STATEMENT OF HON. JOSEPH T. SNEED, DEPUTY ATTORNEY Mr. SNEED. Mr. Chairman, as I said a moment ago, we did come equipped with a copy of the Constitution today. Senator ERVIN. I really am glad to know there is somebody in the executive branch who has a copy of the Constitution, but I would suggest that the President still hasn't read the volume on winning friends, for he still makes such uncomplimentary remarks such as saying the Congress represents special interests. I am not conscious of anything I represent except people of North Carolina, except they do have an interest in the Constitution, and that is the only interest I have. I don't mind him calling the Congress irresponsible, because I think he and Congress are both irresponsible. I think we ought to do like the witness who is sworn to tell the truth and the whole truth. That would show both the executive branch and Congress having been financially irresponsible for a long, long time. I am glad you have the Constitution. Mr. SNEED. Thank you, Mr. Chairman. Let me read my oral statement and then I will ask permission to submit a somewhat extended version of that statement. Senator ERVIN. That will be satisfactory and any extended version will be printed in full at the bottom of your oral statement. Mr. SNEED. I am pleased to have this opportunity to present to this subcommittee the views of the Department of Justice and the administration concerning the general topic of presidential authority to impound appropriated funds and, more specifically, concerning S. 373, the bill recently introduced by you, Mr. Chairman, with the cosponsorship of other Senators, including Senators Burdick and Mathias of the subcommittee. Impounding of funds by the executive branch is a relatively complex and currently much debated subject. It involves profoundly important and sometimes conflicting considerations of policy, and, in certain of its aspects, novel questions of constitutional law. Two years ago, hearings before this subcommittee raised and explored many of the issues in the impounding area, and helped to determine many aspects of the current debate. I believe there is much upon which we can agree. It seems fair to say, however, that several very important questions of policy and law are presently unresolved. I am confident that this subcommittee's work will sharpen the focus of debate and contribute to a wise accommodation of competing interests. METHOD OF IMPOUNDING FUNDS The term "impound" is an inclusive term as generally used in this context. The result of "impounding" funds-not spending moneycan be achieved in various ways and at various levels in the executive branch. In some cases, "impounding" means that funds appropriated for one fiscal year are simply not spent in that year. Another technique is to defer expenditure of funds appropriated or otherwise available for one fiscal year until the next or a later fiscal year. In that situation, the funds will not lapse if the authorizing or appropriating statute so provides, but the expenditures are effectively postponed. A third method of controlling expenditures, somewhat inaccurately referred to as "impounding," involves a refusal to commit obligational authority. Depending upon the particular statute involved, delegations of authority within the executive branch, and the purpose of impounding, funds may be impounded by the action of a departmental official, the Office of Management and Budget, or the President himself. Ultimately, the power and the responsibility to impound funds rests with the President. Senator MUSKIE. Could I ask you an informational question? You refer to the action taken by the water pollution bill as impounding, but I understood that yesterday the President released the list of impoundments. He did not include anything with respect to the water bill and said that that was not impounding; is there a disagreement as to executive as to whether or not the action taken on the water pollution bill was or was not impoundment? Mr. SNEED. I believe there may be disagreement with respect to the word "impounding," which as I have indicated is an imprecise term and has been used with a certain amount of imprecision from time to time. Senator MUSKIE. As defined by you here, the total impoundments are not $8.7 billion, but $11.10 billion by definition, is that right, for this year? It is a total of $6 billion, for this year it would be $11.7 billion? Mr. SNEED. I wouldn't care to comment on that, Senator Muskie. We are using for the definition in that statement one that is frequently Senator MUSKIE. The administration frequently speaks before Congress. Mr. SNEED. The practice of impounding funds, through various techniques and for various reasons, reaches back as far as President Jefferson, who declined to spend an appropriation for gunboats in 1803. A general statutory basis for impounding was first enacted in the Anti-Deficiency Act of 1905. Formal administrative procedures for impounding were first established during the Harding administration, following enactment of the Budget and Accounting Act of 1921. President Franklin Roosevelt was the first to make extensive use of impounding devices to control total Government spending, inflation, an related economic effects. For example, in 1949, President Truman impounded over $700 million appropriated for expanding the Air Force partly in order to avoid "too great a strain on the domestic economy." These and numerous other examples of impounding by the executive branch, particularly during the last 30 years, are contained in the 1971 hearings before this subcommittee. Such a long-continued executive practice, in which Congress has generally acquiesced, carried with it a strong presumption of legality. GENERAL PRINCIPLES CONCERNING IMPOUNDING The Constitution does not speak directly to the matter of impounding funds. I would emphasize that sentence as we go along. Senator MUSKIE. May I ask this question? Roosevelt and Truman examples are often cited. Senator CHILES. I am going to ask that we allow him to finish his statement and then we will proceed from there. Senator MUSKIE. That was with respect to defense spending in which the President acted as Commander in Chief? Mr. SNEED. In the Roosevelt administration, Senator Muskie, it related to domestic expenditures as well. Senator MUSKIE. In the construction field bearing upon our ability to provide admission of war and total war, and the President acted as Commander in Chief and not under any authority, outside of foreign affairs? Mr. SNEED. Senator, you make a point that I was going to make a bit later, which is that there is a relationship between the power of the President in the field of foreign affairs and in the field subject to his control as Commander in Chief and as it relates to national security and domestic programs. The illustration you just gave illustrates that very nicely. Senator MUSKIE. Does that mean usurping a dominance over domestic affairs that has otherwise been conceded in foreign affairs? Mr. SNEED. No, sir; I said they are related. The phenomena of massive Government spending, mounting public debt, and heavy involvement of the National Government in the management of an interdependent industrial and service economy were unknown to the Framers. Until very recently, the judicially developed doctrines of sovereign immunity, standing, justiciability, and political question have largely foreclosed judicial consideration of impounding questions. General principles in the impounding area must be derived largely from past practice, certain statutory obligations of the President such as those relating to the size of the public debt and the purchasing power of the dollar, and the intractable realities of modern government under our system of separated powers. Most Federal statutes establishing Federal spending programs are cast in discretionary language. For example, the Secretary of Agriculture "is authorized to" subsidize dams, and the President "is authorized to" grant various kinds of foreign aid. Similarly, typical appropriation acts for the funding of previously authorized programs simply "appropriate" sums "out of money in the Treasury not otherwise appropriated" in very general terms. Absent an obviously deliberate departure from the usual statutory language, it has been traditionally assumed that such statutes do not require spending the full amounts appropriated. This is so for several reasons, the most obvious being simple economy. The President's obligation to faithfully execute the laws plainly includes an obligation to prevent waste. Impounding to save the taxpayer's dollar has always had the full support of the Congress. In many circumstances, the President has authority to impound money for a particular program by virtue of his authority under another statute, including the Anti-Deficiency Act. In addition to impounding actions taken for reasons of economy in a particular program or pursuant to express statutory authority, it is my view that the President has substantial latitude to refuse to spend or to defer spending for general fiscal reasons. Authority to pursue such goals flows not merely from congressional intent revealed as above indicated and from historical practice but, more fundamentally, from the dilemma in which modern Presidents have frequently been placed by the Congress. Despite the statutory policy and fiscal necessity to protect purchasing power by avoiding intolerable inflation, the structure of Congress does not enable it to assume the executive responsibility for achieving this end. The harsh reality is that time and time again Congress has passed swollen appropriation acts and failed to levy the taxes necessary to avoid. inflation. No President has been willing to accept the full consequences of this chronic tendency of Congress. Rather, they have been forced to resort to their veto power and, ultimately, to impounding of appropriations. While some critics of impounding may question the President's authority to impound funds for general fiscal reasons, even with respect to permissively worded spending program statutes, I believe that question must be resolved in the President's favor. It must be recognized, however, that the question is a much closer one when Congress has explicitly directed that President to spend the amount appropriated. Although the Congress has been keenly aware of executive impounding actions for many years, there have been only a very few Federal statutes in which the Congress has expressed an unequivocal intention to mandate spending for a particular program. This history compels the conclusion that if the Congress wishes to mandate full spending for a particular program, it must do so in unmistakably clear terms. Enactment of a spending mandate raises an important and presently unresolved constitutional question: does Congress have the authority to require the President to spend substantially all funds appropriated for a particular program? As to the Congress, the most relevant constitutional provisions are article I, section 1 and section 9, clause 7. These provisions vest all legislative powers in the Congress and give it the appropriations power. As a general proposition, therefore, Congress has the primary responsibility for establishing general national policy, at least in the domestic area, and the power of the purse to implement those policies. As to the President, the most relevant constitutional provisions are article II, sections 1 and 3. These provisions vest executive power in the President and require him to take care that the laws be faithfully executed. Although there is no judicial precedent squarely in point, Kendall v. United States, 12 Pet. 524 (1838), frequently is cited for the proposition that the Executive must comply with a congressional mandate to spend appropriated sums. The case is distinguishable in several respects. Indeed, in that case, the President had sent a message to Congress concerning Kendall's claim in which he took no position on its merits. Finally, the context in which present issues are being discussed is far different from that in which Kendall arose. Today's context is one in which the powers of Congress and the President must be accommodated to the inexorable necessities of national fiscal policy. To extend the teaching of Kendall to deprive the President of this power ignores these enormous contextual differences. A few other decisions are sometimes cited for the proposition that Congress can mandate spending by the executive branch, such as United States v. Price, 116 U.S. 43 (1885), and Miquel v. McCarl, 291 U.S. 442 (1934). Both cases were essentially similar to Kendall. In Price, the court held that the Secretary of the Treasury was required to pay a claimant for services previously rendered to the Government, as specified in a private bill. In Miquel, the court set aside the Comptroller General's determination that a particular person was not entitled to a veteran's pension under general pension legislation. Like Kendall, these cases contribute little to the current debate. Even if it be concluded, however, that Kendall holds that Congress can mandate spending if it explicitly expresses an intention to override the Anti-Deficiency Act and all other direct and indirect statutory sources of Presidential spending control, it is clear that any such mandate is subject to at least two important qualifications. The President has substantial authority to control spending in the areas of national defense and foreign relations. Such authority flows from the President's constitutional role as Commander in Chief of the Armed Forces and from his relatively broad constitutional authority in the field of foreign affairs. PROPOSED S. 373 I turn now to S. 373, the bill before the subcommittee. The bill in its essentials would require the President to notify the Congress of each impoundment made at his direction or with his approval, within 10 days after such action. It would require the cessation of impoundment after 60 days of continuous session of Congress, unless both Houses within that time approved it in the form of a concurrent resolution. As I view it, the practical effect of S. 373 would be to require the President to spend virtually all sums appropriated by the Congress. The definition of impounding is sweeping; it eradicates any differences between permissive and mandatory appropriation acts; it appears to repeal existing impounding authority provided by the Anti-Deficiency Act to establish reserves and effectuate economies made possible by developments subsequent to appropriations; and it embraces impoundments necessary to remain within statutory debt limits as well as those designed to protect purchasing power. In practice, the provision for approvals of individual actions of impounding by concurrent resolution would be largely illusory. Under the bill's broad definition of impounding, thousands of individual impounding actions will occur each year. Given the pressures of more important matters, it would be realistically impossible for the Congress to give any worthwhile consideration to thousands of impounding actions, each year. In short, the bill seeks to prohibit impounding by the President altogether. In my judgment, S. 373 is wholly impractical, profoundly unwise, and of very doubtful constitutionality. The basic objections to the bill should be readily apparent from what has already been said. Accordingly. I will outline briefly the principal policy and constitutional problems to be found in its overall purpose and effect. |