[Extensions of Remarks]
[Pages E99-E101]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
WHY IMPOUNDMENT CONTROL ACT MATTERS
______
speech of
HON. JOHN A. YARMUTH
of kentucky
in the house of representatives
Tuesday, January 28, 2020
Mr. YARMUTH. Madam Speaker, I include in the Record the Government
Accountability Office's January 16, 2020 legal opinion finding that the
Trump Administration's Office of Management and Budget violated the
Impoundment Control Act of 1974 by withholding foreign aid. I am
submitting this in the Record to help inform the public of the
Administration's systematic disregard of Congress' constitutional
authority, separation of powers principles, and the Impoundment Control
Act.
Gao Decision
Matter of: Office of Management and Budget--Withholding of Ukraine
Security Assistance.
File: B-331564.
Date: January 16, 2020.
DIGEST
In the summer of 2019, the Office of Management and Budget
(OMB) withheld from obligation funds appropriated to the
Department of Defense (DOD) for security assistance to
Ukraine. In order to withhold the funds, OMB issued a series
of nine apportionment schedules with footnotes that made all
unobligated balances unavailable for obligation. Faithful
execution of the law does not permit the President to
substitute his own policy priorities for those that Congress
has enacted into law. OMB withheld funds for a policy reason,
which is not permitted under the Impoundment Control Act
(ICA). The withholding was not a programmatic delay.
Therefore, we conclude that OMB violated the ICA.
DECISION
In the summer of 2019, OMB withheld from obligation
approximately $214 million appropriated to DOD for security
assistance to Ukraine. See Department of Defense
Appropriations Act, 2019, Pub. L. No. 115-245, div. A, title
IX, Sec. 9013, 132 Stat. 2981, 3044-45 (Sept. 28, 2018). OMB
withheld amounts by issuing a series of nine apportionment
schedules with footnotes that made all unobligated balances
for the Ukraine Security Assistance Initiative (USAI)
unavailable for obligation. See Letter from General Counsel,
OMB, to General Counsel, GAO (Dec. 11, 2019) (OMB Response),
at 1-2. Pursuant to our role under the ICA, we are issuing
this decision. Congressional Budget and Impoundment Control
Act of 1974, Pub. L. No. 93-344, title X, Sec. 1015, 88 Stat.
297, 336 (July 12, 1974), codified at 2 U.S.C. Sec. 686. As
explained below, we conclude that OMB withheld the funds from
obligation for an unauthorized reason in violation of the
ICA. See 2 U.S.C. Sec. 684. We also question actions
regarding funds appropriated to the Department of State
(State) for security assistance to Ukraine.
OMB removed the footnote from the apportionment for the
USAI funds on September 12, 2019. OMB Response, at 2. Prior
to their expiration, Congress then rescinded and
reappropriated the funds . Continuing Appropriations Act,
2020, Pub. L. No. 116-59, div. A, Sec. 124(b), 133 Stat.
1093, 1098 (Sept. 27, 2019).
In accordance with our regular practice, we contacted OMB,
the Executive Office of the President, and DOD to seek
factual information and their legal views on this matter.
GAO, Procedures and Practices for Legal Decisions and
Opinions, GAO-06-1064SP (Washington, D.C.: Sept. 2006),
available at www.gao.gov/products/GA0-06-1064SP; Letter from
General Counsel, GAO, to Acting Director and General Counsel,
OMB (Nov. 25, 2019); Letter from General Counsel, GAO, to
Acting Chief of Staff and Counsel to the President, Executive
Office of the President (Nov. 25, 2019); Letter from General
Counsel, GAO, to Secretary of Defense and General Counsel,
DOD (Nov. 25, 2019).
OMB provided a written response letter and certain
apportionment schedules for security assistance funding for
Ukraine. OMB Response (written letter); OMB Response,
Attachment (apportionment schedule). The Executive Office of
the President responded to our request by referring to the
letter we had received from OMB and providing that
[[Page E100]]
the White House did not plan to send a separate response.
Letter from Senior Associate Counsel to the President,
Executive Office of the President, to General Counsel, GAO
(Dec. 20, 2019). We have contacted DOD regarding its response
several times. Letter from General Counsel, GAO, to Secretary
of Defense and General Counsel, DOD (Dec. 10, 2019);
Telephone Conversation with Deputy General Counsel for
Legislation, DOD (Dec. 12, 2019); Telephone Conversation with
Office of General Counsel Official, DOD (Dec. 19, 2019). Thus
far, DOD officials have not provided a response or a timeline
for when we will receive one.
BACKGROUND
For fiscal year 2019, Congress appropriated $250 million
for the Ukraine Security Assistance Initiative (USAI). Pub.
L. No. 115-245, Sec. 9013, 132 Stat. at 3044-45. The funds
were available ``to provide assistance, including training;
equipment; lethal assistance; logistics support, supplies and
services; sustainment; and intelligence support to the
military and national security forces of Ukraine.'' Id.
Sec. 9013, 132 Stat. at 3044. The appropriation made the
funds available for obligation through September 30, 2019.
Id.
DOD was required to notify Congress 15 days in advance of
any obligation of the USAI funds. Id. Sec. 9013, 132 Stat. at
3045. In order to obligate more than fifty percent of the
amount appropriated, DOD was also required to certify to
Congress that Ukraine had taken ``substantial actions'' on
``defense institutional reforms.'' John S. McCain National
Defense Authorization Act for Fiscal Year 2019, Pub. L. No.
115-232, div., A, title XII, 1246, 132 Stat. 1636, 2049 (Aug.
13, 2018) (amending National Defense Authorization Act for
Fiscal Year 2016, Pub. L. No. 114-92, div. A, title XII,
Sec. 1250, 129 Stat. 726, 1068 (Nov. 25, 2015)). On May 23,
2019, DOD provided this certification to Congress. Letter
from Under Secretary of Defense for Policy, to Chairman,
Senate Committee on Foreign Relations (May 23, 2019) (DOD
Certification) (noting that similar copies had been provided
to the congressional defense committees and the House
Committee on Foreign Affairs). In its certification, DOD
included descriptions of its planned expenditures, totaling
$125 million. Id.
On July 25, 2019, OMB issued the first of nine
apportionment schedules with footnotes withholding USAI funds
from obligation. OMB Response, 1-2. This footnote read:
``Amounts apportioned, but not yet obligated as of the date
of this reapportionment, for the Ukraine Security Assistance
Initiative (Initiative) are not available for obligation
until August 5, 2019, to allow for an interagency process to
determine the best use of such funds. Based on OMB's
communication with DOD on July 25, 2019, OMB understands from
the Department that this brief pause in obligations will not
preclude DOD's timely execution of the final policy
direction. DOD may continue its planning and casework for the
Initiative during this period.'' Id.; see id., Attachment.
On both August 6 and 15, 2019, OMB approved additional
apportionment actions to extend this ``pause in
obligations,'' with footnotes that, except for the dates,
were identical to the July 25, 2019 apportionment action.
Id., at 2 n. 2. OMB approved additional apportionment actions
on August 20, 27, and 31, 2019; and on September 5, 6, and
10, 2019. Id. The footnotes from these additional
apportionment actions were, except for the dates, otherwise
identical to one another. Id., Attachment. They nevertheless
differed from those of July 25 and August 6 and 15, 2019, in
that they omitted the second sentence that appeared in the
earlier apportionment actions regarding OMB's understanding
that the pause in obligation would not preclude timely
obligation. Id. The apportionment schedule issued on August
20 read as follows:
``Amounts apportioned, but not yet obligated as to the date
of this reapportionment, for the Ukraine Security Assistance
Initiative (Initiative) are not available for obligation
until August 26, 2019, to allow for an interagency process to
determine the best use of such funds. DOD may continue its
planning and casework for the Initiative during this
period.'' Id., Attachment. The apportionment schedules issued
on August 27 and 31, 2019; and on September 5, 6, and 10,
2019 were identical except for the dates. Id. On September
12, 2019, OMB issued an apportionment that removed the
footnote that previously made the USAI funds unavailable for
obligation. OMB Response, at 2; id., Attachment. According to
OMB, approximately $214 million of the USAI appropriation was
withheld as a result of these footnotes. OMB Response, at 2.
OMB did not transmit a special message proposing to defer or
rescind the funds.
DISCUSSION
At issue in this decision is whether OMB had authority to
withhold the USAI funds from obligation. The Constitution
specifically vests Congress with the power of the purse,
providing that ``No Money shall be drawn from the Treasury,
but in Consequence of Appropriations made by Law.'' U.S.
Const. art. I, Sec. 9, cl. 7. The Constitution also vests all
legislative powers in Congress and sets forth the procedures
of bicameralism and presentment, through which the President
may accept or veto a bill passed by both Houses of Congress,
and Congress may subsequently override a presidential veto.
Id., art. I, Sec. 7, cl. 2, 3. The President is not vested
with the power to ignore or amend any such duly enacted law.
See Clinton v. City of New York, 524 U.S. 417, 438 (1998)
(the Constitution does not authorize the President ``to
enact, to amend, or to repeal statutes''). Instead, he must
``faithfully execute'' the law as Congress enacts it. U.S.
Const., art. II, Sec. 3.
An appropriations act is a law like any other; therefore,
unless Congress has enacted a law providing otherwise, the
President must take care to ensure that appropriations are
prudently obligated during their period of availability. See
B-329092, Dec. 12, 2017 (the ICA operates on the premise that
the President is required to obligate funds appropriated by
Congress, unless otherwise authorized to withhold). In fact,
Congress was concerned about the failure to prudently
obligate according to its Congressional prerogatives when it
enacted and later amended the ICA. See generally, H.R. Rep.
No. 100-313, at 66-67 (1987); see also S. Rep. No. 93-688, at
75 (1974) (explaining that the objective was to assure that
``the practice of reserving funds does not become a vehicle
for furthering Administration policies and priorities at the
expense of those decided by Congress'').
The Constitution grants the President no unilateral
authority to withhold funds from obligation. See B-135564,
July 26, 1973. Instead, Congress has vested the President
with strictly circumscribed authority to impound, or
withhold, budget authority only in limited circumstances as
expressly provided in the ICA. See 2 U.S.C. Sec. Sec. 681-
688. The ICA separates impoundments into two exclusive
categories--deferrals and rescissions. The President may
temporarily withhold funds from obligation--but not beyond
the end of the fiscal year in which the President transmits
the special message--by proposing a ``deferral.'' 2 U.S.C.
Sec. 684. The President may also seek the permanent
cancellation of funds for fiscal policy or other reasons,
including the termination of programs for which Congress has
provided budget authority, by proposing a ``rescission.'' 2
U.S.C. Sec. 683.
In either case, the ICA requires that the President
transmit a special message to Congress that includes the
amount of budget authority proposed for deferral or
rescission and the reason for the proposal. 2 U.S.C.
Sec. Sec. 683-684. These special messages must provide
detailed and specific reasoning to justify the withholding,
as set out in the ICA. See 2 U.S.C. Sec. Sec. 683-684; B-
237297.4, Feb. 20, 1990 (vague or general assertions are
insufficient to justify the withholding of budget authority).
The burden to justify a withholding of budget authority rests
with the executive branch.
There is no assertion or other indication here that OMB
intended to propose a rescission. Not only did OMB not submit
a special message with such a proposal, the footnotes in the
apportionment schedules, by their very terms, established
dates for the release of amounts withheld. The only other
authority, then, for withholding amounts would have been a
deferral.
The ICA authorizes the deferral of budget authority in a
limited range of circumstances: to provide for contingencies;
to achieve savings made possible by or through changes in
requirements or greater efficiency of operations; or as
specifically provided by law. 2 U.S.C. Sec. 684(b). No
officer or employee of the United States may defer budget
authority for any other purpose. Id.
Here, OMB did not identify--in either the apportionment
schedules themselves or in its response to us--any
contingencies as recognized by the ICA, savings or
efficiencies that would result from a withholding, or any law
specifically authorizing the withholding. Instead, the
footnote in the apportionment schedules described the
withholding as necessary ``to determine the best use of such
funds.'' See OMB Response, at 2; Attachment. In its response
to us, OMB described the withholding as necessary to ensure
that the funds were not spent ``in a manner that could
conflict with the President's foreign policy.'' OMB Response,
at 9.
The ICA does not permit deferrals for policy reasons. See
B-237297.3, Mar. 6, 1990; B-224882, Apr. 1, 1987. OMB's
justification for the withholding falls squarely within the
scope of an impermissible policy deferral. Thus, the deferral
of USAI funds was improper under the ICA.
When Congress enacts appropriations, it has provided budget
authority that agencies must obligate in a manner consistent
with law. The Constitution vests lawmaking power with the
Congress. U.S. Const., art. I, Sec. 8, cl. 18. The President
and officers in an Administration of course may consider
their own policy objectives as they craft policy proposals
for inclusion in the President's budget submission.
See B-319488, May 21, 2010, at 5 (``Planning activities are
an essential element of the budget process.''). However, once
enacted, the President must ``take care that the laws be
faithfully executed.'' See U.S. Const., art. II, Sec. 3.
Enacted statutes, and not the President's policy priorities,
necessarily provide the animating framework for all actions
agencies take to carry out government programs. Louisiana
Public Service Commission v. FCC, 476 U.S. 355, 374 (1986)
(``[A]n agency literally has no power to act . . . unless and
until Congress confers power upon it.''); Michigan v. EPA,
268 F.3d 1075, 1081 (D.C. Cir. 2001) (a federal agency is ``a
creature of statute'' and ``has no constitutional or common
law existence or authority, but only those authorities
conferred upon it by Congress'').
[[Page E101]]
Faithful execution of the law does not permit the President
to substitute his own policy priorities for those that
Congress has enacted into law. In fact, Congress was
concerned about exactly these types of withholdings when it
enacted and later amended the ICA. See H.R. Rep. No. 100-313,
at 66-67 (1987); see also S. Rep. No. 93-688, at 75 (1974)
(explaining that the objective was to assure that ``the
practice of reserving funds does not become a vehicle for
furthering Administration policies and priorities at the
expense of those decided by Congress'').
OMB asserts that its actions are not subject to the ICA
because they constitute a programmatic delay. OMB Response,
at 7, 9. It argues that a ``policy development process is a
fundamental part of program implementation,'' so its
impoundment of funds for the sake of a policy process is
programmatic. Id., at 7. OMB further argues that because
reviews for compliance with statutory conditions and
congressional mandates are considered programmatic, so too
should be reviews undertaken to ensure compliance with
presidential policy prerogatives. Id., at 9. OMB's assertions
have no basis in law. We recognize that, even where the
President does not transmit a special message pursuant to the
procedures established by the ICA, it is possible that a
delay in obligation may not constitute a reportable
impoundment. See B-329092, Dec. 12, 2017; B-222215, Mar. 28,
1986. However, programmatic delays occur when an agency is
taking necessary steps to implement a program, but because of
factors external to the program, funds temporarily go
unobligated. B-329739, Dec. 19, 2018; B-291241, Oct. 8, 2002;
B-241514.5, May 7, 1991. This presumes, of course, that the
agency is making reasonable efforts to obligate. B-241514.5,
May 7, 1991. Here, there was no external factor causing an
unavoidable delay. Rather, OMB on its own volition explicitly
barred DOD from obligating amounts.
Furthermore, at the time OMB issued the first apportionment
footnote withholding the USAI funds, DOD had already produced
a plan for expending the funds. See DOD Certification, at 4-
14. DOD had decided on the items it planned to purchase and
had provided this information to Congress on May 23, 2019.
Id. Program execution was therefore well underway when OMB
issued the apportionment footnotes. As a result, we cannot
accept OMB's assertion that its actions are programmatic.
The burden to justify a withholding of budget authority
rests with the executive branch. Here, OMB has failed to meet
this burden. We conclude that OMB violated the ICA when it
withheld USAI funds for a policy reason.
Foreign Military Financing
We also question actions regarding funds appropriated to
State for security assistance to Ukraine. In a series of
apportionments in August of 2019, OMB withheld from
obligation some foreign military financing (FMF) funds for a
period of six days. These actions may have delayed the
obligation of $26.5 million in FMF funds. See OMB Response,
at 3. An additional $141.5 million in FMF funds may have been
withheld while a congressional notification was considered by
OMB. See E-mail from GAO Liaison Director, State, to Staff
Attorney, GAO, Subject: Response to GAO on Timeliness of
Ukraine Military Assistance (Jan. 10, 2020) (State's
Additional Response). We have asked both State and OMB about
the availability of these funds during the relevant period.
Letter from General Counsel, GAO, to Acting Director and
General Counsel, OMB (Nov. 25, 2019); Letter from General
Counsel, GAO, to Secretary of State and Acting Legal Adviser,
State (Nov. 25, 2019). State provided us with limited
information. E-mail from Staff Attorney, GAO, to Office of
General Counsel, State, Subject: RE: Response to GAO on
Timeliness of Ukraine Military Assistance (Dec. 18, 2019)
(GAO's request for additional information); E-mail from GAO
Liaison Director, State, to Assistant General Counsel for
Appropriations Law, GAO, Subject: Response to GAO on
Timeliness of Ukraine Military Assistance (Dec. 12, 2019)
(State's response to GAO's November 25, 2019 letter); State's
Additional Response. OMB's response to us contained very
little information regarding the FMF funds. See generally OMB
Response, at 2-3.
As a result, we will renew our request for specific
information from State and OMB regarding the potential
impoundment of FMF funds in order to determine whether the
Administration's actions amount to a withholding subject to
the ICA, and if so, whether that withholding was proper. We
will continue to pursue this matter.
CONCLUSION
OMB violated the ICA when it withheld DOD's USAI funds from
obligation for policy reasons. This impoundment of budget
authority was not a programmatic delay.
OMB and State have failed, as of yet, to provide the
information we need to fulfill our duties under the ICA
regarding potential impoundments of FMF funds. We will
continue to pursue this matter and will provide our decision
to the Congress after we have received the necessary
information.
We consider a reluctance to provide a fulsome response to
have constitutional significance. GAO's role under the ICA--
to provide information and legal analysis to Congress as it
performs oversight of executive activity--is essential to
ensuring respect for and allegiance to Congress'
constitutional power of the purse. All federal officials and
employees take an oath to uphold and protect the Constitution
and its core tenets, including the congressional power of the
purse. We trust that State and OMB will provide the
information needed.
Thomas H. Armstrong,
General Counsel.
____________________