The Constitution gives Congress the power to levy taxes and raise revenue  for the government, to finance government operations through  appropriation of federal funds, and to prescribe the conditions governing  the use of those appropriations. This power is generally referred to as the  congressional “power of the purse.” The linchpin of congressional control  over federal funds is found in article I, section 9, clause 7 of the  Constitution, which provides that “No money shall be drawn from the  Treasury, but in Consequence of Appropriations made by Law.” Thus, no  officer or employee of the government may draw money out of the  Treasury to fund agency operations unless Congress has appropriated the  money to the agency. At its most basic level, this means that it is up to  Congress to decide whether to provide funds for a particular program or  activity and to fix the level of that funding. It is also well established that Congress can, within constitutional limits,  determine the terms and conditions under which an appropriation may be  used. In this manner,  Congress may use its appropriation power to accomplish policy objectives  and to establish priorities among federal programs. This does not mean agencies are free to ignore clearly expressed  legislative history applicable to the use of appropriated funds. And of  course, we hardly need to note that an agency’s decision to ignore congressional  expectations may expose it to grave political consequences.”

		Recent Guidance to Agencies on Collecting Data on Earmarks

There have been numerous calls in and out of Congress for earmark  reform. Both Houses of Congress have taken steps to increase disclosure  requirements. In addition, OMB directed  agencies to plan on providing information on earmarks in authorizing and  other bills that are identified based on consultation with OMB. OMB’s  guidance to agencies excludes from its definition of earmarks funds  requested in the President’s Budget. These program officials told us that their ability to accomplish  their strategic goals has been limited because congressional directives  make up a large percentage of their budget and it is often difficult to align  the outcomes of congressional directives with these goals. In addition to responding to specific requests  from congressional committees, DOT also communicates some general  funding information on congressional directives to Congress. According to Corps  budget officials, congressional directives are defined by the agency as any  of the following changes to requests made in the President’s Budget:    an increase or decrease in funding levels for a budgeted project,  the funding of a project that was not included in the President’s Budget,  and    any project that has language in a committee or conference report or in  statute that restricts or directs the Corps on how to spend funds. The program manager responsible for responding  to OMB identified the fiscal year 2005 earmarks using appropriations bills  and conference reports. Appendix I: Objectives, Scope, and Methodology

Our objectives were to identify for selected agencies (1) the process for  identifying and categorizing congressional directives; (2) the process for  tracking, implementing, and reporting on congressional directives; and   (3) agency officials’ views on the trends and impact of congressional  directives. The selected agencies were the Department of Defense (DOD),  the Department of Energy (DOE), the Department of Transportation  (DOT), and the U.S. Army Corps of Engineers’ Civil Works programs  (Corps). These agencies cover a range of characteristics concerning  congressional directives, including the number of congressional directives. At DOD, we interviewed officials from the Office of the Secretary of  Defense Comptroller’s office and budget officials from components to  obtain information on how congressional directives are implemented as  well as to obtain their views on the impact of congressional directives on  their budget and program execution. To obtain their views on the trends and impact of congressional directives  on agency programs, we spoke with knowledgeable agency officials from  the selected agencies using similar questions.
Why GAO Did This Study

In recent years, congressional concern and public debate have increased about the nature and growing number of earmarks. This report seeks to provide Congress and the public with an understanding of how agencies respond to congressional funding directions by examining how selected executive branch agencies translate these directions from Congress into governmental activities. There have been numerous calls in and out of Congress for earmark reform in response to concerns about the nature and number of earmarks. Both Houses of Congress have taken steps to increase disclosure requirements. The President has also called for earmark reform. In January 2007, the Office of Management and Budget (OMB) directed agencies to collect and submit data to it on fiscal year 2005 earmarks in appropriations bills and certain authorization bills. GAO collected and analyzed information on four agencies' processes (i.e., the Department of Defense, Department of Energy, Department of Transportation, and U.S. Army Corps of Engineers' Civil Works programs). Our objectives were to identify, for these agencies, (1) their processes for identifying and categorizing congressional directives; (2) their processes for tracking, implementing, and reporting on congressional directives; and (3) agency officials' views on the trends and impact of congressional directives.

What GAO Found

Congress or its committees may use formal vehicles to provide written funding instructions for agencies or to express preferences to agencies on the use of funding. These formal vehicles include statutes (i.e., authorization or appropriations acts) or House, Senate, and conference reports comprising significant parts of the legislative history for a given statute. Often referred to as "earmarks," these written instructions range from broad directions on policy priorities to specific instructions. The U.S. Constitution gives Congress the power to levy taxes, to finance government operations through appropriations, and to prescribe the conditions governing the use of those appropriations. This power is referred to generally as the congressional "power of the purse" and derives from various provisions of the Constitution. Government agencies may not draw money out of the Treasury to fund operations unless Congress has appropriated the money. At its most basic level, this means that it is up to Congress to decide whether to provide funds for a particular program or activity and to fix the level of that funding. It is also well established that Congress can, within constitutional limits, determine the terms and conditions under which an appropriation may be used. In this manner, Congress may use its appropriation power to accomplish policy objectives and to establish priorities among federal programs. Our review of four federal agencies' processes for responding to written directives from Congress regarding the use of funds found that each of the selected agencies responds to congressional directives in a manner consistent with the nature of its programs and operations and in response to the desires of its own authorizing and appropriations committees in Congress. Agencies differ in terms of the specific processes followed to respond to congressional directives, and they have also adopted their own approaches for responding to the 2007 request for data on earmarks from OMB. OMB's guidance to agencies excludes from its definition of earmarks funds requested in the President's Budget. With a few exceptions, officials representing the selected agencies generally expressed the view that the number of congressional directives had increased over time. Agency officials provided a range of views on the impact of congressional directives on budget and program execution. Some agency officials said that congressional directives had a limited impact on their mission requirements or ability to accomplish their goals. Other agency officials reported that implementation of these directives can displace agencies' program priorities as the agencies redirect resources to comply with these directives. Some told us that congressional directives provided money for projects they wanted but had been unable to get funded through budget requests. Agency officials also reported that directives can add uncertainty as agencies respond to congressional priorities identified months later than their planning for items in the President's Budget