Who’s Holding the Purse? The Line Item Veto and other Fun Facts Part I

The 1907 Philippine Assembly

On 8 February 2010 or barely four months before the end of her term,  President Arroyo approved a P 1.54 Trillion Budget for Fiscal Year 2010-2011.  Of this budget, P 800 Billion is  designated as a Special Purpose Fund (SPF) representing “budgetary items that are non-permanent in nature, appropriated to augment obligations of line agencies, governed by special provisions and subject to the President’s approval.” That the SPF is largely under the control of the President would not of itself be remarkable except for the proportion that it bears to the total budget  (more than one-half). According to Prof. Leonor Briones of the University of the Philippines  College of Public Administration, the unprecedented amounts consistently being allotted as SPFs  “[d]istort sectoral and regional budget priorities approved by Congress” and “[w]eakens the ability of Departments and agencies to strategically program spending for their respective services.”  That’s the techno-speak equivalent of saying that the President effectively holds the rest of government by the balls.

Strangely, this situation does not seem to be one allowed by the grand power distribution scheme of the Constitution. At least in theory, there seems to be no doubt that the so-called “Power of the Purse” belongs exclusively to the Legislative.  Article VI, Sections 24 and 25 clearly provide:

“Section 24. All Appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of local application, and private bills shall originate exclusively in the House of Representatives, but the Senate may propose or concur with amendments.

“Section 25. (1) The Congress may not increase the appropriations recommended by the President for the operation of the government as specified in the budget. The form, content, and manner of preparation of the budget shall be prescribed by law.

“(2) No provision or enactment shall be embraced in the general appropriations bill unless it relates specifically to some particular appropriation therein. Any such provision or enactment shall be limited in its operation to the appropriation to which it relates.

“(3) The procedure in approving appropriations for the Congress shall strictly follow the procedure for approving appropriations for other departments and agencies.

“(4) A special appropriations bill shall specify the purpose for which it is intended, and shall be supported by funds actually available as certified by the national treasurer, or be raised by a corresponding revenue proposal therein.

“(5) No law shall be passed authorizing the transfer of appropriations; however, the President, the President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court and the Heads of Constitutional Commissions may, by law, be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriations.

“(6) Discretionary funds appropriated for particular officials shall be disbursed only for public purposes to be supported by appropriate vouchers and subject to such guidelines as may be prescribed by law.

“(7) If, by the end of any fiscal year, the congress shall have failed to pass the general appropriations bill for the ensuing fiscal year, the general appropriations law for the preceding year fiscal year shall be deemed re-enacted and shall remain in force and effect until the General Appropriations Bill is passed by Congress.”

Yet, a series of enactments starting from Presidential Decree No. 1177 of former strongman and ball holder extraordinaire Ferdinand Marcos,  subsequently adopted by the Administrative Code of 1997, succeeded in effectively snatching the power of the purse from legislature and giving it instead from the President.

How was this sleight of hand accomplished?

GMA recently approved a P1.5 Trillion Budget

The true “power of the purse” does not arise from the requirement that all revenue bills must originate from Congress as stated in Article VI, Section 24 of the Constitution. Rather, it lies in the dynamic created by the concept that the President must  ask  Congress for money. Thus, more than the authority of  Congress to institute  revenue measures, the real nature of the power shows itself  in the authority of  Congress to WITHHOLD money from the President.

For example, if the President asks Congress for a certain amount of funding for a health care program, the Congress can either: (i) approve the program in toto, (ii) reject it, (iii) reduce the amount of appropriation or (iv) impose certain conditions for the grant.  Thus, the power of the purse becomes evident NOT in the granting of the appropriation but in the fact that if the President wants the approval, she must be  forced to accept the conditions imposed by Congress for the appropriation.

Indeed, the key to the purse, if you will, is not in Section 24 of  Article VI but rather in the decision (to be made again by Congress) to grant the President a Line Item Veto power. The Line Item Veto power is not inherent to the Presidential office and can be conferred only by statute. A more robust explanation and the line item veto’s  strange legal history will be taken up in our Part II.

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