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Mr. WEINBERGER. Thank you, sir. I hope I will be able to go into and describe to you the general views of the Office of Management and Budget, because this is an area in which we have been delegated a significant role by the President. I think that it would be most helpful to the subcommittee if I began by discussing in general terms what the power of the executive branch is in spending or not spending appropriated funds and the sources of that power in law and the Constitution. Then, if the subcommittee has particular questions on anything. I will be happy to answer them.
Any discussion of the respective powers of the legislative and the executive branches regarding the spending power should begin with a reference to the clear and succinct provision in section 9 of article I of the Constitution that "No money shall be drawn from the Treasury, but in consequence of appropriations made by law ***.” It does not follow from this, however, that the expenditure of government funds involves an exclusively legislative function; in fact, the provision I have just quoted seems to assume that the expenditure of funds—as distinguished from the granting of authority to withdraw them from the Treasury—is an executive function. In any event, it has always been so regarded
The prohibition against withdrawing funds from the Treasury without a law appropriating them is essentially negative in character. No more than the Congress approves may be spent. It is perhaps this character of phrasing which has given rise to the view that a law appropriating funds is permissive and not mandatory in nature.
This thought has been expressed in various ways in recent times. In 1943, the then Senator Harry Truman observed that,
... When the Congress appropriates funds it gives the Executive Branch an authority to incur obligations. Certainlr none of us hold that we give a mandate to expend the funds appropriated. We expect the funds to be used only where needed, and not in excess of the amount appropriated, to carry out some phase of law.
(89 Cong. Rec. 10362).
Again, as the Committee on Appropriations pointed out in 1951— H.R. No. 1797, 81st Cong.–
Appropriation of a given amount for a particular activity constitutes only a ceiling upon the amount which should be expended for that activity. The administration officials responsible for administration of an activity for which appropriation is made bear the final burden for rendering all necessary service with the smallest amount possible within the ceiling figure fixed by the Congress ....
More recently, in an opinion of February 25, 1967, then Acting Attorney General Clark referred to the above-quoted statement of the House Appropriations Committee as a “classic exposition" of the proposition that an appropriation act in itself does not constitute a mandate to spend, and he went on to sav that “An appropriation act ... places an upper and not a lower limit on expenditures." Much earlier, in a letter to Senator Russell in 1942, President Roosevelt had said:
... the mere fact that Congress, by the appropriation process, has made available specified sums for the various programs and functions of the Gov. ernment is not a mandate that such funds must be fully expended.
What is the basis in law for this view so commonly held? Under what circumstances may the executive branch spend less than the total sum appropriated by the legislative branch?
Perhaps the most explicit authority for withholding appropriated funds is section 3679 of the Revised Statutes—the so-called "Antideficiency Act” (31 U.S.C. 665). Since the turn of the century, this statute has required that appropriations be subdivided so as to insure that agencies will not enter into commitments in excess of the amounts appropriated. In 1950, the law was strengthened by the addition of provisions for central mangement of appropriations of the executive branch. These provisions include the authority to establish reserves in particular circumstances to:
(1) Provide for contingencies, and
(2) Provide for savings when savings are made possible by changes in requirements, greater efficiency of operations, or other developments subsequent to the date when the appropriation
was made available. The apportioning authority contained in the Anti-deficiency Act was vested in the director of the Bureau of the Budget by the 1950 amendment. However, by reorganization plan No. 2 of 1970, the one that created the Office of Management and Budget, transferred that authority to the President, who subsequently delegated it to the Director of the Office of Management and Budget by Executive Order No. 11541 of July 1, 1970. At the present time, therefore, the authority which is being exercised when funds are reserved under the Antideficiency Act is the authority of the President.
In addition to this specific statutory authority provided by the Anti-deficiency Act, authority for the President to establish reserves is derived basically from the constitutional provisions which vest the executive power in the President.
Most often it is the general provision of article II, that the President "take care that the laws be faithfully executed,” which authorizes and occasionally requires that the President withhold appropriated funds. In addition to these general provisions, however, brief mention should be made of the specific provisions of article II which designate the President as Commander-in-Chief of the Armed Forces and give him responsibility for negotiating treaties and conducting foreign affairs.
It is impossible, of course, to delineate all of the circumstances in which the President–in the exercise of his authority as Commanderin-Chief or in the field of foreign affairs—might find it necessary to prevent or defer the expenditure of appropriated funds. An example of the exercise of executive authority in this respect is President Truman's 1949 action directing the Secretary of Defense not to expend funds appropriated for a 70-group Air Force.
Returning now to the general provisions of article II, we believe the power to withhold appropriated funds is implicit in them. The President, in the exercise of his authority as Chief Executive, must be concerned with the execution of all the laws, not simply with those laws which appropriate funds or which authorize the making of appropriations for particular programs. As the subcommittee is undoubtedly aware, several laws explicitly restrict the spending of funds regardless of what sums may have been apropriated on an individual
basis. The nonmandatory character of an appropriation is evident in this very fact.
The President must, for example, bear in mind that the Congress has placed a limit upon the public debt and that expenditures must be managed in such a fashion as not to require borrowing which would exceed the limit. Thus, in 1957 President Eisenhower was obliged to direct that expenditures for the fiscal year 1958 be kept at or below the level for the fiscal year 1957 so that borrowings could be kept within the debt limit.
In addition, as is the case in the current fiscal year, the President may be confronted with specific limitations upon expenditures and he may from time to time be obliged to impose restrictions upon certain programs in order to insure that such limitations are not exceeded. The constraints thus placed upon the President in the management of appropriated funds are aptly illustrated by Title V of the Second Supplemental Appropriations Act, 1970_that is the ceiling on outlays and expenditures which limits budget outlays for the fiscal year 1971.
Although the President must curb expenditures so as to comply with that limitation, it is not always possible—even at the beginning of the 9th month of the fiscal year—to determine the precise effect on expenditures of such still unsettled items as supplemental appropriations or even a basic appropriation increase, as occurred this year—required for pay increases, and projected increases in certain uncontrollable items designated in the statute. Accordingly, reserves must be maintained in amounts sufficient to insure that final resolution of those items will not cause total expenditures to exceed the statutory limit.
Finally, mention should be made of the Employment Act of 1946, which declares it to be:
... the continuing policy and responsibility of the Federal Government to use all practicable means consistent with its needs and obligations and other essential considerations of national policy ... to promote maximum employ. ment, production and purchasing power.
In the past, actions have been taken to restrict Government spending in order to resist inflationary pressures.
Thus, in 1966, President Johnson ordered substantial cutbacks in appropriations in an effort to stabilize the economy and combat inflationary pressures. Subsequently, action taken by the director of the Bureau of the Budget and the Secretary of Transportation, pursuant to President Johnson's order—to reduce obligations against Federal-aid highway funds was upheld by Acting Attorney General Clark in the 1967 opinion previously referred to.
These are the general authorities which from time to time require the executive branch to withhold appropriated funds. As vou can see, there are both explicit and implicit directions on the subject.
In closing, let me emphasize one point. Any action to prevent or defer the expenditure of funds which have been appropriated by law is obviously not one to be taken lightly, nor do we take it lightly. Such an action necessarily involves the exercise of a high degree of discretion and judgment, as well as the careful weighing of competing—and sometimes conflicting-constitutional, statutory, and other considerations. This is an area where the legislative and the executive branches share the power over a single object-Federal funds. I assure you that we in the executive branch who are concerned with these matters are deeply conscious of our responsibility to exercise the authority over spending in a manner which will be in accord with the Constitution and the relevant statutes and otherwise consistent with the national interest.
If the subcommittee has any particular questions concerning the exercise of the withholding power during this fiscal year, I will be glad to try to answer them, or supply material for your record.
I said a few moments ago that I hoped that these hearings would be more than an academic exercise. I think by your presence here today, you will help us to insure that they will be more than an academic exercise, because as you yourself have stated, you have been not only the head of the Bureau of the Budget, but you play an active role in living out these problems. I think you can be uniquely helpful to us. I have a few questions which come to mind in the light of your statement.
On page 2 of the statement, you state that as you interpret section 9 of article 1 of the Constitution, the Executive has at least a “shared” responsibility for the expenditure of funds, that the expenditure of funds is an executive function. Would you like to expand on that a little bit for the subcommittee. Mr. WEINBERGER. Yes, Senator, I will be glad to,
I do not think, just to start the discussion, that there is any way in which the management of $229 billion a year, with the various limitations and constraints that are upon us, can be handled in the way that the Congress or the country would want without precisely that, some management. Management necessarily involves from time to time decisions as to whether certain amounts can be spent safely, or whether they can be spent usefully, or whether they can be spent economically. And, as I mentioned, we feel there is ample authority that gives this general management power to the Executive. That is a power without which he could not carry on his responsibilities and I just think there is no way in which the Congress, for example, could provide for every single possible contingency that might arise on an hour to hour or day to day basis. So the President has to be something more than a rubber stamp or something more than a messenger boy, going to the Treasury and drawing out the cash and allocating it. There has to be a management discretionary function and that is the function which I think the Constitution and all of these acts give to the President.
Senator MATHIAS. But you, in your analysis, lay the emphasis on the management function. You make no reference to what has obviously been the basis of some impoundment, which is really a policy question.
Mr. WEINBERGER. Well, it is very hard in my mind to separate management from policy and say one is simply a technical chore and the other involves the exercise of high discretion. They all are matters that involve policy. Policy inevitably is part of every budget decision and every fiscal decision. The budget is one of the greatest of the policy tools that the President has. So that I do not know of any way in which you can make a decision as to whether particular funds can or can't be expended in that particular month or week or year where you were not exercising to some extent and some degree a policy decision. I think it is inevitable.
Senator MATHIAS. But you would not go so far as to say that you feel that appropriations, congressional appropriations, are merely permissive ?
Mr. WEINBERGER. I think that ordinarily, the basic view is that a congressional appropriation is a direction and is an enactment of the Congress, and it is to be followed whenever it is possible to do so. And it is followed in the great bulk of the cases. The amount and the percentage of withheld funds or managed funds that are not spent at the precise time designated is a very small percentage. It is, however, a percentage which has always been part of the management of these funds by the Executive, and I am sure always will be in the nature of things. Every administration has reserved or otherwise not used funds that are in one way or another available for use. It is a very small percentage, looking at the budget as a whole, but it has always been there because it is simply not possible to operate an enterprise of this magnitude without some executive discretion.
Senator MATHIAS. Although you cite the implication that might be drawn from the negative language of the Constitution, and that is the prohibition against withdrawing funds without a law, do you yourself adopt that interpretation ?
Mr. WEINBERGER. I guess I do not understand your question, Senator. What possible interpretation do you mean?
Senator MATHIAS. Well, on page 2 of your statement, you say it is perhaps this phrasing of the Constitution which has given rise to the view that a law appropriating funds is permissive and not mandatory in nature.
Mr. WEINBERGER. I think the intention of the statement was to indicate that that is one of the legal bases for the withholding or the power to withhold or impound funds from time to time. There are many others. One of them, phrased more affirmatively. I mentioned a little further along in the statement. That is the President's obligation to take care that the laws be faithfully executed. I think all of this is inherent in the Executive power, just as the assignment to the President of the Chief Executive power of the United States carries with it by implication many discretionary authorities to enable him to carry that out.
I think this is one of—the citation of the negative language—the legal points that is referred to in our paper. We do not rest entirely on it.
Senator Mathias. When you carry that very argument over to the quotation which you cite on the top of page 3, the quotation from then Senator Harry Truman of Missouri, you can get some interesting consequences. The quotation which is given, if read in its full context would seem to reflect the feelings of a man who was interested