I was rather shocked to find that Senator Tower had not been consulted. He has worked for years on that committee and taken action at the executive level which would go right to the heart of the work of the committee and Congress that goes over a period of years, seemed to me rather abrupt, and I think it made them feel it was difficult to be put in a position not to be able to explain adequately the program the administration is on. Do you think it would avoid some the problems of confrontation and unnecessary ruffled feelings between the executive and legislative branch if when the national interest in the judgment of the executive branch seems to require impounding of funds and changing of programs that at least some consultation, if it is only 24 hours or 5 hours or an hour, some prior consultation to picking up a newspaper and reading about it would help avoid some of the problems we now are confronted with?

Mr. ASH. As Senator Muskie observed earlier, I haven't yet learned everything about everything in this whole business and I don't know the particulars of what may have transpired leading up to the actions that have now been taken over the last month or two.

I do know and I have been a recent part of a number of consulting activities with Members of the Congress, and I know many subjects have come up which certainly added to my own experience, so there has been considerable consultation on many issues. I am sure that the President does believe that consultation does offer considerable advancement. I can't comment on the particular incident that you suggest because it took place, or it might have taken place or didn't take place, at time before I had any such knowledge.

Senator PERCY. I commented this morning on the expression to me by a White House official that they didn't feel consultation was necessary or desirable because it wouldn't have made any difference anyway, the implication being we are not rational men here, we are not subject to persuasion or reason, we have our minds set in concrete or cement. I have never experienced that attitude here. When we did require consultation on reorganization plans and the creation of these new super Cabinet posts. I think it was an entirely different attitude than if we had read about it in the newspaper and had no prior notice whatsoever.

I would only respectfully suggest that in the future of impoundment of funds-this goes right to the heart of the prerogatives that the Congress has--that prior consultation would save a great deal of time.

Senator Humphrey this morning, or yesterday, indicated that there was quite a difference, and Senator Fulbright, in the distinction between temporary and permanent impoundment. Temporary could be better understood, but if it looked like it was a more permanent, a changing of the priorities into perpetuity that he would like something entirely different.

Would you want to draw a distinction between the temporary or permanent nature of some of the delay in expending funds, how long the period of time might be. I understand in housing it was clearly stated it was an 18-months moratorium.

Mr. Asн. I was going to suggest that area as probably one of the best examples we could concentrate on for this very point that you are making.

Given the complexities and difficulties in this whole housing area and the long leadtimes and the tremendous amount of work in the pipeline, it seemed quite appropriate to explicitly state that there would be an 18-month moratorium, for not only would the rate of expenditures from past commitments maintain a relatively high level of housing activity during that time, but this would allow the kind of study necessary to find those improvements that are necessary in some of these areas where we all know things are not fully well. There was a very explicit time, and I think this probably has served the purposes of all interests.

Senator PERCY. Mr. Ash, by your feeling that consultation is desirable, is the administration taking a position that we have no objection to the reporting features of the Ervin bill?

Mr. ASH. The data requested in the Ervin bill for reporting is, as I indicated, identical to that which is even now in the process of preparation, at least as we best understand it.

Senator PERCY. So you have no objection to that being part of the legislation?

Mr. ASH. We feel no need to report a second time that which is already reported once, so, therefore, we would object to a dual reporting of the same thing.

Senator PERCY. Your point is this is a redundant feature in the bill. Mr. ASH. I would make two points about the reporting required in S. 373. First, it is redundant, or appears to be virtually completely or substantially redundant, to that called for, in terms of information.

Second, the definition of what constitutes an impoundment in S. 373 is such that it is impossible to determine what is actually required. By one interpretation there would be thousands of items reported each day because, as you know, every contracting officer on behalf of the Government, every auditor as his actions bear upon payments under Government contracts, every administrative officer of various kinds, make their individual judgmental decisions not to pay an amount today for one of many reasons-maybe never pay it because it isn't duly owed-or maybe pay it at some later time. If each and every one of those thousands of transactions every day had to be reported we would have, of course, not only an onerous requirement in terms of preparing a report, but it would be difficult to understand what to do with the information as that report was received.

There are two basic points: One, it would be substantially redundant, and two, we are not certain of the definition, and because of the definition used and its lack of clarity we are not really sure what is expected of that report under S. 373.

Senator PERCY. My last question can be just a yes or no, hopefully, so that my colleagues can continue.

In Elmer Staats' letter or testimony to us yesterday-perhaps you are familiar with it--he listed the history of impoundment of funds starting with 1942, starting with Presidents Roosevelt, Truman, and all the way through President Johnson's administration when it impounded moneys from the highway trust fund and in 1966 the highway trust fund had cut back some housing, health, education, welfare, and interior.

Do you feel that any of those actions taken by those Presidents were illegal or unconstitutional as you understand them?

Mr. ASH. As I understand them, and I have spent some time coming to understand them, I think they were quite proper given the circumstances of those times, some of which are similar to the circumstances of these times.

Senator PERCY. And those were in the national interest at the time? Mr. Asн. Yes, sir.

Senator PERCY. Thank you very much.

Thank you very much, Mr. Chairman.

Senator ERVIN. This bill hasn't the slightest relation to a contracting officer determining that someone is not doing something on a contract. The bill only relates to the action of the executive, and impoundment of funds, and not spending them. It gives a definition of impounding, and there is no reference to method of carrying out Government contracts, or the situation where someone didn't complete the contract according to its provisions, and therefore funds were withheld for that purpose. At least the Government there is still concerned with carrying out the object of the appropriation.

This is a bill with reference to the executive refusing to spend funds to carry out programs established by Congress.

Mr. Ash. Yes, sir. Now, as I read section 3, second paragraph, it says that the impounding of funds includes any type of executive action which effectively precludes the obligation or expenditure of the appropriated funds. It was from that that I came to such an interpretation. I realize there are many other possible interpretations as well, but short of a more explicit one in the bill, we do feel that it is quite uncertain as to what is required.

Senator ERVIN. Well, section 3 says:

For the purposes of this Act, the impounding of funds includes, one, withholding or delaying the expenditure or obligation of funds, appropriated or otherwise obligated for projects or activities, and the determination of authorized projects or activities for which appropriations have been made.

Two, any type of executive action which effectively precludes the obligation or expenditure of the appropriated funds.

Congress doesn't appropriate funds in order to have a contracting officer see that they are paid to someone who is not entitled to them.

Mr. ASH. I agree with that. To take a specific example-and there are many different kinds of examples-let's assume that it is determined that the most efficient way to spend funds appropriated is not to pay a contractor all of those moneys the moment the contract is let, but to have that determination made according to various measures of progress and paying them at that time. Those are executive decisions taken on the spot by evaluation of work progress.

Senator ERVIN. That is carrying out the objective of the appropriation.

In other words, what this definition is intended to cover, and what I think it says, in fairly plain English, is situations in which the President refuses to carry out the objective of the appropriation. So I don't think every time a contracting officer knocks out 15 cents from an armed services housing project because he says it is not due, that that is an impoundment of funds within this definition.

Mr. Ash. I think the point you raise is a very good one. I interpret that any type of executive action which effectively precludes obliga: tion or expenditure of funds also includes period of delay that take place each day.

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Senator ERVIN. What it precludes is refusing to spend funds for the carrying out of the objectives of the appropriation. Appropriations are not made in Congress for contracting officers to pay people subsidies that are not due.

Mr. Asн. I agree. But also appropriations are not made with the intentions of having them spent the day that appropriation is made. Senator ERVIN. A lot of appropriations are made which are supposed to be spent during the year.

Mr. ASH. Or sometimes appropriations are made with the hope at least that maybe through greater efficiency not all of it will be spent. Senator ERVIN. You say this would require a duplication of reporting services. As I interpret the present statute, it requires reporting once a year of all the funds impounded.

Mr. ASH. No, sir; present legislation requires that there be a report on February the 10th and thereafter as each transaction or group of transactions take place. They will be reported periodically and frequently.

Senator ERVIN. The reporting requirements in this bill are different. It says within 10 days after the impoundment is made.

Mr. Asн. This is very much the same. There may be a slight variation, but very much the same. Even if we would agree on reporting timing it would be approximately the same, I believe.

Senator ERVIN. I am frank to state I am at a total loss to comprehend why the President wouldn't welcome the passage of this bill. It gives him a second chance to persuade Congress that it is acting unwisely in making appropriations or in the manner of appropriations, and if he can persuade Congress, then Congress can pass a resolution ratifying his action, and I think that would be much more orderly than just defying Congress.

Mr. ASH. That is right. I don't believe the intention of the President is to defy Congress. It suggests in fact, as was done in the budget message, that the best possible approach with which the President would fully cooperate is to have the Congress develop a mechanism so that in making the appropriations in the first place they are made in the context of what the totals may be.

Senator ERVIN. The Senate made that recommendation last year in the Len Jordan amendment. The President said he wanted a ceiling of $250 billion on expenditures and so the Senate obliged him. They passed the Jordan amendment, gave the President the right to hold down spending for all appropriated funds for that session of Congress, and forced the people within a ceiling of $250 billion, but the administration fought the bill in the House and secured its defeat because the bill provided that the cut in expenditures should go across the whole board and enforce the ideas of Congress about what the expenditures should be for. The President wanted to pick out the things he was going to fund in full and the things he was not going to fund in full. That is the reason the Senate proposed a mechanism, about the simplest, most understandable mechanism of ingenuity that mankind could have devised, which was to allow him to make an across-the-board cut, rather to have an unconstitutional item veto.

Mr. ASH. Yes, sir. It was the very sense of the bill that you mentioned and the actions of the Congress that $250 billion would be an

appropriate total level of expenditure this year that moved the President to take those necessary actions to make sure the total did come within that, let alone the fact the debt ceiling provides a congressional action that obligates him to control expenditures within that ceiling. Senator ERVIN. Well, Congress, the Senate at least, was willing to give him the power to make the cuts he wanted, the amount of the cuts, but it wasn't willing for him to assume the power to make the decision about where the cuts were going to be made. The Senate said it should be all on the same plane, all on equal proportion.

That is the objection of Congress to the President's action.

Mr. Louis Fisher has given a great deal of study to this effort in a book called "President and Congress: Power and Policy." He cites a number of impoundment funds by other Presidents and says in the cases cited thus far, and I read from page 125:

In the cases cited thus far, funds have been withheld either in response to specific statutory directives or on grounds of prudent use of funds in weapons procurement. An entirely different situation has developed under the Nixon Administration, where funds have been withheld from domestic programs because the President considers these programs incompatible with his own set of budget priorities. In the spring of 1971. the Nixon Administration announced that it was withholding more than $12 billion, most of which consisted of highway money and funds for various urban programs. When Secretary Romney appeared before a Senate committee in March, he explained that funds were being held back from various urban programs because there was no point in accelerating programs that were "scheduled for termination." He was referring to the fact that Congress had added funds to grant-in-aid programs which the Administration wanted to consolidate and convert into its revenue-sharing proposal. To impound funds in this prospective sense--holding on to money in anticipation that Congress will enact an Administration bill-is a new departure for the impoundment technique. Impoundment is not being used to avoid deficiencies, or to effect savings, or even to fight inflation, but rather to shift the scale of priorities from one Administration to the next, prior to congressional action. That is our complaint.

Mr. Asн. Sir, as you know, programs, even in earlier administrations that have had funds impounded, have not been all military. There have been some highway trust funds and educational funds.

Senator ERVIN. President Johnson impounded highway trust funds, but I don't recall any time President Johnson ever adopted this course of procedure. President Nixon insisted on Congress appropriating a very substantial amount of money to aid in the integration of schools and aid disadvantaged students. I voted against that because I knew we didn't have the money, but he insisted on the measure passing. Then the Department of HEW, which is under the Hill's direction, they go to the States, my State and other States, and they implore the State officials to hire teachers and avail themselves of this program, and my State did it. They hired teachers a very short time ago, after the contracts were signed, after the teachers accepted employment; the administration suddenly impounded these funds and said they couldn't be spent. I think that is inexcusable.

I don't object to what the President says in his budget, because that is prospective in operation.

I think the proper way to handle these things is for the President to recommend to the Congress any programs he thinks ought to be abolished or curtailed. I think a lot of them ought to be abolished or curtailed and I will vote with him. I think it is all right to recommend in the budget what amounts you think we ought to spend on a partic