Louis Fisher

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 decides 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 milicu in which he operates permits him to do so." Unfortunately, there is little in the literature on this 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

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budget deficits. 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, scc. 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 sprading 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 presidential 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 legistor] down, that it would only be done under the most peculiar or extraordinary circumstances" (Willoughby, 1918: 148-149).

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 two-thirds of the membership of Congress" (U.S. Department of the Treas ury, 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 I. 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 insubordi nation 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 bureaus-denied 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 or

dered each executive department and burcau to determine the portion of appropriations considered 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 Budget, 1921). Since further savings would be attempted during the course of the fiscal year, each burcau 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 economics 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 lobbyist, 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 excentive orders to regroup and consolidate a total of 38 agencies, but the House disapproved the orders on January 19, 1933, preferring to leave reorga nization changes to the new president. In his last two days in office. Hoover signed two more cconomy measures, authorizing his suc

cessor 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, scc. 4).

In 1932, the Democratic platform 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, 193Sa: 808). Once in office, he requested authority to reduce veterans' benefits and salaries of federal employees. Despite opposition 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 nation il 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, 193Sb).

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: 570S). 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 burcau

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 cconomy acts of 1932 and 1933, or else as itemveto 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 Maverick 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 disposal 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 prerogatives (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 imroundment increased. In his January 1941 budget message, Roosevelt announced that the government had "embarked on a program for the total defense of our democracy." It therefore seemed appropriate, he told Congress, to "defer construction projects that interfere with the defense program by diverting manpower and materials. Further, it is very wise for us to establish a reservoir of post-defense projects to help absorb labor that later will be released by defense industry." He recommended reductions for rivers and harbors and flood-control work, but. funds for power and other projects considered essential to national defense should continue (Rosenman, 1941b: 656).

On May 27, 1941, the president declared a state of unlimited national emergency. When the House passed a rivers and harbors bill which he felt might jeopardize the defense effort, he appealed to the Senate to amend the bill "so as to restrict new construction work to projects having important defense values" (U.S. Congress, 1941a: 5807, 5817). Congress refused to delegate to the president the sole right to decide which projects should go forward, but did acknowledge the gravity of the emergency period by