This interpretation of appropriation has had the effect of limiting the item
veto without undermining 11 The authorization/appropriation distinction has a
long pedigree, and may have been assimied by the drafters of state item veto
provisions. It may also be that rigid adherence to this formal distinction is more
judicially manageable than a standard requiring the courts to gauge the effect of
an authorization measure on state spending. The sharpness of the distinction has
also sometimes benefited governors, as state courts have held that governors
may veto or reduce appropriations without having to veto the underlying au-
thorization for the enddement program that the legislature intended to imple-
ment through the appropriation.''^
More thorny than the appropriation/authorization distinction have been
±e difficulties created by the states' increased utilization of earmarked taxes and
special funds. The traditional conception of the state budget is that revenues are
collected from taxes and other sources and deposited into the state's general
fund and then annually or biennially appropriated for the purposes specified in
the budget. Today, however, many states rely e.xtensiveiy on special taxes and
special ftinds. Taxes may be authorized with the requirement that the revenues
be earmarked for deposit into a special fund which may be used only for a spe-
cial purpose. This may make the tax more acceptable politically and may give
the beneficiaries of the funded program greater assurance that the expenditures
1 17. See. e.z.. Thomas v. Rosen. 569 P.2d 793. 797 (Alaska 1977) (bond issue authorization not
appropnaaon); Harbor v. Deukmejian. 742 P.2d 1290. 1296 (CaL 1987) (provision requiruig AFDC
beneats to be paid from date of application rather than from date application processed, and ulti-
mately requiring payment of additional funds from state treasury, is substantive measure and not
appropnanon); State ex ret. Akron Educ. Ass'n v. Essex. 351 N.E.2d 118. 120 (Ohio 1976) (change
in formula for calculating state aid to school distnca not appropriation); State ex rel. Finnegan v.
Dammann. 264 N.W. 622. 624. fWis. 1936) (revenue bill intended to fund sute program not appro-
pnanon); cf. Karcher v. Kean. 479 A.2d -103. 410 (NJ. 1984) ("[r]he operative statutes imposing
the public unlities franchise and gross receipts taxes and providing for their distnbution are not
themselves appropnauons.").
118. See. e.g. . People ex rei. I.F.T. v. Lindberg, 326 N.H.2d 749, 752 (111.) (governor permitted .
to reduce amount of apprconacions made to pension fund). :err dented. 423 U.S. 339 (1975); Barnes
V. Secretary of Admm.. 536 N.E.Id 958. 961 (Mass. 1992) (governor's reaucrion by 50<?& of emer-
gency/ .assistance program within power of item vetoi.
100
1202 TEMPLE LAW REVIEW [Vol. 66
will ultimately be made. Is the deposit of tax dollars into a special fund to be
treated as an appropriation?
If the focus of analysis is on the expenditure of state funds for a public
purpose, then the deposit into the special fund may not be an appropriation.
After all, the mere placement of tax dollars in the special ftind does not mean
they will be spent and it is conceivable that subsequent legislative changes will
retxim those dollars to the general fund. On the other hand, if the focus is on the
segregation of the tax dollars firom the general fiind and the commitment of the
revenue to the designated statutory purpose, then the creation or deposit of
funds into a special fund might very well be treated as an appropriation.' '' In-
deed, the more a special fund resembles a "locked box" from which moneys can
be withdrawn only as expenditures for the statutory purpose, the more the de-
posit of moneys into the fund resembles an appropriation.
The sitiiation becomes more complicated as the special funds, and the rela-
tionships among the general fund and various special funds, become more com-
plex. Are measures that redesignate certain tax revenues from one special fund
to another,'^ or that transfer funds out of the special fund and back to the
general fund, appropriations? '^^ Some special funds consist of moneys received
from private contributions (such as withholding from state employees) and gen-
eral fund dollars as well as earmarked tax revenues. Are changes in the formulas
for payments into the funds, with concomitant changes in the amount of general
fund dollars placed in these funds, appropriations?^^
There is no consistent line of decisions among the state courts, but in a
number of cases the court's resolution of the dennition of an appropriation was
plainly influenced by its attitude toward the item veto, and the item veto's effect
on the traditional separation of powers. Thus, the Iowa Supreme Court, citing
its general view that the item veto "gives the governor a larger role in the state
budgetary process," determined that "the allocation of funds . . . into a separate
and distinct fund that the State can no longer utilize for other purposes absent
subsequent legislation is an appropriation" for item veto purposes.'^ Similarly,
the Arizona Supreme Court has held that legislation transferring funds out of a
special fund is an appropriation subject to the governor's item veto power be-
cause such an action would reduce the amount of the previous deposit into the
special fund. Such transfers would reduce the appropriation for the specially
funded purpose: "The Constitution does not permit such reductions free of gu-
bernatorial oversight. To hold otherwise . . . would seriously limit the E.xecu-
119. See Rios v. Symington. 333 P.2d :0. 25 (Anr. 1992) (transj'er of funds from special funds
to suce's general fund is appropriaaon).
120. See Johnson v. Cirlson. 494 N.W.2d 516. 518-19 (Minn. Cl. App. 1993) (governor's item
veto, resulting in redirecaon of spetnai funds, deemed unconsxitutional).
121. See. i.g. . Rios. 333 P.2d at 26-27 (transfer of funds from specjJ to general fund appropria-
tion and subject to item veto).
122. See. i.g.. Junicins v. Branstad, -Ug N.W.2d •^80. -184 (Iowa 1989) (set aside of specific
funds deemed appropnauon).
123. Id. at 483-34.
101
1993] THE ITEM VETO 1203
tive's constitutional role in the appropriation process."''* On the other hand, a
Minnesota coun recendy held that the transfer of certain earmarked tax dollars
from one special fund to another did not involve an appropriation. '^^ As the
court acknowledged, its decision was largely driven by a previous Minnesota
Supreme Court decision that determined that the governor's item veto "is an
exception to the authority granted to the legislatxire" and "must be narrowly
construed." '2*
As the Iowa and Arizona cases suggest, the item veto and the executive
budget are intended to give the governor an enhanced role in the state budgetary
process and in the determination of state fiscal priorities. These factors counsel
against a narrow definition of appropriation and suggest instead that when legis-
lation depositing state moneys into a special fund effectively subtracts those
funds from the general fund and commits them to a particular program, the
purposes underlying the item veto require that such legislation be treated as an
appropriation. It may at times be uncertain, however, just how locked up the
moneys in a special fund are, and the state courts have only begun to address
this question.
Moreover, as the Minnesota decision suggests, the definition of appropria-
tion is inevitably shaped by judicial attitudes concerning the impact of the item
veto on executive-legislative relations. '^"^ Courts concerned that a governor may
use the veto power to "modify the legislative strategy"'-^ may be apt to define
"appropriation" not solely in terms of state budget practices and the effect of
special fund mechanisms on the general fund but also in terms of a concern to
cabin the governor's power.
In short, in the definition of "appropriation bill." as in the definition of an
"item," state courts have had to grapple with the uncertainties of language in the
light of contemporary fiscal and institutional practices in state government.
And, as with the definition of "item," ±e resolution of this issue" has powerful
implications for the distribution of power between the executive and the
legislature.
Conclusion
As the state item veto cases indicate, the item veto is not simply a mechani-
cal device for increasing executive control over the budget or reducing fiscal
imbalances. Rather, by altering the role of the executive in the enactment of
laws, the item veto opens questions about basic structural arrangements. The
item veto forces us to think closely about the relationship of the parts of a bill to
each other and to the bill as a whole; to consider the degree to which the execu-
tive's power to unravel legislative packages conflicts with our customary notions
of legislative intent and the way in which legislatures reach agreement and to
124. Rios, 333 P.Id at 26.
125. Johnson v. Carison. 494 N.W.Zd 516. 518 (Minn. Cl .A.pp. 1993).
126. Id. at 517.
127. Id. at 518.
123. Id. (quoting Inter Faculty Org. v. Cirison. -v78 N.W.2d 192, 194 (Minn. 1991)).
102
1204 TEMPLE LAW REVIEW
address the meaning of appropriation at a time when state ftnances are seriously
affected by measures that do not fall within the traditional definition of appro-
priation. Although the item veto has long been a pan of the state budget pro-
cess, these issues remain unresolved or inadequately resolved in many states.
This may be attributable to their inherent difficulty. Indeed — to return for a
moment to the value of state constitutional law as a "laboratory" of democratic
experimentation and a potential model for federal constitutional changes — if
Congress, driven by fiscal and political concerns, should ever decide to give seri-
ous attention to the state item veto as a model for the Federal Constitution, it
must also give comparable attention to the qiiesdons of interpretation and allo-
cation of law-making responsibility that result when the item veto is grafted onto
the long-standing federal system of separation of powers.
103
CoBpCroUer G«nerml
of Ue Uk1U4 States
Waaklafiom, UC. *0t4»
B-258826
Noveniber 17, 1994
To the President of the Senate and the
Speaker of the House of Representatives
In order to keep the Ck)ngress apprised of the amount and frequency of
rescissions projxDsed and enacted we have updated our previous compilation
of historical information and statistics regarding rescissions proposed by the
executive branch and rescissions enacted by the Congress through the close
of the fiscal year. These statistics were prepared in accordance with the
same scope and methodology used in compiling our previous tables.
I trust you will find this information useful.
Comptroller General
of the United States
Enclosures
GA0/0GC-9&-1
104
3
(/)
o
o
z
IXI
1 §2i i g
f ?i $ i 5
11 nil I
! i i H S S i
i(
I
Its s « i 5 ?
r* ^ t^ ^ ^ ri
t
i
!
i
J
«
%
I|P? = ?.
. =.. = ?5
••
\
8 I - - B
f f : - s 1
§ § i i ! 1 J
•
i
1 ! 5 2 '
1 r ; 8 ? ;; 1
•t
;
S . , s ^ iE 5 S
111
5 K : ; s ; i"
~ " - ' ' 2
£
i
i
5
1!
St
1
If
&
<r ^
*■— i *t *■^
=
;
; ° J § 1 § â–
' § ° § i I J.
:
•
s!
1 ? : ? S j
s § E ! :
c
•
ft
i
to 5 " •>
11
X ; r 5
" " 3
•
r"
•
>>
1
i!
1
<
&
111 - . -
. o . , , I
^
t
. - 1 § s g §
§ ° § § i 1
1
S
1 ? 8 r s ;
III |H|2
If?
? S 2 i 5
«
-
5 5 5 2?
s
- s - 5
^
•*
•
!'i
j
&
1' J
- = r s s J
;
i
\i%\%%\%
: 3 £ s s i'
111
ill
1
I
* I
H
If
I!
If
11
105
cc
w
O
o
1 § i § ? 5
§ § i i i § =
1 i § = 5 8
? : ; s R ; J
O J O r» -^ rf*'
E S i ! fi 1 i
- i
i *
«
S
^1'
9*
s|| s : e 3 S
2 - ? ~ 8 " =
2 •
, 1 1 1 i 1
III- S ll
i i 8 5 S I
u 2 ** 2 $ 2
5 ? s * ' 5
• • — * " r^
* " ? ' 1 '•.
'? &
^
11?
gfo
1
CB
z
,5
C
CD
«
U
e
i
14
-
o S
*â–
!so - "5S
- « n o .- M "
g?
i
<
4
5s
o
O "
r
1
J 1 ^ i 1 ! 1
1 § § 1 S ° 5
< cc
c
*
SI t S S S !
ft • n 7 • • i
* ^ Q — <i C
> K^ ft M • ^
«D >
1
tl " « 8 :: :
■» • -n • • g
^ S i : s •.
O -1
9
• O , o
•
a. <
\i
«»
O u
K ce
1
0. C
f
• X
u.
K
1 .
y
o
<
J
u
H >-
y
1 s
â–
S
s
1
3
HI " » - s s •
. -. • - s o «
. §§§§11
§ 1 § 1 § §
i 1 § 1 2 § 1
,1 5 5 i i = 5
•8 88 8 S 5'
- • 6 s • r.
? 5 s ~ ; 1
- - " ~ J
I'i
^
III. . = .-
= s.i~5
5'i
|i : : : : : S
â– tI
i
• f^ •• jn « J *
• * • A M * J
»^;;:;?:
- ' ' - - st
&
i
s
i
2
»
a
c
I
s
t
o
~^:
a 2
j t
n
II
•
i
106
Ui
oc
3
CO
Q
Ui
2
H
< o
i
si
O K
iS§
UI
K
E
3
Z
c S
o.
«
I
1
c
«
is
I 8
II
c
S
E
i
ir>
n
^
~
s
z
o
g
g
s
«D
ll
,^
tA
n'
f^"
<o
<n
5
c
3
•s
<>
a
<ss
O
E
CM*
o
CM
V
o
to
CM
9
.-i
<
CM
">.
^.
n
r>
M
Cv*
cm'
M
T3 6
J
ry
•»
i^
o
o
1 i:
c «
— 3
•1 CD
1^
B 3
so
i
^
E
3
Z
CD
m
CM
r^
*"
•o
c a
s
5-
O
o
CM
CM
O
o
8
e
<?!
c
o
O
s
§
s
s
â– o
o
o
q.
a
^
fO
Oft
«
«
c
3
^
s
u
u
1
r^'
<o'
r>
c
o
o
â– n
<
o
CM
n
£
CM
C4
s
1
•»
s.
O
O
e
a
1
•
1
w TJ
e
0.
3 H
2 ^
o
s
tt
O
o
S
o
o
o
o
o
s
M
o
o
o
<c
o
o
«
c
<n
a>
m"
>.
3
r^
ui
it>
«
A
»
CJ
CM
a
V
1
a
a>
»
n"
ll
It)
â– A
•
n
1h
o
o
•»
_ •
c â– =
II
8
<s
i
E
3
Z
O
CM
s
-
o
•
IS
-J
"5 :=
*n
CM
O
at
<
o 2
oa
at
9
9
o
£^
o
a
a>
a
a>
107
tu
(A
O
_i
o
z
uu
s ^
o
o
lO
7
o
o
o
o
o
w>
«*
o
r^
§
o
o
o
o
s
^.
e S
o
<c
o_
o
o
o
t
«
s
o'
o
^
a>
in"
cm"
o
c
a
(M
«
o
rt
a
o
3
O
6
<
<D
5
»'
o
•"
o*
•
o
m
o
»
s
T3 5
£ <
<n
C4
Ifl
«i
cm"
n
1 i
O
c o
■•
C (T
i
E
r
Z
o
«
CM
1/1
f^
tM
r*
-
in
m
a
â– D
= 5
•
• a.
f^
o
r)
lA
o
<o
s
•
i|
c
<5
^~"
~^
2
o
o
O
o
o
o
o
o
o
o
o
o
o
o
§
m
m
T3
o
o
o
o
o
in
«
s
—
<->"
o'
o
a>'
»rr
<o
m'
•
a
c
>n
o>
f^
9
en
M
«
3
O
1
o
o
<M_
<o
n
•*_
a.
l>^
u
rg"
<o"
n
rt"
in
in
o"
ID
^
M
<n
•9
f^
m
<o
«
m
<
p>
o
ID
J
o
a
V
o"
e
o.
1
c
•
5
w ■«
•
i
z J
o
rg
â– *
p>
o
in
o
7
o
s
O
o
7
7
§
g
o
o
O
o
o
o
o
o_
o
o
o
o
o_
>>.
c
s
o
o
f^"
o"
o
o
o
r*r
^
3
o
o
tt
o
o
o
o
•
^
^
•
»
o
■«
o.
>»
a
«
1^
|5
«â–
in
<o'
«
<o
a
f^"
^
icT
*
r>
CM
<n
n
<o
o
<o
n
J
•»
•
o
«
<0
â– A,
a
!l
II
"^^
â– ^~
â– ^â„¢
I
i
•
o
n
n
lA
(M
a
CM
CM
o
N
O
«D
z
• s
«
«
f^
<o
m
>»
<n
CM
<
o
dl>'
a
s
a
a
a
a
»-
108
cc
(/>
O
UJ
O
1°
H
^^ i
o o s
51 g
O K
ui
oe
3
o
o
g
8
•*
H
c
i
o
s
o
2
a.
o
o
CM
(A
r^
«
§
00
r*
f^"
0(
m"
<
^
<o
f^
fX
1
o
T5
o
it
o
c O
SI
Si
i
E
o
—
■«
r>
«
cc
Z
5 t
a 3
T> £
C S
«lf
•
•
e
o
c
• Q.
u •
o
C4
ex
eg
s
1*
8 -
<s
ss
^^
o
(D
o
o
O
«
S 5
«A
^
o
o
8
^
-D
^
o
o
■•
• •
A
*.
to'
»'
u>
o"
s
o >
Q.
C
<3>
3
U)
a>
O
3
<o
u>
o
o
c "
O
E
CM
o*
9
•D B
•
<
r*.
r-
lA
A
k_
M
8 o
s
M
•»
°- •
8.
o
a
e
_ m
o.
s •
1
23
s 1
If
c
•
•
e
0.
11
o
o
m
N
s
H
•> c
o
Q
o
o
Q
o
» c
o
u «
>-
1
3
8
8
8"
lA
o,
ri
•n
â– O
r>
f>-_
*".
«
CO ff
1
3"
oT
s
8"
â– *
o
II
|o
i
•»
"-
'â– '
3
â– ft
^c
o
O
f-
iS
z
1
i
E
3
z
«M
r^
•
Z
_i
5 •
•
o
<
O
5 •
o
o
a
a
a>
H-
c
S
o
o
at'
o
8
cm'
o
,*? "
<»
â– *
«
O i.
?
â– *'
o
m
>. B
<
o
o
^ c
^
«
â– o E
2 ?
3
o
—
•»
a *
Q
F H
— o
IB LL
ir
S 3
E
Z
o
o
-
o
*
â– o
c S
m
m
8
• a.
a •
in
â– w
*
«
o
a
°- <
c
o
O
^
o
o
o
o
o
o
o
r*
f-
o
o
n
n
„
o
in
o
r>
(»
CM
s
<s
r>
CM
fx
E
r^
00
<n
CM
«
^
m
m
m
<
en
fx
2i
o
o
^
a
c
•
â– a
m
w "D
8
a
r-
r-
o
CM
in
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
c
o
o
o
ir>
r»
r*-
o
o
n
«n
o
o
CD
o
£-
^
U)
CM
CM
iti
â– n
â– o
<
rj
S
CM
at
at
5
s
o
V.
r>
CM
r*
g^
4A
w
1^
o
?£
11
1
ll
E
3
Z
<n
o
CM
CM
in
_j
• i
r^
<o
l«
â– W
<
o ;
r^
f^
r-
r^
â–º-
2
• -J
at
•
at
o>
u. >
Order Code IB89148
CRS Issue Brief
The President and the Budget
Process: Expanded Impoundment and
Item Veto Proposals
Updated October 6, 1994
by
Virginia A. McMurtry
Government Division
Congressional Research Service • The Library of Congress
CRS
110
CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Brief History of Impoundment
Procedures for Congressional Review of Rescissions
Executive Branch Proposals
Alternative of an Item Veto
Expanded Rescission and Statutory Item Veto Proposals
Comparing Rescissions and Item Vetoes
LEGISLATION
CONGRESSIONAL HEARINGS, REPORTS. AND DOCUMENTS
IB89148
111
The President and the Budget Process:
Expanded Impoundment and Item Veto Proposals
10-06-94
SUMMARY
Conflicting budget priorities, along
with concern over the size of the Federal
deficit, have accentuated the institutional
tensions between the executive and legisla-
tive branches inherent in the Federal bud-
get process. President Clinton, like his two
predecessors, wants an item veto, or possi-
bly expanded impoundment authority, to
provide him with greater control over Fed-
eral spending.
Congress exercises its "power of the
purse" by enacting appropriations measures,
but the President has broad authority as
chief executive in the implementation stage
of the budget process. It is at this stage
that the monies provided by Congress are
actually spent by the Federal Government.
Impoundment, whereby the President with-
holds or delays the spending of appropriat-
ed funds, provides one important mecha-
nism for budgetary control during the
execution stage, but Congress retains over-
sight responsibilities at this stage as well.
The Impoundment Control Act of 1974
(Title X of the Congressional Budget and
Impoundment Control Act, P.L. 93-344),
established two categories of impound-
ments: deferrals, or temporary delays in
funding availability; and rescissions, or
permanent cancellation of budget authority.
The 1974 law also stipulated different
procedures for congressional review and
control of the two types of impoundment.
With a rescission, the funds must be made
available for obligation unless both Houses
of Congress take action to approve the
President's rescission request within 45
days of "continuous session."
Consideration of impoundment reform
has become increasingly joined with that of
an item veto for the President. The Consti-
tution provides that the President may sign
a bill into law or veto the measure in its