A Not-So-Brief Lecture On Federal Appropriations Law

With the current impasse in the Congress and all the talk of the shutdown of the Federal Government, this maven has noticed a great deal of confusion about what this all means. So as a public service I will provide the following information on the one area in which I am truly a maven:

1. The Constitution provides that no funds may be drawn from the Treasury except under authority of appropriations made by law. Clearly, this means that without an appropriation payments may not be made by the United States government. However, beginning early in our nation’s history, appropriations have been viewed as providing two authorities. First is the authority of agencies to enter into legal obligations binding on the government. This authority is generally referred to as budget authority. Second is the authority of government disbursing officers to pay money out of the treasury to satisfy the obligations made by agencies.

2. When the head of an agency permits his/her employees to perform work for the government, s/he necessarily incurs an obligation to pay those employees for the time they work. Thus in order for the head of an agency to allow employees to work there must be budget authority available that permits the obligation. Heads of agencies have no authority to accept voluntary services.

3. The budget authority contained in appropriations acts are of three types:

a. One-year: this authority is available for obligation only in the fiscal year for which it is enacted;
b. Multiple-year: this authority is available for obligation for a period greater than one year as specified in the appropriation act itself;
c. No-year: this authority is available indefinitely until the agency uses it.

4. Budget authority is also provided in permanent appropriations. These are provisions of law that authorize agencies to incur obligations and that remain in effect until the Congress repeals or modifies them. Permanent appropriations are generally provided for what are referred to as direct-spending or entitlement programs.

5. If the budget authority under which an agency operates expires, i.e., it is no longer available for obligation, the head of the agency must immediately begin the orderly shutdown of the agency. The head of the agency has implicit authority to incur obligations for the purpose of shutdown but for no other purposes. Only those employees who are necessary to carry out the shutdown are permitted to come to work, and they are only permitted to work on shutting down the agency.

6. Legal opinions issued by the Justice Department have held that the President of the United States has implicit authority under the Constitution to incur obligations even in the absence of budget authority. Thus, for example, even without an appropriation for the Department of Defense, the president may authorize the United States military to continue to operate. Likewise, the president may authorize guards at federal prisons to continue to work even in the absence of an appropriation for the Bureau of Prisons. These and others are considered essential executive functions. However, even though the president can authorize these government employees to come to work, they cannot be paid for this work until the Congress enacts appropriations to pay them.

7. There is likewise implicit constitutional authority in other branches of government to incur obligations in the absence of appropriations. For example, senators and representatives must be able to continue to work in the absence of appropriations to pay them. This authority is a logical necessity. If the Congress could not operate in the absence of appropriations, it could never meet to enact appropriations. The result would be a permanent shut down of the United States Government. (I will not comment on whether this would be good or bad.)

Okay, so where does this leave us in the event that the Congress is unable to agree on appropriations to continue the government beyond tomorrow night?

A. Agencies and programs that are funded by permanent, no-year or multiple-year appropriations can continue to operate. They have budget authority and have no need to shut down. Further, the obligations they incur, including those for salaries and benefits of their employees may be paid without further action of the Congress.

B. Agencies and programs funded by one-year appropriations that are covered by the expiring continuing resolution must be shut down. Heads of those agencies may only permit those employees who are involved in shutting down the agency to come to work. All other employees must be furloughed. Those employees who come to work may be paid only when the Congress enacts appropriations for that purpose. Furloughed employees may be paid if the Congress so provides by law.

C. Agencies and programs which the president determines are necessary to fulfill his constitutional authority may continue to operate. Obligations incurred by those agencies, including obligations to pay their employees, may not be paid until the Congress enacts an appropriation to pay them.

D. Representatives and senators may continue to incur obligations necessary to allow them to enact appropriations to restore the operations of government. This includes the authority to allow staffers to come to work for the purpose of enacting those appropriations. Obligations incurred by the Congress, including salaries and benefits for representatives, senators and their staffs, may not be paid until appropriations are enacted to pay for them.

So now you have it. Everything you never wanted to know about federal appropriations law. Will the government shut down tomorrow night. Don’t ask me! Go to your favorite physic.

Mitch McConnell On Earmarks

Last week, after the voters in just a few states kept him from becoming the Senate Majority Leader in January, Minority Leader Mitch McConnell announced what would be the Republican agenda in the 112th Congress. You’re probably guessing that McConnell’s agenda would include cutting taxes, creating jobs, repealing the so-called “Obamacare” health reforms, or other of the proposals that Republicans ran on in the recent midterm congressional elections. Well, if that’s your guess, you are wrong. Instead, Senator McConnell announced that the Senate minority’s number one objective was making sure that President Obama was not reelected in 2012.

If Mr. McConnell were speaking as the head of a political party, his objective would be perfectly reasonable. Making Barack Obama a one-term president is a legitimate goal of the Republican Party. But as a government leader (although still in the minority in the Senate) one would expect that Mr. McConnell might have some more government-like goals. Senator McConnell’s single objective was questioned by many, including the next Speaker of the House of Representatives, John Boehner. So, Senator McConnell announced a new objective yesterday.

In what was just a two paragraph blurb in Richmond’s great metropolitan daily, Mr. McConnell was reported to be willing to consider a ban on earmarks in appropriations acts. However, Mr. McConnell said that such a ban would be more complicated than it appears. He also acknowledged that banning earmarks would not cut federal spending, since earmarks only affect executive branch discretion on how to spend appropriations, not the amount of the appropriations. So, Mr. McConnell put to sleep the claim that earmarks increase federal spending.

Maven, wait, is that all you’re going to say?

Yes, beloved reader, that is all I have to say.

But, maven, aren’t you going to tell us that Senator McConnell is wrong, that earmarks do increase federal spending?

No, Senator McConnell is right. Earmarks are nothing more than statutory directives controlling how certain appropriations are used by the Executive Branch of the Federal Government.

But, for two years the Republicans have been telling us that earmarks put in appropriations acts by Democrats are a major cause of budget deficits. They’ve told us that eliminating these earmarks would help balance the budget.

Reader, that was before the election. Besides which, they were only talking about Democratic earmarks. Since the Republicans will control the House of Representatives in the next Congress and will therefore be writing all the appropriations acts, we don’t have to worry about Democratic earmarks any more.

Maven, are you saying that Mr. McConnell’s announcement that he would consider a ban on earmarks is meaningless?

I’m sorry. Time is up. No more questions for today.