Since he took office, President Reagan has proposed 160 rescissions and 333 deferrals of federal spending, a mouthful of accounting terms that means he is trying to avoid spending money Congress has told him to spend.
If all his proposals for his first two budget years survive (and many of them have), Reagan will have permanently saved taxpayers $23.1 billion the government otherwise would have spent and will have delayed the spending of another $11.8 billion. Rescissions and deferrals, in short, are fancy words for impoundments.
And to impound, in federal money talk, means someone in the Office of Management and Budget has taken money Congress intended him to spend and stuck it under the Executive Office Building mattress, so to speak. When that happens, the executive branch is supposed to give Congress a chance to intervene.
The question of whether the administration straightforwardly reports all rescissions and deferrals is being asked on Capitol Hill. A related issue is whether, given the extent to which Reagan is using the process, the General Accounting Office is up to the task of monitoring all of them. GAO is supposed to comment on all rescissions and deferrals and uncover those that OMB doesn't report, usually by following up on a query from a member of Congress.
The whole process started when President Nixon impounded money without bothering to tell anyone. Congress responded with the Budget and Impoundment Control Act of 1974, which gave us rescissions and deferrals.
A rescission is an executive branch proposal to stop the spending of funds that have already been appropriated; both houses of Congress must vote in support of the idea within 45 legislative days or the money must be spent.
A deferral is a recommendation by the executive branch that money be spent later than was originally intended. Unless just one house of Congress specifically intervenes, the deferral takes effect and runs for the entire fiscal year.
The use of these budget tools during the Ford and Carter administrations appears now to have been rare. But one of the first things Reagan did when he came to town was propose $15 billion in rescissions in the Carter budget he inherited for fiscal 1981. He won almost $12 billion of them. Additionally, Reagan proposed almost $4 billion in deferrals, and he won almost $3.5 billion of those. It is too early to say what the fiscal 1982 score card will show.
Rep. Norman Y. Mineta (D-Calif.), chairman of a House Budget Committee task force studying the process, recently drafted a "Dear Colleague" letter saying, "It appears that the practice of illegally impounding funds has not escaped us due to the Reagan administration's failure to comply with the law. Through a series of mechanisms, such as failure to report impoundments, reprogramming funds without congressional action, misclassification of impoundments and withholding funds late in the fiscal year so that they lapse, the administration has been able to pursue its own objectives."
Mineta and OMB Director David A. Stockman have had two lengthy exchanges of highly technical correspondence which, were they in English instead of Accounting, would read like the dialogue in a marriage gone bad: both sides are speaking, neither to the other.
"This whole process has been subject to differing interpretations," said OMB spokesman Edwin L. Dale Jr. "I think we try to be pretty conscientious, but there's a difference of opinion there."
Just last week, for example, GAO reported to Congress that the Defense Department had deferred $320.1 million in expenditures "which should have been, but were not, reported to Congress . . . . "
The issue revolves around a fine point. The deferred funds--for shipbuilding, aircraft procurement, Air Force operations and maintenance and Air Force research and development--had been appropriated by Congress but exceeded the amount authorized by Congress. Nonetheless, GAO decided, appropriated but unspent funds are deferrals, regardless of the authorization, and must be reported as deferrals.
The most publicized dispute this year between OMB and GAO concerned a proposed rescission of $22 million in an Education Department grant program for libraries. For technical reasons, GAO ruled the funds could not be rescinded. Suits were filed against OMB in seven states, but the funds were released after the GAO opinion and the issue is moot for the moment.
As a last resort, the GAO is empowered to sue the executive branch, but that has happened only once, during the Ford administration.
Milton J. Socolar, GAO's general counsel, said he thinks on balance the process works well. "Irrespective of disagreement," he said, "the executive has seen fit to follow the signals of Congress."
As for the adequacy of GAO oversight, he said that GAO recently increased from four to eight the number of people assigned to monitor rescissions and deferrals, whether reported or not.