[Reprinted from 38 The George Washington Law Review 124 (1969)]

Funds Impounded by the President:

The Constitutional Issue

LOUIS FISHER*

In its broadest context, impoundment occurs whenever the President spends less than Congress appropriates for a given period. Impoundment may be temporary or permanent, but in most cases it enjoys statutory support and no constitutional issue emerges. For instance, the President is expected to set aside funds for contingencies or to effect savings whenever they 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."

In periods of economic crisis necessitating lower levels of federal spending, the President has been authorized to spend less than the amount appropriated. The Economy Acts of 1932 and 1933 authorized the President to make partial layoffs, reduce compensation for public officials, and achieve economies by recrganizing the executive departments. The War Appropriation Act for 1933-34 called for the impoundment of unneeded funds as determined by an economy survey ordered by the President.3 In an effort to ease the transition

Assistant Professor of Political Science, Queens College of the City University of New York. B.S., College of William and Mary; M.A., Ph.D., New School for Social Research.

1. 31 U.S.C. § 665 (c) (1964). See also Act of Aug. 28, 1957, ch. 14, § 1401, 71 Stat. 440; Act of Sept. 6, 1950, ch. 896, § 1211, 64 Stat. 765; Act of Feb. 27, 1906, ch. 510, § 3, 34 Stat. 48; Act of Mar. 3, 1905, ch. 1484, § 4, 33 Stat. 1257. 2. Act of Mar. 3, 1933, ch. 212, §§ 403, 408, 47 Stat. 1518, 1519; Act of June 30, 1932, ch. 314, §§ 101, 105, 110, 403, 47 Stat. 399, 401, 403, 413.

3. Act of Mar. 4, 1933, ch. 281, § 4, 47 Stat. 1602.

from a wartime to a peacetime economy, Congress has directed the President to reduce the number of federal employees and reduce administrative costs through reorganization. Cessation of World War II left the Government with tens of billions of dollars in excess of military needs. President Truman rescinded these excess appropriations and contract authorizations and directed the Budget Bureau to place these amounts in a nonexpendable status.5

Presidents also receive "no-year appropriations"-funds made available until expended. Programs funded by this technique include procurement of military equipment, construction of public buildings,' ard public works by the Bureau of Yards and Docks. The amount of no-year funds for research and development in the Defense Department comes to slightly more than $8 billion in the fiscal 1970 budget request.

Title VI of the Civil Rights Act of 1964 empowers the President to withhold funds from federally financed programs in which discrimination by race, color, or national origin exists.10 By July 1969, federal funds had been withheld from over 120 school districts because they had refused to desegregate." Additional budget-cutting authority has beer. given to the President in the last two years. The Revenue and Expenditure Control Act of 1968 resulted in expenditure reductions of $8.2 billion, most of which was by administrative action. Of course this reduction was largely offset by spending increases in areas exempted from the act.12 A more stringent spending ceiling established by Congress in July 1969 was followed by President Nixon's announcement to the heads of all departments and agencies, directing them to reduce spending for fiscal 1970 by $3.5 billion.13

Although political objections are sometimes voiced when the President and his executive officers withhold funds on the basis of the statutes cited above, a constitutional issue emerges only when Congress finds a legislative program cancelled or abbreviated because the

4. Act of Dec. 20, 1945, ch. 582, §§ 2, 3, 59 Stat. 613, 614; Act of June 30, 1945, ch. 212, § 607, 59 Stat. 304.

5. Memorandum of Dec. 23, 1945, PUBLIC PAPERS OF THE PRESIDENTS OF THE UNITED STATES: HARRY S. TRUMAN 1945, at 579 (1961).

6. 31 U.S.C. § 649c (1964).

7. Id. § 682.

8. Id. § 635.

9. U.S. BUREAU OF THE BUDGET. THE BUDGET OF THE UNITED STATES GovERNMENT FISCAL YEAR 1970, app. at 294-98 (1969).

10. 42 U.S.C. § 2000d-1 (1964).

11. N.Y. Times, July 4, 1969. at 7, col. 3.

12. Net reduction, after subtracting a $6.9 billion increase in exempted and excepted areas, came to $1.3 billion. 115 CONG. REC. E6374 (daily ed. July 29, 1969) (joint statement by Treasury Secretary Kennedy and Budget Director Mayo).

13. WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 5, No. 30, at 1021 (July 22, 1969) (statement of President Nixon when signing H.R. 11400, Second Supplemental Appropriations Act of 1959).