Thank you for the opportunity to present my views. I would like to include in the record here the memorandum I referred to earlier. Senator CHILES. Without objection.

(The memorandum referred to follows:)

[Bureau of the Budget, October 1961]

MEMORANDUM TO THE PRESIDENT: AUTHORITY TO REDUCE EXPENDITURES

The traditional concept of the responsibilities of the Executive Branch with respect to the use of appropriations was set forth in a report of the Committee on Appropriations of the House of Representatives in 1950 (House Report No. 1797, 81st Cong., 2d Sess.) in these terms:

"Appropriation of a given amount for a particular activity constitutes only a ceiling upon the amount which should be expended for that activity. The administrative officials responsible for administration of an activity for which appropriation is made bear the final burden for rendering all necessary service with the smallest amount possible within the ceiling figure fixed by the Congress. Every official of the Government who has responsibility for administration of a program must assume a portion of the burden for the deficit in the Federal Treasury."

Various statements to the same effect may be found in other congressional committee reports and in congressional debates, where the proposition is most frequently expressed in the statement that “an appropriation is not a mandate to spend." However, none of the various statements of this nature is authority for the proposition that an official charged with carrying out the terms of an appropriation act is free to exercise his own judgment as to whether or not it should be executed. Where the law is clear, the duty is clear; the responsibility of the official is to accomplish the purpose of the law with the smallest possible expenditure of public funds.

Except in a few instances (notably, foreign aid), the authority and responsibility for administering Federal programs is vested by law in the heads of the departments and agencies concerned. While the President has the constitutional duty to "take care that the laws be faithfully executed," the direct responsibility for administration is vested in the officers whom he appoints.

The President's authority to control his appointees in the matter of expenditures of public funds was treated in an unpublished opinion rendered by Attorney General Cummings on May 27, 1937, in response to an inquiry from President Roosevelt as to the President's authority to direct departments and agencies of the Government, either on a percentage basis or with reference to specific items, "to withhold expenditures from appropriations made." The Attorney General's opinion referred to is, in part, as follows:

"To answer your inquiry, it is, therefore, necessary to consider the extent, under the Constitution, of the President's powers over the various departments and agencies of government and the officers thereof. The scope of such powers, while long the subject of discussion, has not yet been absolutely defined, and perhaps is susceptible of delimitation only as particular powers are drawn into question. However, it seems quite clear that the Constitution confers on the Congress the power to establish departments and agencies in the executive branch of the Government and to define the duties and functions of the officers who are to administer them; and that when the Congress has so done, the President, in the absence of legislative authority, has no legal power to interfere with the administration of such departments or agencies further than 'to take care that the laws be faithfully executed.'

"It appears to follow from these authorities that in the absence of legislative sanction an order by you withholding expenditures from appropriations made would not be binding on the disbursing officers in the event that a department head or other authorized official should desire funds from the amount ordered to be withheld. Further doubt regarding the existence of the power to make such an order arises from the fact that the power would in effect enable the President to overcome the well settled rule that he may not veto items in appropriation bills."

While Attorney General Cummings' opinion indicates that the President could not order the head of an agency to defer initiation of the projects involved here, it concludes as follows:

"*** it is, of course, entirely legal for you in an endeavor to accomplish the desired ends to request or direct the heads of the departments and agencies to attempt to effect such savings as may be possible without violation of or interference with the proper performance of any duty prescribed by law."

(The word "direct," as used in the sentence quoted above, in context appears to be synonymous with "request" or "suggest"; it was apparently not used in the sense in which the word "directive" is commonly used today, when a directive is regarded as tantamount to an order.)

Thus, the President certainly may indicate his views to his agency heads and he may request an agency head to delay initiation of some or all of the projects or programs for which funds are provided in the appropriation act. In most cases there is considerable latitude available to the agency head. For example, he can prosecute projects with the utmost vigor, and disregard minor details in an effort to award contracts and initiate projects at the earliest possible moment. On the other hand, he can prosecute a program in a most cautious manner with great attention to detail. Depending upon the manner which he selects, it might be that a greater or lesser number of projects or programs would be initiated or completed during a particular fiscal year.

Action along these lines was taken by the President on June 30, 1959, when he signed H.R. 2256, a bill providing additional funds for housing loans for veterans. Referring to an item of $100 million for direct loans which was not a part of the administration's program, the President noted that such loans were, under basic law, to be made only in areas where private capital was not generally available. He then stated that the Veterans Administration will therefore "exercise maximum caution" in making direct loans until it could be determined whether sufficient private capital would be available for the purpose.

Action by the President along these lines would, however, be far short of a specific order to agency heads to defer initiation or completion of particular projects or programs for which funds have been appropriated. And the effectiveness of such action would depend upon the agency heads' views of the extent to which compliance with the President's expressed wishes would be possible "without violation of or interference with the proper performance of any duty prescribed by law." An additional factor for consideration, of course, is that most agency heads may be removed by the President at will.

In carrying out his duty to take care that the laws be faithfully executed, the President must consider not only appropriation acts but all of the other laws enacted by the Congress. If executing the appropriation act would result in a conflict with other laws, the President would have not only the right but the duty to resolve the conflict. For example, in the fiscal year 1958 the President requested agency heads to delay expenditures and to reduce them below the amounts appropriated by the Congress in order to prevent expenditures which could not be met by borrowing within the statutory limit on the national debt. The Deputy Attorney General, by letter of May 14, 1958, transmitted to the Committee on Armed Services of the House of Representatives a memorandum prepared in the Department of Justice which indicated a view that the actions of the Executive Branch in this regard were in accord with the law.

The authority of the President with respect to limiting expenditures for particular projects was treated by the then Special Counsel to the President, in a letter of August 12, 1955, to a member of Congress, as follows:

"Because of the President's Constitutional obligation to faithfully execute the laws, I am strongly of the view that when Congress has appropriated funds for a particular project, that President cannot set aside the will of Congress and direct that no funds be spent on that project.

"It is true that in the past Presidents have declined to spend funds appropriated by the Congress for a particular purpose, but I have not found any instance of this that did not relate to funds appropriated for the national defense. In this field the President, of course, has Constitutional responsibilities of his own as Commander-in-Chief of the armed forces. Thus President Truman declined to spend funds which were appropriated by the Eightieth Congress for a seventy group air force. These national defense precedents, however, cannot, in my opinion, be used as precedents for withholding funds appropriated for a nondefense purpose."

After the above-referred-to letter was written, President Eisenhower twice requested that expenditures be curtailed in situations not involving his duties as Commander-in-Chief. The first such instance was in fiscal year 1958, involving

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the statutory debt limit, which is referred to above. The second instance occurred in fiscal year 1959, and involved a request for a two percent reduction in employment levels to obtain maximum absorption of increased pay costs and to promote efficiency. In the first instance, the funds were released when the pressure on the debt ceiling was relieved, and the second instance involved no question of delaying or rejecting any specific project or function.

In any event, the President cannot be forced to use appropriations--a fact which has been frequently recognized in congressional debate. If the President directs an agency head not to spend funds, and the agency head is willing to comply, there is no legal means available to compel the Executive Branch to enter into the necessary contracts. Simply stated, the President has the powernotwithstanding any possible limitations upon his authority—to prevent the carrying out of the intent of the Congress. In the event the President should choose to exercise that power, the only remedy available to the Congress would be impeachment. This raises considerations which are essentially political rather than legal.

Under the provisions of the Antideficiency Act (31 U.S.C. 665), appropriations for agencies of the Executive Branch must first be apportioned by the Director of the Bureau of the Budget before they are available to the agencies. The Director is required to apportion annual appropriations in such a manner that they will meet the needs of the entire fiscal year without the necessity for a deficiency or supplemental appropriation; and he is required to apportion no-year appropriations so as "to achieve the most effective and economical use thereof."

The Antideficiency Act expressly authorizes the Director to establish reserves, but only for two specific purposes, as follows:

(1) To provide for contingencies; and (2) to effect savings whenever savings are made possible by or through-Changes in requirements; greater efficiency of operations; other developments subsequent to the enactment of the appropriation.

There is nothing in the statute or its legislative history to support a view that the Director's authority to establish reserves may be used to prevent the execution of projects or programs for which appropriations have been made by the Congress. The language of the Act, when read in context, seems to indicate rather clearly that the provisions permitting the establishing of reserves are to be used only to the extent that they do not interfere with the execution of the purposes for which appropriations are provided. There is nothing in the statute or its legislative history to support a view that the reserve authority may properly be used to prevent the use of appropriations because of overall fiscal considerations.

The authority to make apportionments and to establish reserves is vested directly in the Director of the Bureau of the Budget by the Antideficiency Act and is not dependent upon the Director's relationship to the President. However, the apportionment system was used, during the fiscal year 1958, as the administrative channel for the President's request that the agency heads curtail obligations and expenditures at or below the level for the fiscal year 1957 to the extent feasible.

In the fiscal year 1959 the Director of the Bureau of the Budget by letter conveyed to agency heads the President's request that each agency attempt to hold employment levels for that fiscal year at least two percent below those that could reasonably be financed from appropriations. However, when President Truman in 1949 determined to limit expenditures for the Air Force, he addressed the Secretary of Defense directly and directed him to place in reserve the funds which would have permitted increasing the structure of the Air Force beyond the program proposed in the 1950 Budget.

Thus, action by the President with respect to appropriations could take one of three forms: (1) a request to the Director of the Bureau of the Budget to apportion funds in such a manner as to achieve a particular result: (2) a request to the Director of the Bureau of the Budget to convey to agency heads the President's request that appropriations be conserved in a particular manner. without any direct action to reduce apportionments or establish reserves; or (3) a direct request by the President to agency heads.

Senator CHILES. Senator Ervin.

Senator ERVIN. I want to commend you for your statement, and the ultimate approach that you suggest certainly deserves serious con

sideration by the committee. Also the procedure you suggest providing for a ruling between the Executive and Congress, would be important in providing interpretation as to many appropriation acts and other related acts. I think it would provide good machinery of allowing appeal to the courts to get a decision by an impartial body that is not concerned with this side of right or wrong.

Now, it was suggested by Senator Byrd from West Virginia who testified just before you, that we should establish a joint committee which would jointly study these matters. Do you recall during the last session of Congress, the closing days of the last session of Congress, when the President suggested we ought to have an overall ceiling on expenditures of $250 billion, that the Republican Senator from Idaho, Len Jordan, had an amendment which would give the President authority to cut a proportion of all appropriations made by Congress during that session of Congress. The Senate passed it by a very strong majority, but it was defeated in the House largely as a result of the efforts and opposition of the administration.

Now, wasn't that a very desirable approach to the problem and a very simple solution to the problem of excessive spending which had the virtue of preserving veto priority placed by Congress upon the various programs and projects covered by all appropriations bills during that session?

Senator KENNEDY. I would agree, Senator. I think it was responsive to the particular situation that faced the Congress then. It was a bipartisan effort by Senators Jordan and Packwood and many others, and I think presented the most desirable means for providing some restraint in terms of budgetary expenditures. I think it was certainly the appropriate way to proceed.

The administration rejected this congressional initiative approach toward doing something about the spending ceiling. I think it was preferable and obviously it would have been sounder from a constitutional point than the arbitrary and whimsical response reflected in the administration's meat-axing of programs that have been authorized.

Senator ERVIN. Does not such a solution of the problem of excessive spending have the virtue of being very simple. It only takes a computer to determine exactly what the reduction has to be pro rata.

Senator KENNEDY. Exactly, and as suggested by the formula, it provides a standard-an equal standard-for all the various programs. It seemed to me that even though there may be some programs which any individual members of the Senate or group of Senators preferred as high priority or lesser priority, it did provide the most expeditious means for meeting our responsibilities toward budgetary restraint. I think it was constructive initiative by the Congress and I think that it is all too forgotten by the American people. I think to a great extent the American public felt at the conclusion of the last session that it was the President trying to get the ceiling and it was the Congress trying to block him in this decision.

I think Senator Byrd reviewed with the subcommittee, as the majority leader has at the end of each session, where the Congress over a period of the last 4 years cut $20.2 billion in appropriations from the President's requests.

Senator ERVIN. Do you agree with me that there has developed in Congress a recognition of the desirability of setting the Federal financial house in order, and that Congress is anxious to do that, but the controversy that exists between the Congress and the Executive arises out of the feeling of Congress that it lies solely within the constitutional power of Congress to determine the objectives for which appropriations should be made, or the expenditure of Federal funds should be authorized, and the feeling of Congress that the President is endeavoring to usurp that power of priorities for expenditures for various projects?

Senator KENNEDY. The Senator has stated it accurately. I believe every schoolboy learns how laws are passed, and that is they are passed by the House and Senate and signed by the President, that they become the law of the land, that the President is committed to execute them and uphold them. That is what the Constitution says. That is what every child learns in this country. Yet we have seen by this President the very extensive use of the impoundment process to negate or frustrate various programs which have been passed by the Congress and signed into law by himself. I think that is completely contrary to the Constitution and exceeds any power which was granted to the President.

Senator CHILES. Do you have any questions?

Mr. KURLAND. Senator, I am rather disturbed by your suggestion that impoundment is proper with regard to military expenditures. Senator KENNEDY. I was not trying to suggest that I recognize it was proper. What I was trying to say was that traditionally and historically, from the time of the founding of the Republic there has been a different standard applied for military affairs.

I am not today willing completely to grant the legitimacy of impoundment in military and foreign affairs. I am noting what I think has been a reality, going back from the time of Thomas Jefferson's failing to spend the funds for the 55 gun boats on the Mississippi to President Kennedy's actions relating to the bombers. But I note clear differences between these historical precedents and the wholesale impoundment at the present time of domestic programs with which this administration has disagreed with. It is more a matter of according recognition than a willingness to accept it personally myself, I think is a reasonable interpretation of historical precedents, in light of the language of the Constitution itself.

I would be willing to inquire from you whether or not you would not agree that at least there has been this distinction?

Mr. KURLAND. There are no doubts that precedents exist.

I would note section 8, article 1 includes among the powers granted to the Legislature, the power to declare war, raise and support armies, maintain a navy, provide for a militia, provide for organization and disciplining an army and militia, and finally to make all laws which shall be necessary and proper to carry into execution the foregoing powers and all other powers vested by this Constitution by the Government of the United States or any department or office thereof. I conclude from this there is no constitutional authority in the military area any more than there is in the areas you discussed in your testimony.

Senator KENNEDY. I don't want to be put in the position of trying to defend a position with which I am not in full agreement. But I