[Congressional Record Volume 166, Number 19 (Wednesday, January 29, 2020)]
[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.

                          ____________________