Page images
PDF
EPUB

Nevertheless the Bureau of the Budget continued to impound funds. Among the more important of these actions taken during the period 1941-1950 were those designed to curtail spending by the Armed Forces in the years immediately following World War II. Tables showing such impoundments were included in Hearings before a Subcommittee on Department of Defense Appropriations of the House Appropriations Committee on The Supplemental Appropriation Bill for 1951, 81st Congress, second session, 47, 120, 233 (1950). The Omnibus Appropriation Act for 1951 amended the Antideficiency Act to enlarge the power to apportion reserves and to vest the power to make apportionments in the Director of the Bureau of the Budget in stated circumstances. It now reads in pertinent part as follows:

"31 U.S.C. 665 (c) (d)

"(c) Apportionment of appropriations; reserves; distribution; review. "(1) Except as otherwise provided in this section, all appropriations or funds available for obligation for a definite period of time shall be so apportioned as to prevent obligation or expenditure thereof in a manner which would indicate a necessity for deficiency or supplemental appropriations for such period; and all appropriations or funds not limited to a definite period of time, and all authorizations to create obligations by contract in advance of appropriations, shall be so apportioned as to achieve the most effective and economical use thereof. As used hereafter in this section the term "appropriation" means appropriations, funds, and authorizations to create obligations by contract in advance of appropriations.

"(2) 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. Whenever it is determined by an officer designated in subsection (d) of this section to make apportionments and reapportionments that any amount so reserved will not be required to carry out the purposes of the appropriation concerned, he shall recommend the rescission of such amount in the manner provided in the Budget and Accounting Act, 1921, for estimates of appropriations.

"(d) Officers controlling apportionment or reapportionment.

"(1) Any appropriation available to the legislative branch, the judiciary, or the District of Columbia, which is required to be apportioned under subsection (c) of this section, shall be apportioned or reapportioned in writing by the officer having administrative control of such appropriation. Each such appropriation shall be apportioned not later than thirty days before the beginning of the fiscal year for which the appropriation is available, or not more than thirty days after approval of the Act by which the appropriation is made available, whichever is later.

“(2) Any appropriation available to an agency which is required to be apportioned under subsection (c) of this section, shall be apportioned or reapportioned in writing by the Director of the Bureau of the Budget."

The purpose of this amendment was explained in House Report No. 1797, 81st Congress, second session, page 9, as follows:

"Economy neither begins nor ends in the Halls of Congress. Under the Budget and Accounting Act, it is the responsibility of the executive branch of the Government to submit annually to the Congress the estimates of the amounts which officials in the executive branch feel are required to support the necessary activities of the Government. The Congress reviews these estimates and decides the maximum amounts which must be appropriated for these various activities, and the annual appropriation bill provides the sums so determined by the Congress.

"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. In the first place. he must take into account the condition of the Federal finances when he recommends to the Bureau of the Budget the amount

60-337-71-20

which, in his judgment, is necessary for supporting his activity. In the second place, it is his responsibility to so control and administer the activities under his jurisdiction as to expend as little as possible out of the funds appropriated. "The so-called Antideficiency Act has been a part of the law for many years but the present statute is antiquated and was written at a time when the fiscal operations of the Government were far more simple. Current laws are so complex as to render the current law inoperative in many cases. On that account the committee has included as section 1111 in chapter XI a redraft of the Antideficiency Act. The purpose is to require careful apportionment of all types of funds expended by Federal agencies and efficient administration of the Government's business. (Emphasis supplied.)"

Even as amended it is hard to see how the language of this section can be interpreted to give the Bureau of the Budget unlimited discretion to apportion reserves. The establishment of reserves is authorized "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." This seems to preclude the establishment of reserves simply because of a disagreement of policy between the Executive and Legislative Departments on the basis of the facts existing at the time the appropriation was made. It leaves open to debate, however, the nature of the subsequent developments which would justify the reserving of funds appropriated by Congress for a specific purpose.

III. INTREPRETATION OF APPROPRIATIONS AS PERMISSIVE OR MANDATORY The impoundment of funds by the Executive Department is frequently defended on the ground that appropriations are simply authorizations for the expenditure of funds, but not mandates to do so. In analyzing this argument, it is necessary to distinguish between savings effected by more efficient performance of a function, and savings made by curtailment of a service or omission of a project for which Congress has made specific appropriation.

Recently, in a letter dated February 25, 1967, addressed to the Secretary of Transportation, affirming the legality of the reduction in the amount of Federal-aid highway funds which might be obligated during the fiscal year ending June 30, 1967, the acting Attorney General had this to say

". . . The courts have recognized that appropriation acts are of a fiscal and permissive nature and do not in themselves impose upon the Executive Branch an affirmative duty to expend the funds. Hukill v. United States, 16 C.Cl. 562, 565 (1880): Compagna v. United States, 26 C.Cl. 316, 317 (1891); Lovett v. United States, 104 C.Cl. 557, 583 (1945), affirmed on other grounds, 328 U.S. 303 (1946); McKay v. Central Electric Power Corporation, 223 F.2d 623, 625 (C.A. D.C. 1955).

"Congress, of course, is fully aware of the rule that an appropriation act in itself does not constitute a mandate to spend. The classic exposition of this characteristic of appropriations legislation may be found in the House Appropriations Committee report on the General Appropriation Bill, 1951, submitted by the late Chairman Clarence Cannon:

"Responsibility of the Executive Branch. Economy neither begins nor ends in the Halls of Congress. The Congress *** decides the maximum amounts which must be appropriated for * * * various activities, and the annual appropriation bill provides the sums so determined by the Congress.

"Appropriation of a given amount for a particular activity constitutes only a ceiling upon the amount which should be expended for that activity. *** [It is the] responsibility [of every Government official] to so control and administer the activities under his jurisdiction as to expend as little as possible out of the funds appropriated. H. Rept. 1797, 81st Cong., 2d Sess., p. 9.

"Or as the then Senator Harry S. Truman observed in 1943:

"Mr. Truman. *** When the Congress appropriates funds it gives the executive branch an authority to incur obligations. Certainly 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."

The full text of the comment in House Report No. 1797, 81st Congress, second session (1950) from which the acting Attorney General quoted excerpts, was set forth in the preceding section. When read as a whole, it appears to support

only the proposition that expenditures may be reduced below appropriations where that may be accomplished by efficiency of operations, not that the executive is free to decline to expend funds in order to curtail or omit a service or function for which Congress has made provision.

As will appear in the next section, another portion of this same report made clear that Congress did not acquiesce in the assertion of executive power to disregard the mandate of Congress with respect to the functions to be performed. Nor do the cases cited sustain the broad proposition for which they were cited.

The statement of Senator Harry S. Truman which was quoted in part by the Acting Attorney General was addressed to an amendment proposed by Senator Kenneth McKellar, of Tennessee, to the First Supplemental National Defense Appropriations Act for the fiscal year ending June 30, 1944, which read as follows (89 Congressional Record 10358 (1943)):

"Sec. 305. No part of any funds appropriated for the War or Navy Department, when it is found by the head of such Department that any part of such funds is not necessary for the completion of the purpose for which appropriated, shall be used for any other purpose without the specific approval of law by the Congress; and, notwithstanding any other provision of law providing for transfer of any part of such funds, when it is found by the head of such Department that such funds are not to be used for the purposes for which appropriated, such appropriations to that extent shall be rescinded and canceled and the Secretary of such Department shall certify the amount so reduced, rescinded, and canceled to the Treasury Department, to the Speaker of the House of Representatives, and the President of the Senate: Provided, That no appropriation or part of any appropriation heretofore, herein, or hereafter made available for any executive department or independent establishment to construct any particular project shall be impounded, or held as a reserve, or used for any other purpose, except by direction of the Congress, and any part of such appropriation not needed to complete such project, or the part thereof for which appropriation has been made, shall be retained by the Treasury: Provided further, That section 3 of the Military Appropriation Act, 1944, approved July 1, 1943, is hereby repealed."

Senator Truman opposed this amendment, saying (Id. at 10362-10363):

"... When the Congress acts on one of the regular appropriation bills, it is passing on a program to finance activities over a year in the future. It is acting on a budget prepared over 18 months in advance of the end of the fiscal year concerned.

"Estimates for the annual budget are submitted to the Bureau of the Budget in September of each year. The programs proposed have generally been prepared in the field several months earlier. The funds involved are not available until the following July; that is, about a year later. Exigencies may cause long delays before the actual projects can be placed under way. Should the review of the Senate in connection with the appropriation bill be the last consideration of the project until it is built? No sound business enterprise could be so dogmatically operated. Regardless of other considerations, a review of authorized programs must be maintained so that full advantage can be taken of all changes in circumstances.

"After funds are appropriated and control has temporarily left the hands of Congress, there are two principal changes which may take place in a program and which, it seems to me, call for action in the offices of the President rather than in the agency concerned. The first is a change in conditions which might require that the project priority be changed and the work deferred a short while, or even for an indefinite period. When this comes about, the Executive should set the funds aside for later use. The second is a change in conditions which might eliminate the need of a part or all of the program. When such a condition comes about, a saving should be effected, and this can best be accomplished by the office of an objective reviewer detached from the agency concerned.

"In Government this review and control should be made in the office of the Chief Executive because that Executive is not properly performing his job if he permits the agencies to execute a program no longer needed even though it has been authorized. Lacking a legislative termination of the work, who but the Chief Executive can determine that the work is no longer needed at that time in the over-all program?

"Particularly in times like these when the picture of our Federal program changes in detail almost every week, it is a matter of good judgment that some agency in Government keep a control of the fiscal changes which the new conditions require. What looks like a good program one day may be completely unnecessary 6 months later. We know it is contrary to human nature for an individual himself to determine that his good idea has outlived its usefulness before it has been actually effected. It is the same with Government agencies. They are generally reluctant to curtail their programs as rapidly as changing conditions might warrant. Consequently, some agency in Government should keep on top of the programs so that only those expenditures essential to Government are made.

"When the Congress appropriates funds it gives the executive branch an authority to incur obligations. Certainly 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.

". . . An argument as to prerogative is out of place at this time. Whether it be by the legislative or the executive branch, we need more effective management to accomplish economies in government. The machinery of the Bureau of the Budget establishment of reserves has been available since 1921. From a practical standpoint, this is not the time to abandon the existing procedure for establishing economies and savings to set up a new scheme. Rather, if anything need be done at this time, let us follow the recommendation of the Committee on Reduction of Nonessential Federal Expenditures and strengthen the control now available."

The amendment was adopted by the Senate, id. at 10419, but was deleted before final passage of the bill. 57 Stat. 611, 642.

The Acting Attorney General also cited the following provision from the Rural Post Roads Act of 1943, 57 Stat. 560:

"No part of any appropriation authorized in this Act shall be impounded or withheld from obligation or expenditure by any agency or official, unless the War Production Board shall certify that the use of critical materials for additional highway construction would impede the conduct of the war."

He argued that this was a recognition by Congress that authorizing legislation does not compel the executive department to obligate or to expend highway funds. In view of the legislative comment cited above, it may be that this simply reflected uncertainty as to the power to apportion reserves under the Antideficiency Act.

When impoundment of funds involves the curtailment or omission of a function or project, the question arises whether Congress has indicated an intent that a specific function be performed, or that a given service be performed at a specific magnitude. Those who defend executive discretion in this type of case rely on the language of authorization ordinarily used in appropriation bills. This, however, is only part of the story. Where Congress, by substantive legislation, directs that a certain thing be done, and subsequently, by an appropriation bill, provides the funds for doing it, it can be argued that, taken together, the two measures constitute a mandate to spend so much of the appropriation as is necessary to give effect to the substantive law.

A variation of the argument concerning the permissive character of appropriations has been made with respect to those made on a no-year basis. The Director of the Bureau of the Budget has defended delay in the apportionment of such funds as an exercise of discretion contemplated by this form of appropriation. Hearings before the House Committee on Appropriations on The Budget for 1960, 86th Congress, first session, 39 (1959).

IV. CONSTITUTIONAL POWER OF PRESIDENT TO IMPOUND FUNDS

A. Introduction

The claim of inherent constitutional authority of the Chief Executive to impound appropriated funds has two aspects: (1) Whether, under his constitutional duty to take care that the laws be faithfully executed, it is his prerogative to decide whether funds shall be spent where Congress has left the matter to the discretion of someone in the Executive Department; and (2) Whether he has any inherent constitutional authority to impound funds when Congress has, by law, required that they be expended for a stated object.

B. Impounding of permissive appropriations

In response to a protest against the impoundment of funds for the Farm Marketing Administration in 1942, President Roosevelt defended the action on the ground that the appropriation was permissive and that discretion as to whether the expenditure should be made was vested in him as Chief Executive. In a letter dated August 18, 1942, to Senator Richard Russell, of Georgia, he wrote (Hearings before a Subcommittee of the Senate Appropriations Committee on the First Supplemental National Defense Appropriation Bill for 1944, 78th Congress, first session, 739 (1943):

"It should, of course, be clearly understood that what you refer to as 'the practice of the Bureau [of the Budget] of impounding funds duly appropriated by the Congress' is in fact action by the Chief Executive, and has two purposes. The first purpose is compliance with the Anti-Deficiency Act, which requires that appropriated funds be so apportioned over the fiscal year as to insure against deficiency spending. This step, of itself, has for many years resulted, and will continue to result in important savings of appropriated funds. Secondly, the apportionment procedure is used as a positive means of reducing expenditures and saving money wherever and whenever such savings appear possible.

"While our statutory system of fund apportionment is not a substitute for item or blanket veto power, and should not be used to set aside or nullify the expressed will of Congress, I cannot believe that you or Congress as a whole would take exception to either of these purposes which are common to sound business management everywhere. In other words, the mere fact that Congress, by the appropriation process, has made available specified sums for the various programs and functions of the Government is not a mandate that such funds must be fully expended. Such a premise would take from the Chief Executive every incentive for good management and the practice of commonsense economy. This is particularly true in times of rapid change in general economic conditions and with respect to programs and activities in which exact standards or levels of operations are not and cannot well be prescribed by statute."

There has been little dispute as to the power of the President to make the decision as to whether or not funds shall be spent, if it is clear that Congress intended the appropriation to be permissive.

C. Impoundment of appropriations intended by Congress to be mandatory

In 1949, Congress appropriated funds for a 58-group air force, over the opposition of the administration, which had requested funds for a 48-group force. At the time he signed the bill President Truman issued a statement expressing his objection to the increased funds appropriated for the Air Force and directing the Secretary of Defense "to place in reserve the amounts provided by the Congress in H.R. 4146 for increasing the structure of the Air Force."

When the Secretary of Defense was questioned about the authority for this directive by members of the House Committee on Appropriations, Hearings before the Subcommittee of the House Committee on Appropriations on Department of Defense Appropriations for 1951, 81st Congress, second session 61 (1950), he took the position that

"I think his powers are inherently constitutional both as Chief Executive and Commander in Chief. The Budget and Accounting Act or the Apportionment Act which Colonel Moore mentioned, may be pertinent. Similarly, the war powers may have some bearing, but I am not sure of this at the moment. But whatever is provided in any statute, in my opinion, the source of the President's power is in the Constitution."

In reporting this appropriation, House Report No. 1797. 81st Congress, second session 310 (1950) the Committee challenged the action of the President, saying: "In signing the National Military Establishment Appropriation Act, 1950, the President issued a statement indicating objections to the action of the Congress in increasing funds for the Air Force and directing

"*** the Secretary of Defense to place in reserve the amounts provided by the Congress in H.R. 4146 for increasing the structure of the Air Force, which amounted to an item veto, a power not possessed by the President."

"Under article I, section 8, of the Constitution of the United States, the following is provided:

« PreviousContinue »