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R.V.8. 7 Ag 52

CONTENTS

25

Page

H. R. 7103

2

H. R. 11441.

1

Statement of -

Carlton, John T., executive director, Reserve Officers Association of

the United States...

47

Hébert, Hon. F. Edward, a Representative in Congress from the State

of Louisiana

7

Medley, Max K., Comptroller, General Services Administration.

46.

Merriam, Robert E., Deputy Director, Bureau of the Budget; accom-

panied by James P. Bradley, legal adviser to the Director, Bureau of

the Budget.

32

Porter, Hon. Charles 0., a Representative in Congress from the State

of Oregon.--

Roosevelt, Hon. James, a Representative in Congress from the State

of California

15

Taber, Hon. John, a Representative in Congress from the State of

New York.

42

Letters, statements, etc.; submitted for the record by-

Bradley, James P., legal advisor to the Director, Bureau of the Budget:

Excerpt from testimony of the Director of the Bureau of the Budget

before the House Appropriations Committee.

33

Carlton, John T., executive director, Reserve Officers Association of

the United States: Statement..

Dawson, Hon. William L., a Representative in Congress from the State

of Illinois, and chairman, Government Operations Committee:

Letter from Frank H. Weitzel, Assistant Comptroller General of

the United States, to Hon. William L. Dawson-

May 10, 1957.

5

April 10, 1958.

3
Letter from Maurice H. Stans, Director, Bureau of the Budget,
to Hon. William L. Dawson, May 2, 1958.

2
Letter from Percival F. Brundage, Director, Bureau of the

Budget, to Hon. William L. Dawson, May 24, 1957-.
Mansfield, Hon. Michael J., a United States Senator from the State

of Montana: Letter from Senator Mansfield, to Hon. William L.
Dawson, May 20, 1958.---

45
Medley, Max K., Comptroller, General Services Administration:

Excerpt from letter of Franklin G. Floete of May 5, 1958, re H. R.
11441

46
Merriam, Robert E., Deputy Director, Bureau of the Budget:
Excerpt from revision in 1951 of the Antideficiency Act.

34
Excerpt from statute re savings.

34
Excerpt of letter from Maurice H. Stans, Director, Bureau of the
Budget, to Hon. William L. Dawson, May 2, 1958.

35, 36
Miles, Clarence R., manager, legislative department, Chamber of

Commerce of the United States: Letter from Clarence R. Miles, to
Hon. William L. Dawson, May 27, 1958..

49

Moore, John W., legislative attorney, Office of General Counsel;

accompanied by Steve M. Brown, associate director, accounting and

auditing policy staff, and Owen A. Kane, legislative attorney, Office

of Legislative Liaison, General Accounting Office: Statement.---- 50

III

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PROHIBITING WITHHOLDING OR IMPOUNDMENT OF APPROPRIATIONS AND AMENDING THE ANTIDEFICIENCY ACT

(H. R. 11441, H. R. 11541, H. R. 11682, and H. R. 7103)

TUESDAY, MAY 20, 1958

HOUSE OF REPRESENTATIVES, EXECUTIVE AND LEGISLATIVE REORGANIZATION SUBCOMMITTEE, OF THE COMMITTEE ON GOVERNMENT OPERATIONS,

Washington, D. C. The subcommittee met at 10 a. m., in room 1501, Hon. William L. Dawson (chairman of the subcommittee) presiding.

Present: Representatives Dawson (presiding), Harden, Brown, and Michel.

Also present: Representatives Hébert, Lipscomb, Roosevelt, and Porter.

Staff members present: Elmer W. Henderson, subcommittee counsel; Orville S. Poland, general counsel; and William A. Young.

Chairman Dawson. The Subcommittee on Executive and Legislative Reorganization of the House Committee on Government Operations begins hearings this morning on three identical bills to prohibit the withholding or impoundment of appropriations: H. R. 11441, by Congressman Hébert; H. R. 11541, by Congressman Zelenko; and H. R. 11682, by Congressman Roosevelt.

We shall also consider H. R. 7103, by Congressman Porter, which would strengthen the penalty provisions contained in the Antideficiency Act.

Certain reports on these bills from the Bureau of the Budget and the General Accounting Office have already been circulated to members of the subcommittee.

(H. R. 11441, H. R. 11541, and H. R. 11682 are identical bills; H. R. 11441 and H. R. 7103 follow:)

(H. R. 11441, 85th Cong., 2d sess.) A BILL To prohibit the withholding or impoundment of appropriations Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That, notwithstanding any other provision of law, it shall be unlawful for any officer, agent or employee of the United States, or any department, bureau or agency thereof to withhold or impound or otherwise prevent any moneys appropriated by the Congress from being promptly used or applied by contract or otherwise for the purpose designated in the Act appropriating the

same.

1

(H. R. 7103, 85th Cong., 1st sess.) A BILL To amend subsection (i) (1) of section 3679 of the Revised Statutes to extend the penalty provision

of such subsection to violations of the requirement of apportionment of certain appropriations to avoid the necessity for deficiency or supplemental appropriations, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That subsection (i) (1) of section 3679 of the Revised Statutes, as amended (31 U. S. C. 665 (i) (1)), is amended to read as follows:

“(i) (1) In addition to any penalty or liability under other law, any officer or employee of the United States who shall violate subsection (a), (b), (c) (1), or (h) of this section shall be subjected to appropriate administrative discipline, including, when circumstances warrant, suspension from duty without pay or removal from office; and any officer or employee of the United States who shall knowingly and willfully violate subsection (a), (b), (c) (1), or (h) of this section shall, upon conviction, be fined not more than $5,000 or imprisoned for not more than two years, or both."

Sec. 2. The amendment made by the first section of this Act shall become effective on the first day of the first calendar month which begins after the date of enactment of this Act and shall be applicable only on and after such effective date.

(Reports from the Bureau of the Budget and the General Accounting Office follow :)

EXECUTIVE OFFICE OF THE PRESIDENT,

BUREAU OF THE BUDGET,

Washington, D. C., May 2, 1958. Hon. WILLIAM L. DAWSON,

Chairman, Committee on Government Operations. MY DEAR MR. CHAIRMAN: This is in response to your letters of March 19, March 24, March 28, and April 28, requesting reports on H. R. 11441, a bill to prohibit the withholding or impoundment of appropriations, and on H. R. 11541 and H. R. 11682, which are identical to the first-mentioned bill.

Each of these bills would make it unlawful for any officer, agent, or employee of the United States to withhold, impound, or otherwise prevent any appropriated moneys from being promptly used or applied by contract or otherwise for the purposes designated in the appropriation act.

The Congress has for nearly a hundred years been concerned with the prevention of deficiency spending of appropriated funds—that is, the spending of funds by Government agencies at a rate which exhausts the appropriation prior to the end of the period for which it is made, thus requiring either a supplemental appropriation or a drastic curtailment of the activities financed by the appropriation. This concern has resulted in a number of legislative enactments, beginning with the act of July 12, 1870 (16 Stat. 251), from which has been derived the present Antideficiency Act (sec. 3679 of the Revised Statutes, as amended, 31 U.S. C. 665). The latest substantial revision of section 3679 was effected by section 1211 of the General Appropriation Act, 1951.

The original section 3679 of the Revised Statutes prohibited only the spending of sums in excess of appropriations, or the involving of the Government in any contract for the future payment of money in excess of appropriations. However, this apparently was not sufficient to accomplish the legislative purpose and, by the act of March 3, 1905 (33 Stat. 1257), the Congress provided for an apportionment system. In the words of the act, this was to "prevent undue expenditures in one portion of the year that may require deficiency or additional appropriations to complete the service of the fiscal year;

A system of apportionment of appropriations has been required by law since that date.

The basic prohibition that "No officer or employee of the United States shall make or authorize an expenditure from or create or authorize an obligation under any appropriation or fund in excess of the amount available therein; * * ** remains in the present Antideficiency Act. In order to insure that this prohibition may be observed, it is obviously necessary for the departments and agencies to have available to them a system for the administrative control of funds, such as that which is required by subsection (g) of the present statute. That is to say, control over the timing of the use of appropriations, and authority to establish administrative reserves, must be maintained if provision is to be made-without exceeding the amount of the appropriation-for necessary obligations and expenditures for emergency or unforeseen purposes that may arise from time to time.

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The statute now requires apportionment of appropriations to the agencies of the executive branch of the Government by the Director of the Bureau of the Budget, and of appropriations available to the legislative branch, the judiciary, and the District of Columbia, by the respective officer having administrative control of the funds. The major purposes are, in the words of the act, "* * * to achieve the most effective and economical use" of funds and-for appropriations available for a definite period of time—“* * * to prevent obligation or expenditure thereof in a manner which would indicate a necessity for deficiency or supplemental appropriations ***". In order to accomplish these purposes, reserves are authorized to be established by the apportioning officer. They 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.". The Committee on Appropriations of the House of Representatives, in reporting the revision now in effect, stated that its purpose was “to require careful apportionment of all types of funds expended by Federal agencies and efficient administration of the Government's business" (É. Rept. No. 1797, 81st Cong., 2d sess.).

The enactment of any one of these bills would obviously make it impossible for the Antideficiency Act to continue to have any real meaning or effect. The Congress has never adopted the philosophy that an appropriation should be construed as a mandate to spend. In this respect, the Committee on Appropriations of the House of Representatives stated, in the report previously referred to, that

"Appropriation of a given amount for a particular activity constitutes only a ceiling upon the amount which should be expended for that activity. The administrative 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. Every official of the Government who has responsibility for administration of a program must assume a portion of the burden for the deficit in the Federal Treasury."

These bills would have the effect of changing the concept that appropriations are not mandates to spend into a requirement that they be spent promptly regardless of any reason-however compelling-why they should not be used, or why the timing of their use should be controlled. To adopt the premise embodied in these bills, that appropriations must be fully and promptly used, would place a premium on waste and inefficiency and destroy every incentive for good management and the practice of commonsense economy. This is particularly important in times of rapid change in general economic conditions and with respect to programs and activities in which exact standards or levels of operation are not and cannot well be prescribed by statute.

The Congress, in the major portion of its appropriations, provides for an entire fiscal year. These appropriations are usually made before the beginning of that fiscal year, and are based upon estimates prepared more than 6 months earlier. The conditions which determine the amount of appropriations often change during the ensuing months to such an extent that the appropriations, if fully expended as these bills would require, would result in an unnecessary burden on the taxpaying public. We recommend against favorable consideration of these bills. Sincerely yours,

MAURICE H. STANS, Director.

COMPTROLLER GENERAL OF THE UNITED STATES,

Washington, April 10, 1958. Hon. William L. DAWSON, Chairman, Committee on Government Operations,

House of Representatives. DEAR MR. DAWSON: Your letters of March 19, 24, and 28, 1958, acknowledged March 20, 25, and 31, request our comments on H. R. 11441, H. R. 11541, and H. R. 11682, respectively.

These bills, which contain identical language, would, notwithstanding any other provision of law, make it "unlawful for any officer, agent, or employee of the United States, or any department, bureau, or agency thereof to withhold or impound or otherwise prevent any moneys appropriated by the Congress from being promptly used or applied by contract or otherwise for the purpose designated

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