(b) Presidents may cite statutes or stand on a presidential prerogative when they order impoundments, and usually do both. The reason for the latter course seems to be that, although the language of the 1950 statute already referred to ("*** savings *** made possible by... other developments subsequent to the date on which such appropriation was made available") is general, the motives impelling presidents to impound are so varied as to stretch any formula. What for?

Pre-Keynesian presidents like Coolidge and Hoover, and Andrew Mellon, their Secretary of the Treasury, needed no special motive to justify frugality: an appropriation unspent at the end of the fiscal year was a good in itself. Today the general economic argument for any impoundment, that aggregate spending will thereby be reduced, can only be seriously pressed in periods of strong inflation. No one would repeat F.D.R.'s 1933 course of retrenchment. It does not fol low, however, that in an inflationary period such as we have experienced since 1966, presidents necessarily and always seize upon impoundment as a remedy after they have committed themselves to the recommendations in their annual budgets. On the contrary, in the jockeying for position that culminated in the Revenue and Expenditure Control Act of 1968, and again in the setting of expenditure ceilings for the fiscal years 1970 and 1971, we have witnessed the Ways and Means Committee thrusting a duty of impoundment on a reluctant president as a means of obliging him to share more of the political onus of general measures for fiscal restraint. After the November elections in 1966 President Johnson had announced plans to impound some $3.3 billion in the remainder of fiscal year 1967; he evidently hoped he had done his part before asking for the tax surcharge. It was not enough.

Not only restraint but also the need to redirect the use of resources on a sweeping scale furnished the occasion and motive for President Roosevelt's impoundment of remaining WPA funds and all sorts of civilian construction allocations in 1942, in aid of industrial mobilization. In this case the initiative was presidential.

A third broad purpose that impoundment has occasionally served is the enforcement of presidential policies regarding strategic weapons. In the celebrated instances when President Truman in 1949 impounded Air Force funds for more bombers, and later, funds for the Navy's super carrier, and again when Secretary McNamara held back on ABM installations to shield disarmament negotiations, the President was not so much challenging a hostile Congress as taking a side in a controversy over military strategy that had both supporters and opponents in both the executive and the legislative branches.

A fourth broad use for impoundment emerged in 1969 and 1970 as the Nixon administration set about reordering the program priorities of its predecessor. Partly by vetoes and partly by cutbacks of grants for health research, urban renewal, and model cities, defended as anti-inflationary moves, the President tried to make room for funds for the SST, for NASA, for a larger merchant marine, for Safeguard ABM installations, and so on. Plainly the object was not an overall reduction, or not wholly an overall reduction, but despite continuing inflationary pressures, a redistribution of emphases in

order to favor different constituencies from those the Johnson administration had cultivated.

Impoundment can strike at smaller and more selective targets. One such can be defended by appeal to another general principle, equity. If the Congress has chosen to favor one among a number of claimants similarly situated, the President can plausibly impound the plum until some more equitable distribution is worked out.

Beyond these uses we come to the category of straight exercises of leverage for power. In this category the uses can be either defensive or aggressive, acts of retaliation, or dispassionate disciplinary or bargaining moves in an ongoing series of transactions. On at least one occasion, I am told, and here I am just out of date, for the committee knows more than I do, President Johnson impounded the funds contained in an appropriation because the congressional committee had stubbornly insisted on retaining in the measure a provision for a committee veto over its use. Without knowing the particular circumstances it would be hard for me to classify such a case in these terms. Members of Congress are not without their own means of parry and thrust. A main safeguard against the abuse of impoundments is that they do not occur as isolated events, and abuses accordingly risk the prospect of proving to be counterproductive.

What of it?

Impoundments are here to stay. Too many precedents have accumulated to allow a label of illegitimacy to be pinned on them categorically. They have too many utilities for members and committees of Congress, as well as for the President, to be wished away.

They are not without limits in scope: Not all appropriations can be impounded, nor any appropriations of certain kinds. The President cannot impound funds, for instance, appropriated for the service of the public debt, or OASI pensions-more broadly, for the settlement of contracts, unless very temporarily. When he impounded highway trust funds in 1967 he fortified his position with an opinion of the Attorney General, who was careful to limit his support of the President's power to such of the trust funds as had not yet become "the subject of a contractual obligation on the part of the Federal Government in favor of a State." So, if the Congress is willing to restrict its own freedom of action by contracting to appropriate, it can correspondingly restrict the President's freedom to impound; if it retains discretionary power, it grants him some too.

The Legislative Reorganization Act of 1946 called upon Congress to establish, early in each regular session, an aggregate expenditure ceiling for the coming fiscal year. After a couple of trials the Appropriations Committees abandoned the requirement as impractical. Since 1968, however, the combination of an adjustable ceiling with mandatory impoundment targets required to meet it has emerged as a novel technique. It may not be used this year, or in other years when fiscal stimuli, not restraints, are the order of the day; but it seems likely to be recalled to duty whenever restraint in the aggregate along with expansion in particulars is the dominant mood. The 1946 Act sought to embody an impossible dream, that the Senate and the House between them, after a quick look at the President's budget, could establish a firm expenditure policy. The adjustable ceiling

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, Hoover 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