The CHAIRMAN. I have been fighting in the Rules Committee for a number of years to try to get the Congress to do something to make everybody pay their just share of taxes. I haven't heard one word out of the White House about closing major loopholes in taxes.

Mr. CEDERBERG. Let me respond. Since 1932 the Chairman's party has been in control of the Congress every year except 4, and it has been in charge of the White House every year since 1932, except 12. If you have any complaints, don't take it to the White House; take it to your own party. That is where the problem is.

The CHAIRMAN. Mr. Martin?

Mr. MARTIN. Thank you, Mr. Chairman.

I would like to commend Mr. Cederberg for his very fine statement, practically all of which I agree with.

I received some figures that I requested from the Library of Congress in regard to the history of impoundment of funds. I would like to very briefly go over this. It will take only a moment or two.

The first impoundment was in 1803, when Thomas Jefferson was the President. This was followed by most of the Presidents since that time in minor areas.

In 1941, however, Franklin Roosevelt greatly expanded the impoundment of funds in the area of both public works and highway projects. The Congress objected, but their objections didn't get any place.

In 1949 Congress appropriated money to increase the number of the Air Force groups from 48 to 58. That was the 81st Congress, in both the House and Senate Democratically controlled. President Truman refused to spend the $700 million appropriated to increase the size of the Air Force, and the Congress didn't do anything about it.

In 1950, Truman cancelled construction of the supercarrier the U.S.S. United States, a major project termination.

In 1958, 1959, and 1960 Eisenhower impounded development funds for the ABM system, leaving only research funds.

In 1961 Congress added $180 million for speedy development of the B-70 bomber system. Kennedy impounded the extra funds.

In 1962, under President Kennedy, it added the money again and considered the insertion of mandatory language in the authorization. It backed down on the mandatory language under pressure from the White House, and President Kennedy.

In 1967, with the Vietnam War escalating, President Johnson impounded over $5 billion from domestic and non-Vietnam defense programs.

I would also like to call to the attention of the committee that in June of 1967, the total impoundment of funds under President Johnson amounted to $10.6 billion, which happens to be the same figure as the impoundment in June of last year, so we have had this same situation going on for about 170 years now.

I think the custom has been pretty well established by the President.

Mr. CEDERBERG. I would like to refer the members of the committee to some very interesting articles on impoundment. Mr. Louis Fisher, who is in the Congressional Research Service, has one on the politics of impounded funds, and on the constitutionality of impounded funds. Interestingly enough, he refers to the signing of the agricultural ap

propriation bill in 1966 by the late President Johnson. President Johnson noted that Congress had added $312.5 million to his budget request during a period, he said, "When we are making every effort to moderate inflationary pressures this degree of increase, I believe, is unwise."

Then he went out and decided not to spend it. After the fall election in 1966 he announced a $5.3 billion reduction in Federal programs, and where did they go? The major items affected included $1.1 billion highway trust funds, $750 million under HUD, and sizable cutbacks in Health, Education, and Welfare, Agriculture, Interior, Education funds, the Elementary and Secondary Education Act, and about half of these reductions represented deferrals rather than outright cancellations. So there is nothing new about Presidential activities in this area at all.

The difference is that when you have a President of one party and a Congress of another, you are going to have these kinds of head-on decisions. I didn't hear many Members making many statements condemning the late President Johnson for impounding funds. I didn't hear the Rules Committee holding any legislative hearings on proposed bills such as we have here now. That is understandable.

Mr. CLAWSON. Would the gentleman yield? Could we have these inserted into the record?

your

The CHAIRMAN. Yes, without objection, he may insert them. Mr. CEDERBERG. The whole article is fairly long. I don't know if you would like it all, or have it excerpted. We can get in touch with staff and let your staff decide how much they want to put in. The CHAIRMAN. There is no use burdening the record with a lot of material that is immaterial but as members want it, so be it—without objection.

Mr. CEDERBERG. We will put it all in.

[The material referred to follows:]

[Reprinted from 38 George Washington Law Review 124 (1969)]

LOUIS FISHER-THE POLITICS OF IMPOUNDED FUNDS

This article explores the political factors which give rise to disputes over impounded funds: prevention of budget deficiencies; wartime diversion of human and material resources from domestic public works; presidential restraints on interservice rivalries over procurement; and fiscal measures to reduce inflationary pressures. The question of whether impoundment is justified or not requires close attention to specific cases and the complex interplay of politics, economics, and legislative procedures.

During the past three decades, presidents have refused to release funds for such programs as the B-70 bomber, air force groups, antimissile systems, flood control projects, highways, supercarriers, and small watershed projects. By impounding these funds, the president provokes the charge that he is obligated under the Constitution to execute the laws, not hold them in defiance; obligated to interpret appropriation bills not as mere permission to spend but as a mandate to spend as Congress directs. Otherwise, he is said to encroach upon the spending prerogatives of Congress, violate the doctrine of separated powers, and assume a power of item veto neither sanctioned by the Constitution nor granted by Congress.

Several authors advance this line of argument. Stassen (1969), Davis (1964), and Goostree (1962) invoked Supreme Court decisions to demonstrate that presidents lack constitutional authority to impound funds. On the other hand, Kranz (1962) produced legal evidence to show that there is both statutory and constitutional support for the president's impounding of funds. Yet these Court decisions are less germane than the political context within which the president de

cides to impound funds (Fisher, 1969). As Miller (1965: 533) observed, the president "can and may withhold expenditure of funds to the extent that the political milieu in which he operates permits him to do so." Unfortunately, there is little in the literature on his political aspect. Williams (1955) wrote an excellent study on the interplay between politics and impounded funds from 1941 to 1943. Ramsey (1968) and Jackson (1967) discussed impoundment disputes of the postwar period, but neither attempted a political evaluation. The attempt here is to trace the subject of impounded funds from 1921 to 1970, searching for historical and political factors that help explain why a president resorts to impoundment, and under what conditions his will is likely to prevail over that of Congress.

SOURCE OF AUTHORITY TO IMPOUND FUNDS

Part of the President's responsibility for controlling the level of expenditures can be traced back to the years following the Civil War, when congressional control over the spending power declined as a result of fragmentation of committees. The House Ways and Means Committee split apart in 1865, retaining jurisdiction over revenue but surrendering responsibilities over appropriations and banking and currency to two newly formed committees. Within a few years the jurisdiction of the House Appropriations Committee splintered, with autonomous, spending powers parceled out to separate committees. In the wake of legislative extravagances in the late 1800s, the President, not Congress, played the role of guardian of the public purse (Fisher, 1971).

ANTIDEFICIENCY ACTS

At the turn of the century, outlays for pension bills, river and harbor projects, the Spanish-American War, and the Panama Canal all converged to produce a series of budget defiicits. The Antideficiency Act of 1905 introduced the technique of monthly or other allotments to prevent "undue expenditures in one portion of the year that may require deficiency or additional appropriations to complete the service of the fiscal year . . ." (33 Stat. 1257, sec. 4). In the Antideficiency Act of 1906, Congress stipulated that apportionments could be waived or modified in the event of "some extraordinary emergency or unusual circumstances which could not be anticipated at the time of making such apportionment" (34 Stat. 49, sec. 3). This constituted an admission by Congress that regardless of spending patterns anticipated when passing appropriation bills, or even after apportioning funds, conditions might change and necessitate a different course for actual expenditures.

President Taft received funds in 1910 to investigate into more efficient and economical ways of transacting public business (36 Stat. 703), but when his Commission on Economy and Efficiency recommended the adoption of an executive budget two years later, Congress ignored the proposal. The magnitude of Federal spending during World War I, coupled with the pressing need for managing the huge debt after the war, finally made budget reform unavoidable. The main thrust of recommendations after 1918 centered on two principles: an increase in executive responsibility, and a decrease in legislative opportunities for extravagance. For instance, Senator Medill McCormick proposed that a budget committee be established with power to reduce presidential estimates by simple majority vote: but for increases in budget estimates, he suggested that the committee either approve them by a two-thirds majority or obtain approval from the Secretary of the Treasury, upon presidental authority. Furthermore, after the budget committee had released the appropriation bill for floor action, legislators would not be allowed to offer any amendment increasing the budget "except that it be to restore an item or items in the estimates as they were originally submitted by the President" (U.S. Congress, 1918:6). Congressman John J. Fitzgerald, chairman of the House Appropriations Committee, also argued that "much better results" would be obtained by prohibiting individual legislators from exceeding presidential estimates. Although Fitzgerald would not absolutely forbid such increases, he wanted to "make it so difficult, and loading [the legislator] down, that it would only be done under the most peculiar or extraordinary circumstances" (Willoughby, 1918: 148-149).

Source: Administrative Science Quarterly. September 1970, pp. 361-377. Reproduced with permission by the Library of Congress. Congressional Research Service, July 21, 1971.

Carter Glass, member of Congress for 17 years before becoming secretary of the treasury, told Congress in 1919 that it should limit the right to increase any item "either in committee or on the floor unless recommended by the Secretary of the Treasury, or, in the absence of such recommendation, unless approved by twothirds of the membership of Congress" (U.S. Department of the Treasury, 1919: 123). Increases, he said, should be made on the floor only when restoring an item previously recommended by the secretary. To protect Congress' constitutional right to initiate expenditures. Glass recommended that spending proposals in excess of the president's request be handled by separate bills. David F. Houston, the next secretary of the treasury, made the same proposal (U.S. Department of the Treasury, 1920: 51).

These constraints on legislative additions were not incorporated into the Budget and Accounting Act of 1921, which set forth procedures for the new national budget. Nor was the president protected from insubordination within his own ranks. While section 206 of the act prohibited agency officials from seeking additional funds unless requested to do so by Congress, agencies and bureausdenied a portion of their request by the president-could make informal overtures to Congress to have their funds restored. Without item-veto authority, presidents developed the art of impoundment in order to maintain control over legislative increases and their own executive officials.

Following the 1921 act, administrative regulations extended the Budget Bureau's control over spending levels. The first budget director, Charles G. Dawes, issued a circular setting forth procedures for establishing reserves and effecting savings. Appropriations from Congress were to be treated as a mere ceiling on expenditures, rather than as a directive to spend the full amount. He ordered each executive department and bureau to determine the portion of appropriations considred indispensable for carrying out activities. The estimated savings would be carried as a General Reserve, with the amount approved by the president for expenditure under an appropriation title representing the “maximum available for obligation during the fiscal year" (U.S. Bureau of the Bureau of the Budget, 1921). Since further savings would be attempted during the course of the fiscal year, each bureau was to withhold additional sums from obligation so that these amounts could be added to the General Reserve. As a result of this circular, the allotment technique now had two objectives: to prevent deficiencies, and to effect savings.

DEPRESSION POLICIES

Economic collapse in 1929 led to broader presidential authority for reducing expenditures. When deficits appeared in 1931 for the first time in a decade, President Hoover asked for authority to effect savings through reorganization of the executive departments. Earlier efforts by Congress to reduce spending had been thwarted by such influential lobbyists as veterans' groups. "The only way by which we will get results," Senator Reed told his colleagues, "is by putting the power into the hands of somebody who will assume the responsibility and use it .. if we are to get economies made they have to be made by some one who has the power to make the order and stand by it. Leave it to Congress and we will fiddle around here all summer trying to satisfy every lobbyists, and we will get nowhere" (U.S. Congress, 1932: 9644).

President Hoover received authority to make partial layoffs, reduce compensation for public officials, and consolidate executive agencies in order to effect savings. Funds impounded by this economy act were to be returned to the Treasury Department (47 Stat. 382, Part II, Titles I and IV). Hoover subsequently issued executive orders to regroup and consolidate a total of 58 agencies, but the House disapproved the orders on January 19, 1933, preferring to leave reorganization changes to the new president. In his last two days in office, Hoover signed two more economy measures, authorizing his successor to effect further reorganization and to reduce military spending in accordance with an economy survey ordered by the president (47 Stat. 1519, sec. 16; 47 Stat. 1602, Title II, sec. 4).

In 1932, the Democratic platforms had called for "an immediate and drastic reduction of governmental expenditures by abolishing useless commissions and offices, consolidating departments and bureaus, and eliminating extravagances, to accomplish a saving of not less than 25 percent in the cost of the Federal Government." Although promising to spend more for the hungry and the unemployed, Franklin D. Roosevelt committed himself to his party's economy goal

during the campaign (Rosenman, 1938a: 808). Once in office, he requested authority to reduce veterans' benefits and salaries of federal employees. Despite oppositon from some members of his own party, he obtained this authority in the economy act of March 20, 1933 (48 Stat. 8). Senator Tydings, hearing legislators complain that the president asked for dictatorial powers, replied, “Of course he did. Why? Because Congress itself refused to do its duty, to protect the integrity of the national credit" (U.S. Congress, 1933a: 270). After Roosevelt had reduced veterans' payments by an estimated $460 million, a White House statement soon admitted that cuts had gone deeper than intended. Funds totaling $117 million were restored by a series of liberalizing executive orders issued in June and July, and by the Independent offices Appropriations Act signed June 16 (Rosenman, 1938b).

Acting under authority of the March 20 act, Roosevelt issued Executive Order 6166 to reorganize, transfer, and abolish certain executive agencies and functions. This order transferred the functions of "making, waiving, and modifying apportionments of appropriations" from departmental heads and bureau chiefs to the budget director (U.S. Congress, 1933b: 5708). Unexpended balances for abolished agencies or functions would be transferred to the successor agency as the director considered necessary. Any unexpended balances not disposed of would be impounded and returned to the Treasury. Thus, instead of letting individual bureau chiefs adjust apportionment schedules to satisfy their constituencies, this decision was centered in the Budget Bureau and the president. The inability of Congress to control expenditures when faced with lobbying pressures was illustrated again in the late 1930s. On the basis of recommendations by the Committee on Administrative Management (the Brownlow committee), Roosevelt proposed in 1937 that Congress establish general principles by which the president could reorganize the executive branch on a continuing basis. He emphasized that although reorganization could improve efficiency and morale, it was not intended as an instrument for major spending reductions (Rosenman, 1938c: 668, 1941a: 498). Nevertheless, the reorganization proposal gradually acquired a cost-saving reputation. In January 1938, Congressman Woodrum recommended that the president be authorized to reduce any appropriation whenever he determined, by investigation, that such action would help balance the budget or reduce the public debt, and would serve the public interest. One could interpret this either as a generous extension of impoundment authority under the economy acts of 1932 and 1933, or else as item-veto authority. Woodrum explained that his proposal would protect the president from extraneous items attached to appropriation bills, a legislative practice which put the president in a position of "having to swallow things he does not want or approve items he does not want in order to get an appropriation bill passed" (U.S. Congress, 1938a: 355).

Opponents of the Woodrum motion charged that the president could use the authority to dominate Congress and intimidate opposition. Congressman Mavercik argued that legislators would hesitate to challenge the president since he "could single out any district or portion of America to have appropriations or not to have appropriations, as he pleased." Congressman Ditter charged that the reorganization bill put the public purse at the dispostal of the president and made the civil service the "ready tool of the Executive for political appointments." With Roosevelt's Court-packing proposal cited as an effort to destroy the independence of the judiciary, the reorganization plan was characterized as a companion move to deprive Congress of its vital spending perogatives (U.S. Congress, 1938b: 387; 1938c: 4630; cf. Wann, 1968: 72-98).

A different version of the reorganization bill finally passed in 1939, stating that continuing deficits made cutbacks desirable and directing the president to effect savings by consolidating or abolishing agencies for more efficient operation. Reorganization would take effect after 60 days unless voted down by concurrent resolution. Of the five purposes identified in the act, spending reduction was listed first. Any appropriation unexpended as a result of this act would be impounded and returned to the Treasury (53 Stat. 561). Roosevelt strengthened his control over the budget by using the reorganization authority to transfer the Budget Bureau from the Treasury to the newly formed Executive Office of the President (53 Stat. 1423).

WAR PRIORITIES

With war imminent, the leverage for presidential impoundment increased. In his January 1941 budget message, Roosevelt announced that the government had