Sixteen words in the U.S. Constitution have governed the federal government’s budget process for over 230 years: “No money shall be drawn from the Treasury but in consequence of appropriations made by law.” Presidents of all parties over the country’s long history, nonetheless, have sought to wrest from Congress more control over the Treasury than those 16 words allow.
During the Civil War, President Abraham Lincoln spent millions of dollars without congressional approval. While this was otherwise an unconstitutional act, Lincoln felt his actions were guided by the greater responsibility of his oath to “protect and defend the Constitution of the United States.”
President Richard Nixon in the early 1970s created a constitutional crisis in the budget process by impounding, or refusing to spend, monies from the Treasury that had been authorized and appropriated by Congress. Out of that crisis came the Congressional Budget and Impoundment Control Act of 1974.
The often-overlooked Title X of that law — Impoundment Control — allows the president to impound or delay spending, but only under clearly defined procedures that maintain the authority of those original 16 words. So control over the government purse strings ultimately lies with Congress, regardless of an executive’s desire to the contrary.
Over the 44-year history of the Impoundment Control Act, almost every president has used this authority. Congress, however, has agreed to only a third of all requested rescissions. Two-thirds of President Bill Clinton’s proposed $6.7 billion in rescissions were accepted by Congress, while only 20 percent of President George H.W. Bush’s $13.3 billion were approved. President Ronald Reagan submitted more than 101 rescission requests during his first year in office, totaling more than $15 billion, a record by any president in one year. Two-thirds of Reagan’s first-year rescissions were enacted by Congress.
The Trump administration is considering revising the presidential rescission process, dormant over the previous two administrations. This is partly because of the president’s displeasure at having to sign the fiscal 2018 omnibus spending bill last month to avoid a potential government shutdown or a fifth continuing resolution. The law funded domestic programs at nearly $113 billion higher than what the president requested in his revised 2018 budget.
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But with five months left in the current fiscal year, it would be hard to effectively scrap an unprecedented $113 billion in domestic spending without significant administrative difficulties. Even a smaller rescission package — rumored to be nearly $50 billion — this late in the fiscal year would exceed Reagan’s record proposal.
More critically, the funding for domestic programs follows a bipartisan budget agreement by Congress in February and the enactment of the Bipartisan Budget Act of 2018, which increased this year’s spending caps for both defense and domestic programs. The March omnibus simply filled in the details. Democrats in Congress agreed to the president’s request for higher defense caps so long as domestic spending caps increased as well. Without that compromise, both pieces of legislation would not have overcome the 60-vote hurdle in the Senate. Reneging on these agreements would not only undermine the compromise reached for 2018 spending but would also jeopardize the negotiated caps for the next fiscal year that begins October 1.
Once a president makes his rescission proposal, funding for those programs and activities is withheld for a full 45 days. If Congress takes no action within that time frame, the funds are released. But at that late stage, it would be difficult for program administrators to spend the monies efficiently in the remaining days of the fiscal year.
Historically, it has been Congress, and not the executive branch, that has made the greatest use of the rescission process. Proposals to amend Title X to require both quicker consideration of any presidential rescission package along with a mandatory vote on the measure have been considered in the past. A bipartisan expedited rescission bill in 2012 sponsored by then-House Budget Chairman Paul Ryan and ranking member Chris Van Hollen passed the House but died in the Senate. Rep. Ralph Norman, R-S.C., introduced a similar expedited rescission bill earlier this month.
Regardless of these reform proposals, under existing law, Congress should act quickly to approve or disapprove any proposed rescissions by the administration. Failure to do so this late in the current budget year could effectively result in a de facto impoundment and pass more control of those purse strings over to the president.
G. William Hoagland is a BPC senior vice president, helping to direct and manage fiscal, health, and economic policy analyses. He previously served as vice president of public policy for CIGNA Corporation, staff director at the Senate Budget Committee, and director of budget and appropriations in the office of former Senate Majority Leader Bill Frist.
The Bipartisan Policy Center is a D.C.-based think tank that actively promotes bipartisanship. BPC works to address the key challenges facing the nation through policy solutions that are the product of informed deliberations by former elected and appointed officials, business and labor leaders, and academics and advocates from both ends of the political spectrum. BPC is currently focused on health, energy, national security, the economy, financial regulatory reform, housing, immigration, infrastructure, and governance. Follow BPC on Twitter or Facebook.