An Impoundment Resolution is whenever all or part of any Budget Authority (BA) provided by the Congress is deferred, the President must transmit a message to the Congress describing the deferrals. Either house of Congress may, at any time, pass a resolution disapproving this deferral of BA, thus requiring that the funds be made available for obligation. When no congressional action is taken, deferrals may remain in effect until, but not beyond, the end of the Fiscal Year (FY). If the funds remain available beyond the end of a FY and continued deferral of their use is desired, the President must transmit a new special message to Congress.
There are situations in which a President may desire to not apportion the budget authority contained in an appropriations act – even though he signed that act into law. The Budget and Impoundment Control Act of 1974 permits the President some latitude in the release of that appropriated funding. Under the provisions of that law, the President may identify a specific amount of funding contained in an appropriations act for a specific purpose and initiate an impoundment action.
There are two (2) types of impoundment actions specified in the Budget and Impoundment Control Act of 1974:
- Deferral: is any account where the asset or liability is not realized until a future date
- Rescission: is the unmaking of a contract between parties