A traditional budgeting procedure by which the President of the United States once could prevent any agency of the Executive Branch from spending part or all of the money previously appropriated by Congress for their use. He would accomplish this, in essence, by an executive order that would forbid the Treasury to transfer the money in question to the agency's account. (The Constitution provides that no money from the Treasury can be spent without a specific Congressional appropriation, but it is silent on the question of whether all money appropriated by Congress actually has to be spent.) All American presidents since John Adams asserted the right to impound appropriated funds, and presidents often used this as a way of making relatively small cuts in Federal spending on programs that they deemed unwise or unnecessary, despite occasional murmurings of dissatisfaction from Congressmen annoyed by the cancellation or trimming of some of their pet pork-barrel projects. In 1973-1974, however, President Nixon made unusually large-scale use of impoundment in his efforts to fight the unusually serious inflationary pressures of the time by trimming back the budget deficit. President Nixon impounded nearly $12 billion of Congressional appropriations, which represented something over 4% of the spending Congress had appropriated for the coming fiscal year. Congressional leaders, who were already up in arms against the Nixon White House because of the Watergate scandal, rebelled against the implicit presidential rebuke of their judgment and authority over spending decisions posed by such large-scale impoundment. In 1974, Congress passed legislation purporting to make the old practice of presidential impoundment illegal and legally requiring the Executive Branch to spend every last penny that would ever be appropriated for it by Congress in the future. The administration denied that Congress had the constitutional authority to over-ride the President's control over the executive branch agencies in this manner, but a Federal Court eventually upheld the Congress's position on this matter, and the new Ford Administration chose to acquiesce in this lower court ruling rather than to further antagonize the already hostile Congress with an appeal to the Supreme Court.

[See also: sequestration]