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Public Contract Law Journal

Public Contract Law Journal Vol. 50, No. 1

Government Contracting and Emergency Powers in the Age of Government Shutdowns

Tanner Slaughter


  • Discusses the impact of government shutdowns on government contractors
  • Suggests that Congress should enact statutory emergency authority enabling the President to make funds available immediately for the payment of government contractors
  • Discusses the constitutional and statutory authority and issues that would arise from the enactment of such a statute and concludes it is within Congress's authority
Government Contracting and Emergency Powers in the Age of Government Shutdowns
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Abstract: In late 2018 and early 2019, the United States saw the longest government shutdown in history. While the shutdown made headlines as political news around the country, for many individuals it represented a loss of work, and for government contractors it resulted in billions of dollars in lost revenue. This Note focuses on the impact of government shutdowns on government contractors and suggests a novel solution: Congress should enact statutory emergency authority, available only in the event of a lengthy funding gap, enabling the President to make funds available immediately for the payment of government contractors. This statute would alleviate the strain that government shutdowns place on contractors and their employees. This Note explores the constitutional and statutory issues that may arise from the enactment of such a statute and argues that such a power would be within Congress’ delegatory authority to enact and the President’s executive authority to carry out.

I. Introduction

Government shutdowns are neither new nor unusual to most Americans. Until long-lasting solutions are developed to address the political stalemates and consequent budgetary crises that regularly plague the United States, shutdowns will continue to wreak havoc—not only on the federal government and on Americans’ trust in their political leadership, but also on the ordinary people who depend on government funds for their livelihood. Employees of government contractors are uniquely vulnerable to effects of a government shutdown because, like federal government employees, they are reliant on appropriated money for their work, but often lack the protections afforded to federal employees in the event of a furlough.

In the event of a government shutdown, employees of government contractors face bleak prospects: Congress can and does provide reimbursement money to contractors to pay their workers for the hardship of a shutdown, but that money often arrives months after the end of the shutdown. During the shutdown itself, government contractors often find themselves choosing between keeping their employees on payroll for money they are not guaranteed to receive, and sending their workers home with the hope that they remain available until the cashflow returns. The second option carries its own risks as well—when funding resumes, the government expects the contractor to resume work immediately, which is a challenge if the contractor must attempt to rehire or replace laid-off workers. Employees find themselves burning through vacation days while waiting for the federal government to restore funding before layoffs become inevitable.

This Note argues that legislative action is needed to protect government contractors and their employees from the harmful effects of government shutdowns. In order to prevent political disagreements between the President and Congress from harming employees of government contractors, Congress should enact a law, pursuant to the National Emergencies Act, empowering the President to declare a national emergency when gaps in appropriations result in any federal agency having to close for seven days or more. During such an emergency, the President could unilaterally put government contractors back to work, and the President would be empowered to obligate the necessary funds from the United States Department of the Treasury to pay for the work performed. These powers would terminate upon the resumption of normal government funding, and they could not be used to obligate funds for new contracts entered into after the government shutdown had begun.

Part II of this Note discusses the causes of government shutdowns, including the Antideficiency Act, as well as the development of presidential emergency powers throughout history, including the earliest examples of emergency powers and the modern emergency powers system. Part III includes the text of the proposed statute and analyses the issues that may arise upon enactment of the statute, such as a potential conflict with the Antideficiency Act as well as constitutional arguments concerning presidential authority in the context of the Youngstown decision. It also examines the issue of the Nondelegation Doctrine in the context of congressional delegations of authority.

II. Causes of Government Shutdowns and History of Presidential Emergency Powers

Government shutdowns are no longer an anomaly, with political disagreements between the President and Congress frequently stalling federal funding. A new statutory emergency power is needed to give the President the necessary tools to address this growing crisis. The following Part contains two sections which provide background information on government shutdowns and on existing presidential emergency powers. Section A explains the constitutional and legal causes of government shutdowns, including the relevant provisions of the Antideficiency Act. Section B traces the history of presidential emergency powers from the First Militia Act to the modern system created by the National Emergencies Act.

A. The Constitutional and Legal Causes of Government Shutdowns

Government shutdowns result from disagreements between the President and Congress about spending levels in the appropriations for a fiscal year. The problems that lead to a government shutdown can be traced to October 1 of each year, when the next fiscal year begins and before which funding must be appropriated for the federal government to continue operating normally for the upcoming fiscal year. The Congress and the President are expected to reach an agreement regarding appropriations by October 1; but in the absence of an agreement, the two branches may agree to fund the government through the use of continuing resolutions, which serve as provisional appropriations providing government agencies with funding on a temporary basis until a full appropriation can be made. However, if there is no full appropriation in place and no continuing resolution has been agreed upon, any agencies not funded immediately cease government activities. When this occurs, a government shutdown has begun.

The root of this conflict between the legislature and the executive lies in the division of powers among the coordinate branches of the federal government. The United States Constitution provides that “[n]o Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law,” meaning that funds can only become available once Congress has enacted an appropriation providing for the availability of funds. However, the Constitution also provides that every bill, prior to becoming law, must “be presented to the President of the United States,” whereupon the President may elect to sign or veto the bill, preventing it from becoming law unless his veto may be overridden by a two-thirds vote of both the United States House of Representatives and the United States Senate. Thus the problem of appropriations is not merely political—it is derived from the Constitutional order itself: neither Congress nor the President can secure funding for their priorities without the other’s acquiescence, and each is able to prevent any appropriations from being enacted which they find distasteful. While Congress is empowered to override the President’s veto, the great difficulty of doing so and the infrequency with which such overrides occur underscore the likelihood that funding gaps caused by political disagreements will only increase in frequency.

In the event that the Congress and the President fail to reach an agreement on appropriations for the upcoming fiscal year or beyond the point at which current continuing resolutions have ended, any federal agencies for which funds have not been appropriated are required to cease operations until funding becomes available. This is because of a collection of federal statutory provisions, collectively known as the Antideficiency Act, which provides in relevant part:

(a)(1) An officer or employee of the United States Government or of the District of Columbia government may not—

(A) make or authorize an expenditure or obligation exceeding an amount available in an appropriation or fund for the expenditure or obligation;

(B) involve either government in a contract or obligation for the payment of money before an appropriation is made unless authorized by law. . . .

The Antideficiency Act necessitates what are now commonly called government shutdowns by preventing government agencies from continuing to incur costs in the absence of an appropriation from Congress allowing the agencies to withdraw money from the U.S. Treasury to fund the agencies’ operations. In the past, government shutdowns occurred rarely and usually involved minor disruptions to agency operations. However, in last twenty-five years government shutdowns have increased both in frequency and in potency. Since Fiscal Year 1996, there have been a total of seventy-eight full days of funding lapses. In the last six years alone, three government shutdowns have taken place. The longest government shutdown in history occurred in December of 2018 and January of 2019, lasting thirty-four days, and was estimated to cost government contractors at least $200 million a day.

B. Presidential Emergency Powers and the National Emergencies Act

Although the President maintains certain emergency powers, those powers do not extend to ameliorating the harms of government shutdowns on federal contractors and their employees. This section contains two subsections on presidential emergency powers as they presently exist. The first subsection provides background information on statutory emergency powers from the First Militia Act to the modern framework established by the National Emergencies Act. The second subsection establishes the legal justification for emergency powers within the American constitutional framework.

1. History of Statutory Emergency Powers

Presidential emergency powers have existed since the Republic was still in its infancy. In 1792, in response to widespread armed opposition to a federal tax on whiskey, Congress passed a law providing that the militia be called forth in the case of invasion or of opposition or obstruction of the execution of the laws “by combinations too powerful to be suppressed by the ordinary course of judicial proceedings . . . .” The militia of the states could be called forth under this act by the President following a proclamation by the President “command[ing] such insurgents to disperse.” This is an early example of the typical form of presidential emergency powers: one or more preconditions (here, the threat of invasion or insurrection), the recognition of those preconditions (here, the President’s proclamation), and an additional power made available to remedy the situation (here, calling forth of the militia to defend the government).

President Woodrow Wilson declared the first national emergency in the sense familiar to modern Americans—a proclamation by the President declaring a national emergency and activating the powers delegated to the President for such occasions. From the beginning of the First World War through the early years of the Cold War, Presidents Wilson, Roosevelt, and Truman made use of proclamations to activate statutory emergency powers in order to assist the nation’s war efforts and address ongoing crises, such as Roosevelt’s declaration of a “bank holiday” to stop runs on financial institutions during the Great Depression. Despite the frequent usages of these expansive powers, however, it would not be until 1976 that Congress established an official framework for the invocation of emergency authority by the President.

In 1976, acting on the urging of the Special Committee on National Emergencies and Delegated Emergency Powers, Congress passed the National Emergencies Act (NEA), which remedied Congressional concerns about the state of emergency powers. First, the NEA returned all then-active emergency powers to dormancy. Second, the statute established a clear procedure for the activation of emergency powers going forward: the President is authorized to declare a national emergency in order to activate powers authorized by Acts of Congress by means of a proclamation, which must be sent to Congress and made public in the Federal Register. The President, when declaring a national emergency, must specify the power he intends to activate and the statute which gives him such authority. Moreover, national emergencies declared by the President terminate automatically one year after their declaration, unless the President publishes a notice stating that the emergency will continue. Congress may also terminate present states of national emergency by issuing a joint resolution. That a joint resolution is required underscores the difficulty of terminating states of emergency—joint resolutions, as with acts of Congress, must be presented to the President for his signature or veto, all but requiring the President to consent to the rescission of his own declaration.

As of July 2020, Presidents had declared a total of fifty-seven national emergencies under the NEA, of which thirty-four are still in effect today. The oldest national emergency still in effect was declared by President Carter on November 14, 1979, blocking “all property and interests in property of the Government of Iran, its instrumentalities and controlled entities . . . subject to the jurisdiction of the United States.”

The passage of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (commonly known as the Stafford Act) underscores the generally accepted principle that certain extraordinary powers outside the realm of normal government action must be available to the President in the event of a natural disaster. The Stafford Act operates along the same principles as the NEA, by first establishing a process by which the President may of his own volition, or upon a request made by the governor of an affected state, declare the existence of a state of emergency in order to make available additional powers to allow the federal government to address the effects of natural disasters. Powers under the Stafford Act generally involve making federal resources available to the states, including the President’s power to direct federal agencies to assist in disaster management. This power extends to the armed services, as the Stafford Act authorizes the President, upon the request of the governor of the affected state, to “direct the Secretary of Defense to utilize the resources of the Department of Defense” for the performance of “any emergency work which is made necessary by such incident and which is essential for the preservation of life and property.”

2. The Legal Basis of Emergency Powers

The expansive emergency powers delegated to the executive are arguably a normal function of the constitutional system. Justice Robert Jackson, concurring with the Supreme Court’s invalidation of President Truman’s seizure of the nation’s steel mills in Youngstown Sheet & Tube Co. v. Sawyer, provided the clearest illumination of the constitutional grounds for statutory emergency powers and their necessity: He noted, “[i]n the practical working of our Government . . . Congress may and has granted extraordinary authorities which lie dormant in normal times but may be called into play by the Executive in war or upon proclamation of a national emergency . . . .”

Underlying Justice Jackson’s interpretation are a number of justifications in the text of the Constitution for the broad delegations of authority which typify Congressionally enacted emergency powers. One of the first enumerated powers of Congress is the power to “provide for the common Defence and general Welfare of the United States,” which by itself signifies that Congress has broad discretion to legislate in the specified areas. Beyond that, Congress’ powers to “regulate Commerce with foreign Nations, and among the several States,” to “raise and support Armies,” to “provide and maintain a Navy,” and to “provide for calling forth the Militia,” all indicate expansive Congressional authority to make laws in the spirit of pursuing the “common Defence and general Welfare” of the nation. In the Elastic Clause, the Constitution contemplates the need to delegate these powers and others, by providing that Congress has the power to “make all laws which shall be necessary and proper for carrying into Execution the foregoing powers, and all other powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.” That the Elastic Clause refers specifically to the execution of the powers of the federal government indicates the role the President plays as the delegee of Congress’ authority. Congress may therefore delegate by law whatever powers are given to them by the Constitution in order to ensure the faithful execution of the laws of the land.

III. The Proposed Statute and its Challenges

Harnessing both the delegatory authority of Congress and the executive authority of the President is crucial to address the issue of government shutdowns, because each branch has its role to play in ensuring the prosperity of the nation. A statutory emergency power is therefore the optimal vehicle for the solution to this crisis, as it pools the authorities of two branches to allow one to act quickly and decisively. The proposed statute aims to accomplish this very goal so the President is equipped with the necessary tools to protect employees of government contractors from the effects of a lengthy shutdown.

This Part will examine the proposed statute suggested by this Note, as well as address arguments which might arise against the statute. Section A will detail the statute itself. Section B will address concerns that might arise by the conflict between the proposed statute and the Antideficiency Act. Section C will address the constitutionality of the statute by examination of the Youngstown precedent and the Nondelegation Doctrine.

A. The Proposed Statute

This Note proposes that Congress enact a statute pursuant to the National Emergencies Act. This statute conforms to the framework discussed above consisting of a set of preconditions, a method of acknowledging those preconditions, and a power that is made available in response to such preconditions. As is discussed in the following subsections, the statute is intended to avoid conflict with the Antideficiency Act while conforming with the requirements of the Nondelegation Doctrine in making congressional powers available to the President consistent with Youngstown. The content of the proposed statute is as follows:

(a) notwithstanding any other law respecting the appropriation of funds,

(b) when a lack of appropriation, continuing resolution, or other budgetary enactment causes one or more federal agencies to cease operations in accordance with 31 U.S.C. § 1342(a)(1) et seq., and

(c) when seven (7) calendar days have elapsed from the beginning of the cessation of operations in paragraph (b) of this section, then

(d) the President is authorized, pursuant to the National Emergencies Act, to declare that a state of national emergency exists for the duration of the cessation of funding.

(e) Upon issuing a declaration pursuant to paragraph (d) of this section, the President may

(1) authorize the continued performance of public contracts entered into by the affected agency or agencies before the cessation of funding occurred, or the resumption of performance of such contracts;

(2) authorize the affected agency or agencies to commit the government of the United States to the payment of such contracts; and

(3) withdraw from the Treasury of the United States such funds as are necessary for the payment of such contracts.

(f) Any national emergency declared pursuant to paragraph (d) of this section will terminate immediately upon enactment of appropriations, continuing resolution, or other budgetary enactment regarding the affected agency or agencies.

This statute is designed to provide a standing remedy to be used in case a gap in funding persists for a week or longer. The remedy is the resumed or continued performance of government contracts and the withdrawal of funds from the Treasury to cover this performance. In the event that a funding gap lasts for a week or longer, the President could, by the stroke of a pen, authorize those contractors contracted with the affected agencies to return to their work and receive their pay on a normal schedule. The statute is designed to operate automatically—as long as the President has declared the requisite national emergency, money will be allocated from the Treasury for the work as it is completed by the affected contractors’ employees. This means that Congress would not have to authorize the reimbursement for this work later, nor would the government be required to evaluate costs associated with lost work. Additionally, while employees of government contractors would be able to resume their work, the agencies affected by the government shutdown would not be able to return to work in the same manner, as those federal employees already benefit from statutory protections. The government would remain shut down in the absence of a budgetary agreement between Congress and the President; what would change under this proposed statute is that employees of government contractors would be guaranteed a return to work in the event that political disagreements result in a government shutdown of appreciable duration.

Due to the intricacies of the political system, any version of this statute that might be enacted would likely differ from the proposed statutory text recommended by this Note. Drafters might consider, for example, whether to place a maximum either on the amount of time that emergencies declared under this statute could run, or on the amount of money that could be withdrawn from the Treasury pursuant to emergencies declared under this statute. Such alterations may be judged necessary by lawmakers, but as long as the proposed statute’s key functions—the resumption or continuation of government contract performance in the event of a government shutdown, with money made available from the Treasury to compensate the contractors for their work—are preserved, the law will function as intended.

B. The Proposed Statute’s Conflict With the Antideficiency Act

This Section will address the potential for conflict between the proposed statute and the Antideficiency Act. Because of the language of the proposed statute itself, and because the Antideficiency Act has largely been enforced as a matter of executive discretion, the proposed statute of this Note is compatible with the Antideficiency Act.

The text of the proposed statute begins with a clause meant to remove any concern of conflict with the Antideficiency Act or any other statute. Paragraph (a) is designed to counteract the Antideficiency Act’s prohibition that no official “make or authorize an expenditure or obligation exceeding an amount available in an appropriation or fund for the expenditure or obligation.” However, because the Antideficiency Act specifically prohibits expenditures made “exceeding . . . an appropriation” it is doubtful that the Act would even apply. The proposed statute delegates the appropriation power of Congress to the President by allowing the President to withdraw funds from the Treasury for the payment of the contracts in question. Once the President had declared the emergency pursuant to the statute and withdrawn the necessary funds, any additional obligation would no longer “exceed[] . . . an appropriation” because more funds would have become available.

Further, other text in the Antideficiency Act makes it clear that the statute contemplates the existence of other laws that may authorize the obligation of the government to pay before appropriations are made. As a result, even if the proposed statute did not convey the actual power of appropriation in its delegation to the President, it would be compatible with the Antideficiency Act by authorizing the obligation to pay without appropriation.

Assuming, however, that the text of the proposed statute was found incompatible with the Antideficiency Act, the proposed statute could still survive under a change to executive policy. The Antideficiency Act was previously not enforced to require a total stoppage of government obligations in the event of a funding gap until the 1980s, when a pair of Office of Legal Counsel (OLC) opinions from Attorney General Benjamin Civiletti established the modern practice of government shutdowns by interpreting the Antideficiency Act to require such a stoppage. Since that time, the Office of Management and Budget (OMB) has adopted the OLC memos’ guidance into its Circular A-11.

The system begun under Attorney General Civiletti is not unalterable; the first of the OLC opinions on the matter acknowledges that for the three decades preceding the opinion federal agencies continued to operate normally during “period[s] of lapsed appropriations.” In the event of the enactment of a statute such as the one proposed by this Note, the change in law would warrant the issuance of a new OLC opinion, just as a new amendment to the Antideficiency Act in 1990 prompted an opinion from the OLC examining whether changes would have to be made to the agency guidance. Similarly, a new OLC opinion would affect agency guidance by incorporating the President’s new statutory authority to make funds available. In this way, the proposed statute would become compatible with the enforcement of the Antideficiency Act.

C. The Proposed Statute in the Face of Constitutional Challenges

Having determined that the proposed statute would operate consistent with the Antideficiency Act, the constitutionality of the proposal must be considered. This Section will address the two major constitutional challenges that may be raised against the proposed statute: the issue of statutory presidential authority under the Youngstown doctrine, and the issue of Congress’ delegatory powers under the Nondelegation Doctrine. Because the proposed statute complies with the Youngstown analysis, and because the statute is a valid delegation under the Supreme Court’s rule in J.W. Hampton, Jr., & Co. v. United States, the proposed statute of this Note passes constitutional muster.

1. The Application of Youngstown to the Proposed Statute

The aspect of the proposed statute most likely to be found unconstitutional is the provision allowing the President to make money available from the Treasury for the payment of government contractors during a government shutdown. However, the rationale articulated in Youngstown defeats this attack and provides the constitutional justification for the President’s exercise of this otherwise legislative authority.

The Youngstown decision from 1952 serves as the lodestar of the courts for determining the scope of presidential power. The case arose out of a challenge to an order issued by President Truman which directed the Secretary of Commerce to take possession of, and operate, steel mills across the nation as a response to an imminent strike by the United Steelworkers of America. The purpose of the order was to ensure a steady supply of steel for the continued prosecution of Korean War, which the President worried would be disrupted during the strike.

Justice Jackson, in his concurrence, formulated the now-standard “tripartite framework” of Presidential authority within the structure of the Constitution. Presidential powers are categorized in three broad groups. First are those powers exercised by the President “pursuant to an express or implied authorization of Congress.” Here the President’s power is at its zenith. “In these circumstances, and in these only, may he be said . . . to personify the federal sovereignty.” Second are those powers exercised by the President “in absence of either a congressional grant or denial of authority.” Here the limits of the President’s authority can only be determined by the factual circumstances of its use. Third are those powers exercised by the President “incompatible with the expressed or implied will of Congress.” Here the President can act only within his own freestanding authority under the Constitution. Presidential powers in this category “must be scrutinized with caution, for what is at stake is the equilibrium established by our constitutional system.” Applying this analysis, Justice Jackson concurred with the Court’s judgment that President Truman’s order directing the seizure of the steel mills was an unconstitutional exercise of executive power, because the President had used powers granted to him neither by Congress nor by the Constitution. Justice Jackson’s opinion served as a rebuke to the government’s analysis that President Truman’s action was justified by the extraordinarily dire situation of the wartime strike and by the inherent constitutional authority vested in the President during wartime.

Turning to the proposed statute, it is worth examining whether the President has the authority to utilize the power Congress would delegate under the statute: the authority to withdraw funds from the Treasury. Because it is the prevailing test for analyzing executive power, Justice Jackson’s framework from Youngstown should be employed. A straightforward application of that framework reveals the distinction between the statute proposed by this Note and the action at issue in Youngstown: while President Truman sought to seize steel mills by utilizing the President’s constitutional authority alone, a President operating under this Note’s proposed statute would rely not only on his own authority, but on Congress’ constitutional authority as well, to the extent it had been delegated to him. President Truman’s order failed because by acting without the blessing of Congress, he was obliged only to rely on the independent constitutional authority of the Executive, and even the expansive war-making powers afforded the President as Commander-in-Chief were found wanting in the attempt to seize the nation’s steel mills.

By contrast, the proposed statute of this Note explicitly grounds the President’s actions in Congressional delegation; thus any action taken under the statute falls into the first category of Justice Jackson’s formulation. The only way to deny the President the delegated power in question would be to say “that the federal government as an undivided whole lacks [the] power.” The power delegated by the statute is unquestionably one which the federal government possesses, for it is allocated to Congress in Article I of the Constitution: “No Money shall be withdrawn from the Treasury, but in Consequence of Appropriations made by Law . . . .” The proposed statute delegates from the Congress to the President, under specific circumstances, this power of appropriation. In this way, the statute should survive any argument claiming the President lacks the authority to exercise the power of appropriations, because by Justice Jackson’s reasoning, which is still employed to analyze executive power, the only limit on the exercise of delegated authority is whether the federal government possesses the delegated power to begin with. Because Congress has the power to appropriate funds under Article I, this limit is met, and the President would be free to exercise the delegated authority under the proposed statute.

2. The Proposed Statute and the Nondelegation Doctrine

Having established that the President may exercise such power as the proposed statute contemplates, the question remains whether the Congress may delegate such authority. The Nondelegation Doctrine could conceivably bar the delegation of Congress’ appropriation power to the President. However, per the Supreme Court’s holding in J.W. Hampton, Jr. & Co. v. United States, the proposed statute provides an “intelligible principle” that guides its operation. Therefore, the proposed statute would survive any legal challenge rooted in the Nondelegation Doctrine.

The Nondelegation Doctrine is a principle of constitutional law which limits the degree to which Congress may delegate its lawmaking power to the Executive Branch, and is rooted in the separation of powers between the branches of the federal government. The Court expressed the principle in J.W. Hampton through “[t]he well-known maxim ‘Delegata potestas non potest delegari,’” meaning “the delegated power cannot be delegated.” The principle is simple enough in operation: while Congress may, as a matter of necessity or convenience, give discretion in the carrying-out of the laws to the Executive Branch, Congress may not give to any other body the power to make the law itself.

The demarcation between a constitutional delegation of discretion and an unconstitutional delegation of legislative authority is found in the rule of the intelligible principle. As long as the delegation of power at issue is accompanied by “an intelligible principle to which [the delegee] is directed to conform,” the delegation of power will not run afoul of the Nondelegation Doctrine as a prohibited grant of lawmaking power. The application of the Nondelegation Doctrine’s intelligible principle can be demonstrated by comparing the cases of J.W. Hampton and Schechter Poultry.

J.W. Hampton resulted from a protest over import duties. The duty had been assessed on the importer’s product at a rate higher than the rate set by statute. This was due to a proclamation issued by the President, pursuant to the Tariff Act of 1922 (Tariff Act), which empowered the President to raise import duties by up to fifty percent in order to equalize costs between American-made goods and their foreign equivalents.

The Court upheld the constitutionality of Section 315 of the Tariff Act under the intelligible principle test. Despite the delegation of power to change what was otherwise set out in statute, the Court found that the President had not been granted Congress’ lawmaking authority, but was simply administering the statute that existed. In this role, the President was “the mere agent of the lawmaking department to ascertain and declare the event upon which its expressed will was to take effect,” and did not make the law on his own.

In contrast, Schechter Poultry presents a useful counterpoint to J.W. Hampton. The case arose out of the prosecution of a poultry company for violations of a poultry sales regulation code promulgated under the National Industrial Recovery Act (NIRA). Under the NIRA, the President was authorized to effectuate “codes of fair competition” on an industry, which would then become binding on the industry such that “violation[s] of the codes of fair competition [would] be deemed an unfair method of competition” to be prosecuted by United States Attorneys.

The Court took issue with the level of delegation present in the NIRA. While the NIRA delegated the creation of the codes of fair competition to the President, the mandate for creating those codes was impermissibly broad, and the codes themselves went through no due process before promulgation. “Congress cannot delegate legislative power to the President to exercise an unfettered discretion to make whatever laws he thinks may be needed or advisable . . . .” Upon examination, the Court concluded that the law at issue delegated power to leave President free to devise the codes of fair competition without needing to consult Congress, and with no statutory limit on the breadth of the codes, the President could regulate whole industries without returning to Congress for new delegations.

When the Court applied the intelligible principle test articulated in J.W. Hampton to the facts of Schechter Poultry, it found the NIRA to be unconstitutional under the Nondelegation Doctrine. This was due to the fact that NIRA “supplies no standards for any trade, industry, or activity.” Indeed, the Court could find no principle by which the President was bound to comply, and therefore held that the delegation of the authority to make the codes of fair competition was unconstitutional. In the words of Justice Benjamin Cardozo, “[t]his is delegation running riot.”

In applying the intelligible principle test, there is a question as to whether the proposed statute provides an intelligible principle that would allow for a constitutional delegation of the appropriations power from Congress to the President to pay contractors during a federal government shutdown. The answer to that inquiry lies in the parameters laid out by the statute in paragraphs (b) and (c)—that a funding gap must exist which has caused the cessation of normal operations in at least one federal agency, and that this funding gap must have existed for seven calendar days. These parameters do more than simply establish the preconditions for the use of the statute; they supply the principle by which the President’s power is constrained should the statute be invoked.

It is notable for the purposes of assessing the Nondelegation Doctrine’s applicability that the proposed statute of this Note does not rely, as many emergency powers statutes do, on anyone’s determination—not even the President’s—or on the request of any actor. Rather, the statute establishes an objectively verifiable set of circumstances that must be met before the power delegated may be used. In this manner the proposed statute is similar to the Stafford Act: if a natural disaster causes danger to life and property, the Congress has legislated in advance to provide substantial Presidential power to mitigate the crisis. Likewise, in the event of a collision between Congress and the President over budgetary matters, the proposed statute provides substantial power to mitigate a crisis of a different sort.

The proposed statute certainly calls for a significant delegation: the statute assigns the execution of one of Congress’ most potent tools, the power of the purse. But as the Court demonstrated in J.W. Hampton and Schechter Poultry, whether a delegation of power is unconstitutional is determined not by the size of the delegation, but by whether an intelligible principle exists to restrain the power’s use. The proposed statute sets out parameters that must be met before the delegated appropriations power may be utilized, as well as establishing the time at which the emergency power returns to dormancy—once normal funding has been restored. As a result, the case that most fits this statute is not Schechter Poultry, with its arguably unrestrained delegation of lawmaking power. Instead, the appropriate comparison is the law at issue in J.W. Hampton, which featured a statute delegating the Congressional power to set tariff rates—an exercise of the Taxing Clause and therefore reserved to Congress—to the President in the event of the occurrence of a specific factual circumstance—discrepancy in price between foreign and domestic goods. What differs with this Note’s proposed statute is not the principle, which remains the same as in J.W. Hampton, but the specifics of the delegation. The delegation in the proposed statute is of the appropriations power, and the factual prerequisite is the existence of a funding gap for at least seven calendar days. In this way the proposed statute conforms to the Court’s analysis in J.W. Hampton and is therefore constitutional under the Nondelegation Doctrine.

IV. Conclusion

If government shutdowns continue to occur, and if they increase in length and frequency, it will be necessary to adopt novel solutions to prevent disagreements over the budget from negatively impacting the lives of ordinary Americans. Government contractors and their employees are especially vulnerable, as they rely on a steady supply of government money to support their lives and businesses. A statutory emergency power giving the President conditional authority to make funds available for the payment of these contractors during a government shutdown provides a novel solution which lies within Congress’ constitutional authority and could reduce the severity of the impact of these shutdowns on those businesses and individuals who contract with the federal government.