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[From Department of Housing and Urban Development, Office of the Secretary, Office of
Budget, March 1, 1971) TABLE 1.-DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, SELECTED LIST OF PROGRAM FUNDS A VAIL
ABLE FOR USE FISCAL YEAR 1971
(in millions of dollars)
Urban renewal programs.......
$200.0 This balance of the fiscal year 1971 appropriation is programed for use
in fiscal year 1972. 200.0 Half of this balance of the fiscal year 1971 appropriation is programed
for use in fiscal year 1972. 192.5 This is the amount of contract authority shown in the budget as unused
at the end of fiscal year 1971. Refer to table 3 for congressional
restrictions on the use of this authority. 157.1 Under recently announced reprograming, $148,600,000 of these funds
will be obligated in fiscal year 1971. 575.0 Under recently announced reprograming. $287,700,000 of these funds
will be obligated in fiscal year 1972 instead of only $70,000,000 reflected in the budget.
Model Cities programs.........
Subtotal, social insurance trust funds........
Subtotal, relatively uncontrollable outlays.
Department of Defense....
Civilian agencies. Relatively controllable outlays:
National defense: 3: Proposed volunteer army program........
Other..... Civilian programs: of Proposed added amounts for revenue sharing..
Proposed social security benefit increase...
Total budget outlays..........
EXECUTIVE OFFICE OF THE PRESIDENT,
BUREAU OF THE BUDGET,
Washington, D.C., May 28, 1969. Hon. SAM J. ERVIN, Chairman, Subcommittee on Separation of Powers, U.S. Senate,
Washington, D.C. DEAR MR. CHAIRMAN : Since the receipt of your letter of December 6, 1968, addressed to my predecessor, the Bureau of the Budget staff has been seeking to provide answers to the specific inquiry contained therein. Facts with regard to the illustrative cases you requested are set forth in the enclosure to this letter. Unfortunately, we did not find examples in some of the areas you had in mind.
In the use of the endorsed materials, or in a study of the system of apportionments and reserves, it is essential that there be an understanding of certain points that are often overlooked.
First, as a practical matter, reserves are established not only to save money but also to defer obligations (and therefore expenditures). Congress sometimes provides an appropriation or other budget authority with the intent that it last for more than a year, sometimes to cover program needs for two, three, or more years. In our apportionment system, we operate on a fiscal year basis. Therefore there are occasion when we place outside of current apportionments a part of an appropriation which we expect to apportion in the following year or years, and we call this a "reserve." There are also cases where the apportionment system is used to effectuate a postponement within the fiscal year, and amounts set aside early in the year for consideration later when agency plans are more nearly complete are also called “reserves.” Such cases are not truly “impoundments" in the sense of sequestering or withdrawing funds from being used for their intended purposes.
Second, it is sometimes difficult to establish where the true initiative for a reserve originated. Under the law and the regulations, agency heads (or their designees) place before us their suggestions for apportionments and reserves to assist us in exercising our apportionment responsibility; these appear on the apportionment forms under the heading "Information submitted by agency" although in practice they are usually described as "apportionment requests."
In those cases when our action coincides with the agency request, we are, from a technical standpoint, merely agreeing with the agency heads' own decisions to avoid using the “reserve" portion of the funds currently. On the other hand, it is possible that the agency heads' decision was influenced by others; there is reason to think that, in the area of Defense, under previous Administrations, the President and the Secretary of Defense came into agreement on certain reserves before an apportionment form was filled out, and my predecessors merely ratified formally the reserve proposals coming to us from the Department of Defense, but which in fact may have reflected Presidential thinking. It is logical, I believe to expect that the President and a Cabinet officer may arrive at mutual decision on such matters in a manner that may not be formally recorded as the act of either party. Thus, it may be that the idea for a reserve was originated by agreement between the agency head and the President; or by the agency head alone; or by independent action of the Budget Director (in a case where the agency head's request is revised in the Bureau).
Third, there may be difficulty in distinguishing when a Director of the Bureau of the Budget has acted "in the name of the President”, as your inquiry puts it, and when he has acted in his own name. The Director, alone among all agency heads, is appointed by the President without Senatorial confirmation, and he is expected to be responsive to the President's desireswithin the constraints of the law, of course. The Director sees the President or talks with him on the telephone daily, sometimes 3 or 4 times in the course of a day. Only in the most exceptional circumstances in the past has a Director taken a position publicly differing from a posture adopted by the President. It is difficult, then, to tell when a Director is purely exercising a completely independent judgment, and when his actions reflect his interpretation of the President's attitude towards a matter. Of course, even in the
latter case, his interpretation may be incorrect, and therefore the President cannot be charged with having specifically approved them, but he iş nevertheless responsible.
These factors, along with the large volume of apportionment actions for the whole Government in the period 1945 to 1969, make it impractical for us to undertake a general survey of the type originally envisioned.
However, I shall be glad to assist you and the Subcommittee as much as possible in the light of our resources and circumstances. , Sincerely,
ROBERT P. MAYO.
EXAMPLES OF RESERVES ESTABLISHED UNDER SPECIFIED
CIRCUMSTANCES, 1945–1969 A. Reserves established by the Bureau of the Budget, in the name of the President, which affected specific programs or projects ,
A-1--Public works area [No example found.)
A-2-Human resources area In the fiscal year 1967, reserves were established against various appropriations in accordance with a program of deferrals and reductions discussed by the President in his economic message of September 8, 1966, and by the then Director of the Bureau of the Budget in his later testimony before the Ways and Means Committee. For example, a reserve of $1,892,000 was established against the appropriation of $64,922,000 to the National Institute of Child Health and Human Development. These funds were not obligated and became a part of the unobligated balance which lapsed on June 30, 1967.
A-3-Military procurement area (a) In the fiscal year 1963, there was reserved, at the request of the Department of Defense, $191.6 million which had been added by Congress for the RS-70 weapon systems program, over and above the $171 million budgeted therefor in the appropriation, "Research, development, test, and evaluation, Air Force." These funds were to initiate procurement of more aircraft than originally programmed. Later in the year, $35.8 million of the reserve was released at the request of the Department and used for the RS-70 program. The balance was subsequently applied against fiscal year 1964 requirements for the program.
(b) In the fiscal years 1967 and 1968, the Department of Defense requested that funds of $153.5 million and $269 million, respectively, available for the Nike-X system in the account, "Procurement of Equipment and Missiles, Army,” be placed in budgetary reserve. The program, is approved in the executive branch, did not require these procurement funds during those time periods. The Bureau of the Budget placed the funds in reserve, as requested. In the fiscal year 1969, $284.6 million of these funds were used to offset appropriation requirements for the year in the same account, in accordance with the fiscal year 1969 appropriation act. The balance of $137.9 million has been released for the Sentinel program. B. Reserves established by the Bureau of the Budget, in the name of the President, which affected a group of related programs
B-1-Public works area (a) As a part of an overall effort to control inflationary trends in the economy, the President placed a limit of $4,460 million on Federal highway fund obligations in the fiscal year 1968 budget. At the beginning of fiscal year 1968, under the provisions of the Federal-aid Highway Act of 1966, $4,850 million of advance 1969 contract authority became available. This new authority plus the amount available from prior year authorizations provided a total of $7,500 million for potential obligation. In line with the budgetary decision to limit fiscal year 1968 obligations to $4,460 million and provide quarterly scheduling of obligations to assist in control of inflationary trends, á first quarter apportionment of $2,290 milhon was made and a reserve of $5,210 million was established. This reserve was reduced from time to time during the fiscal year, and funds were made available for construction of highways on a scheduled basis within the established obligation limit.
(b) On December 8, 1966, there was reserved the sum of $41,293 thousand of the appropriation, "Construction, General, Corps of Engineers (Civil)." The cutback was not identified with specific projects, but was directed by the President as a part of a general effort to reduce Government spending in the light of prevailing financial and economic conditions. All of this was released later in the fiscal year—$965 thousand on February 14, 1967, to reimburse the Yuba County Water Agency for the Federal share of costs incurred during the latter part of fiscal year 1966 on the New Bullards Bar project (California), and $40,328 thousand on April 6, 1967, to permit the award of various contracts as rescheduled under the fiscal year 1967 deferral program.
B-2-Human resources area On September 30, 1966 there was reserved the sum $3.6 million of the appropriation and balances available to the Department of Housing and Urban Development for neighborhood facility grants. This action was consistent with the President's announcement in a message to Congress on September 8, 1966, reiterated in his Budget Message of January 24, 1967, that lower-priority Federal programs were being reduced, as a contribution to a moderation of inflationary pressures existing in the latter part of the calendar year 1966. The Director of the Bureau of the Budget explained the reduction efforts generally in testimony before the House Ways and Means Committee in September 1966. The entire reserve was released for use on June 16, 1967, to fund the pilot neighborhood service center program.
B-3—Public works area In the fiscal year 1957, the sum of $1.1 billion was apportioned in the appropriation account, “Procurement and Production, Army." This was $382 million less than the amount requested by the Department of Defense. Notations in the files of the Bureau of the Budget identify the reserves in three categories "aircraft," "guided missiles," and "other"--but no specific projects below these category levels are identified. The background is not clearly known at this time, but it appears that this action may have been a step in meeting overall obligation and expenditure targets established by the President. During the fiscal year, amounts held in reserve were released when requested by the Department of Defense. The funds apportioned and reapportioned were sufficient to cover all the obligations anticipated or incurred for the fiscal year for the approved programs under this appropriation account. C. Reserves established under the Anti-Deficiency Act, which affected specific programs or projects
C-1~Public works area On October 26, 1962 there was reserved the sum of $100 thousand of the appropriation, "Construction, General, Corps of Engineers (Civil)"-a sum which had been appropriated for use on the Cape Fear (New Hope), North Carolina, project, a project which had not been authorized for construction by the Congress. On January 9, 1964 this sum was apportioned, as the project had by then been authorized for construction by the Congress.
C-2-Human resources area In the fiscal year 1957, acting under the authority of the Anti-Deficiency Act, a reserve of $29,800,000 was established against the appropriation of $48,432,000 to the National Cancer Institute, pending review of program plans. Later in the year, this reserve was successively reduced to $27,622,100 (on September 28, 1956), reduced to $4,288,000 (on October 17, 1956), increased to $4,588,000 (on April 11, 1957), increased to $6,623,000 (on May 15, 1957), and finally reduced to $5,573,000 (on June 14, 1957). This latter amount was not obligated and became part of the unobligated balance which lapsed on June 30, 1957.
0-3--Military procurement area In the fiscal year 1958 there was reserved the sum of $925.4 million from the several procurement appropriations of the Department of Defense, affecting such items as: LaCrosse I, Redstone and engineer equipment for Redstone, railways cars and locomotives, the Grumman flight test facility on Long Island, the J-83/85 engine, and Dynasoar. The circumstances surrounding this action
were discussed in hearings on May 20 and June 17, 1959, before the Preparedness Investigating Subcommittee of the Senate Committee on Armed Services, and were printed under the title "Major Defense Matters." Generally, the reason for placing the funds in reserve was because planning (program or financial) for the specific line items was judged to be inadequate as of the time of the reserve action. Maurice Stans, then Director of the Bureau of the Budget, testified (page 272 of the hearings cited above) that requests were made by the Department of Defense for release of the funds, and substantially all of the money was released by the Bureau of the Budget, as requested. D. Reserves established under the Anti-deficiency Act, which affected a group of related programs
D-1_Public Works area In the fiscal year 1954, there was reserved the sum of $43,629,359 in the appropriation, "Construction, General, Corps of Engineers (Civil)". The purpose was to achieve reductions in program obligations and expenditures in the light of circumstacnes then prevailing. The money was apportioned on August 20, 1954, to allow its use for construction in the fiscal year 1955.
D--2-Human resources area (No examples found.]
D-3-Military procurement area [No examples found.]
Senator Ervin. Participating today in our discussion of the questions involving the President's power to impound appropriated funds will be Stewart L. Udall, a former Secretary of the Interior; Joseph L. Alioto, mayor of San Francisco; Representative Charles E. Bennett of Florida; F. C. Turner, Administrator of the Federal Highway Administration; and William J. Driver, a former Administrator of the Veterans' Administration.
On Wednesday, we expect to have with us Caspar Weinberger, Deputy Director of the Office of Management and Budget; Prof. Harvey Mansfield of Columbia University; Raymond C. Coulter, Deputy Solicitor of the Interior Department; and Dr. Warren J. Wisby, Director of the National Fisheries and Aquarium.
On Thursday, panelists will include Prof. Joseph Cooper of Rice University; Prof. Brownlee Sands Corrin of Goucher College; William H. Rehnquist, Assistant Attorney General, Office of Legal Counsel, Department of Justice; and Robert Keller, Assistant Comptroller General of the United States.
We are pleased to have with us for all 3 days Prof. Loch K. Johnson of the University of North Carolina at Chapel Hill. Professor Johnson was instrumental in assisting Senator Church assemble materials and research for his article on impoundments which was published last year in the “Stanford Law Review," I will insert Senator Church's article in the record at a later time.
We are also pleased to have with us Prof. Preble Stolz of the University of California School of Law at Berkeley, now visiting professor of law at Yale University, who will take part in these discussion throughout the 3 days. Professor Stolz has aided this subcommittee in its past studies of the Federal judiciary.
The Library of Congress has been kind enough to lend us the services of Louis Fisher, an analyst on the staff of the Congressional Research Service, formerly assistant professor, Queens College, who has written three very helpful articles on this subject. I shall insert two of these in the record at a later period. We are delighted to have Mr. Fisher with us during the course of these hearings as a special consultant.