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confirmation and restricting the use of executive privilege by administration officials we will be taking substantial steps toward restoring the balance contemplated by the Constitution.
Much more must be done as well. I think all will agree that in order to maintain effective and responsible control over our Nation's fiscal and spending policies, Congress must develop the capacity to focus more directly and sharply on the aggregate results of its spending actions. We must find a way to develop the appropriate priorities between competing programs, and to allocate the available resources in accordance with those priorities.
I am hopeful that the Joint Committee, which was created by title Ill of last year's debt limit bill to recommend procedures for improving congressional control over budgetary outlay and receipt totals, will provide us with some practical approaches to what is certainly a very difficult problem.
I will say as chairman of the Labor and Public Welfare Committee that has that broad domestic jurisdiction, I welcome this approach. In this connection, I believe it important for Congress to develop more adequate resources for evaluating the utility of existing programs and the Nation's future needs. All too often we are in the position of having to accept the judgments of the executive branch, simply because the Executive is better informed.
I believe that in order to responsibly fulfill our role under the Constitution, Congress must continue to develop internal procedures necessary to meet the challenges of the day. Successive Presidents have always found ways to expand their authority in order to deal with new situations; maintenance of the constitutional balance requires that Congress be just as adaptive and responsive to new challenges as Chief Executives have been.
In essential first step, however, is that we renew our constitutional mandate with respect to control over the Federal purse, and I, therefore, applaud the effort you are making to achieve that result.
Mr. Chairman, since I prepared this for presentation, I read in this morning's paper a statement that further aggravates the problem we face here in Congress.
We have before us a nomination to the important position as Secretary of HEW. This is an appointment that will be considered and will be reported or rejected by the Finance Committee. The Labor and Public Welfare Committee has the legislative jurisdiction over such a great number of the programs administered by HEW and we have an opportunity as a committee to hear from the nominee. We have heard the nominee and we have held up our further consideration until We have heard from him on just what the meaning of the budget is in the areas of our jurisdiction. We plan to hear him on Friday in that connection.
We also are holding the nomination up to find exactly where funds have been impounded in the areas of jurisdiction and legislative concern of our committee. That is due under law February 10. We hope to have those impoundments of IIEW matters before we hear Vr. Weinberger on Friday of this week, if that does work out.
Mr. Weinberger, Director of the Ofice of Management and Budget, had something to say, however, that was reported in today's New York Times. I would like to quote this. And this is more than an aggravating
factor in the grave and critical problem that faces Congress today. This is a quotation from page 20 of today's paper:
Mr. Caspar Weinberger, Director of the Office of Management and Budget, who has become Secretary of Health, Education, and Welfare, threatened that money might not be made available for continuation of the programs in their current format if revenue sharing was not enacted.
This is another problem that I want to take this forum just for this moment to sound off on that for lack of a better word I would call legislative blackmail. They propose to hold up the programs unless we vote this special revenue sharing. This I personally resent.
If I have offended the committee by taking that moment it took to say it, I hope you will understand the feeling of one who does not like to legislate with that kind of statement before us.
Senator CHILES. Thank you very much.
I think that the statement of the chairman of the Labor and Public Welfare Committee, which has jurisdiction over the authorization of these broad and great programs, most of which are going to be either discontinued or curtailed by OMB, is most important.
You talk about Hill-Burton, Senator Williams, and mental health programs and said well, the money shall remain available for obligation and expenditure, but that will not work any more with HillBurton and the mental health program because the President has indicated his desire to eliminate these programs, and he does not care whether he expends the previous money or not.
So we have to have further legislation other than that legislation that was part of those acts.
Senator WILLIAMS. Absolutely.
And this legislation that you are considering, I think, is drawn with such skill and it zeroes right in on an effective way; as I understand it, if there is an impoundment this Congress is notified and notified immediately, and unless the Congress ratifies the impoundment, the first action of Congress must prevail unless the impoundment is notified.
Senator METCALF. That is correct. And this is just the opposite of the legislative reorganization. Senator WILLIAMS. I like it this way
better. Senator Cuiles. Thank you very much. We appreciate very much your appearance and your statement, Senator.
Senator WILLIAMS. Thank you very much. Senator CHLES. Our next witness will be Mr. Elmer B. Staats, who is the Comptroller General of the United States, accompanied by Mr. Paul Dembling, General Counsel, and Mr. John Moore, Assistant General Counsel.
STATEMENT OF HON. ELMER B. STAATS, COMPTROLLER GENERAL
OF THE UNITED STATES, ACCOMPANIED BY PAUL G. DEMBLING, GENERAL COUNSEL; AND JOHN W. MOORE, ASSOCIATE GENERAL COUNSEL
Mr. STAATS. Thank you very much, Mr. Chairman. I am very pleased to be here today. In the interest of saving time, I will skip over the first paragraph and a few other places which I will mention
as I go along and have the prepared statement and its attachments submitted for the record. Senator CHILES. Without objection, so ordered,
Mr. STAATS. Executive impounding of funds has a number of factual and legal facets, and it may occur at various levels within the executive branch. It is a problem that has reached significance over the past 30 years and involves problems of statutory and constitutional construction as well as policy considerations. We have set forth what we consider to be the major issues involved. Are appropriations made by the Congress to be considered a mandate to spend, or are they a ceiling on amounts to be expended?
Is a deferral cr postponement of expenditure for a project or activity a frustration by the executive branch of the action of Congress?
What are the limits on the executive branch in exercising the authority in the Anti-Deficiency Act?
Under this act, the President, acting through the Office of ManageIl
ment and Budget, in making apportionments is authorized to estab-, lish reserves to provide for contingencies and for savings when made possible by changes in requirements, greater efficiency of operations, or "other developments" subsequent to the date appropriations are made available. Does the constitutional responsibility of the President to see that all laws are faithfully executed carry with it any implied authority to impound funds; if, in the President's opinion, such impoundments are necessary to comply with other statutory provisions such as expenditure limitations or limitations on the public debt?
These are difficult problems and can only be judged by the considerations, both factual and legal, in the individual case.
The GAO is not structured to resolve these issues because our enforcement power is that of disallowance of expenditures. We have no
power to direct an expenditure except in the limited area of settlement DC of claims against the Government.
The next few paragraphs describe our functions, and I will not take your time to read them, but we felt we should have them for the sake of completeness of our statement.
In summary, the thrust of our audits and reviews relates to the legality of activities and programs; the efficiency and effectiveness with which they are carried out; and whether the funds utilized have been properly accounted for. We have issued numerous reports to the Congress on these matters, but our audits and reviews have not examined
whether agencies should have expended fully the funds that were made Saps available for their use, nor, except under one recent law to be discussed niet later
, have we challenged actions by the executive branch with respect to impounding or withholding of appropriations.
It mav be that in particular cases we have reported that a program
or activity was not completely carried out as a result of fund reservaDBU tion.
Senator Church, in an article in the Stanford Law Review entitled "Impounding of Appropriated Funds: The Decline of Congressional Control Over Executive Discretion," 22 Stan. L. Rev. 1240–53 (1970), suggested as one possible solution to the problems of executive impounding of appropriated funds that: “The duties of the General Accounting Office, an arm of the legislative branch, might be
augmented to include supervision of expenditures in order to identify when impounding has occurred."
Direct reporting to the Congress by the OMB whenever funds are reserved, also suggested by Senator Church, would seem to be a more effective means for Congress to obtain the information it requires. GAO could, however, examine into any specific situation at the request of a committee or Member of Congress.
Currently, the Budget and Accounting Procedures Act of 1950, as amended by section 402 of the Federal Impoundment and Information Act enacted last year, requires that funds partially or completely impounded be reported to the Congress and to the Comptroller General.
There has not been any reporting of impoundments under this law. In this regard, Public Law 93-1, signed by the President on January 19, gives the President until February 10, 1973, to transmit to the Congress his first report on impoundments.
If S. 373 is to be considered favorably, it is suggested that section 3 be amended to make it clear that the impoundments cover contracting authority as well as appropriations. Section 2 of the Budget and Accounting Act, 1921, 31 U.S.C. 2, defines appropriations as including, in appropriate context, funds and authorizations to create obligations by contract in advance of appropriations. It is suggested that section 3 be amended by the addition of a sentence along the following lines to carry out this suggestion:
The term “appropriations" as used in this act includes, in appropriate context, funds and authorizations to create obligations by contract in advance of appropriations.
We think this is important because there has been an issue over the years as to whether or not the term “appropriations" includes contract authority. We think they are the same.
Since we are not aware of any objections to impoundments falling squarely, within the literal language of subsection (c)(2) of the AntiDeficiency Act or specifically authorized in other law, it is suggested that the committee might consider amending S. 373 to provide that its provisions shall not apply to funds being withheld in accordance with this and other specific requirements of law. Also, we suggest you include a statement in the committee report to the effect that the term "impound” is intended to include any action which effectively prevents the creation of obligations or expenditures of appropriated funds or of authorizations to create obligations in advance of appropriations, for any period of time irrespective of whether such action is taken by the OMB or the agency head.
There have been cases in the past where impoundments have been taken by the agency head and not necessarily by the Office of Management and Budget, but the effect is the same.
I would like to add here that in making this suggestion to exclude the Anti-Deficiency Act, we would have no strong objection to leaving the bill as it is except we believe that S. 373 now might be unnecessarily burdensome to the Congress and the Executive by requiring reporting of all of the kinds of actions taken under the Anti-Deficiency Act which so far as we know are noncontroversial as we have defined them.
Finally, we should like to comment on one aspect of S. 373. Under section 2 of S. 373, the President is required to release impoundments within 60 days after notice of the impoundment has been sent to the Congress, unless the Congress grants approval of the impoundment.
Under this language, the President could subsequently impound the funds, make this report, and continue the practice.
In the case of appropriations with fiscal year limitations this practice could be continued until the appropriation authority expired; and in the case of no-year funds, this practice could be repeated.
It would seem to us you would want to make it clear once this authority has been denied, he could not resubmit that impoundment.
In recent public discussions on the subject of impoundment, I have noted very little reference to the authority of the President to reserve fimds under the Anti-Deficiency Act, 31 U.S.C. 665. Subsection (c)(2) of that act provides that in apportioning any appropriation, reserves may be established (1) to provide for contingencies, or (2) to effect savings whenever savings are made possible by or through: (a) Changes in requirements, (6) greater efficiency of operations, or (c) other developments subsequent to the date on which such appropriation was made available.
As we interpret this act, the President has authority to reserve funds to provide for unforeseen or uncertain events which might otherwise cause a deficiency in the appropriation.
There are, for example, seasonal programs such as flood relief, forest fire control, and so forth, which can be anticipated to some degree but difficult to estimate with precision.
So it is necessary that funds be reserved to be sure you can cover those seasonal requirements when they occur.
The second purpose of this act is to effect savings where these are made possible by changes in requirements or through management improvements.
These are economies which again cannot be fully predicted and do not affect the level of the programs being carried out.
The third type of situation relates to savings resulting from devel
opments which may occur subsequent to the date on which appropriaret tions were made available. For example, a weapons system, upon 107 testing, may be found to require major modification with reduced De financial requirements for the fiscal period involved.
There are many other types of situations where developments could not be foreseen at the time of the appropriations action where it is only
commonsense that the funds would be reserved. In a great many of these instances, the money is not legally available for any other purpose,
There is abundant legislative history in connection with the enactla ment of the Anti-Deficiency Act to support our conclusion that this
legislation goes no further than authorizing the President to establish reserves to provide for contingencies, to reflect savings, and to take into account changes in requirements subsequent to the appropriation action, and to reserve funds because of changing circumstances. We are not aware of any specific authority which authorizes the President to withhold funds for general economic, fiscal, or policy reasons.