Impoundment

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The dramatic rise in federal expenditure began in the spring of 1940 as Hitler’s armies began the campaign that led to the fall of France. Urged on by Roosevelt, a reluctant Congress gradually took steps to prepare the nation’s defenses against enemy attack. In January, 1941, as the national emergency deepened, Roosevelt recommended to Congress that it temporarily defer all construction projects “that interfere with the defense program by diverting manpower and materials.” In the next few months he returned several times to this theme.

Congress paid no heed, and when the Civil Appropriations Act of 1942 came before him in August, 1941, Roosevelt found that several new programs had been added to flood-control projects already under way. Like Grant earlier, and now armed with the Anti-Deficiency Act and other legislation giving broad powers to the Bureau of the Budget, Roosevelt announced that he would sign the bill but added that he had no intention of submitting estimates or approving allocations “for any project which does not have important value. …” He said that at least $1.6 million in new funding would remain unspent.

Additionally, he proceeded to impound “excess” moneys in other government programs. He stopped civilian pilot training, held back money from the Civilian Conservation Corps and the National Youth Administration, and cut the appropriation of the Surplus Marketing Corporation. The total impounded in 1941 has not been fully determined, but it included amounts ranging from 1.6 million to 95 million. One estimate suggests that 174 million was placed in reserve.

In 1942 Roosevelt impounded $37 million from the Agriculture Department’s school-lunch program, $3.4 million from “non-essential” programs in the Soil Conservation Service, and $17.8 million from various civilconstruction projects. In all, that year, some $400 million (in a budget of 34 billion) was withheld. In 1943, 500 million was reserved.

Some of this money was subsequently released. A congressional request in late 1942, fortuitously timed with a damaging flood, freed $513,000 for dams and levees in Tulsa, Oklahoma, where river waters threatened war plants in the area. Congressional pressure led to the release of some $800,000 for airport construction in Winnemucca and Lovelock, Nevada, in May, 1943.

Despite such reverses Roosevelt continued to impound, and, on the whole, Congress did not challenge him. Indeed, in 1943 Congress agreed that if impoundments were endorsed by the War Production Board, they would stand.

For the most part Roosevelt’s impoundments were directed against new projects that, however desirable, would have to wait for peacetime conditions for implementation, or against the expansion of existing programs beyond already funded levels. In no instance that has come to light did Roosevelt phase out any established program without congressional approval.

1945–53.

President Truman’s first budget in 1946 totaled $60.4 billion, then the highest peacetime budget in history. By 1948 the budget was reduced to 33 billion, but by 1953, as a result of the Korean War, it had risen to 74.3 billion.

Truman, like Roosevelt, impounded funds. But like his successors, he did not make it a common practice, although a number of construction projects were temporarily deferred in the early years of Korea.

At least three major impoundments were carried out under congressional order. In 1945 Truman halted some $60 million in war contracts, as soon as Japan surrendered, and impounded the money. In 1945 he was also ordered to impound excess personnel funds in government agencies. In 1950 he cut $580 million—at Congress’ direction—from already approved appropriations.

On at least two other occasions, however, Truman acted on his own. In 1949 he impounded $615 million in defense money during an intensive battle over the size of the Air Force. Truman insisted that a forty-eight-wing force was adequate to the nation’s needs; Congress appropriated funds for at least two additional wings. Exercising his prerogative as commander in chief and in the absence of mandated language in the appropriation, Truman did not spend the money. In 1950, following the advice of the Defense Department, he cancelled the construction of the aircraft carrier Forrestal after Congress had made funds available. In both instances the impoundments were allowed to stand.

1953–61.

Although President Elsenhower had announced on taking office that he was prepared to use all the “weapons at the disposal of Government for maintaining economic stability,” he resorted to impoundment reluctantly and only rarely. His first budget in 1954 totalled 67.5 billion and climbed sharply only at the end of his second administration, when, in 1961, it reached 81.4 billion.

Dedicated to keeping spending down, he was successful in getting Congress to trim the budget, although on occasion he used the threat of impoundment to bring the legislature into line, as in 1955, when he said he would withhold funds from certain flood-control projects if Congress exceeded administration requests in the budget for 1956.