BUDGETARY RESERVES COMMUNICATION FROM EXECUTIVE OFFICE OF THE PRESIDENT OFFICE OF MANAGEMENT AND BUDGET TRANSMITTING A REPORT PURSUANT TO TITLE IV OF PUBLIC LAW 92-599, THE FEDERAL IMPOUNDMENT AND INFORMATION ACT FEBRUARY 5, 1973.-Referred to the Committee on Appropriations and ordered to be printed EXECUTIVE OFFICE OF THE PRESIDENT, OFFICE OF MANAGEMENT AND BUDGET, Hon. SPIRO T. AGNEW, DEAR MR. PRESIDENT: The enclosed report is submitted pursuant to Title IV of Public Law 92-599, the "Federal Impoundment and Information Act." In accordance with that Act, the report is being transmitted to the Congress and to the Comptroller General of the United States, and will be published in the Federal Register. The pressure of work on the formulation of the 1974 Budgetwhich was sent to the Congress on January 29-taxed our staff resources to capacity (and perhaps beyond) for the last three months. As soon as the 1974 Budget was being completed, we began to compile ROY L. ASH, BUDGETARY RESERVES AS OF JANUARY 29, 1973 Introduction. The Director of the Office of Management and Budget, under authority delegated by the President, is required to apportion funds provided by the Congress. The apportionments are required under the Anti-deficiency Act (31 U.S.C. 665) and generally are for the current fiscal year. Under the law, such apportionments limit the amounts which may be obligated during specific periods. The Anti-deficiency Act authorizes the withholding of funds from apportioment to provide for contingencies; or to effect savings made possible by or through changes in requirements, greater efficiency of operations, or other developments subsequent to the date on which the funds were made available. There are also occasions when specific provisions of law provide that the funds should be available for use over periods longer than one year; in such cases, they generally are not fully apportioned in the current year, and the unapportioned part is withheld, to be released later for use in the next year or years. Thus, some amounts are withheld from apportionment, either temporarily or for longer periods. In these cases, the funds not apportioned are said to be held or placed "in reserve." This practice is one of long standing and has been exercised by all recent administrations as a customary part of financial management. On occasion the Congress has explicitly required that an amount be placed in reserve pending an administrative determination of need (e.g., the 1973 Agriculture-Environmental and Consumer Protection Appropriation Act-Public Law 92-399). Most reserves, however, are established upon the initiative of the Executive Branch based on an operational knowledge of the status of the specific projects or activities. For example, when the required amount of work can be accomplished at less cost than had been anticipated when the appropriation was made, a reserve assures that savings can be realized and, if appropriate, returned to the Treasury. In other cases, specific apportionments sometimes await (1) development by the affected agencies of approved plans and specifications, (2) completion of studies for the effective use of the funds, including necessary coordination with the other Federal and non-Federal parties that might be involved, (3) establishment of a necessary organization and designation of accountable officers to manage the programs, or (4) the arrival of certain contingencies under which the funds must by statute be made available (e.g., certain direct Federal credit aids when private sector loans are not available). From time to time additional reserves are established for such reasons as the necessity to conform to the requirements of other laws. An example is the executive's responsibility to stay within the statutory limitation on the outstanding public debt. The total of all current reserves is 3.5% of the total unified budget outlays for fiscal year 1973 (as estimated in the 1974 Budget). The comparable percentage at the end of fiscal years 1959 through 1961 ranged from 7.5% to 8.7%. At the end of fiscal year 1967, it stood at 6.7%. At the end of 1972, it was 4.6%. But a range in the neighborhood of 6% has been normal over most of the last decade. Report required by law. This report is submitted in fulfillment of the requirements of Title IV of Public Law 92-599, the "Federal Impoundment and Information Act," enacted October 27, 1972, which provides for a report of "impoundments," and certain other information pertaining thereto. This report lists the budgetary reserves which were in effect as of January 29, 1973. The reserves listed are consistent with the 1974 Budget, transmitted to the Congress on January 29, 1973. Therefore, the estimated fiscal, economic, and budgetary effects of these reserves have been reflected in the estimates and other information in that budget. (This statement is made in response to item Number 7 of the Federal Impoundment and Information Act.) The Anti-deficiency Act requires that all apportionments be reviewed at least quarterly, and that reapportionments be made or reserves be established, modified, or released as may be necessary to further the effective use of the funds concerned. Thus, in answer to item Number 5 of the Federal Impoundment and Information Act, the period of time during which funds are to be in reserve is dependent in all cases upon the results of such later review. Several rescissions of 1973 appropriations have been proposed to the Congress in the 1974 Budget. These amounts have been apportioned to the agencies pending Congressional action (that is, they have not been placed in reserve). The items and amounts proposed for rescission are as follows: Department of Health, Education, and Welfare: Food and Drug Administration: Food, drug, and product Health Services and Mental Health Administration: Indian Office of Education: $17, 252, 000 4, 708, 000 Indian education_ Higher education_ Library resources_ Educational renewal_. Department of Labor: Manpower Administration-Manpower 18, 000, 000 44, 300, 000 2,857, 000 11, 890, 000 283, 881, 000 The remainder of this report lists, by agency, all accounts for which some funds are reserved. For each account, it: -presents the amount apportioned for the current fiscal year; -presents the amount in reserve; states whether the amount reserved will be legally available for obligation in the next fiscal year; —indicates the date of the reserve action and the effective date of the reserve; and -presents (by code) authority and reason for the reserve, without necessarily exhausting all possible authorities and reasons. Codes used in the remainder of this report for the authorities and reasons for the reserve actions are described below: Code 1 2 3. 5. 6. 6a 6b. 6c_ 6d... 6e 7. 8.. 9_ Authority and reason for present action "To provide for contingencies" (31 USC 665(c)(2)). To reduce the amount of or to avoid requesting a defi- "To achieve the most effective and economical use" of -Obligation at this time of amount in reserve is -Existing tax laws and the statutory limitation on the national debt (as provided under Public Law 92-599) will not provide sufficient funds in the current fiscal year to cover the total of all outlays in that year contemplated by the individual acts of Congress. -Action taken pursuant to President's responsibility to help maintain economic stability without undue price and cost increases (P.L. 92-210, which amended Section 203 of P.L. 91-379). -Amount apportioned reflects the level of obligations implicitly approved by the Congress in its review of and action on the appropriation required to liquidate obligations under existing contract authority. -Other. See footnote for each item so coded. The President's constitutional authority and responsibility as Commander in Chief (U.S. Constitution, Article II, Section 2). The President's constitutional authority and responsibility for the conduct of foreign affairs (U.S. Constitution, Article II, Section 2). Other. See footnote for each item so coded. |