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Professor MILLER. Without an appropriation ?

Mr. TURNER. To liquidate our contracts, except if we go to the regular appropriations committees each year.

Professor MILLER. Well, the only other question I think I have is the same one, I think, that concerns Professor Bickel, but in a somewhat different way. That is the legal basis for the authority for what you are doing and what the Executive is doing. As I read the Comptroller General's opinion, shot full of statements that it is an advisory opinion, he says:

It is not within our jurisdiction to determine authoritatively what the executive branch is enabled and required to obligate and spend funds appropriate by the Congress.

In our opinion, this particular question can only be resolved with any finality by the courts.

It seems to me he is cutting the ground out from under him with that particular quotation. He comes back later on and says words to similar effect. He is talking about the constitutional powers of the President:

We have found nothing conclusive on the question of whether this constitntional provision to execute the laws may be considered as sustaining the President's authority to withhold the obligations of appropriations.

I do not think you have anything, Mr. Turner, to sustain your position at all in the Comptroller General's opinion. If you take the Attorney General's opinion, Mr. Clark's, you have a selfserving executive document which was written by an attorney general who is the President's lawyer, who takes his orders from the President, so all you have is a couple of lawyers—somebody for the Comptroller General who says he is not giving you an opinion; and you have a lawyer for the President who is writing on order.

I would like to know from Mr. Wells or from you if you have any Supreme Court case or any case that specifically authorizes the withholding of funds?

Mr. TURNER. Well, you say that the Attorney General is the appointee, the President's lawyer, the lawyer for the executive branch of the Government, which is correct. Likewise, the Comptroller General is the lawyer and interpreter of the intent of the Congress on the congressional side. What you have here is an opinion from both parties that are discussing or arguing points—the lawyer for the Congress, the lawyer for the executive branch.

Professor MILLER. But the Congress' lawyer says he is not saying anything and says it several times. He sets that out very clearly. He says this is advisory only; we do not have the power.

Now, he may have the power. I am not arguing that point. All I am taking is what Mr. Staats said. Now, Mr. Clark says that there is power here.

We had before this subcommittee in January Mr. Rehnquist from the Department of Justice on another matter. I think, as I recall the testimony, he says that he is the President's lawyer and, in effect, writes opinions the way orders come down from 1600 Pennsylvania Avenue. So I do not see where you have a legal basis at all for what you are doing. I do not think you have a court case; I do not think you have any opinions that would stand up anywhere.

I say that perhaps as a comment, but I would certainly like to hear from Mr. Wells if he has ever seen a Supreme Court case which is authoritative on this matter.

Mr. TURNER. Mr. Wells say he knows of no case directly related to the question that you asked, but, of course, we do have pending this month a case that I mentioned in my statement which may decide the thing. But as an officer of the executive branch of the Government, having served for some years in that branch, being fairly well acquainted with the powers, advisory or otherwise, of the Comptroller General, the General Accounting Office, in control of the expenditures, the actions of the executive branch of the Government, I can guarantee to you that as Federal Highway Administrator, I would pay a great deal of attention to an opinion of the Comptroller General, whether he called it advisory or not.

Professor MILLER. Have you ever taken occasion to examine whether you can withhold funds, sir?

Mr. TURNER. I think, in effect, that was the question that we asked.
Professor MILLER. Is this the one here that you have?
Mr. TURNER. He answered, in effect, that we could.

Professor MILLER. I think, as I read it, at least, he tells you that he really has no opinion, although he takes three pages to say it.

Mr. TURNER. But he does not say that we cannot.

Professor MILLER. This is my final statement, sir. I take it, then, and perhaps this is unfair, that you are proceeding on dubious legal authority to do something which you want to do?

Mr. TURNER. That might be your interpretation, but we feel that we had basis for the action that we took.

Professor BICKEL. Dubious legal authority is better than none. You are halfway home. Mr. TURNER. That is the way we did it, anyway.

Senator ERVIN. Mr. Turner, it might be correct to describe you as a career man in the Federal Government, might it not ?

Mr. TURNER. Yes, sir.

Senator ERVIN. You have been connected with the Bureau of Public Roads before the Department of Transportation was set un and with the establishment of the Department of Transportation, then the functions of the Bureau of Public Roads were turned over to that Department and the Bureau of Public Roads was upgraded as a division of the Transportation Department ?

Mr. TURNER. It is incorporated as the Federal Highway Administration in the Department of Transportation, Senator.

Senator Ervin. I believe the highway trust fund was set up in 1956: was it not? Mr. TURNER. Yes, sir.

Senator ERVIN. And the taxes that constitute what we call the highwav trust fund might be correctly described as taxes which are imposed upon articles which are used by the persons who use the highways, and the actual use of the highways—in other words, von might call them highway user taxes, might you not? Mr. TURNER. Yes, sir; they have been described as such.

Senator ERVIN. Now, under the highway trust fund, these taxes are devoted exclusively to highway purposes; are they not?

Mr. TURNER. Yes, sir. By law, they have to be used for that purpose only and those purposes are described in the statute.

Senator ERVIN. And as you pointed out, in the administration of the Federal highway programs, owing to the fact that you have what we call a long leadtime, you have obligational authority ? Mr. TURNER. Yes, sir.

Senator ERVIN. So you can obligate funds even before the funds are collected and before they are appropriated. That is, you can enter into contracts which obligate the payment of these Federal funds before the funds are collected and put into the highway trust fund ?

Mr. TURNER. That is correct. There is, however, Senator, a limitation on that; we cannot enter into obligations that will exceed in amount the estimated income to the trust fund by the date those obligations become due and payable.

Senator ERVIN. So, as a matter of fact, before you pay out the funds, the funds have to be appropriated ? Mr. TURNER. Yes, sir.

Senator ERVIN. And Congress has at least implicitly bound itself not to appropriate more highway funds for any given fiscal year than those available for that fiscal year? Mr. TURNER. That is correct.

Senator ERVIN. Now, it has been a favorite action on the part of the last two Presidents when they thought inflation was getting a little out of hand to defer a large proportion of funds for highway purposes and for most other things; has it not?

Mr. TURNER. Both the present administration and the preceding administration did make reductions in substantial amounts in the highway program. Percentagewise, those reductions to the highway program aggregated as much as a fourth of the total reduction that was made in all programs.

Senator Ervin. That is out of the entire budget, budgeted items, I mean? Mr. TURNER. Yes, sir. Senator ERVIN. And appropriated items?

Mr, TURNER. Yes, sir. The $3 billion that was sought to be obtained on a national basis in one of the actions that are referred to in my statement involved about $700 million reduction in the highway program. So that the highway program took almost a fourth of the total savings for the national Government.

Senator ERVIN. We have received information, as I understand it, from the Office of Management and Budget, that as of February 23, 1971, there has been a withholding of current highway funds to the extent of $411 million, and a deferment of highway funds to the extent of $5 billion, $852 million; is that correct?

Mr. TURNER. I believe those are the figures in the President's budget document as submitted in late January or February. Those are the figures I have; yes, sir.

Senator ERVIN. Now, that is a pretty substantial amount, or, rather, proportion, of the anticipated Highway Trust Fund: is it not for this fiscal year? Or is it the 1971 fiscal year?

Mr. TURNER. That figure is for the 1971 fiscal year, Senator. That amount, $5.8 billion, is more than the estimated revenue during this

fourtway programot involved "abone of the actit was song

same fiscal year to the highway trust fund. But, really, there is no relationship between those two items. The figure that you have just referred to, the $5.8 billion of unobligated contract authority, goes back again to this matter of contract authority. It has no relationship to cash in the highway trust fund.

Senator ERVIN. But it is a limitation on the contractual funds; is it not? In other words, are you not required to limit the discussion of your contractual authority to that extent? Is that not the order from the Office of Management and Budget?

Mr. TURNER. Well, yes; I am directed to make a limitation on the amount of new obligations. The difference between the total amount of money that has been authorized through the Public Works committees by the Congress, which amount of money we have already apportioned to the States, and the total amount that we have actually released, the amount the States can use for new obligations, is the $5.8-billion figure to which you make reference. It is a lag in contract authority rather than dollars or cash in the highway trust fund.

I think it would be well if perhaps you, in connection with what you are discussing, you might even forget the amount of money or cash in the highway trust fund, because it is not related to this contractual authority question at all.

Senator ERVIN. I understand that. This is a limitation, or at least a deferment until some future time, of the contractual authority of your division?

Mr. TURNER. That is correct.

Senator Ervin. This is for the fiscal year that ends on June 30 this year; is it not! Mr. TURNER. Yes, sir; that is correct.

Senator ERVIN. Can you tell us how much money has actually been appropriated by Congress that will be withheld under this limitation ?

Mr. TURNER. I would have to change one word of your questionnot moneys appropriated, but moneys that have been authorized. The figure at the end of this fiscal year we estimate will be $5.5 billion instead of the $5.8 billion that is in the budget document. This is a revised figure.

Senator ERVIN. Now, what is done with the moneys as a practical matter where the obligational authority to spend it or to contract for the expenditure is limited or deferred ?

Mr. TURNER. The obligating authority remains to the credit of the State unless by law, it lapses and, as I said, no case of that kind has ever occurred and we do not intend to let such a situation occur. The balance will be carried forward to some succeeding vear.

The cash in the trust fund that I think you are really inquiring about, by law, is loaned out by the Secretary of the Treasury on the basis of certificates of indebtedness to the general fund of the Treasury.

Senator Ervin. In other words, the general fund of the Treasury borrows the part of the highway fund which would otherwise be available for expenditures until the expiration of the period of deferment?

Mr. TURNER. There is an automatic loan made at the beginning of each month of any estimated excess amounts in the highway trust fund. They are automatically loaned to the general fund on a certificate of indebtedness bearing the rate of interest equal to the average rate that the Treasury has to pay for all other similar certificates of indebtedness. Those moneys, that note, is callable on demand by the highway trust fund if it is needed—if cash is needed to liquidate obligations.

Senator ERVIN. In other words, the highway trust funds, when they are borrowed, are expended for other purposes and then repaid later out of the general fund ?

Mr. TURNER. That is right. The excess balances in the highway trust fund are transferred to the general fund for general purpose uses and lose their identity at that point.

Senator ERVIN. I do not claim to be much of an economist, but I never have understood how you fight inflation by refusing to spend the money you have and then spending some other money you do not have. That is what it seems to me we are doing.

Professor BICKEL. Would not the explanation be, Senator, that that money that they borrowed from the highway trust fund is money that the Treasury does not borrow from banks, and to that degree, you have less actual money in circulation in the economy. which would have, at least according to Milton Friedman, anyway, an impact on inflation ?

Senator ERVIN. It would seem, though, to me, in my economic understanding, that it would be better to defer the expenditure of money that you do not have.

Professor BICKEL. Altogether.
Senator ERVIN. And spend that which you have.

Mr. TURNER. It is a concern, but I do not want to argue the point with you.

Mr. EDMISTEN. Mr. Turner, I notice here on page 1, vou say that you are going to discuss with the subcommittee the action taken by the Federal Highway Administration pursuant to past directives to reduce spending in recognition of the need for curbing inflationary pressures.

Right now, I do not see how that is working. How does this policy fit in with the administration's current expansionary budget policy? That does not quite hold together. Of course, you may not have any control over that.

After you finish that question, I would like to ask you where this control comes from, because I think Congress deserves to know who puts out the directives on the expenditures.

Mr. TURNER. The control comes from the OMB office to the Department of Transportation and thence to me.'

Mr. EDMISTEN. How does that work? Could you give us the procedures? Because for years we have tried to get information out of OMB and only this year were we successful in getting them to tell the American people how much money they have impounded.

Mr. TURNER. Within the executive branch, any agency of the Federal Government, for many years, had to go to the old Bureau of the Budget, now the OMB, with what is called an apportionment

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