Deferred Spending Order to Be Rewritten

Budget Director James C. Miller III, seeking to defuse growing congressional unrest over the White House’s refusal to spend $23 billion in funds appropriated by Congress, has agreed in private talks with Senate Appropriations Committee Chairman Mark O. Hatfield (R-Ore.) to rewrite the Administration order deferring the spending.

Meanwhile, the General Accounting Office has notified the Administration that it may file suit over the Energy Department’s refusal to release $157 million in Strategic Petroleum Reserve funds that the GAO insists was deferred illegally. If the suit is filed, it would be the first such legal action to block an Administration-ordered spending deferral in more than a decade.

Current law allowing the Administration to defer spending that has been appropriated by Congress was intended to give the White House some flexibility in its routine cash management. However, many in Congress have charged that the latest deferral order--which was issued Feb. 5 and was significantly larger than those of previous years--amounted to an Administration effort to replace Congress’ spending policies with its own.

Deferrals Called Unconstitutional

Included in the order were refusals to spend funds appropriated for such programs as low-income housing, urban development and the Strategic Petroleum Reserve. A group of House members and several organizations of municipal officials have filed a lawsuit arguing that such deferrals are unconstitutional.

Miller told Hatfield Tuesday that congressional leaders had misinterpreted the Administration’s initial order and promised a clearer accounting of the deferrals, including a better explanation of which had been ordered for policy reasons.

Miller indicated that the new order would show that only about $5 billion had been deferred as a means of implementing Administration policies but that the remainder was held for routine reasons, Hatfield said. The Administration has said that most of the deferrals are necessary to preserve Congress’ right to cut programs before funds have been allocated.

Wants Better Explanation

Hatfield said that the initial order “looks like we’ve had the gauntlet laid down” but that a better explanation could create a “far less confrontational environment.”

“I want to see it in writing,” he added.

The GAO issued an opinion last week that it was “not permissible” for the Administration to defer three-quarters of the Strategic Petroleum Reserve construction funds that it put on hold last month.

The Energy Department responded Monday that it would continue to study the issue but promised no action.

GAO Comptroller General Charles A. Bowsher then sent a letter to Capitol Hill Tuesday disclosing that the agency may file suit. The GAO is required to wait at least 25 working days, or until April 11, before taking such action.