Financial Control: Congress and The Executive Branch

• Author: Lawrence E. Chermak
• Pages: 03

1. FEDERAL EXPENDITURES

   To meet the demands of national growth and the fulfillment of international obligations, federal expenditures have increased enormously. The Federal Government as a whole spent more money currently in the ten days between the holidays celebrating the birthdates of Lincoln and Washington than was spent for the period between these Presidents' administrations.' The current annual federal expenditures from a11 funds in the Treasury are greater than one hundred ten billion dollars,' which is approximately what the aggregate total federal expenditures were when Franklin D. Roosevelt took In fact, the rate of expenditures in the current decade is much greater than the total money spent by the United States Government up to the Korean Conflict:

   'The Opinion3 and eonclvrione presentad herein are thore a i the author and do not neeessariiy represent the view^ of The Judge Advocate General's

   Sehaai or any other governmental agency.

   ** Counsel to the Comptroller, Department of the Kavy, B.S, 1936. LL B , 1939, LL M.,

   1948, J.S.D., 1950. Nea York University, .4uthar, The Law of Revenue Bonds (1964)

   : Member of the Kew Yark Bar.

   1 The federal government spent $1,730,763,289 up ta 1860 The average

   IO-day expenditure ~n the current Rscsl year 13 m PXCDBS of tuo b>llion dol- 87th Cong., 1st Seas. (1961).

   *The current annual rata of Federai expenditures from all funds in the Treasury is m excess of 110 billion dollars. This includes the 83 billion dollar rate m the General Fund, the 25 billion dollar rate in the Trust Funds and the approximately 9 billion dollar rate (not shown in General Fund1 ~n the Public Enterprise Funds. The indicated rate is in excess of 116 billion dollars. See note 1 BUP~O: The Bvdget of the United States Government for the Fiicsl Year endmg June 80, 1962, Tables on pp. 18. 919 and 982 (1961).

   B The Federal Gorernment had apent 5108,889,796,120 through JYOD 30, 1930. See note 2 mpra.

   4 The tatsi Federal expend>tures out of the General Fund prior to June 30, 1960. WBI $688,161,971,692. At the end of June 30, 1960, thia figure stood st $1,380,024,746,088. The expenditurea aut of Trvat Funds and Public Enter-p m e Funda were many times greater m the past 10 years than oeevrreq for the tots1 period prior to June 30, 1960. For mstanee, no expenditures were made from the Highway Trust Fund prior to June 30, 1950, while more than 8 billion dollars were appropriated to thin Fund up to June 30, 1960. Simi-Iarly, the Trust Fund expenditures in the current fiacsl year for labor and welfare exceed 18 billion dollars, which IS approximsiely equal to the total transfer. made to the trust accounts prior to 1960. Trust Fundi and Publie Enteipme Funds have apent tens of biliiona of doilara more during the 1960-1960 period than was $pent prior to June 30, 1950, See Tables 2 and 3 of Annual Report of the Secretary of the Treasury, note 1 SUPTO; and Special Anslynil A of The Budget of the United Stntea, 1960, note 2 sup7a.*GO (iiSiB 83

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   11. CONSTITUTIONAL REQL'IREMEXTS

   No expenditure may be made by the Executive Branch of the Federal Government iinles~ the Congress appropriates funds to make Payments aut of the Treasury. The Constitution has estab. lished legislative control of the purse by providing that, "So money shall be drawn from the Treasury, but in Consequence of Appropriations made by Isw."' The Executive Branch is limited by the appropriatm in regard to the amount, purpo~e and period of arailabilty of the money made available far obligation and expenditure. These are matters within the sole discretion of the Congress: The exercise of this discretion may be expressed in an appropriation act- or in permanent statutes applicable to all appropriations.' To make an appropriation it is necessary that the Act of Congress declare the appropriation to be made in specific terms." Furthermore, the funds appropriated may only be used far the objects for which the appropriation is made.'" and no officer or employee of the Federal Government may obh-gate or expend in excess or in advance of such appropriations, unless the obligation or contract is authorized by lawLL

   111. BL'DGET PROCESS

   Even though the Congress has exclurive control oyer appropriations, the preparation af the federal budget is the sole respansibility of the Executive Branch. The budget process affords a rivid example of the operation of the division of power between the Executive Branch and the Congress. Once the President has developed his budget-consistinp for fiscal year 1962 of over 1000 appropriations-and presented it to the Congress, the Congress has the responsibility of deciding how much money is to be ap-propriated far each of the executive agencies. For the fiscal year1962, the Congress incorporated these appropriations into 14

   FINANCIAL COSTROL

   major appropriation acts, after editing and sometimes revising the language of each appropriation contained in the budget document.

   Appropriation bills by custom originate in the House of Representatives.>' Full justifications are made before the sub-committees of the House Appropriations Committee. The Senate Appropriations Committee usually limits Its hearings to appeals for increases by the various executive agencies over the House bill. The language of the appropriation is the test of the legality of the purpose for which the funds are appropriated. Budget estimates and related justifications are not controlling, unless they are incorporated either directly or by reference in the act making the appropriation.'" When the appropriations have been made, the control of obligations and expenditures thereunder shifts back to the executive agencies, who hare the responsibility of employing the appropriated funds in accordance to law" and subject to the general control exercised by the President through the Bureau of the Budget." To assure uniformity in practice, a standard fiscal terminology far budget control has been prescribed by the Bureau of the Budget.L' The shift of control to the Execu-tive Branch does not prevent Congress from following the funds. Through the Budgeting and Accounting Act of 1921,'. the General Accounting Ofice, established independent of the Executive Branch, was given authority to audit for the Congress the vnrious appropriation accounts.

   I!'. OBLIGATION COFTROL

   Although the Constitutional limitation is directed toward ex-penditures out af the Treasury, the Congress does not appropriate in terms of expenditure control but in terms of new obligational authority. The budget submitted by the President seta forth new appropriations as new obligational authority requested:' For the

   12 U.S. Const. art. I, 7, cI. 1, provides far revenue bilk to originate ~nthe House of Reorermtatlves. whether thhs meludes BnDTODnatiOnS has not

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   j Government for the Fiscal Year ending June 30, i963, p. 114, which states that "do'ernment aEeneEr are permitted to m u r oblwrtmns, requiring either the current OT future PSY-ment of manev. anlv when they have been eranted awromiatmns or other

   ."

   fiscal year 1962, the original budget submission of the President requested 80.9 billion dollars as new obligational authority and carried o ~ e r into the current year 39.4 billion dollars from previous years. At the same time, the President stated that the budget expenditures against this total outstanding obligational authority of 120.3 billion dollars would be 80.9 billion dollars for fiscal gear 1962. The Congress has made na provision in any of the current appropriation acts to limit the total expenditure for the current fiacal year to this or any other expenditure figure. Under the anniial accrued expenditure legislation,'" this may be done, but any effort to apply an expenditure limitation ta an appropriation has been denied by the House Appropriations Com-mittee: As a re3ult. the burden of balancing the budget-keeping budget expenditures of a fiscal year within the budget revenues Of such fiscal year-continues to rest with the President V. COMMITTEE RESPONSIBILITY

   Under House Rule XXI substantive legislation must originate in standing committees other than the...