committee, the newly-estabilshed Joint Committee on Reduction of Nonessential Federal Expenditures (the "Byrd Committee"), did not agree with the recommendation of the Appropriations group. The Joint Committe, in its first report, had recommended "that legislation be enacted which would authorize the Director of the Budget to set up reserves out of any future appropriation, at such times and in such amounts as the Director may determine." Later Senator Byrd (Dem., Va.) expressed his own doubts about the McKellar proposal: "I have some question in my mind with respect to the latter part of the amendment . . . which provides that no funds appropriated can be impounded except by the direction of Congress. I think there are probably some construction appropriations which have been made, and perhaps it might be wise that those appropriations revert to the Treasury, especially in this emergency, and could be deferred by the action of the Bureau of the Budget, and that the Bureau of the Budget should have authority in those cases, of actually making a reversion of the money into the Treasury." But the arguments for Section 305 carried the day. Passing the Senate by voice vote on December 8, 1943, it was the first across-the-board curtailment of the Budget's impounding procedure to be accepted by either house of Congress. The Bureau hoped, however, that the measure would fail in the House. Three days after Senate passage of Section 305, the Washington Star editorialized against McKellar's proposal. The Star admitted strong constitutional arguments against the impounding of funds, but felt they were outweighed by such practical necessities of fiscal management as controlling projects detrimental to the war effort and giving flexibility to government operations: "Critics might say that the background of the Senate amendment encompasses not only principle but at least the shadow of the pork barrel as well. Thus, it appears to be aimed in part at pushing through to completion more than a score of civilian airports of dubious essentiality at this time." On December 13, Smith conveyed the Budget Bureau's opposition to the rider to Senator McKellar and to Representative Cannon (Dem., Mo.), chairman of the House Appropriations Committee. He called attention to the fact that, for the years 1940 through 1943, savings achieved through impounding ranged from $174 million to $405 million. Enactment of Section 305, Smith warned, would destroy central control of expenditures. Each individual agency would then become sole judge of the timing and amounts of its expenditures. The section would end the present practice of placing appropriated funds in reserve at a time when agencies and the Bureau "believe they may not be needed," and would force a return to the practice of not effecting savings "until it is definitely known that (the funds) are not needed." As in times past, the Bureau found ready allies in the House Appropriations Committee. Cannon spoke against Section 305 and then Congressman Taber (Rep., N.Y.) took the floor. The second half of the amendment, he said,— "would prevent the Budget from impounding any funds appropriated for the construction of a particular project. This would result in the waste of millions and millions of dollars and is inserted in the bill for the purpose of preventing the Bureau of the Budget from impounding funds at the time when we need the exercise of that power more than any other in the history of our country. The sands are shifting very rapidly and as we approach nearer and nearer to the end of the war, it is going to be absolutely necessary for the Budget to impound funds on all sorts of projects, or we are going to face financial bankruptcy. The second part of the proviso of this amendment would prevent the Budget from impounding the funds that need to be impounded." The McKellar amendment was rejected 283 to 18 (128 not voting). By the end of 1943, $500,000,000 appropriated for programmed public works had been impounded. McKellar Seeks The Last Word Senator McKellar sought revenge in grilling Director Smith early in 1944 during hearings on the Independent Offices Appropriation Bill for 1945: "You are operating this practice absolutely without authorization of law. You are treating the Congress of the United States with absolute-not dis respect-but contempt, when you undertake to say, after the Congress has made an appropriation of money and directed the executive officer what to do with it; when you come along and overrule the Congress and put it in a place where the executive officer whose duty it is to spend this money cannot expend it. You put yourself in the place of the Congress, Mr. Smith. I want to say with all due respect that you have no legal right, moral right, or any other right, to overturn the action of the Congress that has been approved by the President of the United States. Now, you cannot do that, and so far as I am concerned, I am going to devote a good deal of time to preventing that in the future. I hope it won't occur again. I hope that you won't undertake to take the place of Congress and pass upon these things that it is necessary for the Congress to pass upon. If you had thought that necessary by reason of not being able to get the proper materials; if you had come up here and appeared before the Congress, the Congress might have sustained you. I do not know what the facts were about it. But, when you undertake to assume the authority yourself to overrule the decision of Congress made with regard to that appropriation, you are assuming authority that you do not have under the law, you do not have under our institutions, and I am very much opposed to that action on your part. . . . And I hope it will not occur again. I want to say right now that those funds ought to be released and it ought not to occur again. I am just merely giving my judgment. "Mr. SMITH. 'Mr. Chairman, I would hesitate very much to have this record show, without any response from me, that I treated the Congress with contempt or that I am violating the law.' "Senator McKELLAR. 'You are doing both. . . .' "Mr. SMITH. 'We could disagree as to the law, which is a matter that can be corrected; but I certainly have no spirit of contempt for Congress, and I have the most deep appreciation of the problems that Congress and this committee face, and I think that we are carrying out the will of the Congress in this very respect and the powers of the President with respect to appropriations. I am sure that this committee does not want us to countenance the expenditures of funds even though appropriated, which would be wasted.' "Senator MCKELLAR. 'You have no more authority in reference to appropriations that are made by the Congress, that the President has signed, and that our administrative officers have been directed as to what to use them for; you have no more authority over those appropriations than you have got over the man in the moon; not a particle.' "Mr. SMITH. "The issue, Mr. Chairman, has not gone to the Supreme Court, but there are court decisions on it, and, as I said, I think the last time I was here, I would be happy to have this issue cleared up. I think I am carrying out the law. Mr. Chairman, I am sure that this is not anything between us personally.' 1 "Senator MCKELLAR. 'Oh, no.' "Mr. SMITH. 'It is purely a matter of what we operate under in the way of legal authority.' "Senator MCKELLAR. 'Yes. . . . I will ask you this "Mr. SMITH. 'I think we can talk in generalities "Senator MCKELLAR. 'Just one moment. I am going to ask you a question. You do not even give the chairman of this committee an opportunity to ask you a question.' "Mr. SMITH. 'Pardon me.' "Senator MCKELLAR. 'You go on talking; and I do not think you mean to be disrespectful.' IV. IMPOUNDING AFTER THE WAR The obvious usefulness of impounding for halting or cutting back appropriations no longer required for prosecution of the war led Congress to take a more favorable view of the policy late in 1944 and in the immediate post-war period. In the Federal Employees Pay Act of 1945, Congress gave the Budget 1 Dr. Vining is not so sure. "I never knew," he says, "why McKellar was so hostile to Harold Smith but I always thought that Smith rather than the Bureau was the object of his hostility." Smith may have rankled the Senator because he was a symbol of the rising influence in government of the professional career civil servant. 60-337 0-71-26 Bureau authority to impound unneeded personnel funds in order to deal with demobilization. Harry S. Truman, defender of project control as a Senator, found an early use for that instrument as President. In May, 1946, he ordered the Director of the Budget to impound funds appropriated in the War Department Civil Functions Appropriation Act, 1947, for the Kings River project, pending final determination of costs and repayment provisions.1 An important use of impounding for program control occurred in 1949 when the President ordered into reserve the $615 million which Congress had appropriated, above his request, for a 48-group Air Force. Neither the President's attitude nor the temporary inclination of Congress to use the policy could resolve doubts in the minds of some of the officials in the Budget Bureau about its legal authority to impound funds in peacetime when the war power of the President could no longer be relied upon. Largely on the insistence of some of the officials in the Estimates Division—who were vigorously disputed by others in the Bureau-it was decided to seek statutory approval from Congress for impounding: not for project control, but for program control. Since the Budget Bureau and the General Accounting Office were collaborating in suggesting improvements in fiscal management to Congress, a reference to impounding was included in this report. A draft bill. submitted with the report on June 5, 1947, to the Senate Appropriations Committee, contained the following provision : "In apportioning any appropriation, reserves may be established to provide for contingencies, or to effect savings whenever savings are possible by or through changes in quantitative or personnel requirements, greater efficiency of operations, or other developments subsequent to the date on which such appropriation was made available." The bill was ignored that year, but two years later the Hoover Commission urged Congress to confirm the President's authority "to reduce expenditures under appropriations, if the purposes intended by the Congress are still carried out." Occasional efforts were made within Congress to grant the President an outright item veto, but though these were unsuccessful, receptiveness to impounding appeared to mount. On May 11, 1949, for example, Senators Gordon (Rep., Ore.) and Knowland (Rep., Cal.) both expressed a belief that the President "may refuse to spend any of the money provided by appropriation bills if he wishes to do so. The fact that the appropriation has been made does not carry with it any mandate to spend the money." Legislative approval came finally in a rider (Section 1211) attached to the General Appropriations Act of 1950. It followed closely the 1947 Budget Bureau-General Accounting Office draft: “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. . . . "Any appropriation subject to apportionment shall be distributed by months. calendar quarters, operating seasons, or other time periods, or by activities. functions, projects, or objects, or by a combination thereof, as may be deemed appropriate by the officers designated . . . to make apportionments and reapportionments. Except as otherwise specified by the officer making the apportionment, amounts so apportioned shall remain available for obligation, in accordance with the terms of the appropriation, on a cumulative basis unless reapportioned. (31 USC 665)" Paragraph (4) of the same section provided for quarterly review of apportionments, at which times reapportionments may be made "or such reserves established, modified, or released as may be necessary to further the effective use of the appropriation concerned." In addition to these provisions, the Act went on in Section 1214 to order the reduction by Executive action of $550 million from the amount appropriated by the Act. The reduction was to be accomplished "through the apportionment procedure provided for in Section 1211 of this Act." On October 10, 1950, in pursuance of Section 1214, the Budget Bureau announced that it had cut a total of $580 million from nondefense appropriations. 1 See Arthur Maass: "The Kings River Proiect" in the ICP Series. also published in Harold Stein: Public Administration and Policy Development (N.Y., Harcourt Brace. 1952). To some Bureau officials, the new law afforded welcome relief from the uncertainties and attacks which had plagued them during the war. Section 1211 of the 1950 Act seemed a firmer ground for impounding than authority inferred from the Anti-Deficiency Acts of 1905-06. But other officials disagreed. Was it a good thing, they asked, to have Congress define a power which the Bureau had exercised up to that point without such explicit definition? "He who can give, can take away." Officials inclined to "strict interpretation" emphasized that Section 1211 reduced rather than expanded the Bureau's authority by stating only two purposes for which reserves might be established: to provide for contingencies or to effect savings (and savings only in those situations where there was a change in requirements, greater efficiency of operations, or other developments subsequent to the date on which the appropriation was passed). Would either stated purpose have authorized the Bureau to halt construction of the two Nevada airports because certain agencies did not share Senator McCarran's views about proper airport location? The Budget Bureau officially has taken the conservative view of its peacetime authority to impound. The 1952 edition of the Examiner's Handbook, the Bureau's "Bible," states: "Reserves must not be used to nullify the intent of Congress with respect to specific projects or level of programs." Project Impounding Since 1950 According to Carl H. Schwartz, Jr., Chief of the Resources and Civil Works Division of the Bureau, project control by impounding has not been attempted since 1950. He writes (1955): "The Bureau since establishment of reserves under Section 1214 of the General Appropriation Act, 1951, has not impounded funds on any civil works projects for the purpose of preventing construction of improvements on which this Bureau had raised objections but for which appropriations had been made by the Congress. There have been instances where funds have temporarily been placed in reserve pending the fulfillment of requirements prescribed by the Congress to be met before construction could start." The disuse of project impounding since 1950 is due partly to the fact that during the period of the Korean conflict and immediately after the armistice the administration operated a "no new starts" rule for public works. Emphasis was on developing power projects at a more rapid rate in areas important to defense production. Most of these projects had been started before the Korean conflict broke out. A second reason for the avoidance of project impounding has been the general philosophy of the Eisenhower administration not to precipitate disputes with Congress. However, on July 19, 1955, President Eisenhower was reported in the Washington Post to have threatened to impound funds appropriated by Congress to the Corps of Engineers for navigation and flood control projects, pending completion of cost and engineering studies. The Post reported adverse reactions from Senators O'Mahoney, Morse, Mansfield, and Humphrey, with Senator O'Mahoney saying that the President's decision would "transfer to the Bureau of the Budget and its anonymous assistants the legislative power that exists in the Congress of the United States." Senator Humphrey was quoted as saying that the Budget Bureau is "taking on the aspect of a second parliament." Whatever interpretation is placed by the Budget Bureau on the powers accorded it in Section 1211, strong Presidents, relying in peacetime on their responsibilities as general managers of the Executive Branch, are as likely in the future as in the past to order impounding of funds for projects which they believe to be inimical to the national interest. No provision of statutory law is likely to settle permanently the question of whether Congress can force the President to allow the expenditure of appropriations against his will. When the strong President of the future does order public works project impounding, certain differences in congressional reaction to project and program control are likely to continue to manifest themselves. While the establishment of reserves to reduce the level of military budgets, foreign aid, or crop support may evoke disagreement from Congressmen who strongly believe in these programs, such impoundings are likely to be tolerated. They will not appear to be personal insults or attacks. But when the President halts a minuscule flood control project in the home district of an individual Congressman, a reputation as a "go getter" with his constituents may suddenly be shattered and chances for reelection imperiled. Project impounding is likely to continue to produce outraged charges of Executive usurpation of the spending power of Congress and demands to know "Who's Boss?" Mr. EDMISTEN. With that, I'll close the hearings. STATEMENT OF THE AMERICAN LIBRARY ASSOCIATION FOR THE SENATE SUBCOMMITTEE ON SEPARATION OF POWERS OF THE COMMITTEE ON THE JUDICIARY ON EXECUTIVE IMPOUNDMENT OF APPROPRIATED FUNDS-APRIL 6, 1971 The American Library Association is a nonprofit educational organization of some 34,000 librarians and others dedicated to the advancement of the Nation's libraries as a fundamental factor in our continued economic, industrial, educational and cultural progress. This statement is in response to your request for examples of the practice by the Executive Branch of impoundment of appropriated funds. Accordingly, we ask that it be made a part of your Committee's hearing record. In recent years, impoundment has gravely affected Federal assistance to college and university libraries, and we welcome the opportunity to discuss the practice, which does not appear likely to abate without specific Congressional action. We are deeply concerned by the impoundment of funds appropriated for the programs authorized by Title II, Part A, of the Higher Education Act: Fiscal year: 1970. 1971. Appropriation Obligation $9,816,000 19,900,000 1 Estimated. The 1970 Appropriations Act (Public Law 91-204) required (Section 410) an overall reduction of 2 percent in expenditures, provided, however, that "no amount specified in any appropriation provision contained in this Act may be reduced by more than 15 per centum." Nevertheless, the appropriation for Title II-A-College Library Resources-was reduced by more than 50 percent. That year, also, the appropriation for Title II, Part B-Library Training— was reduced from $6,833,000 to $3,969,098, or more than 40 percent. Thus, in the 1970 Appropriations Act, Congress directed impoundment within clearly specified limits, which limits were ignored by the Executive Branch in its over-zealous impoundment of funds appropriated for college library resources and the training of librarians and other library personnel. The impoundment of funds under Title II-A for 1971 is noteworthy because that Appropriations Act was voted by Congress to override a Presidential veto of an earlier enactment and subsequently became Public Law 91-380 without his signature. Immediately thereafter, nevertheless, the President exercised a partial item veto with respect to this line-item. We question his authority to do so. In his testimony before this Committee, the Deputy Director of the Office of Management and Budget cited the so-called Antideficiency Act as authorizing the President to impound appropriated funds "to provide for contingencies, and to permit savings made possible by changes in requirements, greater efficiency of operations or other developments subsequent to the date when the appropriation was made available." We submit that this law cannot be construed to authorize the impoundment of $3 million of FY 1970 funds for implementation of the Library Training program under Title II-B of the Higher Education Act, nor of impoundment of $5 million of FY 1971 funds for implementation of the College Library Resources program under Title II-A of that Act. There was no diminution of need for these funds adduced by the Administration, nor any reduction in the number of applications for grants for support of these programs. Far from it-the Office of Education has already received 1,955 applications totaling over $29,000,000 in Basic and Supplemental Grants for FY 1971 funds, and 500 applications requesting about $5,000,000 for Special Purpose Grants are anticipated. |