement. No one will say that we can put a President, this one, in jail. We will not do it." (41)

Section 601 appears to be even less mandatory when we consider the bill authorized appropriations; it did not actually provide funds. The Appropriations Committee would therefore have to balance the President's opposition against the sense of priorities expressed by Congress in the section. Senator Peter H. Dominick said that it was his guess "that the Appropriations Committee will be very, very careful as to how much money it appropriates. I do not believe the Appropriations Committee has any desire to further confuse the issue by appropriating so much that the President cannot possibly swallow it. I do not think that they want to confuse the issue by inviting another veto." (42)

Hearings held during the fall of 1970 provide further evidence of the lack of agreement concerning "mandatory" formula grants. James B. Cardwell, Assistant Secretary, Comptroller of HEW, told the House Committee on Education and Labor that his department had decided that "the HEW general counsel would conduct a thorough review of the legal questions surrounding earlier conclusions as to the mandatory spending aspects of formula grants and sections 406 and 601. We gave ourselves a deadline of from 2 to 3 weeks for this review." By the time of the committee hearing, Cardwell said that the legal review was "all but complete. The HEW Counsel will be ready to present his conclusions to the Secretary and to OMB within the next day or two." (43)

However, there was such a division of opinion among the legal advisers in HEW, with regard to the mandatory nature of formula grants, that the opinion was never completed and released.

4. Removing Statutory Authority. Presidents rely on a combination of statutory and constitutional arguments in defending their withholding of appropriated funds. As a result of the spending ceilings adopted by Congress in recent years, the Administration has argued that certain funds have to be withheld in order to avoid the risk of exceeding the ceiling. Congress did not adopt a spending ceiling for fiscal 1972. Part of the reason, as Rep. Joe L. Evins explained to a budget official, was that "the Congress feels that they don't what to give you a flexible ceiling which you could use as a tool to freeze and impound funds as you did in the past." (44)

Language from the 1950 omnibus appropriation act, and now part of the United States Code, provides very broad authority to the President to impound funds; "In apportioning any appropriation, reserves may be established to provide for contingencies, or to effect savings whenever savings are made possible by or through changes in requirements, greater efficiency of operations, or other developments subsequent to the date on which such appropriation was made available." (45) There is little in the legislative history of the 1950 act to indicate with any greater precision the meaning and intent of these phrases. It would be possible to clarify the language either by amending the apportionment section of the U.S. Code or by elaborating in a committee report of the House and Senate Appropriations Committees the permissible limits of reserving funds.

5. Setting Guidelines. During debate on the 1950 omnibus appropriations bill, Rep. Albert Thomas proposed that the President be authorized to cut the budget by an additional $500 million. To prevent the President from using this authority to eliminate or sharply curtail particular projects and activities, Rep. Thomas further proposed that no domestic program could be cut by more than 15 percent. (46) An amendment by Rep. John Taber called for a reduction of $600 million, limiting the President to 10 areas in which cuts could be made and restricting the reductions to either 5 or 10 percent. The Taber-Thomas proposal thus satisfied two congressional needs: economy and retrenchment on the one hand, and retention of legislative control on the other.

On the Senate side, a proposal by Senators Harry F. Byrd and Styles Bridges supported an estimated reduction of $525 million, requiring a 10 percent cut

back in nonmilitary items and exempting certain programs. (47) The confer ence committee, however, deleted both the Taber-Thomas and the Byrd-Bridges amendments. The resulting act directed the President to use his apportionment authority to cut the budget by not less than $550 million without impairing the national defense. (48) No other legislative guidelines were supplied.

More recently, during Senate action in March 1972 on increasing the public debt limit, an attempt was made to supply legislative guidelines for impoundment. The bill itself provided for a temporary increase in the limit from $430 billion to $450 billion. In an effort to avoid the need for further increases in the debt limit, Senator William V. Roth offered an amendment to set a firm ceiling of $246.3 billion on expenditures for fiscal 1973. The amendment allowed for no exemptions, not even "uncontrollable" increases that might occur in such areas as social security, medicare, or unemployment insurance. This meant that if any part of the budget increased, it would be necessary to make commensurate reductions elsewhere in order to preserve the expenditure ceiling. But who would make the reductions? The Roth amendment placed that responsibility on the President: (49)

"Sec. 2. (a) Expenditures and net lending during the fiscal year ending June 30, 1973, under the budget of the United States Government shall not exceed $246.300,000,000.

(b) The President shall, notwithstanding the provisions of any other law reserve from expenditure and net lending, from appropriations or other obligational authority heretofore or hereafter made available, such amounts as may be necessary to effectuate the provisions of subsection (a).”

This put Congress in the position of authorizing and appropriating funds for various programs, and yet the President would have ultimate authority in deciding which programs to fully fund. Several proposals were presented to retain congressional control over priorities. Senator William B. Spong, Jr., for example. offered an amendment to subject the President's impoundment actions to a legislative veto. The President would have to report each impoundment action to Congress. If within 60 days Congress had not passed a concurrent resolution ratifying the action, the impoundment of funds would have to cease. (50) The difficulty with this amendment was that if Congress failed to act, the spending ceiling would be exceeded.

Senator Spong introduced a separate proposal to require the President tinform Congress of his decision to reserve funds, but this time giving Congress the option of amending the President's recommendation. Congress would have 30 days to pass legislation rescinding appropriations or other obligational atthority in an amount not less than the President's proposal. If during this 30-day period Congress passed such legislation, but it did not become law (because of a veto), the spending ceiling would be increased by the amount set forth in the President's report. The second Spong amendment was adopted by a vote of 42 to 40. (51)

Senator Frank E. Moss offered an amendment to require the President, when ever he withholds funds to remain within the spending ceiling, to reserve funds at a uniform rate. A variation of 10 percent would be allowed. This meant that if the President cut one appropriation by 5 percent, all other impoundments would have to fall within a range of 4.5 to 5.5 percent. The Moss amendment was re jected, 50 to 33. (52)

The Roth amendment, as modified by the Spong amendment, passed the Senate by a vote of 53 to 30. The bill on the public debt limit was further amended or the Senate floor, however, to exempt from the spending ceiling the following areas: social insurance trust funds (including social security, medicare, unenployment compensation, retirement and other programs), national service life insurance trust fund, interest on the public debt, and farm price supports. Tie amendment for these exemptions was offered by Senator Russell B. Long. (53) All of the Senate amendments-by Senators Spong, Roth, and Long-were deleted in conference. (54)

A bill introduced by Rep. Marvin L. Esch on March 23, 1972, contains a section on impoundment procedures. In addition to requiring the President to report impoundment actions and providing for a legislative veto within 60 days by simple resolution, the bill also sets forth these limitations: (1) the President shall not impound any funds unless the impoundment is made in all appropria tions categories of a department or agency on the basis of equal percentage inpoundment among appropriations categories; (2) variations of up to 10 percent in the impoundment of funds between individual appropriations categories shal

not be deemed as unequal; (3) if a President wants to impound funds without reference to the equal-percentage standard, he shall submit a message to Congress to that effect. Either house shall have 30 days to disapprove his action. (55) 6. Legal Remedies. In 1971, after the White House announced that more than $12 billion had been impounded, Senator Mike Mansfield proposed that the House challenge in court the President's power to imopund funds. He suggested that a ruling could be obtained if a suit were brought by the House: "It's their responsibility, since they initiate appropriations bills." (56) Senator Allen J. Ellender, chairman of the Appropriations Committee, said that he did not “put much credence" in the suggestion that Congress might sue the President to get a court-approved division of responsibilities and powers in the expenditure area.

(57)

A memorandum by William H. Rehnquist, when he was Assistant Attorney General in the Office of Legal Counsel, offered the opinion that with regard to funds withheld from the impacted-areas programs "we believe that the recipient school districts will probably have a judicial remedy. . . ." Yet he also observed that "entitlement" under P.L. 874 was not in itself equivalent to a legal obligation by the Federal Government to pay, and it was "doubtful that even entitlement plus appropriation creates a vested right which may not be destroyed by subsequent Congressional action. Accordingly, technical defenses might prevent recovery by a school district even if the court concluded that the Executive branch had a statutory duty to spend the appropriation." (58)

During the summer of 1971, two public agencies of the city of San Francisco brought suit in Federal court for an order to direct the release of housing funds impounded by the Nixon Administration. The San Francisco Redevelopment Agency filed suit to force the release of $200 million in urban renewal funds, while the San Francisco Housing Authority sought the release of $150 million in public housing funds. Mayor Joseph L. Alioto of San Francisco joined as a private attorney to litigate the unconstitutionality of the impoundment action. The U.S. Conference of Mayors adopted a resolution on June 16, 1971, endorsing in principle the issues raised by the two San Francisco agencies. (59) The cases were thrown out by a District Court, however, on the ground that counsel for plaintiffs were "unable to find authority for the proposition that a United States District Court may compel the head of the Executive Branch of government to take any action whatsoever... . It is clear, therefore, that a long standing policy, if not a positive rule, has avoided such an intragovernmental confrontation." (60)

7. Party Actions. Representatives Ella T. Grasso and William R. Cotter proposed a resolution to be considered at the April 21, 1971 meeting of the Democratic Caucus. The resolution, calling attention to the high unemployment levels and the large amounts of impounded funds, directed that "it is the sense of the Democratic Caucus of the House of Representatives that the House majority should seek immediate release of all such appropriated funds by appropriate message to the President; and Resolved further, that the Democratic Caucus of the House hereby urges the House of Representatives to immediately consider that these funds should be released forthwith." (61)

No action was taken on this resolution. However, on April 27, 1971, Majority Whip Thomas P. O'Neill, Jr. introduced a joint resolution instructing the President to release any sums that had been appropriated for fiscal 1971. (62) The Speaker. Carl Albert, announced that the resolution had the "full support of the House leadership ..." (63) The following month the Policy Council of the Democratic National Committee adopted a resolution requesting immediate passage of the O'Neill bill. (64)

8. Interest-Group Pressure. Congress can act in concert with groups at the local level in order to pry loose impounded funds. After the November 1966 elections, President Johnson announced a $5.3 billion reduction in Federal programs. Sensitive to criticism from the States, he released some of the money in February 1967. On the eve of a conference the following month with governors, he released additional amounts. (65)

Pressure also came into play in the fall of 1970 after President Nixon had withheld some education funds. Two weeks before the November elections, in the midst of widespread criticism from school districts. the Administration announced that the money was being released. Elliot L. Richardson, Secretary of HEW, was asked whether the pending elections had prompted the Administration to reverse its position and free the funds. He replied, smiling, that there was "no connection whatsoever." (66)

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