Anti-Deficiency Act
The Anti-Deficiency Act (ADA) is legislation enacted by the United States Congress to prevent the incurring of obligations or the making of expenditures (outlays) in excess of amounts available in appropriations or funds. It is now codified at 31 U.S.C. § 1341[1]. The ADA prohibits the Federal government from entering into a contract that is not "fully funded" because doing so would obligate the government in the absence of an appropriation adequate to the needs of the contract.
This Act of Congress is sometimes known as Section 3679 of the Revised Statutes, as amended.
To some extent, but not entirely, it implements the provisions of Article I, Section 9, Clause 7 (the "power of the purse") of the Constitution of the United States which precludes the expenditure of funds by any branch of the Federal government unless those funds have been appropriated by Congress. In part, the Act is actually inconsistent with the Constitution because it recites that expenditures without appropriations can be made where expressly permitted by Congress: the Constitution permits no such exception[citation needed].
Although the ADA and its predecessors are over 120 years old, no one has ever been convicted or even indicted for its violation.[2]. (Emphasis mine...may Obama be the first to be convicted. ~ Storm'n Norm'n)
An important
corollary of the constitutional provision is that departments and agencies of
the government may not "augment" appropriations either by raising money instead
of seeking and getting an appropriation or by retaining funds collected and
using them instead of receiving an appropriation. This bar to augmentation of
appropriations is regularly violated by the executive branch and often with the
consent of Congress. Practices in the nature of revolving funds (funds that are
kept liquid by the use of "income" realized by agencies) clearly violate the
augmentation limitation.
A more subtle but important violation of the
Constitutional provision occurred when Congress passed TARP. Congress never
appropriated ANY funds to TARP and instead simply recited that the necessary
funds would be "deemed appropriated" at the time they were expended. This
"deeming" provision violated not only the cited provision of the constitution
but a host of other provisions as well.
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