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July 2024
14min read

Impoundment appears to be a uniquely American practice that until recently has escaped public notice. It occurs when the President of the United States refuses to spend certain moneys appropriated by the Congress in a given fiscal year. Only eight chief executives are known to have impounded, two in the nineteenth century and, since 1941, every contemporary President from I’ranklin Roosevelt to Richard Nixon.

In the last year, however, the President’s authority to withhold allocated funds has been vigorously challenged in Congress, in tlie federal courts, and in the press, raising substantial constitutional questions about the executive’s spending power and his relationship to the legislative branch of government. Ls the President, for example, required to spend the money Congress allocates, or is he merely given permission to spend when and if he chooses? If he accepts all appropriations as fully mandated, does tie then compromise the independence of the executive branch and make the President a mere custodian of the law? IJ he chooses not to spend, is he then flouting the very laws he as chief executive is sworn to uphold?

To date there are no clear-cut answers. Although the lower federal courts have consistently held that appropriations are binding (i.e., the money must be spent), the Supreme Court has yet to rule. And while many congressmen insist that the President has no discretionary power over spending, supporters of impoundment cite broad constitutional and statutory authority granting that right.

To shed what light we can on the matter we present here a record of impoundments from the past.


Ironically, the chief precedent now claimed for impoundment was established by Thomas Jefferson, a foe of big government in general and of a powerful executive in particular. For most of his administration Jefferson held firmly to the belief—strongly supported by his Secretary of the Treasury, Albert Gallatin—that Congress, not the President, should dictate the expenditure of funds. But in 1803 events along the Mississippi forced him to deviate momentarily from that position.

In late October, 1802, the port of New Orleans was summarily closed to American trade. In response to this crisis Jefferson dispatched James Madison to France to negotiate a settlement that, if possible, would include the purchase of the port, but Congress chose to anticipate war and immediately appropriated fifty thousand dollars for the construction of fifteen gunboats. Jefferson was perhaps the nation’s leading advocate of a gunboat navy (as opposed to costly ships of the line) and for some time had been pressing for such a fleet. Nonetheless, for the duration of the year he refused to spend the money, because he feared Madison’s secret talks with Napoleon might be jeopardized and because he was convinced that the boat designs then available were too expensive and too unwieldy to be effective.

Before a constitutional conflict over the matter could develop, the Ixmisiana Purchase eliminated the trouble with France and, as Jefferson put it to Congress, “rendered an immediate execution of [the] law unnecessary. …” Now, he suggested, the easing of tensions made it possible to search prudently for the most versatile and economical boats. By the end of 1804 satisfactory models had been found, and Jefferson released the funds.

Strictly speaking, Jefferson’s “impoundment” was only a deferral, and it differs in a number of key ways from later practice: (1) in private meetings and public statements Jefferson kept Congress informed as to what he was doing; (2) he was not opposed in principle to the appropriation; (3) the release of funds came through executive initiative, not congressional pressure; and (4) Jefferson did not defer spending on any other occasion.


Ulysses S. Grant was the first President after Jefferson and the last before Franklin Roosevelt to impound. In 1876 he challenged certain portions of the heavily padded Rivers and Harbors bill as inimical to the national interest. At the same time he established what from a modern President’s point of view is the argument at the heart of the impoundment issue.

As Grant saw it, the President was at the mercy of Congress in appropriation bills because the Constitution does not provide the executive with an item veto. As chief executive officer he must approve or veto in its entirety any measure passed by Congress. He may not pick and choose among the several items in a bill; he must accept everything or nothing. As a result he has little control over special-interest riders—the so-called pork-barrel legislation—that Congress frequently attaches to money bills. The President may not directly eliminate individual projects or programs he thinks to be extravagant, inflationary, or illegal except by vetoing the entire appropriation measure.

Grant first called attention to the problem in 1873, and, like him, every President since has urged the passage of a constitutional amendment creating an item veto in appropriations, subject to the overriding power of Congress. Since 1873 more than a hundred separate resolutions to that effect have been introduced in the House and Senate; all of them have died in committee.

Lacking then the clear constitutional authority to veto portions of bills—a power granted by the Confederacy to its president and currently by forty-three states to their governors—Grant, like a number of contemporary Presidents, resorted to a broad reading of the executive power and exercised the right to impound. Unable to persuade Congress to abandon pork-barreling and confronted in August, 1876, with what he took to be an outrageously larded rivers bill, Grant sent the legislature a stinging message. In it he said he was constrained to sign the measure because certain portions of it were essential and provided for the completion of projects that could not, in fairness, be left undone. As for the remainder of the bill, it funded “works of purely private or local interest, in no sense national,” and he served notice that he would “take care that during my term of office no public money shall be expended upon them.”

The money remained unspent, as Grant said it would, but the issue over the impoundment was never joined, perhaps because Grant’s term had only seven months to run and more likely because the bulk of the impounded funds was restored in the next rivers bill.

1900–73: The Background.

Although Thomas Jefferson’s deferral provided the form and Ulysses S. Grant’s impoundment the rationale, contemporary impoundments have proceeded on vastly different constitutional and statutory grounds.

To begin with, in the twentieth century Congress has given the President greater and greater control over the federal budget and the national economy. Until 1905 the President had relatively little authority in fiscal matters, and the government itself operated on less than a business basis. There was no standardized accounting system and no central overseer of the budget. Each department, agency, and branch of the federal government assembled its own budget requests, which were passed on to the Treasury Department, where they were assembled without review and sent on to Congress. Once the moneys were allocated, they became the responsibility of individual department heads.

By the end of the nineteenth century it was clear that this system was responsible for inefficiency, waste, and overspending. As a result Congress initiated a series of reforms, the net result of which over the past seventy years has been to increase the President’s responsibility in assembling the budget and in managing the disbursement of funds after Congress has appropriated them. In every instance the chief executive has been placed under statutory obligation to effect savings wherever possible.

At the present time the President is required to keep the budget within statutory limits, to observe the debt ceiling established by Congress, and to oversee all governmental expenditures. In addition, he has been given broad statutory power to. deal with the economy at large, particularly in times of inflation or recession.

Of the dozens of laws that brought about these new duties, four stand out as bases for impoundment:

The Anti-Deficiency Act (1905), as amended to 1973, was initially designed to prevent overspending by requiring all government agencies to divide their allocations into quarterly amounts, which could not be exceeded or carried forward. All unspent moneys were to be placed in reserve (impounded) by the President.

Section 1211, General Appropriation Act (1951), the key amendment to the Anti-Deficiency Act, gives the President specific authority to establish reserves from appropriated funds wherever and whenever possible “subsequent to the date on which such appropriation was made available.”

Budget and Accounting Act (1921), as variously amended, established the Bureau of the Budget to coordinate the development and later the management of the federal budget. In 1970 the bureau—now under direct Presidential control—became the Office of Management and Budget, with a broad range of powers, including the preparation of the budget, the supervision and control of budget allocations, and the coordination of fiscal affairs so that “the moneys appropriated by the Congress may be expended in the most economical manner.…”

The Employment Act of 1946 created the Council of Economic Advisers and, at the same time, established the principle of a controlled economy, maintained and stabilized by actions of the federal government. The law requires the President to utilize existing statutes to stabilize the economy (e.g., to combat inflation) and to develop programs “to promote maximum employment, production, and purchasing power.” It is from this delegation of authority that Presidents in the past twenty-five years have derived the right to impound.

What makes impoundment necessary, in a President’s view, is the extraordinary growth of the federal budget in the last forty years. Until 1900 the cost of government and the services it provided was relatively minuscule, both in dollar amounts and as a percentage of the gross national product. In fact, the total of all federal expenditures from 1789 through 1899, including war costs and the servicing of the Revolutionary debt, amounted to $16.4 billion. By contrast, Medicaid and Medicare, which together comprise about 6 per cent of the 1974 budget, will cost $17.3 billion. Defense costs in fiscal year 1974—excluding veterans’ benefits and foreign military assistance programs—amount to 30.2 per cent of the budget, or $81 billion. This is roughly equivalent to all federal expenditures from 1789 through 1925. Indeed, in any given year since 1968 the federal budget for that year has exceeded all federal expenditures between 1789 and 1942.

Where in the past federal spending was largely confined to operational costs, military defense, war debts, and veterans’ benefits, since 1933 increasingly larger amounts have been expended on a variety of national programs undreamed of by nineteenth-century Americans. Beginning with the New Deal the nation came to accept—if not demand—a broader governmental role in dealing with the nation’s social problems. The list of funded services seems endless, embracing everything from medical and educational projects through sewer and water systems to farm supports and industrial loans, and in recent years Congress and the President have struggled to define priorities among the competing interests, painfully aware that at some point spending has to stop.

Despite its size, however, the budget offers very little room for fiscal maneuvering. It is not newly created each year, and most of the budget items, as well as the majority of increases, carry over from year to year as the result of earlier legislation and prior commitments. Salary increments for government employees, social security benefits, scheduled payments on government bonds, and funding of the national debt are, generally speaking, fixed costs that for a variety of legal, political, and economic reasons cannot easily be reduced or eliminated.

Faced from time to time by a budget crunch, the contemporary President is caught between his statutory obligation to manage the budget prudently and to meet the priorities Congress has set. Increasingly he has resorted to impoundment as the means to extricate himself from budgetary problems.

1900–73: The Record.

Although the story of modern impoundment begins with Franklin Delano Roosevelt’s third term, which began in 1941, the record of the past thirty years is, admittedly, somewhat vague because, until this past year, the President was under no statutory requirement to report to Congress that he had placed moneys “in reserve.”∗ Legislation passed late in 1972 requires the Office of Management and Budget “promptly” to publish reports of each Presidential impoundment, along with the President’s reasons, in The Federal Register , the daily compilation of executive documents printed in Washington. Unless he publicized his actions or Congress discovered that money was not being spent, the reserved funds simply disappeared into a reserve category somewhere in die tangled thickets of the federal budget, a document so forbiddingly complex that even experts have been hard pressed to understand it fully. No one knows for certain how much money has been impounded, and what follows is merely suggestive.

It should be noted diat in addition to the deliberate—and sometimes controversial—Presidential impoundments described here, there is another kind of statutory impoundment that is regularly employed. Since 1921 the Bureau of the Budget (now the Office of Management and Budget) has been empowered to place in reserve any moneys saved in any budget area during die fiscal year. If, for example, a completed project costs less than the money allocated for it, die excess funds are automatically impounded. Or if, through greater efficiency or whatever reason, an agency does not spend its full quarterly allotment, die unspent money is reserved. Moreover, in line with sound business practice, some expenditures may be deferred in a given fiscal year until all statutory requirements (i.e., contract specifications) are met.

The President, however, is not free to spend die money thus reserved. Unlike die housewife who may use money saved from household accounts for a new dress, or die businessman who skips lunch to save for a fly rod, die President may not transfer funds from one budget account to another without die permission of Congress. As a rule, all unspent appropriations or surplus funds are placed in a contingency account for current emergencies. If unspent at die end of die fiscal year, diey pass into die yearly surplus, which may be used as Congress directs to fund die national debt or as revenue for the next year’s budget. Every administration since Harding’s has regularly impounded money in this manner. The Office of Management and Budget estimates that in die past ten years an average of 6 per cent of die budget has been placed in reserve, some of which was later released.


President Roosevelt’s impoundments were relatively extensive and, like many of his New Deal policies, controversial. They occurred during World War II, when the national budget rose sharply from nine billion dollars in 1940 to thirteen billion in 1941 to a high of 98.4 billion in 1945.

The dramatic rise in federal expenditure began in the spring of 1940 as Hitler’s armies began the campaign that led to the fall of France. Urged on by Roosevelt, a reluctant Congress gradually took steps to prepare the nation’s defenses against enemy attack. In January, 1941, as the national emergency deepened, Roosevelt recommended to Congress that it temporarily defer all construction projects “that interfere with the defense program by diverting manpower and materials.” In the next few months he returned several times to this theme.

Congress paid no heed, and when the Civil Appropriations Act of 1942 came before him in August, 1941, Roosevelt found that several new programs had been added to flood-control projects already under way. Like Grant earlier, and now armed with the Anti-Deficiency Act and other legislation giving broad powers to the Bureau of the Budget, Roosevelt announced that he would sign the bill but added that he had no intention of submitting estimates or approving allocations “for any project which does not have important value. …” He said that at least $1.6 million in new funding would remain unspent.

Additionally, he proceeded to impound “excess” moneys in other government programs. He stopped civilian pilot training, held back money from the Civilian Conservation Corps and the National Youth Administration, and cut the appropriation of the Surplus Marketing Corporation. The total impounded in 1941 has not been fully determined, but it included amounts ranging from 1.6 million to 95 million. One estimate suggests that 174 million was placed in reserve.

In 1942 Roosevelt impounded $37 million from the Agriculture Department’s school-lunch program, $3.4 million from “non-essential” programs in the Soil Conservation Service, and $17.8 million from various civilconstruction projects. In all, that year, some $400 million (in a budget of 34 billion) was withheld. In 1943, 500 million was reserved.

Some of this money was subsequently released. A congressional request in late 1942, fortuitously timed with a damaging flood, freed $513,000 for dams and levees in Tulsa, Oklahoma, where river waters threatened war plants in the area. Congressional pressure led to the release of some $800,000 for airport construction in Winnemucca and Lovelock, Nevada, in May, 1943.

Despite such reverses Roosevelt continued to impound, and, on the whole, Congress did not challenge him. Indeed, in 1943 Congress agreed that if impoundments were endorsed by the War Production Board, they would stand.

For the most part Roosevelt’s impoundments were directed against new projects that, however desirable, would have to wait for peacetime conditions for implementation, or against the expansion of existing programs beyond already funded levels. In no instance that has come to light did Roosevelt phase out any established program without congressional approval.


President Truman’s first budget in 1946 totaled $60.4 billion, then the highest peacetime budget in history. By 1948 the budget was reduced to 33 billion, but by 1953, as a result of the Korean War, it had risen to 74.3 billion.

Truman, like Roosevelt, impounded funds. But like his successors, he did not make it a common practice, although a number of construction projects were temporarily deferred in the early years of Korea.

At least three major impoundments were carried out under congressional order. In 1945 Truman halted some $60 million in war contracts, as soon as Japan surrendered, and impounded the money. In 1945 he was also ordered to impound excess personnel funds in government agencies. In 1950 he cut $580 million—at Congress’ direction—from already approved appropriations.

On at least two other occasions, however, Truman acted on his own. In 1949 he impounded $615 million in defense money during an intensive battle over the size of the Air Force. Truman insisted that a forty-eight-wing force was adequate to the nation’s needs; Congress appropriated funds for at least two additional wings. Exercising his prerogative as commander in chief and in the absence of mandated language in the appropriation, Truman did not spend the money. In 1950, following the advice of the Defense Department, he cancelled the construction of the aircraft carrier Forrestal after Congress had made funds available. In both instances the impoundments were allowed to stand.


Although President Elsenhower had announced on taking office that he was prepared to use all the “weapons at the disposal of Government for maintaining economic stability,” he resorted to impoundment reluctantly and only rarely. His first budget in 1954 totalled 67.5 billion and climbed sharply only at the end of his second administration, when, in 1961, it reached 81.4 billion.

Dedicated to keeping spending down, he was successful in getting Congress to trim the budget, although on occasion he used the threat of impoundment to bring the legislature into line, as in 1955, when he said he would withhold funds from certain flood-control projects if Congress exceeded administration requests in the budget for 1956.

On the principal occasions when he did in fact impound, he challenged military spending, withholding funds for the Nike-Zeus missile, then in the early stages of development; and from 1958 to 1960 he spent less than Congress wished (and had appropriated) for maintaining the Marine Corps at full strength and for constructing Polaris submarines. Like Truman, Eisenhower accepted Defense Department recommendations on weapons systems and in 1956 refused to spend moneys that had been made available for the construction of some twenty bombers.


The most visible of President Kennedy’s impoundments was his refusal to spend additional moneys appropriated by Congress for the construction of B-70 high-altitude bombers in 1962. From the beginning of his Presidency, Kennedy had urged that part of the B-70 program be abandoned and other strike systems developed. Supported by his Secretary of Defense, Robert McNamara, but opposed by a substantial number of congressmen, Kennedy in the end consented to the construction of three B-70’s as originally requested but impounded the excess funds Congress had voted.


Lyndon Johnson inherited a budget for fiscal 1964 of $92.6 billion. By 1968, as a result of the Vietnam war, the budget had swollen to more than 135 billion.

Like Truman earlier, Johnson was several times ordered by Congress to impound funds, most notably in 1966 when he cut into the Highway Trust Fund. In the next two years, to fight inflation and fund the war, he held back more than $5 billion from a variety of domestic programs in housing, education, agriculture, and conservation, among others. Virtually all of these impoundments, however, were temporary and represent deferrals because most moneys were released before the end of the fiscal year. Although some programs were cut back or else not permitted to grow beyond already funded levels, no programs were terminated. Congressional opposition to the impoundments was generally mild.


Beginning in fiscal 1969 the federal budget (on President Johnson’s recommendation) became comprehensive—that is, it reported for the first time outlays for social security, the highway trust fund, and other programs not included in past budgets. Under the old accounting system the total appropriation for 1969 would have been $147.4 billion; under the new system it appeared as $186.1 billion. The estimated comprehensive budget for fiscal 1974 is about $269 billion.

Faced through his five years in office with budgets of this size, President Nixon has freely impounded funds to an extent unmatched by any of his predecessors. It is estimated that to date he has withheld more than $30 billion (although some of it has since been released). In doing so he has added several new dimensions to impoundment.

Where earlier Presidents saw impoundment as a lesser string in the Presidential bow and used it sparingly, Mr. Nixon has made it an integral part of his fiscal policy and has used it on a regular and systematic basis. Where earlier Presidents generally reserved funds from defense and construction budgets, leaving domestic social programs virtually untouched except in wartime, Mr. Nixon has specifically drawn his reserves from a broad range of social-welfare projects. Where earlier Presidents cut only selected projects or limited their expansion within established larger programs, Mr. Nixon has used impoundment to terminate total programs to which he is opposed.

In fiscal 1970 Nixon made his deepest cuts in the poverty programs of the Department of Health, Education, and Welfare. In fiscal 1971 he reserved some $13 billion, the bulk of which came from welfare, education, and housing programs. In fiscal 1973 he withheld more than $400 million Congress appropriated for the food-stamp program. He impounded $8 billion allocated for water reclamation after the Congress had overridden his veto of the original appropriation.

In January, 1973, he announced that he would not request funds for fiscal 1974 for the Office of Economic Opportunity and that he intended to reserve all unspent funds in the 1973 budget for that program while phasing it out.

In January, 1973, the Office of Management and Budget reported that the Nixon administration had currently impounded from the 1973 budget $8.7 billion, not including three billion dollars in water-reclamation funds. Drawn from the budgets of ten cabinet-level departments and from nineteen independent agencies, the moneys had been allocated by Congress for urban mass transportion, water and sewer projects, land-conservation programs, the Appalachian regional development program, and Rural Electrification Administration loans.

In February, 1973, $500 million more was withheld from HEW programs funding day-care centers, the treatment of alcoholics and drug addicts, and programs for the elderly. Three months later the administration reserved some $400 million in aid-to-education money. In addition, housing, medical research, and a variety of environmental funds were unspent. As the fiscal year ended in June, 1973, an estimated $18 billion was impounded.

What will happen to these funds is uncertain. Some of them, undoubtedly, will be released if higher courts uphold the many separate lower-court rulings now on appeal. Congress has prepared legislation to bring about the release of other moneys and to limit impoundment in the future. But for the moment the issue is cloudy, and all that can be said with certainty is that Mr. Nixon intends to maintain his position, which is that impoundments are fully authorized under existing legislation and that they are essential to the maintenance of economic stability. They will continue to be a major weapon of the administration in budget management and a chief source of conflict between the President and Congress.

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