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"Congress has never conceded that Presidents have the power to ignore laws it has enacted or to reverse the priorities it has set. The Constitution gives Congress the responsibility of raising funds and determining how they shall be spent, and it charges the President with faithfully executing the laws. The Presi. dent's veto powers are spelled out, and limited. When Presidents have withheld authorized expenditures, because economies could be effected or, because the outlays were no longer required (as when a war ended), usually Congress has insisted on giving its specific approval and legislative sanction to such Presidential actions.

"However, it is certainly true that Presidents and Congresses have sometimes done battle over particular Administration refusals to spend funds. That issue has not been clearly resolved because successive Administrations kept it out of the courts until 1970. In several cases, the right of Presidents to impound funds has now been challenged; in the first important test—the Missouri State Highway Commission v. Volpe-a Federal judge in Missouri ruled this year that it was illegal for the Nixon Administration to impound highway funds. The Government has appealed this verdict.

"Looking beyond the immediate controversy, we believe that it would be desirable for the President to have carefully limited authority to impound funds either to effect economies in specific programs or to achieve over-all fiscal objectives. Senator Ervin of North Carolina in the last session of Congress introduced a bill that could achieve this objective on the expenditure side in a way that would not encroach upon the constitutional powers of Congress, by giving the President authority to impound funds for a limited period pending Congressional review.

"Both the need for greater economy in Government and better fiscal planning require a greater degree of budgetary flexibility ; but it is equally important that the constitutional responsibilities and authority of Congress not be undermined by undue assertions of Presidential power."

Mr. ERVIN. Mr. President, I might state that in my judgment both the Judiciary Committee and the Government Operations Committee have jurisdiction of this proposed legislation. The Subcommittee on Separation of Powers of the Senate Committee on the Judiciary conducted extensive hearings on this matter during the last session.

Mr. President, I ask unanimous consent that the bill be referred in the first instance to the Judiciary Committee, with the understanding that when the Judiciary Committee completes its action on the bill, the bill then be referred to the Committee on Government Operations. I might state that the purpose of this unanimous-consent request is to enable the two committees to jointly hold hearings on the bill.

The ACTING PRESIDENT pro tempore. Without objection, it is so ordered. Mr. HUMPHREY. Mr. President, I want to commend the distinguished Sen. ator from North Carolina for his admirable and effective leadership on this whole issue of the impoundment of funds by the President and the executive branch.

No Member of this body is a more capable lawyer, a more capable student of the law, or more dedicated to the constitutional processes than is the distinguished Senator from North Carolina.

I am so grateful that he has taken the leadership here on this matter because we trust him and I think the country trusts him. He is a man of moderation and judicious temperament. I am so pleased that he is taking this bill before the two committees to get the matter completely aired and hear all of the testimony and take appropriate legislative action.

Mr. ERVIN. Mr. President, if the Senator would yield, I wish to thank him for the high compliment he has paid me. I point out that the distinguished Senator from Minnesota has been very much interested in this subject and has added amendments, which were agreed to by the Senate, to bills on this subject matter, Some of the ideas he has expressed in his amendments are incorporated in the bill.

Mr. HUMPHREY, Mr. President, I thank the Senator very much.

IMPOUNDMENT OF FUNDS

Mr. MUSKIE. Mr. President, it is with pleasure that I join my distinguished colleague, the senior Senator from North Carolina, in sponsoring legislation to reconfirm the power of Congress to supervise the financial policies of government.

The arrogance with which the administration has ignored and twisted specific congressional directives on funding Federal programs has made firm action on our part a necessity. Ours is not a political vendetta but an urgent effort to safeguard the constitutional checks and balances that are now so grossly violated.

The appropriations process has been brought into disrepute by executive actions that openly defy the will of the Congress and the intent of our fundamental laws. Those laws require that an administration set forth its priorities and present specific requests for the financial means with which to carry them out. The Congress then has the duty both to consider and revise those budget priorities and to determine the funds required. Once Congress has made those decisions, it is, of course, proper for the President to dissent-by vetoing our acts and submitting his veto to the Congress for reconsideration.

But it is not just improper—it is devious in the extreme and brutally damaging to the constitutional scheme of government—to accede to a congressional order and then secretively undermine its implementation by impounding public funds the Congress has directed be spent. If the President chooses to dispute our directives—and he has every right to do so the dispute must be in the open. Hole-and-corner tactics do grave injury to the political process and sap the strength of democracy.

The bill I am proud to support as a cosponsor will, first of all, put an end to dissembling. It will require the President to explain his actions to Congress and seek approval for them. It does not prohibit a President from exercising fiscal responsibility or taking emergency economic measures a particular situation may require. But it compels the Executive to inform the Congress and the people of all such actions and to acknowledge the shared responsibility of both branches of Government for the sound administration of our resources.

The exercise of greater candor and consultation by the administration in its relations with Congress would have precluded this legislation. But the reverse policy-one of deception and defiance necessitates our unmistakable response. I urge speedy consideration and enactment of this important bill to restore to the representatives of the American people the authority that is now being drained from them.

Senator ERVIN. I understand that Senator Burdick has a statement and I recognize him for any statement he may have at this time.

OPENING STATEMENT OF SENATOR QUENTIN N. BURDICK OF

NORTH DAKOTA

Senator BURDICK. Thank you, Mr. Chairman. Mr. Chairman, these hearings on S. 373, regarding the impoundment by the executive branch of funds appropriated by Congress for the administration of programs specifically approved by Congress, are of grave importance to the American people. I want to thank you very sincerely for your prompt action in scheduling this hearing early in the session. I have the honor of being one of the 50 Senators who joined you, Mr. Chairman, in sponsoring this bill.

Mr. Chairman, this whole impoundment problem results from the failure of the President to follow the Constitution. Article 1, section 7, clause 2 of the Constitution of the United States defines how laws are made. It states:

Every bill which shall have passed the House of Representatives and the Senate, shall, before it becomes a law, be presented to the President of the United States; if he approve, he shall sign it, but if not, he shall return it, with his objections to that House in which it shall have originated . .. and [they shall] proceed to reconsider it. If after such reconsideration two-thirds of that House shall agree to pass the bill, it shall be sent, together with the objections, to the other House, by which it shall likewise be reconsidered, and if approved by twothirds of that House, it shall become a law.

That means that the Congress shall initiate bills which, if they are signed by the President, become law. If the President does not agree, he may veto an act, but he has no choice as to whether he can accept a part and reject a part of a measure. Further, if he does veto a bill, he must state his reasons in writing and submit them to the Congress. Under the Constitution, if two-thirds of the Congress disagree, they may override the President's veto, and a law becomes effective.

With respect to the power and responsibility of the President, article 2, section 1 of the Constitution states, "[t]he Executive Power shall be vested in a President of the United States," and section 3 of that article states, "[h]e shall take care that the laws be faithfully executed ..." Thus, the responsibility of the President is clear-he is to oversee and execute the laws that Congress chooses to pass.

In spite of the fact that these constitutional responsibilities appear to be clearly defined, the Administration in recent weeks has impounded funds for a number of programs that have been authorized by Congress.

Because North Dakota is a farm State, where almost half of the people live on farms and in rural communities, we are most seriously affected by the impoundment of funds for the financing of programs administered by the U.S. Department of Agriculture. Therefore, I will outline briefly the impact on North Dakota of the termination and cutback of some programs due to the impoundment. These programs are: (1) Rural Electrification Administration low-interest loans to electric and telephone cooperatives serving sparsely settled areas; (2) the rural environmental assistance program (REAP), a costsharing program with farmers to encourage conservation practices; (3) the water bank program to protect migratory waterfowl; and (4) the Farmers Home Administration for low- and middle-income housing loans.

Rural electric and telephone cooperatives were established in North Dakota because our rural population is so thinly distributed that privately owned utilities did not consider it profitable to extend service there. It is only because of the low-interest direct loans made available by the Rural Electrification Administration to farmer cooperatives that North Dakota farms and small towns have been able to enjoy the labor-saving benefits of electric power and rapid communication that people in other parts of the country have taken for granted for years.

The termination of the REA 2-percent direct loan program forces all electric and telephone cooperatives, regardless of their financial situation or the density of the area served, to pay higher interest rates on borrowed capital necessary to meet the needs of consumers. The increased costs will necessarily be reflected in higher rates charged to consumers. In North Dakota, where net profit from farming operations is usually quite small because of the ever-increasing costs of production, this additional expense added to others could be enough to drive some people off farms and out of rural communities.

It is estimated that cancellation of the REA 2-percent loan programs will cost rural electric cooperatives $1,369,137 more per year for higher interest costs on the $65,197,000 in loan funds now required for the balance of the present fiscal year. Taken for the total 35-year term of

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such loans, this results in increased interest costs amounting to $47,919,795.

For telephone cooperatives, $252,300 more per year will be required on loans of $12,014,294 for this fiscal year or a total of $8,830,506 for the 35-year period.

The rural environmental assistance program is the basic agricultural program that has been authorized by the statutes since the 1930's. This is a grassroots action program through which the Government shared with the people on the land the responsibility and the cost of preserving and improving our great national resources of soil and water. Congress had provided for REAP an advance contract authorization of $225.5 million for fiscal 1973, of which only $14.5 million had been utilized prior to the cut-off. Termination of the program can result in the closing of anywhere from 300 to 1,000 county ASC offices as well as the loss of 700 conservation engineers who have been employed by the Soil Conservation Service as technical consultants.

In 1971, North Dakota farmers and other rural residents received REAP payments totaling $5,600,000. This money, plus matching funds from the cooperators, went to equipment dealers for earth moving equipment; seed dealers for grass seed, small grains and fertilizer for establishing protective cover; tree nurseries; and petroleum dealers. Throughout North Dakota, over 1,000 jobs will be directly affected in the rural areas by the termination of cost-share conservation programs. This will be a severe blow to the State's economy.

The new water bank program was the result of years of intense effort by conservation and wildlife organizations concerned with the preservation of wetlands for migratory water-fowl habitat. It was enacted in 1970 and implemented in 1972 as a pilot program in 15 States, with funding at a level of $10 million per year. In 1972, 334 contracts were signed by farmers in 15 North Dakota counties at a cost of $271,000. These contracts provided for the protection of 20,454 acres of wetlands. Abolishing the water bank program will save very little money but will lead to the further deterioration of our natural wildlife resources.

The Farmers Home Administration has been especially active in the development of North Dakota rural communities. This development will be severely curtailed by the impoundment of $42 million in funds for water and sewer grant assistance which were already scaled down from the $108 million figure appropriated by Congress. Last year, the now frozen Farmer's Home programs provided about 5,500 houses for rural areas in North Dakota. This program should be bolstered, not eliminated.

The termination of the water and sewer grants assistance program means that 19 small North Dakota cities, each with less than 10,000 people, will have to look elsewhere for their money. Previously, the Farmers Home Administration helped 85 communities build adequate systems. In addition, the cessation of the HUD water and sewer grant program means that credit-poor small towns will be out looking for loan money without a tax base sufficient to meet their needs.

In effect, Mr. Chairman, the Nixon administration has told small cities to look elsewhere for their water and sewer funds; but for many of these, the Government was the last place they could look for help. What are we in Congress going to tell them?

Mr. Chairman, to return to the legal question of the President's power, as I see it, he has no discretion in this matter--to enforce some laws or a part of a law-and if he does have the discretion, then it is hard for me to see what meaning attaches to the requirement in the Constitution that he can only approve or veto an entire bill. Yet, the White House's interpretation of the Constitution and the statutes allows the President to "veto in fact" parts, or all, of legislation that Congress has passed and that he, or his predecessor has signed.

Now, I do not think that the framers of the Constitution intended all these phrases defining the responsibilities and duties of the President and Congress to be meaningless. They intended that there would be separate and equal branches of Government and that each would be responsible for their own affairs. But the White House and the President are now trying to make the Congress an unequal and subordinate branch. John Ehrlichman, the President's Assistant for Domestic Affairs, has said that the President can't just look at a law Congress has passed, but that the "President has very broad powers in determining how these expenditures should be made."

Let me add, Mr. Chairman, that the legal basis of the “veto by impoundment" hangs on a slender legal thread-an interpretation of the Anti-Deficiency Act which gives the President broad power over spending. I believe that power was intended to be a limited one-to effect savings. It is not a power to cancel programs enacted into law. The President has two opportunities to shape spending priorities: First, when he sends his budget recommendations to Congress, and, second, when he signs or vetoes a bill. That is enough.

Now, Mr. Chairman, what the White House is trying to do is create government by prerogative. But that scheme of disregarding the Congress, the people's elected representatives, through these "prerogative powers" creates a concentration of power without adequate control and responsibility. It is the very evil which led to the revolt which created our country out of 13 small colonies.

Mr. Chairman, that is the reason why your bill should be passedso that the farmers in my State can have their funds restored, so that the funds that the Congress had designated for education can be restored, and the funds that Congress has provided for control of the environment-some of them over the President's veto--can be restored, and the Congress can be restored to its rightful place in our Government.

Senator ERVIN. Thank you.
Do you have a statement, Mr. Chiles?

I am going to ask you to preside because I may have to go to the Judiciary Committee any minute and you are chairman of the committee which really has charge of the bill.

OPENING STATEMENT OF SENATOR LAWTON CHILES OF FLORIDA

Senator CHILES. I am delighted to be here this morning to participate in these hearings as chairman of the Ad IIoc Subcommittee on Impoundment of Funds. As you know, Senator Ervin, chairman of the Government Operations Committee, the distinguished chairman of the Subcommittee on Separation of Powers, held hearings on executive impoundment of appropriated funds on March 23, 24, and 25, of

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