History of Impoundment
The following is an excerpt from the CRS Report Item Veto and Expanded Impoundment Proposals: History and Current Status (pages 1-3), which provides a brief overview of the history of the practice of impoundment before the enactment of the Impoundment Control Act of 1974, which was enacted as title X of its companion law, the Congressional Budget Act of 1974.
Brief History of Impoundment
Impoundment includes any executive action to withhold or delay the spending of appropriated funds. One useful distinction among impoundment actions, which received statutory recognition in the 1974 Impoundment Control Act, focuses on duration: whether the President’s intent is permanent cancellation of the funds in question (rescission) or merely a temporary delay in availability (deferral).
Another useful contrast distinguishes presidential deferrals for routine administrative reasons from deferrals for policy purposes. Virtually all Presidents have impounded funds in a routine manner as an exercise of executive discretion to accomplish efficiency in management. The creation of budgetary reserves as a part of the apportionment process required by the Antideficiency Acts (31 U.S.C. 1511-1519) provided formal structure for such routine impoundments, which originated with an administrative regulation issued in 1921 by the Bureau of the Budget and then received a statutory base in 1950.3 Impoundments for policy reasons, such as opposition to a particular program or a general desire to reduce spending, whether short-term or permanent, have proved far more controversial.
Instances of presidential impoundment date back to the early nineteenth century, but Presidents typically sought accommodation rather than confrontation with Congress.4 In the 1950s and 1960s, disputes over the impoundment authority resulted from the refusal of successive Presidents to fund certain weapons systems to the full extent authorized by Congress. These confrontations between the President and Congress revolved around the constitutional role of commander-in-chief and tended to focus on relatively narrow issues of weapons procurement. President Johnson made broader use of his power to impound by ordering the deferral of billions of dollars of spending during the Vietnam war in an effort to restrain inflationary pressures in the economy. While some impoundments during these periods were motivated by policy concerns, they typically involved temporary spending delays, with the President acting in consultation with congressional leaders, so that a protracted confrontation between the branches was avoided.
Conflict over the use of impoundments greatly increased during the Nixon Administration and eventually involved the courts as well as Congress and the President. In the 92nd and 93rd Congresses (1971-1974), the confrontation intensified as the President sought to employ the tool of impoundment to reorder national priorities and alter programs previously approved by Congress. Following President Nixon’s reelection in 1972, the Administration announced major new impoundment actions affecting a variety of domestic programs. For example, a moratorium was imposed on subsidized housing programs, community development activities were suspended, and disaster assistance was reduced. Several farm programs were likewise targeted for elimination. Perhaps the most controversial of the Nixon impoundments involved the Clean Water Act funds. Court challenges eventually reached the Supreme Court, which in early 1975 decided the case on narrower grounds than the extent of the President’s impoundment authority.5
Impoundment Control Act of 1974
During these impoundment conflicts of the Nixon years, Congress responded not only with ad hoc efforts to restore individual programs, but also with gradually more restrictive appropriations language. Arguably, the most authoritative response was the enactment of the Impoundment Control Act (ICA), Title X of the Congressional Budget and Impoundment Control Act of 1974.6 As a result of a compromise in conference, the ICA differentiated deferrals, or temporary delays in funding availability, from rescissions, or permanent cancellations of designated budget authority, with different procedures for congressional review and control of the two types of impoundment.7 The 1974 law also required the President to inform Congress of all proposed rescissions and deferrals and to submit specified information regarding each. The ICA further required the Comptroller General to oversee executive compliance with the law and to notify Congress if the President failed to report an impoundment or improperly classified an action.
The original language allowed a deferral to remain in effect for the period proposed by the President (not to exceed beyond the end of the fiscal year so as to become a de facto rescission) unless either the House or the Senate took action to disapprove it. Such a procedure, known as a one-house legislative veto, was found unconstitutional by the Supreme Court in INS v. Chadha (462 U.S. 919 (1983)). In May 1986 a federal district court ruled that the President’s deferral authority under the ICA was inseverable from the one-house veto provision and hence was null; the lower court decision was affirmed on appeal in City of New Haven v. United States (809 F.2d 900 (D.C.C. 1987)).
In the case of a rescission, the ICA provided that the funds must be made available for obligation unless both houses of Congress take action to approve the rescission request within 45 days of “continuous session” (recesses of more than three days not counted). In practice, this usually means that funds proposed for rescission not approved by Congress must be made available for obligation after about 60 calendar days, although the period can extend to 75 days or longer. Congress may approve all or only a portion of the rescission request. Congress may also choose after the 45-day period to rescind funds previously requested for rescission by the President. Congress does rescind funds never proposed for rescission by the President, but such action is not subject to the ICA procedures.
The ICA establishes no procedures for congressional disapproval of a rescission request during the 45-day period. However, some administrations have voluntarily followed a policy of releasing funds before the expiration of the review period, if either the House or the Senate authoritatively indicates that it does not intend to approve the rescission.
In the fall of 1987, as a component of legislation to raise the limit on the public debt (P.L. 100-119), Congress enacted several budget process reforms. Section 207 prohibited the practice, sometimes used by Presidents when Congress failed to act on a rescission proposal within the allotted period, of submitting a new rescission proposal covering identical or very similar matter. By using such resubmissions, the President might continue to tie up funds even though Congress, by its inaction, had already rejected virtually the same proposal. The prohibition against such seriatim rescission proposals contained in the 1987 law applies for the duration of the appropriation, so that it may remain in effect for two or more fiscal years. Section 206 of P.L. 100-119 served to codify the decision in the New Haven case, allowing deferrals to provide for contingencies, to achieve savings made possible through changes in requirements or efficiency of operations, or as provided in statute. The ICA as amended no longer sanctions policy deferrals.8
Footnote #3. See Budget and Accounting Procedures Act of 1950, P.L. 81-784, 64 Stat. 2317.
Footnote #4. For a history of presidential impoundment before 1974, see Louis Fisher, Presidential Spending Power (Princeton, NJ: Princeton University Press, 1975), pp. 147-201; and Ralph S. Abscal and John R. Kramer, “Presidential Impoundment Part I: Historical Genesis and Constitutional Framework,” Georgetown Law Journal, vol. 62 (July 1974), pp. 1549-1618
Footnote #5. Train v. City of New York, 420 U.S. 35 (1975). For further discussion regarding the role of the courts in the impoundment disputes during the Nixon Administration, see James P. Pfiffner, The President, the Budget, and Congress: Impoundment and the 1974 Budget Act (Boulder, CO: Westview Press, 1979), pp. 77-108.
Footnote #6. P.L. 93-344, 88 Stat. 332. The ICA became effective upon signing of the law on July 12, 1974 . For further discussion of the impoundment conflicts and the legislative history of the 1974 law, see Allen Schick, Congress and Money (Washington, DC: The Urban Institute, 1980), pp. 17-81.
Footnote #7. According to one account, “Written by the staff members who put together the final version of budget reform, Title X was a novel combination of the House and Senate versions of the impoundment control bills.” See Joel Havemann, Congress and the Budget (Bloomington, IN: Indiana University Press, 1978), pp. 178-179.
Footnote #8. “Conference Report on House Joint Resolution 324,” (H. Rept. 100-313), Congressional Record, vol. 133, Sept. 21, 1987, p. 24655.
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