The question of whether the president can refuse to spend money Congress has appropriated--an action known as impounding--has taken a new turn in recent months. Because of court decisions, the General Accounting Office has reversed itself and decided that Congress can, at the time it writes appropriations bills, effectively prevent impoundments. There are two kinds of legal impoundments--rescissions and deferrals.

At issue is something known as the "fourth disclaimer," so named for a fourth subparagraph in the Budget and Impoundment Control Act of 1974. It says that nothing in the act, which spells out how money can be impounded legally, supersedes "any provision of law which requires the obligation of budget authority or the making of outlays thereunder."

Vastly oversimplified, that has come to mean to the GAO (and some courts) that the president may not withhold funds appropriated under so-called mandatory spending statutes.

To determine whether spending is mandatory, the GAO said an appropriation's legislative history must be studied and a number of tests applied. One of GAO's tests is whether the legislation sets up a formula for distributing money among the states and establishes a spending schedule. When that happens--even if Congress does not expressly prohibit an impoundment--the White House can't impound the money, according to GAO.

The Office of Management and Budget disagrees, and argues that impoundments are legal unless expressly forbidden by the appropriations act.

"There are momentous implications in this issue," an OMB insider said, the largest being the possibility that "all formula programs could be excluded from impoundment."

In the meantime, just as the law says: if rescissions are not approved by Congress, OMB releases the money as the law provides; if deferrals are not specifically prohibited, OMB holds on to the money.

The latest point of contention: $2.8 million in outdoor recreation grants from the National Park Service, which OMB is deferring and which GAO says must be spent. Watch this space.