spending committees of cach house, was hampered by friction between the two houses, between taxing and spending committees, and by intraparty wrangling. Moreover, this new procedure conflicted with the established practice of having separate appropriations subcommittees review the president's budget to decide the level of funding. Thus, the legislative budget prematurely set a ceiling before the subcommittees could complete their work, and was abandoned by Congress after three unsuccessful efforts (cf. Leiserson, 1948; Fielder, 1951).

In 1950, instead of handling appropriations by separate bills, the House Appropriations Committee reported out an omnibus appropriation bill. In addition to making selective cuts in the president's budget, the House considered a proposal by Congressman Thomas to authorize the president to cut the budget by an additional $500 million, subject to two legislative guidelines: reductions would not be applied to military programs, and no domestic program could be cut by more than 15 percent. Clarence Cannon, chairman of the House Appropriations Committee, considered this an abdication of legislative responsibility, while Congressman Keefe charged that the prospect of turning over to the president the responsibility for making reductions was "a monstrous display of congressional incompetence, to say the least" (U.S. Congress, 1950b: 6812, 6814). Congressman Taber moved to increase the reduction from $500 million to $600 million, but limited the president to 10 areas in which cuts could be made, and restricted the reductions to either 5 or 10 percent. The TaberThomas proposal passed, satisfying economy advocates as well as those who wished to exercise greater congressional responsibility in the spending power (U.S. Congress, 1950c: 6815, 6844).

By the time the Senate began debate on the omnibus appropriation bill, South Korea had been invaded and President Truman moved quickly to curb domestic spending, ordering all executive agencies to defer civilian programs which did not directly contribute to defense needs. Legislative activity after this point was not much more than a sanctioning of presidential war prerogatives. Nevertheless, the Senate adopted

a proposal by Senators Byrd and Bridges to bring about an estimated reduction of $525 million, calling for a 10 percent cutback in nonmilitary items and exempting certain programs (U.S. Congress, 1950d: 11547-695; Truman, 1950: 543).

The conference committee decided to drop both the Taber-Thomas and Byrd-Bridges amendments and simply direct the president to cut the budget by not less than $550 million without impairing the national defense. President Truman fulfilled the statutory directive by placing $573 million in reserve, including $343 million in appropriations, $119 million in contract authority, and $110 million in authorizations to borrow from the Treasury (64 Stat. 595, sec. 1214; U.S. Congress, 1951b). Congressman Phillips later remarked, it was "an ironic paradox that members of Congress who shudder at the thought of a Constitutional amendment allowing a President to veto individual items in a bill have supported an extra-Constitutional device which in effect gives the President the same veto power but allows the Congress no opportunity to override him" (Phillips, 1951: 255; cí. Nelson, 1953).

Before 1950, the authority to create reserves and to spend less than Congress appropriated had been drawn initially from the Budget Bureau's interpretation of the Budget and Accounting Act, and then later supported in 1933 by Executive Order 6166. The

effect cf Section 1211 of the 1950 omnibus appropriation act was to amplify this authority in the statutes and the U.S. Code: "In apportioning any appropriation, reserves may be established to provide for contingencics, or to effect savings whenever savings are made possible by or through changes in requirements, greater efficiency of operations, or other developments subsequent to the date on which such appropriation was made available" [64 Stat. 595, sec. 1211: 31 U.S.C. §665 (c)]. Anti-Inflation Policy

The meaning of "changes in requirements" and "other developments" has been broadly interpreted to include inflationary pressures. Congressman Mahon explained that Presi dent Johnson impounded funds in 1966 when "we had inflationary problems, and a chang

ing condition following the time the appropriations were made, and I assume the President relied upon the portion of the law [the 1950 omnibus appropriation act] to which I have referred" (Ü.S. Congress, 1967b: 29282). In signing an agricultural appropriation bill in September 1966, President Johnson noted that Congress had added $312.5 million to his budget request. “During a period," he said, "when we are making every effort to moderate inflationary pressures, this degree of increase is, I believe, most unwise." Instead of vetoing the bill and losing funds he wanted, he decided to reduce expenditures for certain items in the bill "in an attempt to avert expending more in the coming year than provided in the budget" (Johnson, 1966: 980). The president's economic message to Congress, September 8, 1966, estimated that spending must be cut $3 billion to protect the nation's economy. Johnson had already ordered agencies to save $1.5 billion by deferring, stretching out, and otherwise reducing contracts, ne v orders, and commitments. Whenever possible, appropriations provided in excess of the president's recommendations were to be withheld (Johnson, -1966: 987-988).

Exactly where the economy axe would fall was not known until after the November clections. At that point, the president announced a $5.3 billion reduction in federal programs, permitting more than a $3 billion reduction for the remaining seven months of the fiscal year. The major items affected included a reduction of $1.1 billion in obligations under the highway trust fund, $750 million withheld from housing and urban development, and sizable cutbacks in the Departments of Health, Education, and Welfare, Agriculture, Interior, and in education funds for the Elementary and Secondary Education Act. About half of these reductions represented deferrals rather than outright cancellations (U.S. Congress, 1967c: 13–14; Johnson, 1966: 1406-10).

When asked to identify the legal authority for withholding highway trust funds, Budget Director Schultze replied that "basically it is the general power of the President to operate for the welfare of the economy and the Nation in terms of combating inflationary pressures." He also pointed out that highway

construction bid prices, after remaining relatively stable over a seven-year period, had risen 12 percent in 18 months (U.S. Congress, 1967d: 78, 111). His successor as budget director, Charles J. Zwick, justified the freezing of highway funds on the grounds of good management. When funds were withheld, the construction cost index dropped by about 3 percent for several quarters. Zwick argued that prudent management of these funds would produce more miles of highway, and that there was nothing in the law that says "every time a dollar comes in you must shove it out no matter what it costs." He referred to an opinion by Ramsey Clark, acting attorney general, who declared that the secretary of transportation had the power to defer the availability of highway construction funds which had not yet become the subject of a contractual obligation by the federal government in favor of a state (U.S. Congress, 1968: 72-73, 134).

These economic and legal justifications failed to placate localities affected by the cutbacks. Sensitive to criticism from the states, President Johnson released $175 million in highway funds in February 1967, and on the eve of a conference the next month with governors, released another $791 million, including $350 million for highways, $250 million for low-cost housing, and lesser amounts for agricultural loans, flood control projects, and education grants (Johnson, 1967: 219, 357).

In the fall of 1967, Congress considered a proposal to direct the president to cut spending by $5 billion. Central to the debate was the question of who should be made responsible for reducing the budget: Congress or the president. The House voted to transfer this responsibility to the president, but the Senate refused to agree to the $5 billion mandatory reduction. Between late October and December 6, House and Senate conferees met six times in search of a compromise solution, but to no avail. The conference report attributed the difficulty to "the extremely complex and controversial nature of broad reduction propositions" and the Administration's pending tax surcharge proposal (U.S. Congress, 1967c: 4). On the basis of an acceptable budget-cutting formula proposed by the Administration, Congress directed a

spending cut of $4.3 billion for fiscal 1968. Congress itself reduced spending by $1.8 billion, leaving $2.5 billion for the president to cut. The budget-cutting formula directed each civilian agency to reduce its budgeted obligations by an amount equal to 2 percent of payroll, plus 10 percent of other controllable obligations. Defense Department obligations were to be reduced by an amount equal to 10 percent of non-Vietnam programs (Johnson, 1967: 1174; 81 Stat. 662).

The Revenue and Expenditure Control Act of June 1968 combined a surtax with a spending ceiling of $180.1 billion, requiring a $6 billion reduction in the Administration's budget. Congress accepted responsibility for making about half of this mandatory cut, while additional cutbacks by the Johnson and Nixon Administrations brought total reductions up to $8.2 billion. Most of this was offset by increases in arcas exempted from the expenditure control: Vietnam operations, interest on the debt, veterans services and benefit payments, and payments from social security trust funds. These programs increased by $5.1 billion. Still other exceptions were later added by Congress for price support payments, public assistance grants to states, and school assistance to impacted areas. The total increase in exempted and excepted areas came to $6.9 billion. The net reduction therefore represented only $1.3 billion instead of $8.2 billion, while the budget ended up not at the spending ceiling of $180.1 billion but at $ÏS4.8 billion (U.S. Congress, 1969a: E6374).

Congress tried a more stringent method of control in July 1969, setting the spending ceiling for fiscal 1970 at $191.9 billion ($1 billion below Nixon's recommendation), but this time allowing no exemptions. Congress permitted the president some flexibility by authorizing him to raise the ceiling by as much as $2 billion to cover certain "uncontrollable" items: interest on the public debt, farm price supports. Medicare, and other social insurance trust funds. The ceiling could thus range from $191.9 billion to $193.9 billion (PL 91-47). In signing this bill, President Nixon stated that his earlier expenditure estimates for fiscal 1970 appeared to be low by about $2.5 billion, and that congressional action and inaction threatened to add another

billion to expenditures. Consequently, he directed the heads of all departments and agencies to reduce spending by $3.5 billion. A few weeks later, when the House persisted in voting more funds than he had requested, he repeated his determination to stay within his budget target of $192.9 billion. Referring to his "obligation under the Constitution and the laws," he said that he would not spend funds in excess of the expenditure ceiling (Nixon, 1969a: 1021; 1969b: 1142).

President Nixon subsequently ordered all federal agencies to reduce new contracts for government construction by 75 percent in an effort to direct resources into the depressed housing market. In dollar terms, this meant deferral of $1.5 billion in contracts and an expected saving of $300 million for fiscal 1970. This announcement was followed by plans to reduce research health grants, defer $215 million in Model Cities funds, and reduce grants for urban renewal (Nixon, 1969c: 1225; The New York Times, 1969, 1970). This opened the president to the charge that he had allowed his anti-inflation policy to fall most heavily on the cities and public services, while at the same time backing such costly projects as the supersonic transport, a manned landing on Mars, revenue sharing, a larger merchant marine fleet, a new manned bomber, and the Safeguard ABM system. Impoundment was used here not simply as an anti-inflation technique but to shift the scale of prio.itics from one Administration to the next.

The question of priorities came to a head on January 26, 1970, when President Nixon vetoed a Labor-HEW appropriation bill which provided $1.1 billion more than he had requested. After the veto was sustained, Congress agreed to reduce appropriations from $19.7 billion to $19.3 billion. The bill included a provision limiting expenditures to 98 percent of appropriations, specifying that no single appropriation could be cut more than 15 percent. This 2-percent cutback provision represented a further reduction of $347 million. President Nixon signed the bill on March 5. (PL 91-204; U.S. Congress, 1970: S2913). The tables were reversed in June when Nixon's veto of the Hill-Burton hospital construction bill was overridden by Congress, authorizing direct grants more

than $300 million in excess of Nixon's fiscal 1971 budget.

While this executive-legislative struggle was in process, two factors were at work to frustrate the spending ceiling for fiscal 1970. Congress reserved for itself the privilege of increasing appropriations and raising the spending ceiling, converting it into what Nixon (1969d: 1758) called a "rubber ceiling." Legislative actions increased the budget by $1.8 billion. Secondly, Nixon announced in his budget message of February 2, 1970, that uncontrollable spending had increased by $4.3 billion-$2.3 billion higher than Congress' allowance. As a result, the "ceiling" starts at $191.9 billion, climbs by $1.8 billion and then again by $4.3 billion, and ends up at $198 billion.

BOUNDARIES OF IMPOUNDMENT

POWER

The delegation of budget-making responsibilities to the president in 1921 was merely one step in the decline of legislative spending prerogatives. Since that time, Congress has demonstrated on many occasions its inability to cut expenditures when needed. Though legislators could reach agreement on the need for retrenchment, they were frequently unable, or unwilling, to make specific reductions and offend the affected constituents and interest groups.

When impounding funds to prevent deficiencies or to effect savings, few legislators would contest the president's authority. George H. Mahon (1969), chairman of the House Appropriations Committee, has said that "the weight of experience and practice bears out the general proposition that an appropriation does not constitute a mandate to spend every dollar appropriated. That is a generally accepted concept. It squares with the rule of common sense. I subscribe fully to it. The Congress does not administer the government. . . . I believe it is fundamentally desirable that the Executive have limited powers of impoundment in the interests of good management and constructive economy in public expenditures.” The decision to impound becomes more controversial when used for canceling domestic projects which compete with wartime production, delaying weapons systems while awaiting further tests,

withholding funds from specific projects as an anti-inslation measure, or when canceling programs altogether.

Because of legal obligations and political constraints, relatively few items in the budget are subject to impoundment. In the 1971 budget presented by President Nixon, the total budget estimate of $200.8 billion for expenditures includes outlays of $138.4 billion considered relatively uncontrollable. These outlays include $46.9 billion for social security, Medicare, and other social insurance trust funds under January 1969 laws; $4.6 billion for social insurance benefit increases recently enacted; $17.8 billion for interest on the public debt, and other amounts to cover military retired pay, veterans benefits, farm price supports, public assistance grants (including Medicaid), postal operations, legislative and judiciary expenses, and other essential programs. Funds already obligated because of contractual and other legal obligations come to $23.7 billion for national defense and $19.6 billion for civilian programs. Thus, out of the total budget, about 69 percent consists of outlays that are relatively uncontrollable (U.S. Burcau of the Budget, 1970a: 44).

The greatest opportunity for impoundment lies with defense spending. Close to half of Defense Department appropriations is in the form of "no-year money." This is money made available until expended, and permits the president to release these funds when he determines that the money can be spent in the most effective manner. In the 1971 budget, no-year money in Defense Department funds includes $17.7 billion for procurement, $7.3 billion for research, development, test, and evaluation, and $1.4 billion for military construction (U.S. Bureau of the Budget, 1970b: 253-307).

In periods of inflation, especially when Congress adds to the president's budget without making commensurate reductions elsewhere, the president's power to impound gains greater legitimacy. Congressional programs also become vulnerable to impoundment when unusual, extraconstitutional procedures are employed, such as committee resolutions. If a particular public works project fails to receive a favorable report from the Corps of Engineers, or if the Budget

Burcau excludes the project from the president's program, the Senate or House Committee on Public Works may pass a resolution requesting the Corps to "reexamine" the project. These resolutions are not subject to presidential veto (33 U.S.C. §§ 541, 542, and 701; cf. Maass, 1950). Omnibus bills for rivers and harbors projects further dilute his veto power, forcing the president either to acquicsce or else veto the entire package. Since appropriation bills frequently come late in a legislative session, long after the fiscal year has begun, veto is seldom an option. Thus, the president may prefer to sign the bill and impound funds for certain projects. For example when Congress provided funds in 1959 and 1962 for public works projects that had not been authorized, the Budget Bureau placed the amounts in reserve pending authorization. The projects were subsequently authorized and the funds released (U.S. Department of the Army, 1969).

President Johnson impounded funds for small watershed projects because he objected to the use of so-called committce vetoes. This legislative device requires that Administration actions first receive clearance from an appropriate committee. Johnson considered this procedure contrary to the spirit of separation of powers and objected to its use in legislation for water research grants, military installations, and water resource development. Instead of vetoing a rivers and harbors bill in 1965, he noted his opposition to the committee-veto procedure and asked that it be repealed in the next session. Congress refused and the funds for small watershed projects remained impounded (Johnson, 1964: 862; 1965: 907, 10S2-S3). On March 27, 1969, President Nixon advised his secretary of agriculture that he would not object to the committee-veto procedure for small watershed projects. A list of 18 projects was submitted to Congress on June 30 for committee approval (U.S. Department of Agriculture, 1969; U.S. Congress, 1969b).

To make a judgment about the political merits of impoundment, it is necessary to study individual impoundment disputes in the light of historical developments, economic conditions, the political situation, and legislative procedures, and then construct a scale of legitimacy for the different types of