Impoundment
What is impoundment?
What is its history?
How is it implemented following the law and the Constitution?
Impoundment is a term applied to presidential executive actions that seek to either delay or postpone spending money, or to permanently halt spending money that has been legally authorized by Congress. As an example, suppose Congress has passed an appropriation bill (a bill that spends money) and it has been signed by the President. According to the Constitution (Article I, section 8, clause 1), Congress has the sole authority to spend money, but does so with the consent of the President, because the President has the power to sign or veto all appropriations bills. If the President vetoes the bill, Congress may override the veto if both houses pass it again by a two-thirds vote. Section 9 of Article I also states that “No money may be drawn from the Treasury, but [rather] in Consequence of Appropriations made by law.” In other words, the only way to withdraw money from the Treasury is through a congressional appropriation. Impoundment has been tested before the Supreme Court.1
Throughout the nation’s history, Congress has appropriated funds for many purposes, for example, to build canals, bridges and highways; to advance research in agriculture, medicine and space travel; and to help the elderly, veterans and children. At times, presidents have disagreed with Congress’s choices and expressed their displeasure as they carried out Congress’s decisions, but carry them out they did, usually by finding grounds for compromise with the legislature. However, during President Nixon’s second term, tensions with Congress increased as Nixon sought to expand his powers while Congress fought to restrain him yet also reassert its own constitutional authority. One result of this struggle was the Budget and Impoundment Control Act of 1974.2
The Impoundment section of the Act permits Congress to review
presidential impoundments, identifying two distinct types: deferral
and recission. A deferral is a temporary stay or
postponement of spending, intended to achieve savings or greater
efficiency in the fund’s expenditures. A recission
permanently cancels the spending, and the funds are returned to the
US Treasury. They may not be repurposed by the president
without express authorization by congress.
To exercise a deferral, a president, acting through the Office of
Management and Budget (OMB), must inform both houses
of Congress in writing, explaining the reasons for the
deferral. If neither chamber acts to reject the deferral,
the deferral stands, but the president must spend the funds by the
end of the Congress’s term.
To exercise a recission, the president, again acting through the
OMB, must similarly inform both houses in writing and
provide an explanation. To take effect, Congress must act
within 45 days and pass a recission bill that cancels all or part of
that appropriation. Failure to pass a recission bill means
that the President’s recission is null and void, and the money must
be spent.
The Impoundment Act assigns responsibility for tracking and evaluating impoundment actions to the Government Accountability Office (GAO). The GAO also determines the executive branch’s compliance with the appropriation bill in question. The Comptroller General, the GAO’s head, releases reports of its work to Congress. These reports include factual, legal, and potential impact analyses. Presidents may intentionally or unintentionally impound funds. If this occurs, the GAO will report unreported or misclassified impoundments, and has the authority to sue the executive branch to release improperly withheld funds.
- Train v. City of New York (1975): Congress passed the Federal Water Pollution Control Act Amendments of 1972, which appropriated funds to assist municipal water and sewer authorities to improve their systems and thereby reduce water pollution. President Nixon ordered Mr. Train, his EPA director, to not spend all the money that Congress had appropriated. The Court voted 8 to 1 and ruled that the statute’s language did not permit the President to refuse to spend properly designated funds. ⇧
- The Budget section of the Act created standing budget committees in both houses of Congress along with the Congressional Budget Office. It also established a formal budget timetable (one had never before existed) for Congress to receive and process the President’s proposed budget, which included a budget resolution. Thirdly, it allowed for a budget reconciliation to reduce spending under special circumstances. See Walter J. Oleszek, Mark J. Oleszek, Elizabeth Rybicki and Bill Heniff, Jr. Congressional Procedures and the Policy Process, 11th ed., cptr 2. ⇧
Additional Information
For even more information, see Louis Fisher, Presidential Spending Power (1975).