Monday, April 16, 2018

Presidential Overreach and Supposedly Excessive Spending

by Neil H. Buchanan

Will Donald Trump induce his pliant congressional Republican allies to turn him into even more of an autocrat?  Last week, I discussed reports that Trump is channeling his inner Nixon once again, this time trying to impound funds from the most recent spending bill.  Essentially, Trump wants to be able to cancel items in that bill, even though he signed it, because he did not like all aspects of the new law.

I will summarize the mechanism for rescinding funds in a moment, but it is important to note up front that this is probably a dead issue, at least for now.  Politico reported two days after I published my column that "Republicans who helped craft the legislation are in open revolt" against the idea of allowing Trump to cancel some of its provisions.  Even so, we should remember that all bad ideas seem to come back from the dead in the Trump era.  To take but one example, his absurd border wall simply will not die.

Whether or not Trump is ever able to overcome this purported revolt -- or if he even remembers the issue at all -- it is notable that the initial idea of allowing Trump to impound funds found a ready enabler in House Majority Leader Kevin McCarthy.  Apparently, McCarthy has been trying to kiss up to the hard right anti-spending caucus in his party, all of whom are quite upset about the recent bill.

And that was before we found out that Paul Ryan would be leaving the Speaker's chair at the end of this year (or sooner).  McCarthy is about to get a do-over in his flailing efforts to become Speaker, and he is certainly willing to make it clear to everyone that he will happily do whatever Trump wants him to do.

Here, I want to discuss how presidential impoundment of funds fits into the broader story about federal spending, in particular the false ideas that both parties in Congress are too prone to spend money and that only a strong president can intervene and keep both parties honest.  As one might imagine, even arguments for enhanced executive power that might sound appealing in the abstract are less appealing at a time when saying, "Let us give the president more power," means "We're about to give Donald Trump more power."

The background story here is that spending bill that Congress recently passed, averting yet another shutdown of the federal government.  This time, Congress actually passed a bill that would last through the end of the fiscal year (September 30), which was a significant improvement over the several-weeks-at-a-time bills that Congress had burped up over the last few months.

But because that bill included spending for some programs that Trump does not like -- all on the domestic side, and all benefiting non-rich people -- he threatened to veto it before he signed it.  (He was also, of course, upset that there was no funding for the Great Wall of Trump.)  Someone with Trump's ear must be at least minimally competent, however, because they actually came up with a strategy that could achieve his goals -- while doing immeasurable damage to the country.

As I discussed last week, Congress passed a major budget law in 1974, the Congressional Budget and Impoundment Control Act, in part to prevent Richard Nixon from unilaterally canceling spending laws that Congress has passed.  This law includes a safety-valve mechanism known as "rescission."  After funds have been appropriated (that is, after Congress has passed a law detailing how much money is to be spent, and in what ways), the president can ask Congress to cancel any or all spending items in the bill.  If Congress votes against the request -- or even if it simply ignores him -- the law goes into effect as initially enacted.

The key here is that the Impoundment Control Act requires the President to spend all of the money that Congress appropriates, and the Supreme Court has confirmed that appropriations laws are not to be interpreted to mean that the President must spend "up to this amount of money."  That is exactly what Nixon had argued, and Congress passed a law saying otherwise.

And because impoundment is just another name for a line-item veto (a president nixing specific appropriations after Congress has sent the bill to his desk), we now know that the Impoundment Control Act was unnecessary.  The Supreme Court in Clinton v. New York held that even Congress itself cannot give away its own authority under the spending power to appropriate (or choose not to appropriate) funds.

If the separation of powers means anything in the area of spending, therefore, it means that the president must spend what Congress tells him to spend, no more and no less.  (Longtime readers of Dorf on Law will recognize that all of these issues came up during the recent debt-ceiling crises and that Professor Dorf and I have already analyzed them at length.)

At most, then, the Impoundment Control Act simply sets up a mechanism by which a president can politely ask Congress to reconsider specific spending items, where Congress has the ability to say no with whatever degree of politeness it chooses.

In my column last week re the Trump/McCarthy rescission scheme, I noted a particularly nasty and perverse political dynamic that rescission could set up.  If each individual voting member of Congress knows that the president can later -- with the assistance of fifty percent of Congress -- be able to cancel any particular spending item, then it will be impossible to win votes through compromise.  "I'll give you the spending you care about on X if you'll agree to my request for Y" no longer works if X or Y can be retroactively canceled.

Even worse, knowing that a president will be able to request cancellation of spending items after they have been passed can create an especially weird version of Christmas-tree legislating.  Congress could approve excessive spending on everything under the sun, knowing that most or all of the spending will never happen.

In the context of the Impoundment Control Act, this would be especially chaotic because no one would want to be willing to be that anti-Santa who later takes away the goodies that have already been passed.  Predicting what would be rescinded would become nearly impossible, so (to change metaphors) it would be wise for every legislator to throw as much as they can against the wall to see what sticks.

This is ironic, to say the least, because the usual anti-government orthodoxy is in large part built around the idea that Congress cannot be trusted under current rules to be fiscally responsible.  Indeed, the standard-issue cynical response to my example above -- I'll vote for X if you'll vote for Y -- is to say that such logrolling is the problem.  That is, people who think themselves quite wizened wearily tell us that Congress "spends like a bunch of drunken sailors" because political trade-offs create an upward ratchet of spending.

As always, that kind of conventional wisdom shows up in the mainstream press.  A news item in The Washington Post last week, written by its reliably gullible economics reporter, warned readers that "[i]f spending keeps up at this pace (and there is every indication that it will), President Trump and his successors are going to have less flexibility to pump up the economy during a downturn or even a crisis."

What is so gullible about that claim?  The reporter is supposedly setting off alarm bells about deficits, which are the difference between spending and taxes, yet she does not say that "if spending keeps up at this pace and Congress refuses to cancel the regressive tax cuts that it just passed," there will be a problem.  It is all about spending, confirming the conservative anti-government worldview.

Similarly, in the midst of an otherwise valuable op-ed piece showing that Democratic presidents are more fiscally conservative than Republicans (even on the spending side), New York Times columnist David Leonhardt decides to concede that "the Democrats’ biggest recent deficit sins have come when they are in the minority, and have enough power only to make an already expensive Republican bill more so. The budget Trump signed last month is the latest example."

Sins?  What we saw in the most recent spending bill was an increase in domestic discretionary programs that was decidedly smaller than the increase in military spending, even though Congress has simply refused to force the Pentagon to cut wasteful spending (and, even more perversely, has actually forced the Pentagon to spend money on items that the military itself has told Congress is wasteful and unnecessary).

The article to which Leonhardt links in the snippet above, in fact, notes that the spending bill on which the Democrats were able to have some influence (and which Trump did not like), "blocked the hiring of thousands of new border patrol agents; stopped deep cuts to foreign aid, the diplomatic corps and environmental programs; thwarted a push to fund vouchers for private and parochial schools; and even rescued the National Endowments for the Arts and the Humanities."

If that is what counts as "sins" when it comes to spending -- some provisions that prevented unneeded and damaging spending along with other provisions that saved pittances of valuable spending -- I think Democrats can look forward to an easy time at St. Peter's pearly gates.  More to the point, the Democrats were only able to guarantee those items by agreeing to other items with which they disagreed.  That is what the Constitution requires, and (as the rest of Leonhardt's article demonstrates) it is more than possible for our political process to keep spending under control -- at least when Democrats are president.

But what if a Democratic president faces a Republican Congress that passes spending provisions that are unappealing to that president?  As I was researching last week's column, I found a typically over-the-top editorial from the conservative editorial page of The Wall Street Journal in 2011 (behind a paywall, of course) that -- beyond the usual nonsense about out-of-control spending and some fatuous constitutional claims -- claimed that FDR, Truman, Clinton, Gore, and Obama have all argued in favor of impoundment.

Clinton defended the Line-Item Veto Act, and he obviously liked the idea of being able to increase his power at the expense of Congress.  Obama, along with everyone else who has ever thought about being the president, would surely have concluded that a president could make wiser decisions than those idiots in Congress.  But that is why constitutions exist.  Situationally convenient changes do not justify long-term alterations in the balance of power among the branches of government.

Moreover, as I noted above, turning rescission (or a line-item veto) into a regular feature of U.S. budgeting would be ironic in making it even more likely that Congress would approve and then fail to cancel needless spending.  Even if Senate Republicans went nuclear and never needed another Democratic vote to pass anything, they would quickly find that the looming prospect of rescission would cause every Republican in both houses to insist on passing every spending item they might want.

What would happen next?  Every spending bill would be followed by presidential rescission requests, but that would not be the end of it.  If the president failed to request rescission of a provision, a voting member could say, "I'll vote for the rescission of what the president did request, but only if we also cancel some other items that he did not single out."  Or, it could go in the other direction: "I'll vote for the rescission only if we pass a non-rescindable spending item that I prefer."

In short, we are all understandably especially sensitive to presidential overreach in the current context.  It is unsurprising that Trump is trying to be Nixonian, and it is heartening that Republicans appear to be uninterested in allowing him to pull off this gambit.  But even if the parties' situations were reversed, the spending power should stay with Congress -- not only because the alternatives do not solve the supposed bias toward excessive spending but also because those alternatives would turn the budgeting process into an even bigger circus than we have seen under congressional Republicans for the past few years.


Joe said...

Off topic but relevant to some writings of those on this blog: two requests for views of the Solicitor General today (CVSG) involves Commerce Clause challenges to two state laws in place to protect treatment of animals raised for food.

I agree with the concerns over line item veto authority. Why should the executive have such authority in the first place? They already have some discretion in usage of funds.

John Oliver last night had a bit on taxes.

CJColucci said...

I'm assuming, on no basis whatsoever, that if Congress appropriates X billion dollars to buy y thousand widgets and the relevant purchasing officer negotiates a better deal and gets the widgets for less, or if Congress appropriates Z million dollars to deal with an expected event -- say, a state visit from the President of Fredonia, who dies before the planning gets serious -- that does not occur, then the President need not spend the appropriated funds. Am I wrong about this?

Shag from Brookline said...

I assume CJ's astute comment may have been prompted by this from Neil's post:

"If the separation of powers means anything in the area of spending, therefore, it means that the president must spend what Congress tells him to spend, no more and no less."

Common sense would support CJ's comment. Article II's "take care" clause might suggest such common sense for CJ's examples, as the missions were accomplished/addressed; but what happens to the funds not spent?

Joe said...

I'm not sure how often it would come up since Congress doesn't really tend to provide a to the penny or something duty for the executive but speaks in more general terms.

So, such and such is appropriated for some agency, but how exactly it is spent is a matter of some discretion. Likewise, I don't think there is some obligation to spend exactly what is given. And, there is room for some accounting tricks to transfer money around some.

Sometimes, you hear of some scenario where a government body wants to spend the money apportioned to them since if they don't, they will just lose it. So, there is some lack of incentive to economize on that front. What happens if there is a remainder is unclear; I gather there are rules, such as putting it back in a general fund or applying it to debt etc.

Shag from Brookline said...

Regarding the 2017 Tax Bill for the Rich, I filed my federal and MA 2017 income tax returns today, together with estimated payments of both federal and MA for the first quarter of 2018. MA is of course a blue state with many taxpayers losing itemization of SALT deductions. My calculation of federal estimated tax for 2018 reveals more than double my 2017 federal income tax. I'm retired with no earned income for the past several years. So the Trump tax "cuts" will be bleeding me, at age 87!