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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. 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 effectire 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 Harola 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. (Whereupon, at 3:20 p.m., the hearings were concluded.)
STATEMENT OF THE AMERICAN LIBRARY ASSOCIATION FOR THE SENATE SUB
COMMITTEE ON SEPARATION OF POWERS OF THE COMMITTEE ON THE JUDICIARY
ON EXECUTIVE IMPOUNDMENT OF APPROPRIATED FUND8-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:
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 applimations requesting about $5,000,000 for Special Purpose Grants are anticipated.
The Administration offered no explanation for its impoundment of these funds in either year save "budgetary constraints," which we cannot find mentioned in the Antideficiency Act.
The general provision of Article II of the Constitution that the President "take care that the laws be faithfully executed” is also cited as authorizing impoundment. In our opinion, this Article has been violated, certainly in spirit, by the impoundment of funds appropriated for Title II-A of the Higher Education Act consequent upon issuance of regulations that directly flout the authorizing statute.
The law authorizes grants of three kinds to college and university libraries— basic, supplemental and special purpose grants. All otherwise eligible institutions are to receive basic grants of $5,000 each. Three-fourths of the appropriation is reserved by the authorizing statute for basic and special purpose grants, with the remainder of the appropriation, if any, available for supplemental grants.
The House and Senate Committee reports are quite specific as to the intent of Congress with respect to the priority to be accorded basic grants. (H.Rept. 89621 and S.Rept. 89–673):
"A program of basic grants . . . will double, and in some instances triple, the funds available for library resources in small and poorly supported colleges. Colleges and universities will be eligible to request a basic grant of up to $5,000, regardless of their student enrollment, if their library expenditures are maintained and matching funds are made available.
“The Committee recognizes that this method of allocating funds is a departure from the traditional formula for allocation of funds which tends to favor larger institutions. However, the departure will facilitate a program of grants which takes into full account the acute needs in small developing institutions."
Notwithstanding the plain language of the law (P.L. 89-329, as amended) and the clear legislative history, the "manual of instructions” that accompanied the announcement of grants under Title II-A that went to institutions of higher education in the first week of February 1971 contained the following statement:
"Except for the applications for basic grants to new institutions of higher education, only those which can qualify under criteria set forth in § 131.8 of the attached Regulations for a supplemental grant will be considered for award of a basic grant. This means that an institution of higher education applying for a basic grant must also apply for a supplemental grant, and vice versa."
In this instance, the expressed will of Congress is being subverted, we believe, both by the impoundment or withholding of appropriated funds and by altering the allocation of funds to reflect the priorities of the Administration rather than the specific provisions of the law. The combined effect of these two actions is that an estimated 750 colleges and universities will qualify for aid instead of 2,200.
We have protested these actions by the Executive Branch, and our members have appealed to their Senators and Representatives. We have considered the possibility of challenging the Executive Branch in the courts through suits brought by applicant institutions, but we have been advised that the case would probably be mooted by the approval of a grant.
Our best hope for an early and complete cessation of these challenges on the part of the Executive Branch to the authority of Congress lies in the study of the matter that has been undertaken by the Subcommittee under your Chairmanship. We commend you for your attention to this grave problem and stand ready to assist, if we can, by furnishing additional information.
Washington, D.C., March 19, 1971.
DEAR SAM: Reference is made to your letter of February 8, 1971, concerning the hearings scheduled by your Subcommittee on March 23, 24 and 25 to examine the power of the Executive to impound funds that had been appropriated by the Congress.
I appreciate the opportunity afforded me to submit a statement relating to the funds impounded from the Public Works Appropriation Act for fiscal year 1971. My statement is attached. Sincerely,
ALLEN J. ELLENDER, Chairman.
STATEMENT OF HON. ALLEN J. ELLENDER (DEMOCRAT OF LOUISIANA), CHAIRMAX,
COMMITTEE ON APPROPRIATIONS, U.S. SENATE (Funds Impounded by the President, from Appropriations Contained in the Public Works Appropriation Act for Fiscal Year 1971.)
Mr. Chairman, I appreciate the opportunity to express my views on the impoundment of funds by the President of appropriations made by the Congress for Public Works for fiscal year 1971.
The Subcommittee on Public Works of the Committee on Appropriations held 42 sessions between March 4 and June 30 for the purpose of taking testimony from Government and non-Government witnesses. During that period the Committee heard testimony or received statements from 914 individuals or organizations. The hearings were printed in eight volumes containing some 7,981 pages. I think this record is very significant, Mr. Chairman. It is evidence that the Committee did not consider this subject lightly. In each and every case there was sound evidence to support the recommendations of the Committee. I would like to particularly emphasize the fact that not one dollar was recommended in excess of an amount the responsible agency testified that they could economically and efficiently utilize.
Before discussing the merits of a few of the Congressional increases, I would like to bring to your attention the cavalier manner in which the Administration treated the considered judgment of the Congress. Not one single new start, or one single increase of a budgeted amount for planning or construction of a water resource project in the entire bill was apportioned for use in fiscal year 1971. The entire amount was placed in budgetary reserve.
Most, but not all, of these funds are presently scheduled for release in fiscal year 1972. However, the funds in budgetary reserve from 1971 add-ons to a great extent are being used to finance the program in fiscal year 1972, and thereby reducing the Administration's request for fiscal year 1972 funds.
The Executive action shows a complete and utter disregard for the expressed will of the Congress in expressing its judgment on priorities.
From time to time the Administration refers to expenditure limitation. The Congress last year appropriated $3,491,829,930 less than the President requested. The final Public Works bill was $25.1 million below his estimate. So, it was not a case of Congressional irresponsibility.
Attached to my statement is a list of projects and amounts placed in budgetary reserve. I would like to comment on just a few of these items.
Gila River and Tributaries Downstream from Painted Rock Dam-$500.000. In addition to the flood control benefits for which the project is justified on a benefit-to-cost ratio of 3.2 to 1.0, the urgency of early construction has international aspects. The United States and Mexico consummated an agreement in March of 1965 to achieve a solution to the Colorado River salinity problem which has caused strained international relations. Completion of the project will reduce the saline water volume from flood flow to about five to ten percent of that under existing conditions. The United States Commissioner on the International Boundary and Water Commission, United States and Mexico, has urged early initiation of construction.
Lock and Dam 26, Alton, Illinois-$351,000. This was an increase in the allocation for planning. The existing dam is continuing to deflect and will become an increasing problem in the next few years. The structural integrity of the dam is questionable since it is resting on the edge of a scour hole that is deeper than the tips of the wood friction pile supporting the dam. The Committee considered it was imperative that the design and construction of the replacement dam be completed as rapidly as possible. It is expected that before the dam can be replaced, commerce through the lock will increase to about 60.000.000 tons a year.
Lake Pontchartrain and Vicinity, Louisiana-$3,000,000. The budget estimate last year was $8,250,000 with completion of the project scheduled for December of 1978. This is a hurricane protection project. If the path of Hurricane Camille