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history of the Federal Property and Administrative Services Act to suggest that the Congress intended the authority to dispose of excess property to be used by a Federal agency as a means of relieving itself of its statutory responsibilities. In our view, the utilization of such act as a vehicle for closing down the entire PHS medical facility system, and thereby effectively terminating the hospital medical care role performed by the PHS for the past 170 years, would be wholly inappropriate. Such action would relieve the agency of the function of maintaining a hospital system which, as we have shown above, has heretofore been considered by the Congress to be an essential statutory responsibility.

It is therefore our opinion that under the 1944 Public Health Service Act, the Congress intended that the hospital system characteristic of the Service since its inception in 1802 with the Marine Hospital is to be operated and maintained by the Service in order to carry out the functions and duties imposed by the 1944 act. In light of the foregoing, the Secretary may not, in our view, use his discretionary powers under the 1944 Public Health Service Act or the Federal Property and Administrative Services Act of 1949 to effect the closing of all PHS hospital facilities by means of the transfer of these institutions to nonfederal ownership.

2. Authority to Provide for Care of PHS Beneficiaries in other than PHS Facilities.

Consistent with the foregoing, we stated in our June 7, 1965, decision that the Public Health Service Act "in the absence of Public Health Service facilities authorizes the referral of such beneficiaries, at the expense of the Service, to public or private hospitals (42 U.S.C. 249)." As pointed out above, the legislative history makes clear that this provision is designed to meet overflow conditions and cases where beneficiaries may be remote from any Service facility. 78th Congress, House Rept. 1364, April 28, 1944, on H.R. 4524. Accordingly, we would see no legal objection to the referral of PHS beneficiaries to other public or private facilities, under such limited circumstances. 3, 4. Priority of PHS Beneficiaries in VA Hospitals and Authority to Arrange for Cross-servicing of VA and PHS Beneficiaries.

Regarding the priority of PHS beneficiaries in VA hospitals, we stated in a letter dated June 22, 1965, copy enclosed, to Chairman Fountain, Intergovernmental Relations Subcommittee, House Committee on Government Operations, that the rendering of a service by an agency under section 601 of the Economy Act of 1932, 31 U.S.C. 686, which authorizes Federal departments and agencies to place orders for goods and services with other Federal agencies, if it can be considered a function of the agency rendering the service, is at best a secondary or incidental function, and that section 601 certainly was not intended to be a basis for transferring a primary administrative function from an agency in which it is vested by Congress.

Since by statute the primary function of the PHS is to provide care for seamen and that of the VA to provide care for veterans, we could not then, and do not now, see a legal basis for admitting merchant seamen to VA hospitals ahead of veterans eligible for treatment of nonservice-connected disabilities.

Regarding the authority to arrange for cross-servicing of VA and PHS beneficiaries, we stated in our June 22, 1965, letter that the admission of merchant seamen to VA hospitals would involve interagency services under 31 U.S.C. 686, since merchant seamen are not beneficiaries of the Veterans Administration, and that "except as a humanitarian service in emergency cases," the Administrator of Veterans Affairs would otherwise not be authorized to admit merchant seamen. See 38 U.S.C. 610, 611. Accordingly, and provided that the VA is "in a position to supply or equipped to render" the services requisitioned in accordance with the requirements of section 601 of the Economy Act, we see no legal objection to periodic arrangements for crossservicing of VA and PHS beneficiaries.

We trust that the above is responsive to your request.

Sincerely yours,

(Signed) ELMER B. STAATS, Comptroller General of the United States.

[Excerpt from H.R. 17399, Second Supplemental Appropriations Bill, 1970.
91st Congress, 2d Session]

TITLE V

LIMITATION ON FISCAL YEAR 1971 BUDGET OUTLAYS

Title V of the bill would place an overall ceiling on budget outlays of the Federal Government during the fiscal year 1971 that begins on July 1, 1970. The precise terminology is "Expenditures and net lending" which, taken together, constitute "budget outlays".

CONCEPT OF THE CEILING

The proposed ceiling for fiscal 1971 is quite similar in concept and structure to the ceiling currently applicable to the fiscal year 1970. There is, however, one major difference: Congress, in enacting the 1970 ceiling last July, imposed a blanket $1 billion cut from the budget spending total at the outset. The proposal for 1971 in the accompanying bill makes no such cut. The Committee did not recommend any initial cut last year and does not think it appropriate to do so this year.

The Committee, in initiating an all-encompassing ceiling last year, was not seeking to advance a vehicle for arbitrary broad-axe type cutbacks that would leave to the Executive the allocation of any spending reduction to specific agencies and programs. The whole idea was to focus on the totality of Federal spending by putting the control of total spending in the hands of Congress, adjustable only by the Congress.

It is not too widely recognized that in the various annual bills affecting the budget, Congress, in respect to the $200.8 billion fiscal 1971 spending budget, would normally deal with requests involving less than half of that spending total about 47 percent, to be more exact. (The other 53 percent springs from unexpended carryover balances from previous years and from so-called permanent appropriations that arise automatically under earlier laws.)

By covering the annual expenditures from all sources, the ceiling focuses on the total and tends to keep it in focus. And such a ceiling affords the opportunity to force attention on possible alternatives and substitutes when upward pressures are exerted on the ceiling.

An overall ceiling, adjustable to the independent decisions of the Congress in the various bills during the year, not only provides a useful disciplinary target to guide individual actions by Congress and the Executive, but can also have some usefulness as a short-run regulating device, especially when economic and fiscal pressures are great.

THE CEILING FOR 1971

The amount specifically stated in the provision in the bill, $200,771,000,000, is a beginning figure, not an ending figure. It is the President's initial projection of 1971 budget outlays in the Budget for 1971, submitted February 2. Coupled with the $200.8 billion figure is language, identical to what is in the current ceiling, providing

***That whenever action, or inaction, by the Congress on requests for appropriations and other budgetary proposals varies from the President's recommendations reflected in the Budget for 1971 (H. Doc. 91-240, part 1), the Director of the Bureau of the Budget shall report to the President and to the Congress his estimate of the effect of such action or inaction on budget outlays, and the limitation set forth herein shall be correspondingly adjusted: Provided further, That the Director of the Bureau of the Budget shall report to the President and to the Congress his estimate of the effect on budget outlays of other actions by the Congress (whether initiated by the President or the Congress) and the limitation set forth herein shall be correspondingly adjusted * * *

In other words, Congress would work from the President's proposed total spending estimate. It would do so through its actions, or its inactions, on requests for appropriations and other budget obligational authority and outlay proposals in the various appropriation bills and other bills affecting budget proposals, including amendments and supplements to the February budget.

The language would operate continuously to adjust the ceiling, as appropriate, to comport with the estimated expenditure effect of specific congressional actions or inactions having budgetary impact.

It is a flexible provision—but in terms of aggregate spending, flexible only on the action of the Congress, not the Executive.

It does not seek to declare something of the end from the beginning; it sets a beginning point against which Congress would work in deciding, through its various spending actions, what the ultimate total should be, and supplies a mechanism for resetting the ceiling accordingly.

It would be the second ceiling ever to place directly in the hands of Congress the specific decision as to the maximum amounts to be taken out of the Treasury for payment of the Government's bills in a given 12-month period.

The ceiling proposed in this bill would afford opportunity for maximum flexibility within the overall total to meet, as fully as reasonably possible, changed and changing expenditure requirements in certain specific programs that cannot be foreseen with great precision. The administration is committed to continue vigorous efforts to control Federal spending. An aggregate ceiling should be facilitating in this regard.

Of course, the President can seek supplemental relief to meet necessary but unforeseen and unavoidable outlay increases which he finds cannot be accommodated within the overall total.

Setting a beginning ceiling in this fashion should in no way discourage the Executive Branch from its continuing commitment-and responsibility-for seeking to conduct the day-to-day management of government programs at the very minimum cost consistent with the public necessities, refraining from spending every dollar that can reasonably be saved. Constructive economy in public spending is not alone a matter of legislative decision. It is also a matter of administration. The administration has attached high priority to quality of performance in administering the government. Wasteful and needless expenditures often do not become so until funds are poorly managed. The primary burden of getting a dollar's value for every dollar justifiably appropriated to the purposes of government lies mainly with those who administer, not with those who legislate.

CUSHION FOR DESIGNATED UNCONTROLLABLES

Experience in the current fiscal year 1970 clearly suggests the advisability of providing some limited "cushion" for underestimates of budget outlays in fiscal 1971 for certain so-called uncontrollable objects and programs. i.e., in a handful of cases, where Congress does not annually act on the budgetary estimates involved. These are mainly so-called permanent authorizations that each year automatically stem from various basic laws.

A "cushion" for such items, of $2,000,000,000, was carried in the 1970 ceiling law, but already, as explained earlier in this report in connection with title IV of the bill, the overruns arising from administration miscalculations of outlay requirements approximate $4,300,000,000, and will probably go even higher before fiscal 1970 ends.

Accordingly, the bill proposes a similar cushion for 1971-covering the same items as did the 1970 ceiling law-but puts a dollar limit of $3,000,000,000 on how far the President can go in so adjusting the ceiling on this account. This is higher than the current year cushion but considerably less than the current year overrun. It amounts to about 12 percent of the overall budget total and about 41⁄2 percent of the estimates for the items involved.

The items encompassed are listed on page 49 of the Budget for 1971. They generally involve very large sums and items where it is difficult to make accurate projections. The items are:

Social security, medicare, and other social insurance trust funds;
National service life insurance (trust fund);

Interest; and

Farm price supports (Commodity Credit Corporation).

Decline of receipts (credited in the budget against expenditures and net lending) derived from

Sales of financial assets of programs administered by the Farmers Home Administration, Export-Import Bank, agencies of the Department of Housing and Urban Development, and Veterans Administration, and Leases of lands on the Outer Continental Shelf.

60-337-71—37

In contrast to the situation as to these designated uncontrollables on which Congress does not annually act, since the bill sets a comprehensive ceiling which would be continuously adjustable based on congressional actions or inactions on budgetary proposals whether initiated by the President or by the Congress and whether or not inside or outside the February 2 budget totals, there is no necessity to exempt any area of the budget that Congress normally acts upon each year. Approval of supplemental appropriations to meet existing unbudgeted requirements would also be the basis for a corresponding adjustment in the ceiling on budget outlays.

UNEXPENDED CARRYOVER BALANCES AND THE DIMENSIONS OF ANNUAL ACTIONS

The proposed ceiling provision, being all-inclusive covers outlays in fiscal 1971 from budget authority to be newly granted in this session; outlays from so-called permanent appropriations that flow automatically from earlier laws; and outlays from unexpended carryover balances of prior years. Very substantial portions of the $200.8 billion beginning ceiling figure spring from each of these three general sources of expenditure availability.

For example total unexpended carryover balances at the beginning of fiscal 1971 will approximate $234 billion-about $108 billion in social security and other trust funds and $126 billion in Federal funds. But some $77 billion of the $126 billion of Federal funds will have been obligated for programs across the government but not yet actually paid out. The remaining $49 billion, not obligated and not expended, is in many accounts across the government.

But of the $234 billion total beginning carryover, trust and federal funds combined, roughly $96 billion is projected for expenditure (disbursement, that is) in fiscal 1971, and roughly that amount is thus counted in the $200.8 billion ceiling figure. The remainder of the carryovers-some $138 billion-becomes part of the total unexpended carryover projected into the following year, fiscal 1972.

Roughly then, it can be seen that only about $105 billion of the newly projected outlay total for 1971 ($200.8 billion, less the $96 billion from carryovers) is estimated to come from the $218 billion net new budget authority requested or estimated for that same year of 1971. In other words, the 1971 outlay total involves less than half of the new budget authority requested for 1971. Funds appropriated in a given year are expended partly in that year and partly in subsequent years because of long lead-times, construction time, and other factors.

DIMENSIONS OF ANNUAL ACTIONS ON BUDGET

Budget obligational authority (appropriations, essentially) is the traditional basis on which appropriation and authorization bills are stated and voted on regardless of the year or years in which the funds are to be actually disbursed in the form of budget outlays.

Thus the $200.8 billion "outlay" budget for 1971 is not the "action" budget before the Congress. The Congress will not vote on that figure in the various appropriation and other spending and authorization bills relating to fiscal 1971. Congress, in these bills, will be voting on an entirely different basisthe appropriations or new budget (obligational) authority basis.

The gross total new budget (obligational) authority proposed or estimated in the February budget for 1971-and this is not as widely known as the more familiar $200.8 billion outlay estimate-is $234,819,000,000, gross.

Of that, about $86,706,000,003 is estimated to become available automatically without action by the Congress this session for such so-called permanent items as interest on the debt and various social insurance trust funds. That leaves roughly $148.113,000,000 subject to Congressional action this year. That is the total in the February budget for 1971, and, like all budgets, is subject to amendments and supplements from time to time (already, for example, the President's messages of April 3 and 16, relating to pay increases and postage rates and reform, have substantially modified the budget aggregates in some particulars).

The February budget for 1971 in respect to budget authority totals; budget outlay totals; and what is subject to annual action and what is not is capsuled in the following table using budget figures:

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1. Proposed to be available through current actions by the Congress.
2. Portion estimated to become available without current actions by the Congress (so-
called permanent authorizations under laws of earlier years, such as interest on
the debt, social security and other trust funds, etc.)..

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Subtotal

234,819

121,624

3. Outlays from unexpended carryover balances of all kinds (from prior years).

95,935

Gross total..

234, 819

217, 559

4. Deduct offsetting receipts (intrabudgetary transactions to avoid double counting, and ''proprietary receipts from the public'').

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Net totals in the 1971 budget.

218, 031

200, 771

THE $200.8 BILLION OUTLAY ESTIMATE FOR 1971

There have been a number of developments since submission of the February 2 budget that either constitute a basis for adjusting the $200.8 billion outlay total upward under the flexible ceiling provision proposed in the bill or point to upward pressures on it. A number of major specifics are mentioned in the printed hearings, at pages 788-790.

Other developments of many kinds, and for many reasons, will of course take place as the session and the year progress that will bear on both the outgo and income sides of the fiscal 1971 budget. The Committee merely thought it appropriate to call attention to these major specifics mentioned in the hearings since the $200.8 billion figure is used in the ceiling language of the accompanying bill notwithstanding the fact that things have already happened, some of which lay the basis for changes in that figure; some do not.

LIMITATIONS AND LEGISLATIVE PROVISIONS

The following limitations and legislative provisions not heretofore carried in connection with any appropriation bill are recommended:

On page 3, in connection with "Public Safety," District of Columbia :

The limitation on the expenditure of funds by the Chief of Police for prevention and detection of crime during the current fiscal year shall be $100,000.

On page 5, in connection with the "Commission on Population Growth and the American Future":

Provided, That $700,000 of the foregoing amount shall not become available without submission of a program and financial plan by the Commission and approval thereof by the Committees on Appropriations of the Senate and House of Representatives.

[Reprinted from 44 Fordham Law Review 39 (1964)]

CONGRESSIONAL POWER TO REQUIRE DEFENSE EXPENDITURES (By Gerald W. Davis*)

I. INTRODUCTION

The notion that the President's power as Commander in Chief gives him authority to ignore legislation enacted by Congress relating to the armed forces or national defense appears to be of comparatively recent origin. "The first impounding of appropriated funds occurred in 1941, when President Roosevelt ordered the impounding of funds appropriated for public works

* Colonel, U.S. Army; member of the Nebraska Bar.

60-337-71-38

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