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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 Govern

ment.

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 Hoc 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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1971. I would hope the continued study of this issue will serve to shed more light on a situation that has already generated much heat. Presidents have refused to spend appropriated funds in the past *** but this President has shown unusual contempt for the Congress by using impoundment as a kind of "item veto" power-which Congress does not have the right to override.

He has refused to spend $6.5 billion appropriated for the 1973 fiscal year. And his budget for the 1974 fiscal year contains no funds at all for no less than $17 billion worth of projects. When the last Congress authorized $24.7 billion to clean up the Nation's water the President vetoed the bill. After Congress overrode the veto he impounded $6 billion of the money simply by ordering that it not be spent. Among other cutbacks he has canceled the rural environmental assistance program-proved to be one of the tested tools for helping farmers save basic land, water, woodland, and wildlife resources. When conservation needs are so great, when so many pressures are being put on the farmers, and when the President himself has called for a "full national effort" to solve environmental problems, it seems strange that a program like REAP is terminated. We were told that REAP and the water bank were "terminated" because "these two programs are among those selected after a review of Federal programs to identify those of low priority that can be reduced or eliminated without serious economic consequences."

I feel it is the duty and constitutional responsibility of the Congress and not the President to create new programs if needed or to abolish them if that is necessary. There is, I feel, no more direct challenge to congressional power than President Nixon's refusal to spend money Congress has appropriated.

When Congress mandates funds for spending and the congressional mandate has been signed into law by the Chief Executive, the dangerous trend of impounding becomes a practice which could eventually destroy public reliance on Congress and seriously damage our tradition. of separate powers.

Our Constitution's framers understood best how to avoid tyranny. While conditions in our modern world may well impel us to give the President some additional authority, we must still guard cautiously against the "accumulation of all powers-legislative, executive, and judiciary in the same hands." We must guard carefully our power of the purse as one of the Congress' few means for controlling the Federal bureaucracy.

Today the President is impounding funds as never before, using his Executive power to legislate, reshape, and reduce public programs mandated by the Congress. He argues that major portions of congressionally approved programs are so wasteful and ineffective that it is his duty to block expenditures the Congress has said it wants made. The question of whether impoundment is justified or not requires close attention to specific cases and the complex interplay of court actions, politics, economics, and legislative procedures. Impoundment seems to be only one element in a tortuous appropriations process in need of reform. And we are perhaps foolish to expect reform in one area unless there is congressional reform in a number of related areas. Impoundment is a clear instrument of executive power-and like all instruments of power, subject to abuse. These hearings are being

held essentially because there is serious concern that President Nixon has abused the impoundment power. The current battle between the legislative and executive branches must surely make at least one thing clear: If Congress is really going to "reassert" itself, we are going to have to find some mechanism in the Congress to hold down Federal spending. For a fight over impoundment and its legality is one that only the President can win until Congress puts its own house in order and develops the capability for self-imposing a lid on Federal spending. Balking at the President's attempts to cut Federal spending only draws sharper attention to our own budgetary inadequacy.

The best long-range solution to the impoundment problem is going to be one that does not attempt to make the administration a mere spending robot-doling out the dollars when Congress pushes the right button, but rather one that includes a thorough overhaul of the congressional appropriations process. The current financial performance of the Government-executive and legislative branches alikeconstitutes a serious breach of faith with the Nation's people. And those involved in this historic struggle between the branches must hold that thought central.

The President last year nearly persuaded Congress to let him reject appropriations in an effort to limit total Federal spending. And in the hectic closing days of the 92d, we did manage to establish a joint committee to recommend procedures for improving congressional control over the budget-a step in the right direction ***. Even last year Congress cut $20 billion from the President's appropriations request in an effort to significantly limit Federal expenditures.

But while reform plans are in the developmental stages, what is to be done? Can we afford to sit back and simply let the President exercise an informal line-item veto of appropriated money which cannot be overridden by the Congress? Can we sit back and allow declared congressional policy to be thwarted? Can we allow the Constitution to be violated in spirit and intent and the very existence and relevance of the Congress to be threatened?

I believe that while power has, in recent years, shifted and legislative direction has come to be expected from the President, some of the lawful powers of Congress have been consistently given up by the branch and thrust upon the Presidency because Congress has not been willing to carry the responsibility of exercising these powers itself. Congressional power, I am afraid, has been not so much usurped by the Presidency as given up to the Presidency by the Congress. I hope the 93d Congress will begin to reverse this trend.

These hearings were planned to take a close look at the overall issue of impoundment-and the ramifications that result from its abuse, in addition to hearing viewpoints regarding Senator Ervin's proposal before this subcommittee.

S. 373, the impoundment procedures bill, would, as you know, require the President to notify the Congress whenever he impounds or authorizes the impounding of appropriated funds and requires the President to cease that impounding after 60 days unless Congress approves his action by concurrent resolution.

I believe the Senator's proposal is a sound one-and an immediate and practical alternative-not a panacea or instant cure-all to the problem.

The purpose of the hearings is to offer a channel for the expression of significant points of view on the issue of impoundment. And I want to assure everyone that I believe this committee is openminded and will give close attention to all the testimony that will be presented. But I believe that we are all determined that the blatant use of arbitrary impoundment will not continue; that it is about time the erosion. of Congress' power of the purse ends. The American people are beginning to feel that their attempts to appeal to their elected representatives are futile. And when that happens it is more than a regulation of the balance of influence between the legislative and executive branches of Government that we are speaking of-it is the survival of the Democratic process itself.

You may be interested to know of a study being conducted by the University of Florida College of Law on the impoundment question. This study, possible through a grant from the Josephine McIntosh Foundation, will hopefully result in a description of the impounding practice as it currently exists in the Federal Government, constitutional and other legal aspects of the practice—and it will try to come up with an evaluation of the propriety of impoundment on constitutional, legal, and policy grounds. My office is working closely with the directors of the study, aiding their research in any way possible. I would like at this point to submit for inclusion in the printed record of the hearings a description of this research.

(The document referred to follows:)

MCINTOSH FOUNDATION EXECUTIVE IMPOUNDMENT PROJECT, HOLLAND LAW CENTER, UNIVERSITY OF FLORIDA, GAINESVILLE, FLA.

(Jon L. Mills, Project Director)

ORIGIN OF THE PROJECT

As a result of the efforts of Professor Harold Levinson and the directors of the Josephine McIntosh Foundation, the University of Florida College of Law has been funded with $66,000 with which to conduct a comprehensive and objective study of what is currently termed the "impoundment" question, together with related issues and controversies surrounding the executive exercise of spending discretion.

By some definitions of the word, "impoundment" has been an American budgetary phenomenon since 1803 when Thomas Jefferson refused to release funds for allegedly unneeded gunboats on the Mississippi. The question as it has currently arisen is whether the actions of the executive in withholding appropriations are an encroachment on the congressional "power of the purse." The evolution of the executive budget has further complicated the congressional role and has raised fundamental questions regarding the respective powers of the executive and legislative branches.

ORGANIZATION OF RESEARCH

A preliminary collection of data is being performed by 14 advanced law students who have already compiled an extensive preliminary outline and working papers. Much of the research as well as formulation of the final product will be conducted by the Principal Investigator, Harold Levinson and the Project Director, with the assistance of professors from other relevant disciplines. Pursuant to our goal of obtaining a broad range of opinions and expertise, further information is being sought through discussions of the "impoundment” issue with informed sources in both academic and governmental realms. Additionally, we plan to continue correspondence with foreign governments, public officials, attorneys, and professors, which has already produced invaluable information.

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