Impoundment of Appropiated Funds
SECTION 3. He shall from time to time give to the Congress Information on the State of the Union, and recommend to their Consideration such Measures as he shall judge necessary and expedient; he may, on extraordinary Occasions, convene both Houses, or either of them, and in Case of Disagreement between them, with Respect to the Time of Adjournment, he may adjourn them to such Time as he shall think proper; he shall receive Ambassadors and other public Ministers; he shall take Care that the Laws be faithfully executed, and shall Commission all the Officers of the United States.
In his Third Annual Message to Congress, President Jefferson established the first faint outline of what years later became a major controversy. Reporting that $50,000 in funds which Congress had appropriated for fifteen gunboats on the Mississippi remained unexpended, the President stated that a “favorable and peaceful turn of affairs on the Mississippi rendered an immediate execution of the law unnecessary. . . .” But he was not refusing to expend the money, only delaying action to obtain improved gunboats; a year later, he told Congress that the money was being spent and gunboats were being obtained.711 A few other instances of deferrals or refusals to spend occurred in the Nineteenth and early Twentieth Centuries, but it was only with the Administration of President Franklin Roosevelt that a President refused to spend moneys for the purposes appropriated. Succeeding Presidents expanded upon these precedents, and in the Nixon Administration a well-formulated plan of impoundments was executed in order to reduce public spending and to negate programs established by congressional legislation.712
Impoundment713 was defended by Administration spokesmen as being a power derived from the President’s executive powers and particularly from his obligation to see to the faithful execution of the laws, i. e. , his discretion in the manner of execution. The President, the argument went, is responsible for deciding when two conﬂicting goals of Congress can be harmonized and when one must give way, when, for example, congressional desire to spend certain moneys must yield to congressional wishes to see price and wage stability. In some respects, impoundment was said or implied to ﬂow from certain inherent executive powers that repose in any President. Finally, statutory support was sought; certain laws were said to confer discretion to withhold spending, and it was argued that congressional spending programs are discretionary rather than mandatory.714
On the other hand, it was argued that Congress’s powers under Article I, § 8, were fully adequate to support its decision to authorize certain programs, to determine the amount of funds to be spent on them, and to mandate the Executive to execute the laws. Permitting the President to impound appropriated funds allowed him the power of item veto, which he does not have, and denied Congress the opportunity to override his veto of bills enacted by Congress. In particular, the power of Congress to compel the President to spend appropriated moneys was said to derive from Congress’s power “to make all Laws which shall be necessary and proper for carrying into Execution” the enumerated powers of Congress and “all other Powers vested by this Constitution in the Government of the United States, or in any Department or officer thereof.”715
The President’s decision to impound large amounts of appropriated funds led to two approaches to curtail the power. First, many persons and organizations, with a reasonable expectation of receipt of the impounded funds upon their release, brought large numbers of suits; with a few exceptions, these suits resulted in decisions denying the President either constitutional or statutory power to decline to spend or obligate funds, and the Supreme Court, presented with only statutory arguments by the Administration, held that no discretion existed under the particular statute to withhold allotments of funds to the states.716 Second, Congress in the course of revising its own manner of appropriating funds in accordance with budgetary responsibility provided for mandatory reporting of impoundments to Congress, for congressional disapproval of impoundments, and for court actions by the Comptroller General to compel spending or obligation of funds.717
Generally speaking, the law recognized two types of impoundments: “routine” or “programmatic” reservations of budget authority to provide for the inevitable contingencies that arise in administering congressionally-funded programs and “policy” decisions that are ordinarily intended to advance the broader fiscal or other policy objectives of the executive branch contrary to congressional wishes in appropriating funds in the first place.
Routine reservations were to come under the terms of a revised Anti-Deficiency Act.718 Prior to its amendment, this law had permitted the President to “apportion” funds “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.” President Nixon had relied on this “other developments” language as authorization to impound, for what in essence were policy reasons.719 Congress deleted the controverted clause and retained the other language to authorize reservations to maintain funds for contingencies and to effect savings made possible in carrying out the program; it added a clause permitting reserves “as specifically provided by law.”720
“Policy” impoundments were to be reported to Congress by the President as permanent rescissions and, perhaps, as temporary deferrals.721 Rescissions are merely recommendations or proposals of the President and must be authorized by a bill or joint resolution, or, after 45 days from the presidential message, the funds must be made available for obligation.722 Temporary deferrals of budget authority for less than a full fiscal year, as provided in the 1974 law, were to be effective unless either the House of Representatives or the Senate passed a resolution of disapproval.723 With the decision in INS v. Chadha,724 voiding as unconstitutional the one-House legislative veto, it was evident that the veto provision in the deferral section of the Impoundment Control Act was no longer viable. An Administration effort to utilize the section, minus the veto device, was thwarted by court action, in which, applying established sever-ability analysis, the court held that Congress would not have enacted the deferral provision in the absence of power to police its exercise through the veto.725 Thus, the entire deferral section was inoperative. Congress, in 1987, enacted a more restricted authority, limited to deferrals only for those purposes set out in the Anti-Deficiency Act.726
With passage of the Act, the constitutional issues faded into the background; Presidents regularly reported rescission proposals, and Congress responded by enacting its own rescissions, usually topping the Presidents’. The entire field was, of course, confounded by the application of the other part of the 1974 law, the Budget Act, which restructured how budgets were received and acted on in Congress, and by the Balanced Budget and Emergency Deficit Control Act of 1985.727 This latter law was designed as a deficit-reduction forcing mechanism, so that unless President and Congress cooperate each year to reduce the deficit by prescribed amounts, a “sequestration” order would reduce funds down to a mandated figure.728 Dissatisfaction with the amount of deficit reduction continues to stimulate discussion of other means, such as “expedited” rescission and the line-item veto, many of which may raise some constitutional issues.
711 1 J. Richardson, supra at 348, 360.
712 History and law is much discussed in Executive Impoundment of Appropriated Funds: Hearings Before the Senate Judiciary Subcommittee on Separation of Powers, 92d Congress, 1st Sess. (1971); Impoundment of Appropriated Funds by the President: Hearings Before the Senate Government Operations Ad Hoc Subcommittee on Impoundment of Funds, 93d Congress, 1st Sess. (1973). The most thorough study of the legal and constitutional issues, informed through historical analysis, is Abascal & Kramer, Presidential Impoundment Part I: Historical Genesis and Constitutional Framework, 62 Geo. L. J. 1549 (1974); Abascal & Kramer, Presidential Impoundment Part II: Judicial and Legislative Response, 63, id. at 149 (1974). See generally L. Fisher, Presidential Spending Power (1975).
713 There is no satisfactory definition of impoundment. Legislation enacted by Congress uses the phrase “deferral of budget authority” which is defined to include: “(A) withholding or delaying the obligation or expenditure of budget authority (whether by establishing reserves or otherwise) provided for projects or activities; or (B) any other type of Executive action or inaction which effectively precludes the obligation or expenditure of budget authority, including authority to obligate by contract in advance of appropriations as specifically authorized by law.” 2 U.S.C. § 682(1).
714 Impoundment of Appropriated Funds by the President: Hearings Before the Senate Government Operations Ad Hoc Subcommittee on Impoundment of Funds, 93d Congress, 1st Sess. (1973), 358 (then-Deputy Attorney General Sneed).
715 Id. at 1–6 (Senator Ervin). Of course, it was long ago established that Congress could direct the expenditure of at least some moneys from the Treasury, even over the opposition of the President. Kendall v. United States ex rel. Stokes, 37 U.S. (12 Pet.) 524 (1838).
716 Train v. City of New York, 420 U.S. 35 (1975); Train v. Campaign Clean Water, 420 U.S. 136 (1975). See also State Highway Comm’n of Missouri v. Volpe, 479 F.2d 1099 (8th Cir. 1973); Pennsylvania v. Lynn, 501 F.2d 848 (D.C. Cir. 1974) (the latter case finding statutory discretion not to spend).
717 Congressional Budget and Impoundment Control Act, Pub. L. 93–344, title X, §§ 1001–1017, 88 Stat. 332 (1974), as amended, 2 U.S.C. §§ 681–88.
718 Originally passed as the Act of Feb. 27, 1906, ch. 510, § 3, 34 Stat. 27, 48. The provisions as described in the text were added in the General Appropriations Act of 1951, ch. 896, § 1211(c)(2), 64 Stat. 595, 765. The amendments made by the Impoundment Control Act, were § 1002, 88 Stat. 332, 31 U.S.C. §§ 1341, 1512. On the Anti-Deficiency Act generally, see Stith, Congress’s Power of the Purse, 97 Yale L. J. 1343, 1370–1377 (1988).
719 L. Fisher, supra at 154–57.
720 31 U.S.C. § 1512(c)(1) (present version). Congressional intent was to prohibit the use of apportionment as an instrument of policymaking. 120 Cong. Rec. 7658 (1974) (Senator Muskie); id. at 20472–20473 (Senators Ervin and McClellan).
721 §§ 1011(1), 1012, 1013, 88 Stat. 333–34, 2 U.S.C. §§ 628(1), 683, 684.
722 2 U.S.C. § 683.
723 § 1013, 88 Stat. 334. Because the Act was a compromise between the House of Representatives and the Senate, numerous questions were left unresolved; one important one was whether the President could use the deferral avenue as a means of effectuating policy impoundments or whether rescission proposals were the sole means. The subsequent events described in the text mooted that argument.
724 462 U.S. 919 (1983).
725 City of New Haven v. United States, 809 F.2d 900 (D.C. Cir. 1987).
726 Pub. L. 100–119, title II, § 206(a), 101 Stat. 785, 2 U.S.C. § 684.
727 Pub. L. 99–177, 99 Stat. 1037, codified as amended in titles 2, 31, and 42 U.S.C., with the relevant portions to this discussion at 2 U.S.C. §§ 901 et seq.
728 See Stith, Rewriting the Fiscal Constitution: The Case of Gramm-Rudman-Hollings, 76 Calif. L. Rev. 593 (1988).