Deferral of Budget Authority


The deferral of budget authority is the temporary postponement of the authority to obligate funds provided by Law. It may be contrasted with “impoundment” which was indefinite postponement of such  obligation authority. Without further Congressional action, a “deferral” of budget authority will automatically  expire under  the terms of the Impoundment Control Act of 1974.


Deferral of Budget Authority: Definition from the Impoundment Control Act of 1974

Deferral of budget authority (ICA 1974)
DEFINITIONS

Sec. 1011. [2 U.S.C. 682] For purposes of this part—

(1) “deferral of budget authority” includes—

(A) withholding or delaying the obligations 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;

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GAO Glossary of Terms and Definition (September 2005)

Deferral of Budget Authority

Temporary withholding or delaying of the obligation or expenditure of budget authority or any other type of executive action, which effectively precludes the obligation or expenditure of budget authority. A deferral is one type of impoundment. Under the Impoundment Control Act of 1974 (2 U.S.C. § 684), budget authority may only be deferred to provide for contingencies, to achieve savings or greater efficiency in the operations of the government, or as otherwise specifically provided by law.

Budget authority may not be deferred for policy or any other reason.

Deferrals may be proposed by agencies but must be communicated to Congress by the President in a special message. Deferred budget authority may be withheld without further action by Congress. Congress may disapprove a deferral by law. A deferral may not extend beyond the end of the fiscal year of the budget authority’s availability. However, for multiyear funds, the President may re-report the deferral the next fiscal year. Deferred budget authority that is disapproved by Congress must be made available immediately. Agencies must release all other deferred budget authority with sufficient time remaining in the fiscal year to prudently obligate that budget authority before the end of the fiscal year. (See also ApportionmentBudgetary ReservesImpoundmentRescission.)

[PAGES 42-43]

Rules and Manual of the House of  Representatives

RULE X. ORGANIZATION OF COMMITTEES

(b) Committee on Appropriations.

*  *  *  *  *  *  *

Notes from House rules and  manual

§717. Responsibilities under Budget Act.

Effective July 12, 1974, special Presidential messages on rescissions and deferrals of budget authority submitted pursuant to sections 1012 and 1013 of the Impoundment Control Act of 1974 (2 U.S.C. 683, 684), as well as rescission bills and impoundment resolutions defined in section 1011 (2 U.S.C. 682) and required in section 1017 (2 U.S.C. 688) to be referred to the appropriate committee, are referred to the Committee on Appropriations if the proposed rescissions or deferrals involve funds already appropriated or obligated. Also effective July 12, 1974, the Congressional Budget Act of 1974 (sec. 404(a)) added to the committee’s jurisdiction, which was later perfected by the Committee Reform Amendments of 1974 (H. Res. 988, 93d Cong., Oct. 8, 1974, p. 34470, subparagraphs (2), (3), and (4)).


Congressional Budget Process: An Explanation (Senate Budget Committee)

Definition of Deferral of Budget Authority 

Deferral of Budget Authority: An action by the executive branch that delays the obligation of budget authority beyond the point it would normally occur. Pursuant to the Congressional Budget and Impoundment Control Act of 1974, the President must provide advanced notice to the Congress of any proposed deferrals. A deferral may not extend beyond the end of the fiscal year in which the President’s message proposing the deferral is made. Congress may overturn a deferral by passing a law disapproving the deferral.

[The Congressional Budget Process: An Explanation, Appendix J (Glossary), Committee on the Budget of the U.S. Senate, S. Prt. 105-67 (Revised December 1998).]


Budget Process Law Annotated (1993)

Deferral of Budget Authority

[Note #1072 of the BPLA]. Section 206(c) of the Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987 entitled “Codification of Law Regarding Deferral Authority,” provides: “Sections 1015 and 1016 of the Impoundment Control Act of 1974 are reaffirmed”. Pub. L No. 100-119, 206(c), 101 Stat. 754, 786 (1987). The joint statement of managers accompanying the conference report on the Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987 explained: 

9. Codification of Law Regarding Deferral Authority 

Current Law 

The Supreme Court in Immigration and Naturalization v. Chadha, 462 U.S. 919 (1983), held legislative vetoes unconstitutional. Applying Chadha, the Court of Appeals in City of New Haven v. United States, 809 F. 2d 900 (D.C. Cir. 1987), struck down Section 1013 of the 1974 Impoundment Control Act, dealing with deferrals, [thereby denying the President his sole statutory authority to make deferrals for policy reasons. The Court noted its view that the Executive’s power to defer was now limited to so-call programmatic deferrals under the Antideficiency Act, which it characterized as dealing with “routine” and “trivial” matters “relating to the normal and orderly operation of the Government that Congress expected to present little controversy”. The reporting requirements of Section 1013 have continued in force by virtue of other statutory reference to that section.][1] 

Section 1015 of the 1974 Impoundment Control Act directs the Comptroller General to report to Congress when he determines that the President has failed to transmit a special message with respect to a deferral or rescission, or has incorrectly classified an action in such message. Section 1016 of the Act empowers the Comptroller General to bring a civil action to require that unlawfully impounded budget authority be made available for obligation. The Comptroller General has expressed the view that he lacks authority to take any action to compel the release of impounded funds since such authority was linked to the invalidated Section 1013. 

Senate Amendment 

The Senate amendment (Section 229) enacts a new Section 1013 that codifies the New Haven decision and General Accounting Office administrative interpretations by prohibiting policy deferrals and providing that deferrals will be permissible only: (1) for contingencies, (2) for efficiency, or (3) as specifically provided for by law. [Programmatic deferrals must be reported to the Congress and be accompanied by a detailed description and justification of the proposal. Deferrals may not be proposed for any period extending beyond the end of the fiscal year in which the proposal is reported.][2] 

The Senate amendment also reaffirms the Comptroller General’s authority under Sections 1015 and 1016 of the Act to initiate suits to compel the release of impounded funds and his duty to safeguard Congress’ institutional interest in the spending process. 

Conference Agreement 

The House recedes and concurs in the Senate amendment. 

H. Rep. 100-313 (Conference Report pp. 66-67), 100th Cong., 1st Sess. (1987), reprinted in 1987 U.S.C.C.A.N. 739, 766-67.

[1] Text in brackets included here is omitted from the BPLA.

[2] Text in brackets included here is omitted from the BPLA.

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Pages 390-391 (BPLA): Note 1072 from Section 1015 of the Impoundment Control Act (BPLA)

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