StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between

Disagreeing With Bruce On Impoundments

25 May 2010
Posted by Stan Collender

There are several flaws in Bruce's post from late yesterday on impoundments.

First, the Congressional Budget and Impoundment Control Act of 1974 didn't do away with impoundments, it legalized them.  The impoundment control provisions gave the president the specific authority to propose that some already enacted appropriations not be spent.  This was authority every president since Thomas Jefferson had used without it actually having been granted to them.  The budget act changed that by creating two different categories of impoundments --rescissions and deferrals -- and a process by which Congress could review what the president proposed.  In other words, the Congressional Budget Act made impoundments legal rather than illegal and there's nothing that needs to be repealed for a president to propose them.

Second, contrary to what Bruce says, it's not at all clear that going back to the pre-Congressional Budget Act impoundment process would be legal.  As I recall, there were a number of legal challenges to Richard Nixon's use of impoundments (I think it was mostly by state and local governments which didn't like the fact that it was their grants that were on the chopping block) and in almost all cases the courts said that the president had improperly withheld the funds.  If I remember correctly, the White House didn't appeal the cases to the Supreme Court at least in part because it didn't want that type of definitive ruling against what it was doing.

For some reason I have a strong memory of senior Nixon advisor John Ehrlichman being asked about this on Meet The Press (I've tried but haven't been able to find a clip).  Ehrlichman was asked whether what the president was doing was legal given that he had a constitutional responsibility to enforce the laws and the spending provisions he was refusing to enforce were part of appropriations Nixon had signed.  Ehrlichman answered that the president has many responsibilities, one of which was to deal with fiscal policy.  The legal reasoning by the White House for not spending the funds never seemed to be equal to what the courts were saying, but it worked as an answer at the time.  (Here's a story about Ehrlichman and impoundments from 1973 and a picture that will bring back memories for some.)

All the enhanced rescission bill the White House announced yesterday and which will be formally introduced in the House later this week basically would revise part of the impoundment control procedures put in place in 1974.  Under current law, a proposed rescission must be spent less Congress votes to approve it within a certain period of time.  If Congress takes no action, however, the impoundment is considered to be disapproved and the funds are supposed to be spent as intended. 

The existing process would be turned on its head by the administration's proposal.  If Congress didn't take a vote within a certain period of time, the proposed rescission automatically would be approved.

Budget watchers and analysts may have a sense of deja vu about all of this.  A different version of enhanced rescission sponsored by now House Budget Committee Chairman John Spratt (D-SC) and Rep. Charlie Stenholm (D-TX) passed the House in the late 1990s but died in the Senate.  As Bruce mentions in his post, the GOP-controlled Congress then gave Clinton a line-item veto under the assumption that it would be available to a Republican president to use starting in 2001.  That was the law that was struck down as unconstitutional.

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