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B-220532, SEP 8, 1986

B-220532 Sep 08, 1986
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GAO ENDORSES PROVISIONS REQUIRING THE PRESIDENT TO SPECIFY FOR EACH DEFERRAL DATES CERTAIN ON WHICH HE WILL RELEASE THE DEFERRED BUDGET AUTHORITY. THE BILL WOULD REQUIRE THE PRESIDENT TO SPECIFY FOR EACH DEFERRAL A DATE CERTAIN ON WHICH HE WILL RELEASE THE BUDGET AUTHORITY REPORTED AS DEFERRED. WE SUPPORT THE REQUIREMENT OF H.R. 4888 THAT THE PRESIDENT SPECIFY DATES CERTAIN ON WHICH HE WILL RELEASE BUDGET AUTHORITY PROPOSED FOR DEFERRAL. THIS APPROACH IS BASED ON A SUGGESTION OF OURS. 132 CONG. THE CONGRESS WOULD NOT HAVE TO ENACT LEGISLATIVE DISAPPROVALS OF DEFERRALS TO ENSURE TIMELY RELEASE OF THE FUNDS (UNLESS IT WANTED THE FUNDS RELEASED EARLIER THAN THE DATE SPECIFIED IN THE PRESIDENT'S MESSAGE).

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B-220532, SEP 8, 1986

APPROPRIATIONS - IMPOUNDING - IMPOUNDMENT CONTROL ACT DIGEST: H.R. 4888, BY ELIMINATING THE ONE-HOUSE VETO OF DEFERRALS, WOULD SOLVE THE IMPOUNDMENT CONTROL ACT'S CHADHA PROBLEM. GAO ENDORSES PROVISIONS REQUIRING THE PRESIDENT TO SPECIFY FOR EACH DEFERRAL DATES CERTAIN ON WHICH HE WILL RELEASE THE DEFERRED BUDGET AUTHORITY, AND PROHIBITING WITHHOLDING AFTER THE DATE CERTAIN. GAO RECOMMENDS DELETING OR ALTERING THE BILL'S PROVISION REQUIRING THE COMPTROLLER GENERAL TO PROMULGATE AND APPLY STANDARDS DEFINING ANTIDEFICIENCY ACT DEFERRALS, AS OPPOSED TO FISCAL POLICY DEFERRALS. SUCH PROVISION MAY BE SUBJECT TO CONSTITUTIONAL CHALLENGE IN LIGHT OF BOWSHER V. SYNAR.

THE HONORABLE JACK BROOKS:

CHAIRMAN, COMMITTEE ON GOVERNMENT OPERATIONS

HOUSE OF REPRESENTATIVES

THIS RESPONDS TO YOUR MAY 28, 1986 REQUEST FOR OUR VIEWS ON H.R. 4888, 99TH CONGRESS. H.R. 4888 WOULD AMEND THE IMPOUNDMENT CONTROL ACT OF 1974 (THE ACT) IN SEVERAL WAYS. THE BILL WOULD REQUIRE THE PRESIDENT TO SPECIFY FOR EACH DEFERRAL A DATE CERTAIN ON WHICH HE WILL RELEASE THE BUDGET AUTHORITY REPORTED AS DEFERRED. THE PRESIDENT COULD NOT WITHHOLD BUDGET AUTHORITY FOR ANY REASON AFTER THE DATE CERTAIN. FOR ALL FUNDS, THE DATE CERTAIN COULD BE NO LATER THAN THE LAST DAY ON WHICH ENOUGH TIME REMAINS BEFORE EXPIRATION TO PRUDENTLY OBLIGATE IT. FOR MULTI-YEAR FUNDS, A LIMIT ON DEFERRAL DURATION OF 365 DAYS ALSO APPLIES, AND IN NO EVENT COULD ANY FUNDS BE PERMITTED TO LAPSE AS A CONSEQUENCE OF A DEFERRAL. REDEFERRALS WOULD BE PROHIBITED.

H.R. 4888 WOULD ALSO REQUIRE THE COMPTROLLER GENERAL TO PRESCRIBE STANDARDS FOR DETERMINING WHETHER OR NOT A DEFERRAL PROPOSES TO WITHHOLD BUDGET AUTHORITY EXCLUSIVELY FOR A PURPOSE AUTHORIZED BY 31 U.S.C. SEC. 1512(C)(1) (THE ANTI-DEFICIENCY ACT), AND IN A MANNER WHICH IMPROVES THE MANAGEMENT AND ADMINISTRATION OF THE BUDGET AUTHORITY, WITHOUT DIVERGING FROM THE POLICIES, PURPOSES, AND OBJECTIVES OF THE CONGRESS IN MAKING SUCH BUDGET AUTHORITY AVAILABLE. THE COMPTROLLER GENERAL WOULD REVIEW EACH DEFERRAL MESSAGE TO DETERMINE WHETHER IT COMPLIED WITH THOSE STANDARDS. IF HE DETERMINED THAT A PROPOSED DEFERRAL DID NOT COMPLY, HE WOULD REPORT THAT DETERMINATION TO BOTH THE HOUSES OF CONGRESS, AND THE DEFERRAL WOULD, UNDER THE BILL, BE TREATED AS A RESCISSION PROPOSAL.

AS WE SAID IN OUR JULY 21, 1986 LETTER TO YOU COMMENTING ON H.R. 4205 (B- 222693), WE SUPPORT THE REQUIREMENT OF H.R. 4888 THAT THE PRESIDENT SPECIFY DATES CERTAIN ON WHICH HE WILL RELEASE BUDGET AUTHORITY PROPOSED FOR DEFERRAL, AND THE BILL'S PROHIBITION ON WITHHOLDING AFTER THE DATE CERTAIN. INDEED, AS THE SPONSORS ACKNOWLEDGE, THIS APPROACH IS BASED ON A SUGGESTION OF OURS. 132 CONG. REC. H3249 (DAILY ED. MAY 22, 1986).

SUCH AMENDMENTS WOULD, WE BELIEVE, PREVENT MANY IF NOT ALL OF THE KINDS OF DEFERRALS WHICH MANY MEMBERS NOW FIND OBJECTIONABLE. FOR EXAMPLE, SINCE THE BILL LIMITS SUCH DEFERRALS TO A MAXIMUM OF 365 DAYS, THE EXECUTIVE WOULD NO LONGER BE ABLE TO PROPOSE INDEFINITE DEFERRALS OF NO- YEAR FUNDS. THE CONGRESS WOULD NOT HAVE TO ENACT LEGISLATIVE DISAPPROVALS OF DEFERRALS TO ENSURE TIMELY RELEASE OF THE FUNDS (UNLESS IT WANTED THE FUNDS RELEASED EARLIER THAN THE DATE SPECIFIED IN THE PRESIDENT'S MESSAGE).

THESE AMENDMENTS WOULD ALSO OVERCOME CONSTITUTIONAL OBJECTIONS TO THE ACT, HELD TO EXIST BY THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA IN NEW HAVEN V. UNITED STATES, NO. 86-0455 (D.D.C. MAY 16, 1986). THE DISTRICT COURT, CITING IMMIGRATION AND NATURALIZATION SERVICE V. CHADHA, 462 U.S. 919 (1983), CONCLUDED THAT THE ACT'S ONE-HOUSE DISAPPROVAL OF DEFERRALS CONSTITUTED AN UNCONSTITUTIONAL LEGISLATIVE VETO, AND STRUCK DOWN THE ENTIRE DEFERRAL PROCEDURE OF THE ACT, BOTH THE PRESIDENT'S AUTHORITY TO DEFER AND THE CONGRESSIONAL DISAPPROVAL MECHANISM. BECAUSE DEFERRED BUDGET AUTHORITY, UNDER H.R. 4888, WOULD HAVE TO BE RELEASED ON THE DATE CERTAIN WITHOUT CONGRESSIONAL ACTION, A ONE- HOUSE VETO IS AVOIDED.

H.R. 4888 WOULD ADD A NEW SECTION 1018 TO THE ACT. AS PROPOSED, SECTION 1018 WOULD REQUIRE THE COMPTROLLER GENERAL TO PROMULGATE AND APPLY STANDARDS FOR DETERMINING WHETHER A DEFERRAL IS AN ANTI DEFICIENCY ACT DEFERRAL, AND AUTHORIZE THE COMPTROLLER GENERAL TO CONVERT POLICY DEFERRALS TO RESCISSIONS. IN LIGHT OF THE SUPREME COURT'S RECENT DECISION IN BOWSHER V. SYNAR, 54 U.S.L.W. 5064 (U.S. JULY 7, 1986), SECTION 1018 COULD RAISE FURTHER CONSTITUTIONAL CHALLENGES TO THE ACT, RESULTING IN LENGTHY AND COMPLEX LITIGATION. WHATEVER THE OUTCOME OF ANY SUCH LITIGATION, THE EFFICACY OF THE CHALLENGED PROCEDURE COULD BE IMPAIRED AT LEAST UNTIL THE LITIGATION WAS COMPLETE. AN AMENDMENT TO THE BILL COULD AVOID THIS SITUATION WITHOUT, WE BELIEVE, SACRIFICING THE INTEREST OF THE CONGRESS.

THE REQUIREMENT IN THE BILL FOR RECLASSIFICATION BY THIS OFFICE OF POLICY DEFERRALS RESULTS FROM THE CONCERNS OF MANY CONGRESSMEN THAT THE PRESIDENT IS TAKING ADVANTAGE OF DOUBTS ABOUT THE CONSTITUTIONALITY OF THE ACT'S CURRENT PROCEDURE FOR ONE-HOUSE DISAPPROVAL OF DEFERRALS. KNOWING THAT THE CONGRESS, IN REACTION TO THE CHADHA DECISION, HAS BEEN RELUCTANT TO USE THE ONE-HOUSE DISAPPROVAL TO OVERTURN SUCH DEFERRALS, THE PRESIDENT HAS, IN THIS VIEW, USED THE DEFERRAL PROCESS TO ACHIEVE SUBSTANTIVE CHANGE IN PRIORITIES ESTABLISHED BY THE CONGRESS IN APPROPRIATION ACTS. THE PRESIDENT HAS MOST OFTEN ASSERTED CHANGES IN FISCAL POLICY WITH SUCCESSIVE REIMPOUNDMENTS OF MULTIYEAR FUNDS, OR PROLONGED WITHHOLDINGS PENDING LEGISLATIVE TRANSFER OF THE DEFERRED FUNDS. IN OTHER INSTANCES OF FISCAL POLICY DEFERRALS, THE PRESIDENT HAS DEFERRED UNTIL THE END OF FISCAL YEAR BUDGET AUTHORITY WHICH WAS TRANSFERRED FROM TRUST FUNDS TO OTHER ACCOUNTS FOR NON-TRUST FUND PURPOSES FOR ONLY ONE FISCAL YEAR. ALTHOUGH THE DEFERRED BUDGET AUTHORITY, AT THE END OF THE FISCAL YEAR, WOULD REVERT TO THE TRUST FUND, THE DEFERRAL IN SUCH INSTANCES COULD RESULT IN THE DEFEAT OF THE PURPOSE FOR WHICH THE CONGRESS TRANSFERRED THE BUDGET AUTHORITY. OR, IN A VARIATION OF THIS, THE PRESIDENT HAS DEFERRED FOR A FULL FISCAL YEAR "PERMANENT, INDEFINITE" BORROWING AUTHORITY WHICH THE CONGRESS HAS MADE AVAILABLE FOR ONLY ONE FISCAL YEAR.

IN THE SYNAR DECISION, THE SUPREME COURT HELD UNCONSTITUTIONAL THE COMPTROLLER GENERAL'S ROLE IN THE DEFICIT REDUCTION PROCESS UNDER THE BALANCED BUDGET AND EMERGENCY DEFICIT CONTROL ACT OF 1985, PUB.L. NO. 99-177. UNDER THE ACT, THE COMPTROLLER GENERAL, EACH FISCAL YEAR, WAS TO ESTIMATE FEDERAL REVENUES AND EXPENDITURES, AND TO SPECIFY BUDGET REDUCTIONS NECESSARY TO MEET THE ACT'S DEFICIT TARGET FOR THAT FISCAL YEAR. THE COURT FOUND THESE FUNCTIONS TO BE EXECUTIVE IN NATURE: "INTERPRETING A LAW ENACTED BY CONGRESS TO IMPLEMENT THE LEGISLATIVE MANDATE IS THE VERY ESSENCE OF 'EXECUTION' OF THE LAW." 54 U.S.L.W. AT 5069. AS AN AGENT OF THE CONGRESS, THE COURT HELD, THE COMPTROLLER GENERAL MAY NOT UNDERTAKE EXECUTIVE FUNCTIONS. THE COURT SAID THAT "ONCE CONGRESS MAKES ITS CHOICE IN ENACTING LEGISLATION, ITS PARTICIPATION ENDS. CONGRESS CAN THEREAFTER CONTROL THE EXECUTION OF ITS ENACTMENT ONLY INDIRECTLY-- BY PASSING NEW LEGISLATION." ID.

BY REQUIRING THE COMPTROLLER GENERAL TO PROMULGATE STANDARDS GOVERNING DEFERRALS AND TO APPLY THOSE STANDARDS TO PRESIDENTIAL ACTIONS, THE BILL IS OPEN TO CONSTITUTIONAL CHALLENGE. DELETING THIS PORTION OF H.R. 4888 WOULD ELIMINATE THE POSSIBILITY OF SUCH CHALLENGE, WITHOUT DEFEATING THE PURPOSE FOR THE REQUIREMENT. WE BELIEVE THAT THE PROVISIONS OF THE BILL, WHICH WOULD REQUIRE THE PRESIDENT TO SPECIFY DATES CERTAIN FOR EACH DEFERRAL ON WHICH HE WILL RELEASE THE DEFERRED FUNDS, WHICH WOULD PROHIBIT WITHHOLDING AFTER THE DATE CERTAIN, AND WHICH WOULD PREVENT REDEFERRALS AND DEFERRALS OF MULTI-YEAR FUNDS FOR MORE THAN 365 DAYS, WOULD MINIMIZE, AND POSSIBLY ELIMINATE, THE PROBLEMS ARISING FROM FISCAL POLICY DEFERRALS. THUS, FOR EXAMPLE, THIS BILL WOULD EFFECTIVELY PRECLUDE SUCCESSIVE REIMPOUNDMENT OF MULTI-YEAR FUNDS. SIMILARLY, PROLONGED WITHHOLDINGS PENDING LEGISLATIVE TRANSFER WOULD BE CONSTRAINED BY THE REQUIREMENT TO RELEASE THE FUNDS FOR OBLIGATION NO LATER THAN THE DATE CERTAIN.

AN ALTERNATIVE, WHICH WOULD ALSO ESCAPE CONSTITUTIONAL SUSPICION, WOULD BE FOR THE CONGRESS TO DEFINE LEGISLATIVELY THOSE IMPOUNDMENTS WHICH WILL NO LONGER BE CLASSIFIED AS DEFERRALS, RATHER THAN DIRECTING THE COMPTROLLER GENERAL TO DO SO. IN THAT EVENT, SUCH IMPOUNDMENTS WOULD BE CLASSIFIED AS RESCISSIONS BY RULE OF LAW, NOT BY THE COMPTROLLER GENERAL.

IF THE CONGRESS SHOULD PREFER THIS ALTERNATIVE, WE WOULD PROPOSE THAT BECAUSE OF THE CONCEPTUAL DIFFICULTY OF ARTICULATING PRECISE DEFINITIONS OF ANTI-DEFICIENCY ACT DEFERRALS, AS OPPOSED TO FISCAL POLICY DEFERRALS, THE CONGRESS IN THE ACT SIMPLY ENUMERATED THOSE KINDS OF WITHHOLDINGS WHICH WOULD BE CLASSIFIED AS RESCISSION PROPOSALS. THE CONGRESS COULD AMEND SECTION 1012 OF THE ACT TO ADD A NEW SUBSECTION (C) AS FOLLOWS:

"(C) WHENEVER THE PRESIDENT PROPOSES TO

(1) RESERVE BUDGET AUTHORITY WHICH HAS BEEN RESERVED PREVIOUSLY;

(2) RESERVE BUDGET AUTHORITY PENDING THE ENACTMENT OF LEGISLATION TO TRANSFER THAT BUDGET AUTHORITY TO ANOTHER ACCOUNT OR PENDING ENACTMENT OF A BUDGET PROPOSED BY THE PRESIDENT REDUCING A SUBSEQUENT FISCAL YEAR'S APPROPRIATION TO THE SAME ACCOUNT BY THE AMOUNT OF THE RESERVATION;

(3) RESERVE BUDGET AUTHORITY WHICH THE CONGRESS HAS TRANSFERRED FROM A TRUST OR REVOLVING FUND TO ANOTHER ACCOUNT FOR ONLY ONE FISCAL YEAR; OR

(4) RESERVE OTHER PERMANENT, INDEFINITE BUDGET AUTHORITY (FOR EXAMPLE BORROWING AUTHORITY) A PART OF WHICH THE CONGRESS HAS DESIGNATED FOR USE IN ONE PARTICULAR FISCAL YEAR;

SUCH RESERVATIONS SHALL BE TREATED AS IF TRANSMITTED UNDER SUBSECTION (A) OF THIS SECTION."

IF THE CONGRESS, HOWEVER, DECIDES NOT TO ALTER H.R. 4888, WE WOULD SUGGEST A TECHNICAL AMENDMENT TO THE NEW SECTION 1018(B)(1). AS CURRENTLY DRAFTED, SECTION 1018(B)(1) WOULD REQUIRE THE COMPTROLLER GENERAL TO REVIEW PRESIDENTIAL SPECIAL MESSAGES WITHIN 5 DAYS OF THE RECEIPT OF THE MESSAGE BY THE CONGRESS. THIS TIME LIMITATION SHOULD BE DELETED. RARELY IS 5 DAYS SUFFICIENT TO REVIEW A MESSAGE TO VERIFY THE INFORMATION REPORTED THEREIN, AND TO DEVELOP INFORMATION THE CONGRESS WILL NEED IN ITS CONSIDERATION OF THE MESSAGE. IT IS NOT UNUSUAL FOR A MESSAGE TO CONTAIN 25 OR MORE DEFERRALS; AND, THE MESSAGES OFTEN PROVIDE LITTLE INFORMATION REGARDING THE JUSTIFICATION FOR AND IMPACT OF THE DEFERRALS. WE REVIEW AND REPORT TO THE CONGRESS ON ALL MESSAGES AS EXPEDITIOUSLY AS POSSIBLE, AND WE WILL CONTINUE TO DO SO.

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