The Reagan administration has frozen spending by numerous agencies all across the government even before formally asking Congress to approve the president's recommended spending cuts, the Office of Management and Budget confirmed yesterday.
Edwin Dale, the OMB spokesman, said the freeze was put into effect in mid-February in anticipation of the spending reductions that President Reagan will propose to Congress beginning next week.
Programs and agencies affected by the freeze include the Economic Development Administration, where loans and grants are being held up, the Environmental Protection Agency's sewage treatment grant program, the Youth Conservation Corps, the Export-Import Bank and numerous energy programs.
These and other programs that have been targeted for cuts have, in effect, been placed on hold for almost a month while OMB does the necessary paper work prior to sending the official spending cut requests to Capitol Hill.
While no overall figures are available and the administration has not announced most of the agencies and programs affected by the freeze, the OMB order of mid-February clearly involves hundreds of millions of dollars in potential spending in dozens of agencies.
It could also revive a debate of the last decade over a president's authority to halt congressional spending unilaterally. Dale conceded that the Reagan administration's action involves a "gray area" of presidential authority, but he said there is ample precedent to justify the freeze order.
As a result of the controversy over the impoundment of appropriated funds during the Nixon administration, Congress enacted legislation in 1974 governing a president's authority to hold up spending. Under this legislation, the president can ask Congress for a rescission, or cancellation, of previously appropriated funds.
Both houses of Congress must approve the rescission within 45 congressional working days of the request or the appropriation remains in effect and the spending goes forward. But during the 45-day period, the funds involved in the rescission requests are frozen and cannot be spent.
As part of his austerity program, Reagan will ask Congress to approve more than $5 billion in rescissions for the current fiscal year after the details of his budget cuts are made public next Tuesday. That money will then be frozen while Congress considers the requests.
What is not clear is the president's authority to freeze those funds even before he requests a rescission -- the gray area that OMB wandered into with its mid-February order to agencies that will be subject to rescissions.
Since passage of the 1974 legislation, according to Dale, it has become accepted in the government that it is "legitimate to do this [freeze funds] about 30 days in advance" of a formal rescission request.
Among other things, such a freeze would prevent an agency from frustrating the intention of an impending rescission request by a rush of spending just before the request is sent to Congress. Dale said OMB's action last month would fall within the accepted 30-day practice governing such situations.
However, as the extent of the freeze becomes moree widely known and the spending holdups affect more constituent groups, there are likely to be a growing number of protests to the freeze and challenges to OMB's authority to institute it. Earlier this week at a House Banking Committee hearing, Rep. Barney Frank (D-Mass.) challenged OMB Director David A. Stockman's authority to impose a prerescission freeze on the National Consumer Cooperative Bank.
"I know what a rescission is and I know what a deferral is, but I'm bothered by this 'withhold pending rescission,'" Frank said of the OMB order.