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impoundment combination is less a fiscal policy than a political modus vivendi for bridging the separation of powers and thereby resolving conflicts that might otherwise develop into paralyzing confrontations. Our system puts a premium on such problem-solving devices, so this invention may prove to be a durable contribution to the art of government.
Mr. EDMISTEN. I think we should hear from all three and then have a discussion.
Professor COOPER. I am supposed to precede Professor Maass, I believe.
Mr. EDMISTEN. Yes.
Professor COOPER. My statement is rather long and I think I had best confine myself to sketching the high points of it. I would like it to be reprinted in the record in its entirety.
In testifying today, Professor Maass and I wish to make a joint presentation. Though we have divided our labors, we have integrated our efforts with the result that all the conclusions we shall present are common or shared.
Senator ERVIN. We will print your statement in full in the body of the record immediately after the conclusion of your remarks.
Professor COOPER. Thank you. I would be happy to expand on any points that are of special interest to the committee or to the consultants. I believe that the history of impoundment reveals or contains four lessons of great import for present policy development, The first is that the practice of executive withholding or impoundment of funds is a product of incremental development since 1921 in which the final or ultimate result was not originally intended or even foreseen for several decades. To say this is not necessarily to condemn it. Many of our present congressional arrangements emerged in a similar way, but I think this point should be understood to put the impoundment procedure into perspective. To understand the process of development, I divide it into four stages. The initial stage commenced in 1921 with the creation of the Budget Bureau. The first Director of the Bureau, Charles Dawes, believed firmly that the prime purpose of the new agency, under the legislation that established it, was to bring efficient, business management to bear on the financial operations of the Federal Government. One of the steps he took to achieve this objective was to alter the manner in which the provisions of the Anti-deficiency Act were interpreted and implemented. The terms of the Anti-deficiency Act required funds appropriated to agencies or departments to be apportioned at a rate that would prevent expenditure in excess of the total amount appropriated for the fiscal year. Dawes believed that on the basis of the authority granted the Budget Bureau he could establish reserves under the Antideficiency Act, not only to prevent or to guard against the contingency of over-expenditure, but also to effect savings per se. It is for this reason that Dawes proclaimed this doctrine that we have heard about so much ever since, that the amount appropriated was not necessarily the amount to be expended, that appropriations were not mandatory. Rather, he asserted that the procedures of apportionment or allotment should be used to make provision for "savings" as well as for preventing deficiencies and with the help of the President he created machinery under which a reserve fund was established.
However, if Dawes believed that appropriations were not mandatory, neither he nor his contemporaries in the Harding administration understood that proposition as the President or Budget Bureau does today. All that Dawes meant was that an agency did not have to spend the full amount of an appropriation if it could accomplish its program objectives while spending less, and he fully expected most agencies to be able to effect savings through more efficient operation. In contrast to current executive views, the notion that a department head or the President could control the level or the actual execution of a program by setting aside appropriated funds was not contemplated or envisioned by Dawes or other high government officials in the early 1920's. This is clearly indicated by Dawes' comments and analysis in his book, "The First Year of the Budget of the United States.” Moreover, an interesting test case occurred in 1923 that further substantiates this claim. In early 1923 the House increased the President's request for rivers and harbors funds, included in an Army appropriations bill, from $37 to $56 million. The President was furious. He tried unsucessfully to pressure the Senate to get the Senate to restore the original amount. He threatened to veto the bill, he threatened to propose a constitutional amendment for an item veto. Finally he even suggested that he might withhold the funds. At this point, he was denounced roundly on the Senate floor and people waited to see what would happen. Well, the President signed the bill without comment and none of the funds were withheld.
The next stage begins in the early 1930's. Though Dawes did not understand the notion that appropriations are not mandatory or the notion that money might be withheld to effect "savings" as the Budget Bureau does today, these notions were inherently very elastic. By the early 1930's, under the pressure of the depression, they began to be interpreted more expansively. Thus, in 1931 President Hoover used the procedures for establishing an annual budget reserve to effect an overall 10 percent cut in expenditures. In short, Iloover began to use the power to withhold to effect savings by controlling the tempo or rate of program implementation in an overall sense.
By the mid and late thirties, further development of the notion that you could use the power to withhold to control the tempo and rate of implementation occurred. By the mid thirties, the President and the Budget Bureau were effecting savings by controlling the tempo or rate of program implementation not merely in general or overall terms, but with reference to specific programs—for example, by providing only for an Army of 147,000 men in 1935–36 though Congress had appropriated for one of 165,000 men.
I might say these were still very isolated cases but they indicate the trend of development in the thirties.
The third stage begins in the early 1940's. By this time control of the tempo or rate of program implementation by withholding funds had been established in practice as had centralized control of apportionment by the President through the Budget Bureau. The next step was to move to effect savings not simply by controlling the tempo or rate of program implementation, but by controlling the achievement or execution of particular programs per se.
Thus, beginning in 1941 President Roosevelt announced that he would not allocate funds for any water resource project that did not have an important national defense value. In short, though again the differences are relative, he moved from shrinking entire programs to eliminating portions of programs at his own discretion. This led to a continuing and bitter battle with Congress throughout the whole course of the war with the President's actions coming under constant attack by the Congress.
At the war's end, use of withholding or impounding for a variety of purposes continued. In 1949, for example, the President impounded $614 million which Congress had added to his request for a 48-group Air Force. Even so, the Budget Bureau was troubled. It possessed no statutory authority even to establish reserves for the purposes Dawes contemplated let alone for denying Congress certain programs or projects it desired. Moreover, the controversy surrounding impounding during the 1940's focused attention on the question of executive authority. Therefore, at the initiative of the Budget Bureau, legislation was drafted and was passed. Such legislation was passed in 1950 as section 1211 of the General Appropriation Act of 1951. The language adopted closely followed language proposed by the Budget Bureau itself. It amended the Antideficiency Act so as to provide that:
In apportioning any appropriation, reserves may be established to provide for contingencies, 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 * * *.
This language was intended by Congress simply to authorize the Budget Bureau to impound to effect savings in cases where greater efficiency or changed conditions bearing on program implementation made such savings possible. It was clearly not intended to authorize the Budget Bureau to frustrate the legislative purposes of Congress. Indeed, interpreted strictly, this authority authorized no more than Dawes had claimed as a power of executive management—the power to effect savings where they could be made without interfering with program implementation. It is thus, not surprising that the Budget Bureau itself was divided over the question of whether it had gained or lost ground as a result of the passage of this new legislation. I might say that in this J. D. Williams case study there is an interesting page or two talking about conflicting opinion in the Budget Bureau, over whether section 1211 had helped or hurt the Bureau.
The final and current stage began in 1950 with the passage of section 1211. Whatever the intent of Congress, the language was exceedingly broad. It can without a great deal of stretching be read to authorize control of the tempo or rate of program implementation in the interests of economy. Indeed, the same act that included this new language provided for an overall cut of $550 million in nondefense spending to be accomplished through the apportionment procedure established in section 1211. Moreover, the differences between controlling the tempo or rate of program implementation and controlling the achievement of a program per se are relative rather than absolute. The one shades into the other with the result that the differences can be ignored or obscured and thus the authority claimed
to accomplish the lesser objective can be stretched to justify the latter.
As a consequence, despite its wording, section 1211 did not restrict subsequent exercises of withholding or impoundment, but rather has served as a platform for sizable growth or expansion of the practice in the fifties and sixties.
So here we are in this fourth and current stage of increasing use of impoundment to the point where, as I understand from figures given to the subcommittee, in the current fiscal year something like $11 billion is being withheld.
Nor has the current stage in the development and emergence of the practice of impoundment been characterized simply by an expansion in the number and scope of particular impoundments. Executive success in expanding both the number and scope of various exercises of the impoundment power has tended to relegate distinctions and limits accepted by past decades to oblivion and to encourage executive officers and other commentators to assert new grounds or bases for impoundment. I will have something more to add in this regard later in my presentation.
A second conclusion or lesson that can be drawn from the history is that Congress has had conflicting goals and motives and that this conflict has contributed significantly to the growth of the practice of impoundment to its current dimensions.
During the first two stages of development all the steps taken to establish and expand the practice of impoundment either had substantial congressional support or did not arouse any substantial congressional opposition.
The reasons for this are, of course, not difficult to understand. On the one hand, the Congress is vitally interested in economy, in savings. On the other hand, during the twenties and thirties it did not perceive that impoundment posed any substantial threat to its will or purpose with reference to particular programs.
Thus, it was not until the forties, the third stage of development that I have identified, that Congress became aroused over the impoundment of funds. Still, even after Congress perceived that impoundment could indeed threaten its legislative will or purpose, its desire for economy blunted any counterattack either to put an end to impoundment or to confine the executive simply to impoundments that did not seriously threaten program objectives. During the course of the war, there were two attempts to attach riders to bills to make appropriations mandatory. In one instance, the requirement was substantially watered down and in the second instance, the requirement did not pass.
Moreover, after the war's end Congress was highly responsive to the Budget Bureau's desire for explicit authority to secure and establish impoundment on a firm statutory base. It is true, of course, that the Budget Bureau drafted the language of the new legislation in terms that suggested that impoundment would be carried on only to effect savings without interfering with congressional purpose. Nonetheless, it is also true that Congress' desire for economy was so strong that it took no pains to rework the proposed new language, despite its generality and despite the record of severe conflict with the Budget Bureau over impoundment during the war. Rather, Congress simply bowed to the wishes and initiative of the House Ap- ! propriations Committee.
Since 1950, despite the increase in the number and scope of various impoundments, Congress' desire for economy has continued to block any congressional move to impose limits on the Executive. It is true that in several cases Congress has adopted language that rendered expenditure mandatory. But these have been relatively few. Moreover, it is also true that designing legislative language in this area that would preserve the Budget Bureau's ability to effect substantial savings while still limiting its ability to impair or negate congressional purpose is no simple or easy task. But it is not as difficult as the Budget Bureau pretends and Congress has thus far made no serious effort to come to grips with the problem. Few hearings have been held; few bills have been submitted ; and those few that have been introduced have never emerged from committee.
A third lesson or conclusion that can be drawn from the history of impoundment is that the Executive has indulged in a number of arguments to justify and advance this practice. I think it is worth pointing out to the Executive that their case has varied substantially over time.
The intial executive case for withholding was, of course, put forth by Charles Dawes who instituted the practice of withholding for purposes other than to prevent deficiencies. Dawes, as we have noted, correctly claimed that the Budget and Accounting Act of 1921 had established the new budget system to promote economy and efficiency in government. He therefore inferred that the Executive need not regard appropriations as mandatory and could use the procedures of apportionment to effect savings as well as to prevent deficiencies. However, as we have also noted, Dawes' case for withholding was a carefully circumscribed one which justified it only as a means of saving money while accomplishing congressional will or purpose. I have several quotes of Dawes that illustrate his views. In one he says
The Bureau of the Budget is simply a business organization whose activities are devoted constantly to the consideration of how money appropriated by Congress can be made to go as far as possible toward the accomplishment of the objects of legislation.
Another one worth quoting is as follows:
I want to say here again that the Budget Bureau keeps humble, and if it ever becomes obsessed with the idea that it has any work except to save money and improve efficiency in routine business it will cease to be useful in the hands of the President. Again I say, we have nothing to do with policy. Much as we love the President, if Congress, in its omnipotence over appropriations and in accordance with its authority over policy, passed a law that garbage should be put on the White House steps, it would be our regrettable duty, as a bureau, in an impartial, nonpolitical, and nonpartisan way to advise the Executive and Congress as to how the largest amount of garbage could be spread in the most expeditious and economical manner.
I am sure today the Budget Bureau would tell you that they could impound the funds for such a purpose.
Nor did Dawes doubt in any way Congress' right to increase appropriations above and beyond presidential recommendations or suggest that the President had any recourse other than exercise of his veto.