Impoundment is the decision of a President of the United States not to spend money that has been appropriated by the U.S. Congress. The precedent for presidential impoundment was first set by Thomas Jefferson in 1801. The power was available to all presidents up to and including Richard Nixon, and was regarded as a power inherent to the office. The Congressional Budget and Impoundment Control Act of 1974 was passed in response to perceived abuse of the power under President Nixon. Title X of the act, and its interpretation under Train v. City of New York, essentially removed the power. This severely inhibited a president's ability to combat excessive spending.[1]
The Impoundment Control Act of 1974 provides that the president may propose the rescinding of specific funds, but that rescission must be approved by both the House of Representatives and Senate within 45 days. In effect, this has removed the impoundment power, since Congress is not required to vote on the rescission and has ignored the vast majority of presidential requests.[2]
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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 "[t]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."[3] In keeping with his efforts to reduce the size of the debt, he left the funds for the ships unspent for over a year.
Forty three of fifty U.S. states give their governors the authority to not spend money allocated by the state congress.[4]
Every recent president has supported 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.[5]
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 in to law by President Bill Clinton. However, This law was stuck down in 1998 by the courts 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.