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The practice of impounding funds, through various techniques and for various reasons, reaches back as far as President Jefferson, who declined to spend an appropriation for gunboats in 1803. As he stated in his annual message to the Congress: "The favorable and peaceful turn of affairs on the Mississippi rendered an immediate execution of that law unnecessary, and time was desirable in order that the institution of that branch of our force might begin on models the most approved by experience." *
A general statutory basis for impounding was first enacted in the AntiDeficiency Act of 1905. Formal administrative procedures for impounding were first established during the Harding Administration, following enactment of the Budget and Accounting Act of 1921.8
President Franklin Roosevelt was the first to make extensive use of impounding devices to control total government spending, inflation, and related economic effects, particularly during World War II. A wide variety of funded programs, notably public works projects unrelated to the war effort, were shelved for the duration of the war.” Succeeding Administrations have continued the practice. For example, in 1919, President Truman impounded over 700 million dollars appropriated for expanding the Air Force partly in order to avoid "too great a strain on the domestic economy." 8 In the latter part of his Administration, President Eisenhower impounded funds for Nike-Zeus missile development." During the Kennedy Administration, appropriations almost double the amount requested by the Administration for development of the B-70 bomber were impounded."
These and numerous other examples of impounding by the Executive branch, particularly during the last thirty years, are contained in the 1971 hearings before this Subcommittee. Such a long-continued Executive practice, in which Congress has generally acquiesced, carries with it a strong presumption of legality.
GENERAL PRINCIPLES CONCERNING IMPOUNDING The Constitution does not speak directly to the matter of impounding funds. The phenomena of massive government spending, mounting public debt, and heavy involvement of the national government in the management of an inter-dependent industrial and service economy were unknown to the Framers. Until very recently, the judicially-developed doctrines of sovereign immunity, standing, judiciability and political question have largely foreclosed judicial consideration of impounding questions.
Impounding disputes, when they have arisen, have traditionally been resolved in the political arena, and for good reason. It has long been recognized that*The interference of the courts with the performance of the ordinary duties of the executive departments of the government, would be productive of nothing but mischief; and we are quite satisfied that such a power was never intended to be given to them, Decatur v. Paulding, 11 Pet. 497, 516 (1840)."
Decisions to impound inevitably involve policy judgments concerning changing national needs and highly technical predictions about their effect upon the economy. Significant impounding actions can rarely be taken to alleviate one problem, without aggravating another. These "trade-offs" involve delicate adjustments peculiarly within the competence and constitutional authority of the Executive branch. Judges do not make economic policy under our system. Nor are they technically competent to review such economic decisions. For beyond the fundamental question of legitimacy, there is a "lack of judicially discoverable and manageable standards for resolving" these essentially political questions. Baker v. Carr, 369 U.S. 186, 217 (1962).
In accordance with this principle, a federal district court recently dismissed a challenge to an impounding action partly on political question grounds." Despite
+ 1 Richardson, "Messages and Papers of the Presidents," pp. 360–361. 533 Stat. 1257.
* 42 Stat. 20. See Fisher, "The Politics of Impounded Funds." 15 Administrative Science Quarterly 361, reproduced in Hearings, supra at 104.
* Fisher, op. cit. 106-107. * Fisher, op. cit. 108-109.
Fisher, op. cit. 110-111. 16 Fisher, op. cit. 111.
11 Housing Authority of San Francisco v. Department of Housing and Urban Development, Civil Action C-71-1135 OJC (N.D. Cal. 1972).
a few other recent Executive impounding actions now being challenged in the lower federal courts, there are no controlling Supreme Court decisions in the area. General principles in the impounding area must be derived largely from past practice, certain statutory obligations of the President such as those relating to the size of the public debt and the purchasing power of the dollar, and the intractable realities of modern government under our system of separated powers.
Most federal statutes establishing federal spending programs are cast in discretionary language. For example, the Secretary of Agriculture "is authorized to" subsidize dams,12 and the President “is authorized to" grant various kinds of foreign aid.13 Similarly, typical appropriation acts for the funding of previously authorized programs simply "appropriate" sums "out of money in the Treasury not otherwise appropriated" in very general terms. Absent an obviously deliberate departure from the usual statutory language, it has been traditionally assumed that such statutes do not require spending the full amounts appropriated.
This is so for several reasons, the most obvious being simple economy. The President's obligation to faithfully execute the laws plainly includes an obligation to prevent waste. If Congress appropriates $100 million to develop a tank for the Army, no one would contend that the Executive branch is breaking the law if it develops the tank for $50 million. On the contrary, impounding to save the taxpayer's dollar has always had the full support of the Congress.
In many circumstances, the President has authority to impound money for a particular program by virtue of his authority under another statute. Perhaps the most explicit authority for such action is the so-called Anti-Deficiency Act, 31 U.S.C. 665, which requires that appropriations be subdivided to ensure that agencies will not make commitments in excess of amounts appropriated for them. The Act also includes authority to establish reserves to provide for savings when developments subsequent to enactment of an appropriation statute make that possible.
Congress periodically enacts provisions limiting the total amount of the federal debt. Thus, under Public Law 92-599, this debt may not exceed $165 billion for the period ending June 30, 1973, and the public debt today is about $449 billion. When appropriations exceed the federal government's revenues, the President may be obliged to impound appropriations in order to comply with the debt limit.
In 1957, President Eisenhower ordered that total expenditures for fiscal year 1958 be kept below the level of the previous year in order to ensure that borrowing be kept within the debt limit.14
A more direct method of controlling spending is legislation which places a ceiling on total expenditures for a given fiscal year. When such ceilings are adopted, the President may be required to set aside sufficient reserves to ensure that the ceiling is not exceeded.
From time to time, the Executive is confronted with apparently conflicting statutory directives seeming to mandate spending, on the one hand, and authorizing economy, on the other. In such situations, Congress frequently has not anticipated the conflict, and the two statutes must be harmonized ba sed largely upon inferences as to probable Congressional intention. For example, the 1971 military pay raise statute expressly required that the raises were to be effective October 1, 1971.6 However, that statute was enacted without reference to the President's general authority to freeze pay raises under the Economic Stabilization Act.16 Attorney General Mitchell rendered an opinion to the Chairman of the Cost of Living Council that the President was authorized under the Stabilization Act to defer the military pay raise temporarily beyond October 1.
In addition to impounding actions taken for reasons of economy in a particular program or pursuant to express statutory authority, it is my view that the President has substantial latitude to refuse to spend or to defer spending for general fiscal reasons, such as control of inflation. This view is supported by the Congressional intent revealed by the Employment Act of 1946,- the Economic Stabilization Act Amendments of 1971,15 and the debt limit imposed by Public Law 92-599. Moreover, this view is buttressed by Presidential practice, Republic can and Democratic, and, in most instances, by Congressional acquiescence since World War II. Vumerous impounding actions since President Franklin Roosevelt's time have been taken largely in furtherance of general economic goals.
19 16 U.S.C. 1003, 1006a.
17 15 U.S.C. 1021. 60 Stat. 23. This statute declares it to be “the continuing policy and responsibility of the Federal Government to use all practicable means consistent with its needs and obligations and other essential considerations of national policy
to promote maximum employment, production, and purchasing power."
18 P.L. 92-210.
Authority to pursue such goals flows not merely from Congressional intent revealed as above indicated and from historical practice but, more fundamentally, from the dilemma in which modern Presidents have frequently been placed by the Congress. Despite the statutory policy and fiscal necessity to protect purchasing power by avoiding intolerable inflation, the structure of Congress does not enable it to assume the executive responsibility for achieving this end. The harsh reality is that time and time again Congress has passed swollen appropriation acts and failed to levy the taxes necessary to avoid inflation. Efforts to control this tendency by the adoption of congressional budgets in the past have been made with little success, 19 No President has been willing to accept the full consequences of this chronic tendency of Congress. Rather, they have been forced to resort to their veto power and, ultimately, to impounding of appropriations. Senator Long went to the heart of the matter when he said:
“If we can't restrain ourselves from spending $30 billion more than we are taking in, in good times, by either raising taxes or cutting spending, one way or the other, then we shouldn't complain about a fellow who refuses to bankrupt the country." 20
While some critics of impounding may question the President's authority to impound funds for general fiscal reasons, even with respect to permissively worded spending program statutes, I believe that question must be resolved in the President's favor. It must be recognized, however, that the question is a much closer one when Congress has explicitly directed the President to spend the amount appropriated.
MAY CONGRESS MANDATE SPENDING ?
Although the Congress has been keenly aware of Executive impounding actions for many years, there have been only a very few federal statutes in which the Congress has expressed an unequivocal intention to mandate spending for a particular program.” This history compels the conclusion that if the Congress wishes to mandate full spending for a particular program, it must do so in unmistakably clear terms. In some cases where inclusion of a spending mandate has been considered, the issue has been highly controversial in the Congress, and the resulting statutory language and legislative history have been ambiguous. A classic example of this is the recently enacted Federal Water Pollution Control Act Amendments of 1972. The history of that statute makes it plain that the proponents of mandatory spending simply did not have the votes." In any event, enactment of a spending mandate raises an important and presently unresolved constitutional question: does Congress have the authority to require the President to spend substantially all funds appropriated for a particular program?
From time to time, individual Congressmen and Senators have expressed the opinion that Congress does not have the power to compel the Executive to spend money. * As then Congressman Laird said in 1968—
"The language will not be interpreted as a requirement to spend because of the constitutional question which is involved. The Congress cannot compel the President of the l'nited States to spend money that he does not want to spend." 24
As to the Congress, the most relevant constitutional provisions are Article I, section 1 and section 9, clause 7. These provisions vest "all legislative powers" in the Congress and give it the appropriations power. As a general proposition, therefore, Congress has the primary responsibility for establishing general national policy, at least in the domestic area, and the power of the purse to imple
15 Fisher, op. cit. pp. 111-112.
Quoted in the Washington Post, Jan. 26, 1973, p. A2. 21 See, e.g., section 9, Rural Port Roads Act of 1943, 57 Stat. 560 ; section 658, Foreign Assistance Act of 1971, P.L. 92-226.
See, e.g., remarks of Senator Cooper, 118 Cong. Rec. S. 18551 ; remarks of Congressmen Harsba and Clausen, Id. at H 10268. H 10272.
See, e... remarks of Senators Dominick and Yarborough and Congressmen Perkins and Onie 'in connection with congressional consideration of the Vocational Education Amendments of 1968. 114 Cong. Rec. 29159, 29418.
94 114 Cong. Rec. 3038S-89. The quoted statement was made during Congressional consideration of the Labor-HEW Appropriation Act of 1969, 82 Stat. 969. See also, remarks of Congressman Flood, Id. at 30588.
ment those policies. As to the President, the most relevant constitutional provisions are Article II, sections 1 and 3. These provisions vest "executive power" in the President and require him to “take care that the laws be faithfully executed."
Although there is no judicial precedent squarely in point. Kendall v. United States, 12 Pet. 524 (1838), frequently is cited for the proposition that the Executive must comply with a Congressional mandate to spend appropriated sums. The case is distinguishable in several respects.
First, it involved payment of a claim for personal services (carrying the mail) already performed. No such direct reliance by an individual that has resulted in: a tangible benefit to the United States exists in the usual appropriation act even when cast in mandatory language. Second, the Court recognized that the duties: enjoined by Congress under the facts of the case were merely ministerial.. Language of its opinion addressed to situations in which the duties involve discretion must be regarded as dicta. Third, Kendall did not involve a direct challenge to Presidential authority. Indeed, in that case, the President had sent a message to Congress concerning Kendall's claim in which he took no position on its merits. Finally, the context in which present issues are being discussed is far different from that in which Kendall arose. Today's context is one in which the powers of Congress and the President must be accommodated to the inexorable necessities of national fiscal policy. Expenditures must be linked to taxes in a manner that avoids ruinous inflation, A Congress that wishes to spend more than current levels of taxation justify and in excess of a President's wishes cannot discharge its responsibilities by mandating expenditures only. To remain faithful to its own commitment to restrain inflation, it must concurrently increase taxes. If it chooses not to remain faithful to that commitment, the President must serve the commitment hy impounding. To extend the teaching of Kendall to deprive the President of this power ignores these enormous contextural differences.
A few other decisions are sometimes cited for the proposition that Congress can mandate spending by the Executive branch, such as United States v. Price, 116 U.S. 43 (1885), and Miguel v. MoCarl, 291 l'.S. 442 (1934). Both cases were essentially similar to Kendall. In Prire, the Court held that the Secretary of the Treasury was required to pay a claimant for services previously rendered to the Government, as specified in a private bill. In Miguel, the Court set aside the Comptroller General's determination that a particular person was not entitled to a veteran's pension under general pension legislation. Like Kendall, these cases contribute little to the current debate.
Even if it be concluded, however, that Kendall holds that Congress can mandate spending if it explicitly expresses an intention to override the Anti-Deficiency Act and all other direct and indirect statutory sources of Presidential spending control, it is clear that any such mandate is subject to at least two important qualifications. The President has substantial authority to control spending in the areas of national defense and foreign relations. Such authority flows from the President's constitutional role as Commander-in-Chief of the Armed Forces and from his relatively broad constitutional authority in the field of foreign affairs. See, e.g., United States v. Curtiss-Wright Erport Corp., 299 U.S. 304, 319-320 (1936). In those areas, Congressional directives to spend may intrude impermissibly into matters reserved by the Constitution to the President. It is noteworthy that Congress has never successfully challenged an impounding action in the foreign relations and national defense fields.
I turn now to S. 373, the bill before the Subcommittee. The bill in its essentials would require the President to notify the Congress by special message of each impoundment made at his direction or with his approval, within 10 days after such action. It would require the cessation of impoundment after 60 days of continuous session of Congress, unless both Houses within that time approved it in the form of a concurrent resolution. The 60-day period would begin to run upon receipt of the message by Congress. The approval resolution would not be referred to committee, but would be "privileged business for immediate consideration," with certain procedural safeguards against delaying final action.
As I view it, the practical effert of S. 373 would be to require the President to spend virtually all sums appropriated by the Congress. The definition of impounding is sweeping: it eradicates any difference between permissive and mandatory appropriation acts; it appears to repeal existing statutory authority provided by
the Anti-Deficiency Act to establish reserves and effectuate economies made possible by developments subsequent to appropriations; and it embraces impoundments necessary to remain within statutory debt limits as well as those designed to protect purchasing power. In practice, the provision for approvals of individual actions of impounding by concurrent resolution would be largely illusory. Under the bill's broad definition of impounding, thousands of individual impounding actions will occur each year. Given the pressures of more important matters, it would be realistically impossible for the Congress to give any worthwhile consideration to individual impounding actions. In short, the bill seeks to prohibit impounding by the President altogether.
In my judgment, S. 373 is wholly impractical, profoundly unwise, and of very doubtful constitutionality. The basic objections to the bill should be readily apparent from what has already been said. Accordingly, I will outline briefly the principal policy and constitutional problems to be found in its overall purpose and certain of its specific provisions.
To begin with, the bill seeks to reverse 170 years of Presidential practice. It appears to proceed on the assumption-demonstrably erroneous as a matter of history—that appropriation acts mandate spending. It would be well to ponder the practical needs of government underlying that history, before they are cast aside.
The bill would very substantially undercut the President's existing authority to combat inflation, unemployment and a wide range of economic ills. Indeed, in many circumstances, it would compel him to add fuel to the fire.
The mechanism of S. 373 would place the burden on Congress to ensure reasonably balanced budgets, control inflation, and provide against a host of volatile economic problems. I submit to you that the Congress has not demonstrated a capacity for exercising full and comprehensive control of these issues. Ours is not a parliamentary system. Congress represents many interests and, at times, speaks for each of them. This is as it should be. But the correlative weakness of this strength is its frequent inability to pursue integrated fiscal policies which will keep taxes in proper step with expenditures. Our Nation needs the impounding authority vested in the President to check this otherwise ruinous tendency of Congress. The exercise of this authority by the President to promote fiscal stability is not usurpation; rather it is in the great tradition of checks and balances upon which our Constitution is based.
The inevitable result of enactment of S. 373 will be to sharply escalate conflicts between the Executive and Legislative branches. Thus, if the President knows that he must spend every dollar in every appropriations bill, he can only resort to greatly increased use of his veto power. Moreover, it is likely that there will develop a tendency to provide the equivalent of item veto power by splitting omnibus appropriation bills into many separate but related bills. That would certainly be unfortunate.
An across-the-board mandatory spending statute like S. 373 would also raise substantial constitutional questions. As I said earlier, there is doubt whether Congress can legislate against impoundment even in the domestic area when to do so results in substantially increasing the rate of inflation. To admit the existence of such power deprives the President of a substantial portion of the "executive power" vested in him by the Constitution. Herein lies a major constitutional flaw of legislation like S. 373. The President, as a part of his executive power, has the duty to administer the national budget which, in turn, inescapably imposes on him a heavy responsibility to avoid fiscal instability. S. 373 attempts to reduce the scope of his budgetary duties enormously, and makes it difficult for him to contribute to the achievement of fiscal stability in the manner in which past practice approves. I question whether Congress has the power to convert the Chief Executive into “Chief Clerk," a position which he has never held under our Constitution.
Constitutional questions under the bill would perhaps be greatest in the areas of national defense and foreign relations. There, as I have said, the President's constitutional powers and responsibilities find their source not only in his duty to take care that the laws shall be faithfully executed, but also in his powers and responsibilities derived from his express status as Commander-in-Chief of the Nation's Armed Forces, and as the sole organ of the Nation in the conduct of its foreign affairs. I do not believe that Congress is constitutionally empowered in those areas to compel the President to spend willy-nilly, as S. 373 purports to do.
I also view the "concurrent resolution" feature of the bill as raising constitutional doubts, because it constitutes an effective exercise of legislative power not