Presidential discretion allowed by the Impoundment Control Act

The Competitive Enterprise Institute (CEI) publishing my paper this week about the possible constitutional arguments against the Impoundment Control Act of 1974. This is especially important because both President Trump and OMB Director Vought have either stated or strongly implied an intent to challenge the Impoundment Control Act on constitutional grounds. Yet, there is another critical issue related to the Impoundment Control Act that is entirely separate from its constitutionality—its actual function and scope.

The Impoundment Control Act does not explicitly mandate the President to fully expend all appropriated funds—and almost no one claims it does. Mostly, it creates a procedure where the President can ask Congress not to spend money that is already required to be spent.

However, according to the GAO, the Act also imposes a requirement to take “reasonable” steps to spend all appropriations unless such spending is unavoidably delayed. The GAO classifies such unavoidable circumstances as “programmatic delays.”

Yet the term “programmatic delays” does not appear anywhere in the statutory text. Instead, the statute categorically prohibits “deferrals” unless they are (1) for contingencies, (2) to achieve cost savings through improved efficiency, or (3) as specifically provided by law. It defined deferral as withholding or delaying the obligation or expenditure or such action or inaction that effectively precludes the obligation or expenditure of budget authority. It also effectively prohibits budget authority from being “rescinded for fiscal policy or other reasons” without congressional approval.

So, how does the GAO justify these “programmatic delays” when the statute itself is silent on them? Initially in 1976, GAO asserted such delays do not “constitute a withholding of budget authority” under the Act. By 1980, the GAO shifted its position, that any delays cannot be so unusual or unreasonably long to show an “intent to delay the obligation of funds until the fiscal year expired.” The D.C. Circuit in City of New Haven, Conn. V. U.S. (D.C. Cir. 1987), took yet another approach, distinguishing between two types of delays:

The majority of proposed deferrals are routine “programmatic” deferrals, by which the Executive Branch attempts to meet the inevitable contingencies that arise in administering congressionally-funded agencies and programs. Occasionally, however, the President will seek to implement “policy” deferrals, which are intended to advance the broader fiscal policy objectives of the Administration. The critical distinction between “programmatic” and “policy” deferrals is that the former are ordinarily intended to advance congressional budgetary policies by ensuring that congressional programs are administered efficiently, while the latter are ordinarily intended to negate the will of Congress by substituting the fiscal policies of the Executive Branch for those established by the enactment of budget legislation.

Rather than debate whether a temporary delay constitutes a “withdrawal” or an “intent to delay,” the more pertinent question is whether the action falls within the “provided by law” exception within the Impoundment Control Act.

Many appropriations do not require the executive to spend every dollar. Some do, but many incorporate a degree of executive discretion to determine how to allocate funds effectively. Additionally, certain expenditures require permits or regulatory approvals—a process that inherently involves executive discretion. There Congress provides executive discretion as a precondition for the spending of the funds. In such cases, it furthers the will of Congress to ensure the executive carefully considers how and when to spend the money. Thus, the Impoundment Control Act may not even apply in many cases when Congress has granted the president discretion to manage funds.

In short, many executive spending decisions could be legally justified under the Impoundment Control Act without relying on arguments about contingencies or efficiency or the statute’s constitutionality. The administration could consider whether Congress allows a particular spending decision by the executive before launching a broader constitutional challenge. This is especially true on issues outside of spending on executive powers. On core executive powers, however, my paper demonstrates that the Impoundment Control Act is likely unconstitutional.