Impoundment

To propose a deferral, the president must send Congress a request identifying the amount of money to be deferred, the program that will be affected, the reasons for the deferral, the estimated fiscal and program effects of the deferral, and the length of time for which the funds are to be deferred. Funds cannot be deferred beyond the end of the fiscal year, or for so long that the affected agency could no longer spend the funds prudently.

In the original Impoundment Control Act, the president was allowed to defer funds for any reason, including opposition to a specific program or for general policy goals, such as curtailing federal spending. Congress retained the right to review deferrals, and a deferral could be rejected if either the House or the Senate voted to disapprove it. In 1986, several members of Congress and a number of cities successfully challenged the constitutionality of these deferral procedures in City of New Haven v. United States, 809 F.2d 900 (D.C. Cir. 1987). New Haven was based on a 1981 case, INS v. Chadha, 454 U.S. 812, 102 S. Ct. 87, 70 L. Ed. 2d 80, in which the Supreme Court ruled that one-house vetoes of proposed presidential actions are unconstitutional. The Chadha ruling invalidated Congress's right to review and disapprove deferrals. In response, Congress took away most of the president's deferral power through provisions in the Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987 (2 U.S.C.A. § 901 et seq.) (otherwise known as Gramm-Rudman-Hollings II). These provisions allow presidential impoundment for only three reasons: to provide for special contingencies, to achieve savings through more efficient operations, and when such deferrals are specifically provided for by law. The president can no longer defer funds for policy reasons.

Once the president sends a message to Congress requesting a deferral, the comptroller general must submit a report on the proposed deferral to Congress. A proposed deferral is automatically considered to be approved unless the House or the Senate passes legislation specifically disapproving it. If the president still refuses to spend appropriated funds after Congress has formally disapproved of a deferral, the comptroller general has the power to sue the president in federal court.