History
President Thomas Jefferson's first use of the power involved refusal to spend $50,000 in funds appropriated for the acquisition of gunboats for the United States Navy. He said in 1803 that "he sum of fifty thousand dollars appropriated by Congress for providing gun boats remains unexpended. The favorable and peaceable turn of affairs on the Mississippi rendered an immediate execution of that law unnecessary." In keeping with his efforts to reduce the size of the debt, he left the funds for the ships unspent for over a year.
Many other presidents have followed Jefferson's example with the president from time to time not spending funds if Congress has appropriated more funds than was necessary to reach its goals. However, the impoundment power has limits. For example, in 1972 Richard Nixon attempted to use the impoundment power not to actually allocate funds for an environment project which he opposed. In this case Congress had previosly overridden Nixon's veto of the project. The Supreme Court in Train v. City of New York (1975) ruled that the impoundment power cannot be used to frustrate the will of Congress in such circumstances.
The Impoundment Control Act of 1974 was passed in response to Congressional feelings that President Nixon was abusing his ability to impound the funding of programs he opposed. The Act effectively removed the president's power of impoundment and set up in its stead a regime whereby the president was required to propose to Congress the rescission of specific funding proposals, which either or both houses could ignore. The Act passed easily as the administration was then embroiled in the Watergate scandal and unwilling to provoke Congress.
However, the procedure set up by the Act was cumbersome. Every recent president has supported the restoration of the power of impoundment, including Presidents Ronald Reagan, George H. W. Bush, Bill Clinton, George W. Bush, and Barack Obama. Politicians John McCain, John Kerry, Al Gore, Pat Buchanan, Jeb Hensarling, Russ Feingold, Joe Lieberman, Judd Gregg, Paul Ryan have supported a return of the power as well.
In 1996 a bipartisan effort recognized the need for an executive tool to curb federal spending. This led to the passage of the Line Item Veto Act of 1996, signed into law by President Bill Clinton. President Clinton applied the line-item veto to the federal budget 82 times before the law was struck down in 1998 by the Supreme Court on the grounds of it being in violation of the Presentment Clause of the U.S. Constitution.
Strengthening the rescission provision within the 1974 act has also been proposed as a means to curtail excessive congressional spending.
Read more about this topic: Impoundment Of Appropriated Funds
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