Saturday, December 22, 2018

Can He Do That? Of Appropriations, Walls and Shutdowns

David Super

     The beginning of a partial government shutdown of uncertain duration seems an appropriate time to sort through the mechanics of shutdowns as well as to evaluate some of the claims about appropriations law that have been appearing in the media for the past week or so. 

The Scope of the Shutdown

     First, it is important to note that this shutdown affects only part of the federal government, albeit a large part.  Before the election, Congress passed, and the President signed, five of the seven annual appropriations bills required to fund the government.  These included the huge bills for the Defense Department and for the Departments of Labor, Health and Human Services, and Education as well as those for Military Construction, Veterans’ Affairs, energy and water projects, and the legislative branch. 

     In addition, some government activities operate under multi-year or permanent appropriations.  Old-Age, Survivors, and Disability Insurance, better known as Social Security, has its own permanent appropriation as do many State Department functions involving passports.  Section 110 of the continuing appropriations resolutions that have funded the government since October 1 provides funding for other entitlement programs to continue through January.  Moreover, where a provision of federal law gives someone a legal right to a payment – as, for example, the National School Lunch Act does for certain child care providers – any eligible entity that is not paid due to a lapse in appropriations can sue in the Court of Federal Claims and receive a judgment that would be paid out of a fund that has a permanent, uncapped appropriation.  That process would be extremely disruptive, but payments would be assured. 

     As a result, the principal effect of the partial shutdown is on the operation of government programs in the affected agencies that are funded through annual appropriations.  This famously includes national parks but more generally covers many routine operations of the Departments of Agriculture, Commerce, Homeland Security, Housing and Urban Development, Interior, Justice, State, Transportation, and Treasury as well as agencies such NASA and the Legal Services Corporation.  The shutdown easily could have been considerably smaller:  four of the seven remaining appropriations bills were essentially finished several weeks ago, but with the White House sending mixed signals about its appetite for a shutdown congressional Republicans declined to pass them.  Since the summer, however, it has been clear that the appropriations bill for Commerce, Justice, Science and related agencies would be held to the end, ensuring that any government shutdown would affect funds for Special Counsel Robert Mueller’s investigation. 

“Essential” and “Non-essential” Government Employees

     Much has been written about the distinction between “essential” and “non-essential” employees.  This springs from the interaction between two sections of the Anti-Deficiency Act.  The Act is the most important statute Congress has passed to enforce the Appropriations Clause of the Constitution.  Officials violating the Act’s core prohibitions face up to two years in prison.  Federal employees who take great comfort in the sweeping immunities the courts have granted them from personal liability nonetheless react very skittishly to potential exposure under the Anti-Deficiency Act.

     The Act’s primary section prohibits “[a]n officer or employee of the United States Government” from “mak[ing] or authoriz[ing] an expenditure or obligation exceeding an amount available in an appropriation or fund for the expenditure or obligation [or] involve[ing the] government in a contract or obligation for the payment of money before an appropriation is made unless authorized by law”.  

     One of several sections that seeks to prevent evasion of the main prohibition dictates that “[a]n officer or employee of the United States Government … may not accept voluntary services for [the] government or employ personal services exceeding that authorized by law except for emergencies involving the safety of human life or the protection of property.”  Thus, no official may obligate the government to pay for any federal workers during a lapse in appropriations, but those federal employees essential to “the safety of human life or the protection of property” may volunteer.  In practice, these employees are effectively compelled to “volunteer”. 

     Mindful of officials’ tendency to stretch definitions to avoid difficult choices, this section goes on to warn that “the term ‘emergencies involving the safety of human life or the protection of property’ does not include ongoing, regular functions of government the suspension of which would not imminently threaten the safety of human life or the protection of property.”  Although Administration officials may feel tempted to assuage public ire by keeping popular sites and functions open, in doing so they expose themselves to prosecution under the Anti-Deficiency Act.  Anticipating what functions will prove essential to protect human life or property can be difficult:  if the current unease in the markets turns into something worse, we may rue having furloughed economists at the Treasury Department. 

     Historically, once a shutdown ends Congress has appropriated funds to pay the “volunteers” for their services as well as to make up the lost paychecks of furloughed federal employees.  This Administration has been unfriendly to federal workers in many respects, but with many of those affected at Homeland Security and other agencies being disproportionately aligned with the President’s agenda, it is difficult to believe that he will block payments to them.  Far less fortunate are government contractors, who typically are not made whole for money they lose during shutdowns. 

Shifting Money to the Wall from Other Accounts

     For a time, it appeared that a shutdown might be averted because the President believed he could put together the money for the border wall from other appropriations accounts.  Senator Schumer insisted that that, too, would require congressional approval, which would not be forthcoming.  The President soured on the idea and decided on a shutdown after all. 

     The reality is somewhere in between President Trump’s initial optimism and Senator Schumer’s adamant denial.  In truth, administrations have been scrounging money for unfunded projects from other accounts for a very long time. 

     One prominent example was the Obama Administration’s implementation of the Affordable Care Act after Republicans captured the House in the 2010 election.  Although the Act contained its own appropriations for some aspects of implementation, others depended on annual appropriations that House Republicans were determined not to provide.  President Obama could not sit by and watch his signature legislation be strangled for lack of appropriations, and House Republicans were leery of taking the blame for doing so.  A tacit compromise emerged under which appropriations acts would provide no money explicitly for the ACA but everyone involved knew that the Administration would shift money from other accounts to fund the bare minimum needed to implement the parts of the ACA that lacked permanent appropriations.  The amounts the appropriators allowed to be transferred were far less than what was needed for robust implementation, but it was enough that the ever-cautious Obama Administration elected not to take the conflict public. 

     Indeed, something vaguely similar has already been happening with funding for the border wall.  Congressional Democrats, and some Republicans, have refused to provide any funds explicitly for building the wall.  But they have appropriated some money for loosely defined border security efforts.  The Administration can claim that it is diverting these funds to make preparations for building the wall while Democrats can insist that the funds carry provisos against actual wall construction. 

     How much latitude an administration has to shift funds from one activity to another depends on the language of the appropriations act providing the money, the permanent statute authorizing the activity in question, and sometimes the law setting out the powers of the officials in question.  Some statutes explicitly authorize transfers of funds.  For example, the Gramm-Rudman-Hollings Act that provides for some budget sequestrations allows the president to shift funds within Pentagon accounts for various purposes, including the protection of military salary accounts, by cutting other functions more deeply.  Other statutes define allowable activities so broadly that the Administration has considerable flexibility without formally shifting funds at all.

     On the other hand, when Congress becomes skeptical of flexibility, often after perceived administration abuses, it has sharply limited discretion to reprogram appropriated funds.  For example, after the disastrous response to Hurricane Katrina showed that the Federal Emergency Management Administration (FEMA) had been stripped bare to serve other priorities, Congress imposed strict limits of diversion of FEMA’s resources.  Congress commonly prohibits transfers to activities for which it has denied funding or to activities it has designated as being of lower priority.  Identifying all restrictions on reprogramming appropriated funds is exceedingly difficult for anyone not well-versed in a particular program.  Even appropriations acts from decades earlier may restrict how all subsequent appropriations may be spent. 

     Here again, the Anti-Deficiency Act plays a key role.  For example, “[a]n agency in existence for more than one year may not use amounts otherwise available for obligation to pay its expenses without a specific appropriation or specific authorization by law.”  Quite apart from any policy preferences they may have concerning the border wall, federal employees who participate in spending federal funds without clear authority from an appropriation subject themselves to criminal penalties.  To be sure, this Administration is unlikely to bring charges against any officials carrying out the President’s orders, and the President could try to pardon those involved.  Most civil servants, however, strongly prefer to avoid committing serious crimes even if they are likely to escape punishment.  They may balk at dubious legal theories in this context far more than they do when contemplating rule-making or other executive acts. 

     It will be interesting to see if President Trump adds the Anti-Deficiency Act to his list of legal difficulties.  One cannot help but remember other figures who avoided many high-profile legal perils only to succumb to charges for similarly prosaic violations. 

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