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U.S. Department of the Army 1969 Leller from Lt. Gen. F. J. Clarke,
Chief of Engincers, to Senator Allen
1919 · Annual Report of the Sccretary of the - Treasury on the State of the Finances,
1918-19. 1920 Annual Report of the Secretary of the
Treasury on the State of the Finances,
1919-20. Wann, A. J. 1968 The President as Chief Administrator.
Washington: Public Affairs Press. Williams, J. D. 1955 The Impounding of Funds by the
Bureau of the Budget. Indianapolis:
Bobbs-Merrill. Willoughby, William F. 1918 The Problem of a National Budget.
New York: D. Appleton.
60-337 0 - 71.9
(Reprinted from 38 The George Washington Law Review 124 (1969)]
Funds Impounded by the President:
The Constitutional Issue
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 layoiis, 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. 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 Siat. 48; Act of Mar. 3, 1905, ch. 1484, § 4, 33 Stat. 1257.
2. Act of Mar. 3, 1933, ch. 212, $$ 103, 408, 47 Stat. 1518, 1519; Act of June 30, 1932, ch. 314, $$ 101, 105, 110, 103, 47 Siat. 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,o construction of public buildings,' and public works by the Bureau of Yards and Docks.8 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 reit sed to desegregate.11 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 liy administrative action. Of course this reduction was largely offset ly 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 1910 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. $ 6490 (1964).
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. § 20000-1 (1954).
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).
President considers the purpose unwise, wasteful, or inexpedient. He then no longer operates on the basis of legislative authority. On the
contrary, he matches his will against that of Congress. As Represent“ ative George Mahon once remarked, “economy is one thing, and the
abandonment of a policy and program of the Congress another thing."14
Despite protests from Congress, Presidents have regularly impounded funds to cancel or curtail programs ranging from flood control projects to B-70 bombers, anti-missile systems, and nuclearpowered vessels. Every Administration from Franklin Roosevelt's to Lyndon Johnson's has resorted to this method of control. When the first serious incident of impoundment occurs under the Nixon
Administration, critics of presidential power will renew their asser→ tion that appropriation bills are not mere ar'thority or permission to spend but rather a mandate from Congress to spend as directed.
More specifically, these critics assert that numerous decisions of the Supreme Court demonstrate that Presidents lack constitutional s authority to impound funds. This critique covers three areas:
executive discretion over funds, inherent powers of the President, and the restraints on executive power implied by the doctrine of separation of powers. In examining these Court decisions, this article finds that they have scant bearing on the p actice of impoundment, and offer little promise of resolving the rispute on constitutional grounds.
Executive Discretion Over Funds Prominent among the cases used to challenge the constitutionality of impoundments is Kendall v. United States ex rel. Stokes.15 The Postmaster General under President Jackson's administration refused to pay the claim of an individual who had contracted to carry the mails and sought compensation for his services. Congress directed the Postmaster to pay the amount, as did the Circuit Court of the District of Columbia. The Supreme Court held that the Postmaster could not refuse this payment which was authorized by law.
In the words of one study, Kendall "scouted the idea that the effect of the responsibility to see that the laws are faithfully executed is to create discretion in the President as to their execution."IG The decision has also been interpreted17 as recognizing congressional authority to order executive officials to make payments as directed by law.
Indeed, at first glance it appears that Kendall bears directly on the issue of impoundment. The Court, for instance, declares: “To con
14. 95 CONG. Rec. 14922 (1949).
16. Goostree, The Power of the President to Impound Appropriated Funds, 11 AM. U.L. Rev. 32, 37 (1962).
17. Ramsey, Impoundmont by the Executive Department of Funds which Congress has Authorized It to Spend or Obligate 32 (Library of Congress Legislative Reference Service, May 10, 1968); Davis, Congressional Power to Require Defense Expenditures, 33 FORDHAM L. Rev. 39, 47-48 (1964).
that the band implies a pitution, and
tend, that the obligation imposed on the President to see the laws faithfully executed, implies a power to forbid their execution, is a novel construction of the constitution, and entirely inadmissible."18 Also to the point, apparently, is the Court's conclusion that it is "an alarming doctrine, that congress cannot impose upon any executive officer any duty they may think proper, which is not repugnant to any rights secured and protected by the constitution . . . ."19
Taken from context, these sentences cast dark shadows on the practice of impounding funds. Yet the decision is only remotely relevant, since impoundment entails no claim for services performed, as did the situation in Kendall. Moreover, the Court was careful to circumscribe its jurisdiction to avoid colliding with a coequal branch. Payment of the claim was a “purely ministerial" act, in the same sense that "an entry in the minutes of a court, pursuant to an order of the court, is an official act."20 For such ministerial duties there could be no discretion.
The question of judicial intervention in an executive act, requiring discretion and judgment, was carefully distinguished. The Court explained that the mandamus to pay the amount did not seek "to direct or control the postmaster-general in the discharge of any official duty, partaking in any respect of an executive character; but to enforce the performance of a mere ministerial act, which neither he nor the President had any authority to deny or control."21
Two other cases relied upon to challenge the constitutionality of impoundments suffer from the same infirmity as Kendall. In United States v. Price,23 the Government sued to recover a sum of money, the payment of which was authorized by Congress. The statute was held controlling and the defendant therefore was "under no obligation to pay back what he shad) received."24 In United States v. Louisville,»5 the Government again tried to recover a payment made pursuant to an act of Congress. The Court declared that the duties of the Treasury officials were limited “to the clerical functions of making payment," and no discretion could be exercised to reexamine the correctness of the claim.26 These cases, involving obligation of contracts or payments, bear little relation to impoundments, where neither obligation nor payment is in issue. In addition, both
18. 37 U.S. (12 Pet.) at 613. 19. Id. at 610. 20. Id. at 613. 21. id. at 610. 22. See Ramsey, supra note 17, at 34; Davis, supra note 17, at 54 n.91. 23. 116 U.S. 43 (1885). 24. Id. at 45. 25. 169 U.S. 249 (1898). 26. Id. at 255.