StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between



Why Not Impoundment?

24 May 2010
Posted by Bruce Bartlett

The Obama administration has announced another effort to give the president some sort of line-item veto authority. Since the Supreme Court has made clear that a statutory line-item veto is unconstitutional--Republicans gave it to Bill Clinton in 1996 and it was ruled unconstitutional in 1998--Obama is asking for enhanced rescission authority. Basically, the president would ask for spending cuts and Congress would be forced to vote upon them as a package.

I have no problem with this legislation; I do believe that insofar as the budget is concerned that the president needs more authority vis a vis Congress. However, I think there really is a much simpler way of getting around the constitutional problem--just repeal the part of the Budget Act which prohibits impoundment.

In essence, impoundment means that if the president doesn't want to spend money appropriated by Congress he simply impounds it; i.e., doesn't spend it. It has exactly the same effect as a line-item veto and is unquestionably constitutional--every president up until Nixon had and routinely used impoundment to control spending.

But in 1973, Nixon became heavy-handed in his use of impoundment, which outraged members of Congress of both parties. Legislation was drafted to eliminate impoundment and force the president to spend every penny appropriated by Congress exactly as Congress intended. All the president could do to change congressional priorities was ask for a rescission or deferral. But there was no way of forcing Congress to act on these requests and most were simply ignored.

Under ordinary circumstances, Nixon would have vetoed the impoundment bill as an infringement on long established presidential authority. But unfortunately the Watergate scandal broke just as the congressional fight over impoundment legislation reached its peak. The best that Nixon and congressional Republicans could do was to attach budget reform measures to the impoundment bill. The resulting law, one of the last signed by Nixon before resigning, was the Congressional Budget and Impoundment Control Act of 1974. Since almost everyone just calls it the Budget Act of 1974, people have forgotten that restricting impoundment was actually the central purpose of the legislation.

Therefore, it would seem to me that simply getting rid of or amending the section of the Budget Act relating to impoundment could give the president de facto line item veto power in a way that would be much more effective than enhanced rescission authority and would certainly be constitutional.

Are you sure frequent use would pass the Supreme Court?

Actually, from what I've read it looks like impounding was never really put to the test in the Supreme Court. From what I've read, it wasn't used that often before Nixon. Here's a quote from a 1973 article in Time magazine on this issue:

As Jackson [U.S. Supreme Court Justice Robert Jackson] pointed out: "Any actual test of power is likely to depend on the imperatives of events and contemporary imponderables rather than on abstract theories of law." For this reason, constitutional authorities would prefer that the issue be ajudicated not in the courts but in the rough and tumble of the political arena.

at: http://www.time.com/time/magazine/article/0,9171,903811-1,00.html

Of course, on today's Supreme Court you can count on at least four of the justices to be as ideologically biased to the right as they feel they can get away with, so their reasoning will be very different.


why not? because the presidency is already too imperial

The most surprising thing about this post is its casualness -- ho hum, another option for reining in the budget. But isn't it obvious that impoundment is unlikelyt o restrain spending? Presidents spend money for the same reasons Congresses do -- to stimulate a down economy, to curry favor, to indulge in a pet project. And by and large those expenditures have little to do with the structural budget deficit, in the first case because stimulus is not a structural expense and in the latter cases because they do not amount to much. We will be waiting a long time for a president to impound Medicare payments. All impoundment would do is add to the list of incentives or cudgels presidents could wield in their efforts to persuade Congress to do their bidding. Presidents would decide more, Congresses less. Fine, if that is what you want. But don't we deserve at least one paragraph of evidence for the alleged greater fiscal rectitude of the presidency? I imagine the reply -- likely ignoring any convincing case for inherent presidential parsimony -- would be that impoundment may aggrandize the executive, but in a way that can serve only to limit the size of government. Surely that is naive. Maybe some years in some presidencies impoundment would serve that purpose on the margins, in the the sub-one-tenth-of-a-percent range. But in the long run isn't it a lot more likely that impoundment's main effect will merely be to support government wanted by the executive -- larger, smaller, same size, more liberal, more conservative, as it had been, whatever -- over the one that legislators want? There is no reason to think that budget reduction will figure into it any more than budget enhancement. With impoundment, ultimate budget levels will simply depend a little more on the president than it already does. It won't change budget levels over the long term, but hey, presidents generally seem less shabby than Congresses, so let's go for it anyway. Strange how notional conservatives ever build up the king repudiated by the founders whose limited-government vision they claim to revere.


More Choices

The problem I see with impoundment is that, like the filibuster, it requires that the people using it will be sensible and act in good faith for the good of the country. Obviously that isn't happening with the filibuster, Republicans are using as a partisan political tool to stop all bills regardless of the merits. In this partisan environment I am hesitant to give that much power to any politician.

On the larger subject of reining in spending, I don't trust either party to come up with a reasonable plan that reflects the priorities of the American public. As I said on a different post, we need a contest. Let all interested parties submit a plan to cut spending, let the CBO score them all, and then let the public vote using some runoff voting technique like IRV. Vote one off the island every week, then people would pay attention.

Obama's deficit commission will come up with one plan, but I bet that AEI or CAP would come up with much different plans. Let the American people articulate our priorities not 18 rich politicians that have been insulated from real life for decades. We say we like competition, lets have some real competition in politics for a change.


Works in Some Ways - Be Careful!

The idea of impoundment is not novel. Companies do this all the time - "We budgeted for that, but now we won't spend it." I doubt it can be used in entitlement payments, since if the government owes you Social Security or Medicare payments, you as taxpayer can sue to claim what's rightfully yours. But if the government chooses not to build their Bridge To Nowhere this year, before the funding expires - they do this all the time. It would certainly give the executive brnch a fascinating lever against congress - "pay as you play" pork in return for cooperation. The fear should be that the tool would be used in the same spirit as pork - not to do serious cost-cuting, not to prove a point that some things should not be in a budget or recovery bill, but to twist arms and dole out favours in the grand tradition of gatekeepers of funds everywhere.




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