[Reprinted from 43 North Carolina Law Review 502 (1965)] PRESIDENTIAL POWER TO IMPOUND APPROPRIATED FUNDS: AN EXERCISE IN CONSTITUTIONAL DECISION-MAKING ARTHUR SELWYN MILLER* The Negro revolt of the 1960's, as with all social crises in the United States, has brought with it a number of legal and constitutional problems. Not least among them are those involved in the Civil Rights Act of 1964,1 recommended by President Kennedy in June 1963 and signed by President Johnson in July 1964, a comprehensive attempt to redress some of the injustices forced upon those Americans who had the lack of foresight to be born to parents whose skin was not that delicate shade of off-white pink so prized by that minority of human beings who have European heritages. The merits and demerits of the constitutional basis for such an exercise of federal power have been, and are being, extensively debated elsewhere and need not be of present concern. Suffice it to say that there appears to be legal warrant for the controversial segments of the Civil Rights Act in either the fourteenth amendment or the interstate commerce clause2 or both, and that, echoing Mr. Justice John Marshall Harlan I, perhaps the thirteenth amendment may also be used for such a purpose. However, one part of the bill-title VI,3 referring to authorization for the Chief Executive to withhold the expenditure of certain appropriated funds from areas practicing unlawful discrimination-has received relatively little attention. My purpose in this article is to delve into the background constitutional question inherent in title VI, to set forth what little law that exists on the subject, and to suggest certain conclusions relating to a problem that cuts across both of the primary constitutional divisions of power: the federal system and the separation-of-powers. The principal emphasis will be upon the broad question of presidential power Professor of Law, the Law School and the Graduate School of Public Law, The George Washington University. The author gratefully acknowledges the research assistance of William Cohen, third-year law student at The George Washington University. 178 Stat. 241. 'See Heart of Atlanta Motel, Inc. v. United States, 379 U.S. 241 (1964); Katzenbach v. McClung, 379 U.S. 294 (1964). 78 Stat. 252 (1964), 42 U.S.C.A. §§ 2000d to 2000d-4 (1964). over appropriations; less attention will be accorded title VI-the first congressional use of the spending powers to help achieve positive programs of nondiscrimination. It is too early to do more than list some generalizations regarding executive implementation of that title. What follows is essentially an exposition in the elements of constitutional decision-making, set against the backdrop of the Civil Rights Act of 1964. The provisions of title VI are both comparatively simple and distressingly vague, but the basic constitutional problem of public expenditures for purposes which may involve separation on the basis of race, color, creed, or national origin is rather more complex. At issue are such matters as the position of racial and ethnic minorities in the American polity, the constitutional power of Congress to permit, but not require, racial discrimination in projects it authorizes and which it finances through the Treasury, the independent power of the President to impound appropriated funds for reasons deemed by the President to be good and sufficient, and the relationship of the states to the central government. These questions are not readily determined by resort to widely-accepted, black-letter law (to "neutral principle," as some might put it); as with any constitutional problem likely to be under dispute, any or all of the issues posed display a multiplicity of relevant principles, which permit varying conclusions depending on the choice made between them. The answers to constitutional questions, that is to say, are to be found, not solely by searching in a corpus of known legal principle to find the one rule or doctrine applicable, but by an analysis that draws into the crucible of decision-making all of the diverse legal and policy considerations relevant to a given issue, and in so doing, finds principle being created as well as applied. What little the Supreme Court has said in this area is far from determinative of the matters at issue. The language of title VI as it came from Congress differs considerably from the way it was phrased when first drafted in the Department of Justice. As enacted, the bill is much stronger than that originally contemplated. It now reads in part as follows: Sec. 601. No person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance. Sec. 602. Each Federal department and agency which is empowered to extend Federal financial assistance to any program or activity, by way of grant, loan, or contract other than a contract of insurance or guaranty, is authorized and directed to effectuate the provisions of section 601 with respect to such program or activity by issuing rules, regulations, or orders of general applicability which shall be consistent with achievement of the objectives of the statute authorizing the financial assistance in connection with which the action is taken. No such rule, regulation, or order shall become effective unless and until approved by the President. The remainder of section 602 provides for sanctions, mainly termination or refusal to grant or to continue assistance, after a finding of noncompliance; section 603 provides for judicial review of action taken pursuant to section 602; section 604 exempts "employment practice (s)" from the title; finally, section 605, in somewhat baffling terms, reads as follows: "Nothing in this title shall add to or detract from any existing authority with respect to any program or activity under which Federal financial assistance is extended by way of a contract or guaranty.” The earlier version of the act was permissive. It provided a statutory basis for withholding funds but did not require it. Here, however, each department and agency "is authorized and directed" to fulfill the legislative purposes of nondiscrimination because of "race, color, or national origin" in any program or activity receiving financial assistance. On the other hand, excepted from section 602 are contracts "of insurance or guaranty." As will be noted below, this provision seems to relate to President Kennedy's executive order on housing issued in November 1962. The exception, however, must be read in light of section 605, and also with cognizance of whatever legislative history may exist. Suffice it to say at this time that title VI is a blanket requirement for federal departments and agencies to eliminate discrimination for race, color, or national origin; however, there may be a “hidden joker" (of which more below) in section 602 in the "contract of insurance or guaranty" exception. 78 Stat. 252 (1964), 42 U.S.C.A. §§ 2000d to 2000d-1 (1964). Title VI in the original bill displayed all the earmarks of hasty draftsmanship and a desire to empower the Executive with withholding authority but not to make it mandatory. The title was put into its present form by the House of Representatives. Exec. Order No. 11063, 27 Fed. Reg. 11527 (1962). The following discussion is divided into two broad areas: first, the basic constitutional questions behind title VI, and second, some of the questions inherent in that title itself. I. THE CONSTITUTIONAL CONTEXT A. Constitutional Provisions As with any constitutional question, initial resort must be to the basic document itself. It is readily apparent, in the first place, that the Constitution is silent on the questions that are involved in title VI, although some guidance is available in very general terms. Thus Congress has power under article I, section 8, to spend money for a variety of purposes (to promote "the general welfare"), most of which require action by some executive or administrative official to put into effect. Furthermore, article I, section 9, reads in part as follows: "No money shall be drawn from the Treasury, but in consequence of appropriations made by law; and a regular statement and account of the receipts and expenditures of all public money shall be published from time to time." The system, thus, is one of shared power between the legislature and the executive-not surprisingly, to be sure, in a Constitution which was drafted. so as to fragment power. Congress must appropriate, but would find it difficult indeed, if not constitutionally improper, to spend; the President (and the remainder of the public administration) may spend, but not appropriate. That, on the level of highest abstraction, is the law-but while it settles some questions, it fails to come to grips with others. Moreover, Congress may establish a system whereby disbursements are supervised as to their lawfulness; the General Accounting Office has been entrusted with that responsibility (the one administrative agency which is commonly accepted to be truly an "arm of the Congress"). In sum, accordingly, the language of the Constitution and, what is of greater importance, the practices that have developed in the more than 175 years of American constitutional history indicate that neither the Congress nor the President has complete control and that the relative powers of the two branches are not at all clearly defined with respect to federal spending. Accounting and Auditing Act of 195, 64 Stat. 837, 31 U.S.C. § 67 (1958). In the great majority of appropriations, of course, no problem of conflict between the two branches develops. Moneys are appropriated routinely and disbursed equally routinely in a system in which Congress by and large either does not care or does not have the competence to be too specific about the precise ends to which the funds are to be put. Agency and departmental budgets are approved, usually with an annual congressional ritual of arguing over relatively minor details, more or less as they come to Congress from the other end of Pennsylvania Avenue. Some chopping and other lopping-off is done by chairmen of some of the congressional committees, who assert thereby their extra-constitutional power of "item veto." The net result is this: Congress, according to the Constitution, must appropriate—but what is appropriated, speaking very generally, is what is presented to them by the Administration. No doubt what a President sends to Capitol Hill reflects in part an evaluation of what Congress might approve. But the initiative is usually executive, the nay-saying normally legislative. Some— those who are wont to look upon the Constitution as a collection of timeless political verities which can solve any modern constitutional problem by reference to what the fifty-five men now revered as the Founding Fathers said or did not say or might have said or thought -may find it a bit difficult to rationalize a situation where the Constitution says that the President has the veto power but he does not usually use it in appropriation matters, while Congress in fact exercises the veto power although the Constitution does not grant it to the legislators. Thus, the appropriation power which the Constitution puts squarely into legislative hands is, by congressional abdication or cession of power-by the "living" Constitution in action-as much executive as legislative. Shared power over appropriations, with the formal constitutional authority in Congress but with a growing amount of the effective control in the hands of the Chief Executive, thus seems to be the general pattern, but a number of questions are left dangling. These may be taken up seriatim and set out with a brief discussion of each. In each may be seen the interplay of the modern doctrine of separation of powers, as well as the operation of the federal system. At the outset, it is meet to note that, as Richard Neustadt has recently On congressional veto, see Cooper & Cooper, The Legislative Veto and the Constitution, 30 GEO. WASH. L. Rev. 467 (1962). |