Impoundment

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Lacking then the clear constitutional authority to veto portions of bills—a power granted by the Confederacy to its president and currently by forty-three states to their governors—Grant, like a number of contemporary Presidents, resorted to a broad reading of the executive power and exercised the right to impound. Unable to persuade Congress to abandon pork-barreling and confronted in August, 1876, with what he took to be an outrageously larded rivers bill, Grant sent the legislature a stinging message. In it he said he was constrained to sign the measure because certain portions of it were essential and provided for the completion of projects that could not, in fairness, be left undone. As for the remainder of the bill, it funded “works of purely private or local interest, in no sense national,” and he served notice that he would “take care that during my term of office no public money shall be expended upon them.”

The money remained unspent, as Grant said it would, but the issue over the impoundment was never joined, perhaps because Grant’s term had only seven months to run and more likely because the bulk of the impounded funds was restored in the next rivers bill.

1900–73: The Background.

Although Thomas Jefferson’s deferral provided the form and Ulysses S. Grant’s impoundment the rationale, contemporary impoundments have proceeded on vastly different constitutional and statutory grounds.

To begin with, in the twentieth century Congress has given the President greater and greater control over the federal budget and the national economy. Until 1905 the President had relatively little authority in fiscal matters, and the government itself operated on less than a business basis. There was no standardized accounting system and no central overseer of the budget. Each department, agency, and branch of the federal government assembled its own budget requests, which were passed on to the Treasury Department, where they were assembled without review and sent on to Congress. Once the moneys were allocated, they became the responsibility of individual department heads.

By the end of the nineteenth century it was clear that this system was responsible for inefficiency, waste, and overspending. As a result Congress initiated a series of reforms, the net result of which over the past seventy years has been to increase the President’s responsibility in assembling the budget and in managing the disbursement of funds after Congress has appropriated them. In every instance the chief executive has been placed under statutory obligation to effect savings wherever possible.

At the present time the President is required to keep the budget within statutory limits, to observe the debt ceiling established by Congress, and to oversee all governmental expenditures. In addition, he has been given broad statutory power to. deal with the economy at large, particularly in times of inflation or recession.

Of the dozens of laws that brought about these new duties, four stand out as bases for impoundment:

The Anti-Deficiency Act (1905), as amended to 1973, was initially designed to prevent overspending by requiring all government agencies to divide their allocations into quarterly amounts, which could not be exceeded or carried forward. All unspent moneys were to be placed in reserve (impounded) by the President.

Section 1211, General Appropriation Act (1951), the key amendment to the Anti-Deficiency Act, gives the President specific authority to establish reserves from appropriated funds wherever and whenever possible “subsequent to the date on which such appropriation was made available.”

Budget and Accounting Act (1921), as variously amended, established the Bureau of the Budget to coordinate the development and later the management of the federal budget. In 1970 the bureau—now under direct Presidential control—became the Office of Management and Budget, with a broad range of powers, including the preparation of the budget, the supervision and control of budget allocations, and the coordination of fiscal affairs so that “the moneys appropriated by the Congress may be expended in the most economical manner.…”

The Employment Act of 1946 created the Council of Economic Advisers and, at the same time, established the principle of a controlled economy, maintained and stabilized by actions of the federal government. The law requires the President to utilize existing statutes to stabilize the economy (e.g., to combat inflation) and to develop programs “to promote maximum employment, production, and purchasing power.” It is from this delegation of authority that Presidents in the past twenty-five years have derived the right to impound.