USDA, IG at odds over budget authorities needed for Kansas City relocation

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The Agriculture Department may not have the budgetary authority to relocate employees at two of its research bureaus to Kansas City, the USDA inspector general said Monday.

In a highly anticipated report, USDA Inspector General Phyllis Fong said the department violated a provision in a 2018 appropriations bill when it reprogrammed funding to explore relocation possibilities for the Economic Research Service (ERS) and the National Institute of Food and Agriculture (NIFA).

The provision, which was a fixture throughout the 2018 omnibus spending package for several agencies, was designed to prevent them from using appropriated funding to reprogram, reorganize or relocate without first earning congressional approval.

The IG said USDA had the legal authorities it needs relocate ERS and NIFA employees, but the 2018 appropriations law put the department on shakier ground when it came to the budget.

USDA informed Congress last August of its plans to relocate ERS and NIFA to a new site outside of the Washington, D.C. metropolitan area.

The department never received congressional approval for the relocation, yet ERS and NIFA entered an inter-agency agreement to each reimburse USDA for the cost of hiring a contractor to review expressions of interest from state and local organizations across the country.

Phyllis Fong, inspector general, USDA (photo by Lance Cheung)

In October, ERS and NIFA each contributed $169,655 to hire Ernst & Young to review site proposals for the USDA relocation, the IG said.

“While we recognize that the department notified Congress a required, [the omnibus bill] also requires that the department receive congressional approval prior to its reprogramming and use of appropriated funds for the purpose of such relocation,” Fong said in the report. “That prior approval did not appear to have been granted. This obligation of funds may have also violated the Antideficiency Act.”

The situation is slightly different for NIFA, which had received $6 million for relocation expenses in the 2018 spending package. The appropriations bill, however, required USDA to tell Congress about its plans for this funding with 60 days, which the department didn’t do, the IG said.

The inspector general acknowledged USDA did inform Congress of its plans for relocation, but the department never sought and gained permission from lawmakers, which, in the IG’s view, may have violated the 2018 omnibus bill.

The IG suggested USDA’s Office of General Counsel develop a legal opinion to evaluate whether the department violated appropriations law or potentially the Antideficiency Act.

USDA issues its own legal opinion

USDA in a detailed legal opinion on the topic, adamantly dismissed the possibility it had violated the Antideficiency Act or the 2018 omnibus spending package.

Instead, USDA’s general counsel said the 2018 provision was unconstitutional. It cited a Supreme Court decision, a Justice Department legal opinion and a Government Accountability Office “Redbook” on appropriations law as the basis for its determination.

USDA drew on a 1983 Supreme Court decision, which declared any statutory mechanism designed to allow one chamber of Congress to invalidate a decision from the executive branch unconstitutional.

Put another way, one congressional committee can’t prevent the department from moving forward with the USDA relocation because it didn’t gain prior approval, the general counsel said.

USDA fulfilled congressional expectations that it inform lawmakers of its plans for the relocation. It didn’t seek approval because it’s not necessary, the department argued.

“The department has complied with applicable law by providing Congress with the notice it called for in appropriations legislation,” Stephen Vaden, USDA’s general counsel, wrote. “USDA is not required to abide by unconstitutional laws. Therefore, the department declines OIG’s recommendation to ignore Supreme Court, Office of Legal Counsel and Government Accountability Office precedent and seek congressional committee approval of the relocations.”

The IG pushed back slightly on the USDA’s opinion.

“OIG notes that such provisions have been included in relevant appropriations acts since 2015, and that the department has previously taken the position that provisions, such as those found in [the omnibus] are binding upon the department.”

Precedent for other agency relocations?

USDA’s legal argument could be a potentially significant one, especially as Congress has used the appropriations process time and again to block administration priorities, like reorganizations.

And USDA’s legal analysis could serve as a model, as other agencies look to find a way around the barriers Congress created in the appropriations process to block reorganizations, said Don Kettl, a public policy professor at the Lyndon B. Johnson School of Public Affairs University of Texas at Austin.

“If it turns out [the administration] can find a crack in this wall having to do with the way the USDA can reorganize, then it could create an opportunity for trying to make some of the same arguments for the reorganizations that at least some people on the White House staff care a whole lot more about, which is the plan to reorganize OPM,” he said.

The House has already passed provisions designed to reject the administration’s proposed OPM merger with the General Services Administration, though

The Trump administration, despite congressional skepticism, is still making the case to reorganize and merge most existing functions at the Office of Personnel Management with the General Services Administration.

The Interior Department and its reorganization plans have faced similar congressional backlash. The department announced plans earlier this summer to relocate several hundred employees at the Bureau of Land Management to Colorado and other states across the country.

USDA’s legal opinion was a disappointment for House Majority Leader Steny Hoyer (D-Md.) and D.C. Del. Eleanor Holmes Norton, who had asked the IG back in September to review the legal and budgetary authorities for the USDA relocation.

“The secretary must follow the will of Congress and refrain from moving forward with the relocation until Congress approves the use of funds for those purposes as directed by the fiscal year 2018 Consolidated Appropriations Act,” the members said Monday in a statement. “It ought not change interpretations when it is convenient for the administration or the secretary at any given moment.”

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It’s perhaps no surprise that members of Congress are disappointed by USDA’s legal opinion. For Kettl, the back-and-forth over the USDA relocation represents a classic power struggles between the legislative and executive branches.

“Can Congress find ways of trying to shape what the administration can and cannot do in reorganization?” Kettl said. “On the other hand can the administration find ways that it can take advantage of the flexibility in the appropriations acts to be able to do what it wants to do… too?”

Hoyer and Holmes Norton also expressed frustration that the IG report didn’t evaluate the impacts the USDA relocation would have on employees or ERS and NIFA retention.

More than half of the ERS and NIFA employees who were asked to relocate to Kansas City have declined the move or haven’t responded, USDA said last month.

The IG did express some concern with USDA’s own internal regulations regarding reorganization and relocation and asked the department to clarify its policies. USDA, however, again pointed to the department’s legal opinion and argued the secretary had the discretion to deviate from agency regulations and make his own decisions about its organization.

Fong accepted USDA’s argument.

Meanwhile, Hoyer and Norton reiterated their opposition to the USDA relocation, which is moving along as employees make plans to move or leave the department by September.

“We continue to urge Secretary Perdue to halt this misguided relocation process that is causing massive attrition at these agencies, harming U.S. agriculture by undermining the missions of these agencies and causing serious dislocation and upheaval for the families of hundreds of long-time federal employees,” they said.

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