Gonzales v. Macaraig

Gonzales v. Macaraig

191 SCRA 452 (1990)

Facts:

                On 16 December 1988, Congress passed House Bill 19186, or the General Appropriations Bill for the Fiscal Year 1989. As passed, it eliminated or decreased certain items included in the proposed budget submitted by the President. Pursuant to the constitutional provision on the passage of bills, Congress presented the said Bill to the President for consideration and approval. On 29 December 1988, the President signed the Bill into law, and declared the same to have become RA 6688. In the process, 7 Special Provisions and Section 55, a “General Provision,” were vetoed. On 2 February 1989, the Senate, in Resolution 381 (“Authorizing and Directing the Committee on Finance to Bring in the Name of the Senate of the Philippines the Proper Suit with the Supreme Court of the Philippines contesting the Constitutionality of the Veto by the President of Special and General Provisions, particularly Section 55, of the General Appropriation Bill of 1989 (H.B. No. 19186) and For Other Purposes”) was adopted. On 11 April 1989, the Petition for Prohibition/ Mandamus was filed by Neptali A. Gonzales, Ernesto M. Maceda, Alberto G. Romulo, Heherson T. Alvarez, Edgardo J. Angara, Agapito A. Aquino, Teofisto T. Guingona, Jr., Ernesto F. Herrera, Jose D. Lina, Jr., John Osmeña, Vicente T. Paterno, Rene A. Saguisag, Leticia Ramos-Shahani, Mamintal Abdul J. Tamano, Wigberto E. Tañada, Jovito R. Salonga, Orlando S. Mercado, Juan Ponce Enrile, Joseph Estrada, Sotero Laurel, Aquilino Pimentel, Jr., Santanina Rasul, Victor Ziga, as members and ex-officio members of the Committee on Finance of the Senate and as “substantial taxpayers whose vital interests may be affected by this case,” with a prayer for the issuance of a Writ of Preliminary Injunction and Restraining Order, assailing mainly the constitutionality or legality of the Presidential veto of Section 55, and seeking to enjoin Catalino Macaraig, Jr., Vicente Jayme, Carlos Dominguez, Fulgencio Factoran, Fiorello Estuar, Lourdes Quisumbing, Raul Manglapus, Alfredo Bengson, Jose Concepcion, Luis Santos, Mita Pardo De Tavera, Rainerio Reyes, Guillermo Carague, Rosalina Cajucom and Eufemio C. Domingo from implementing RA 6688. No Restraining Order was issued by the Supreme Court. Gonzales et al.’s cause is anchored on the following grounds: (1) the President’s line-veto power as regards appropriation bills is limited to item/s and does not cover provision/s; therefore, she exceeded her authority when she vetoed Section 55 (FY ‘89) and Section 16 (FY ‘90) which are provisions; (2) when the President objects to a provision of an appropriation bill, she cannot exercise the item-veto power but should veto the entire bill; (3) the item-veto power does not carry with it the power to strike out conditions or restrictions for that would be legislation, in violation of the doctrine of separation of powers; and (4) the power of augmentation in Article VI, Section 25 [5] of the 1987 Constitution, has to be provided for by law and, therefore, Congress is also vested with the prerogative to impose restrictions on the exercise of that power. The Solicitor General, as counsel for Macaraig et al., counters that the issue in the present case is a political question beyond the power of the Supreme Court to determine; that Gonzales et al. had a political remedy, which was to override the veto; that Section 55 is a “rider” because it is extraneous to the Appropriations Act and, therefore, merits the President’s veto; that the power of the President to augment items in the appropriations for the executive branches had already been provided for in the Budget Law, specifically Sections 44 and 45 of PD 1177, as amended by RA 6670 (4 August 1988); and that the President is empowered by the Constitution to veto provisions or other “distinct and severable parts” of an Appropriations Bill.

Issue:

                whether or not the President exceeded the item-veto power accorded by the Constitution or differently put, has the President the power to veto provisions of an Appropriations Bill

Held:

                No. The veto power of the President is expressed in Article VI, Section 27 of the 1987 Constitution. Paragraph (1) refers to the general veto power of the President and if exercised would result in the veto of the entire bill, as a general rule. Paragraph (2) is what is referred to as the item-veto power or the line-veto power. It allows the exercise of the veto over a particular item or items in an appropriation, revenue, or tariff bill. As specified, the President may not veto less than all of an item of an Appropriations Bill. In other words, the power given the executive to disapprove any item or items in an Appropriations Bill does not grant the authority to veto a part of an item and to approve the remaining portion of the same item. Notwithstanding the elimination in Article VI, Section 27 (2) of the 1987 Constitution of any reference to the veto of a provision, the extent of the President’s veto power as previously defined by the 1935 Constitution has not changed. This is because the eliminated proviso merely pronounces the basic principle that a distinct and severable part of a bill may be the subject of a separate veto. The restrictive interpretation urged by Gonzales et al. that the President may not veto a provision without vetoing the entire bill not only disregards the basic principle that a distinct and severable part of a bill may be the subject of a separate veto but also overlooks the Constitutional mandate that any provision in the general appropriations bill shall relate specifically to some particular appropriation therein and that any such provision shall be limited in its operation to the appropriation to which it relates. In other words, in the true sense of the term, a provision in an Appropriations Bill is limited in its operation to some particular appropriation to which it relates, and does not relate to the entire bill. The President promptly vetoed Section 55 (FY ‘89) and Section 16 (FY ‘90) because they nullify the authority of the Chief Executive and heads of different branches of government to augment any item in the General Appropriations Law for their respective offices from savings in other items of their respective appropriations, as guaranteed by Article VI, Section 25 (5) of the Constitution. Noteworthy is the fact that the power to augment from savings lies dormant until authorized by law. When Sections 55 (FY ‘89) and 16 (FY ‘90) prohibit the restoration or increase by augmentation of appropriations disapproved or reduced by Congress, they impair the constitutional and statutory authority of the President and other key officials to augment any item or any appropriation from savings in the interest of expediency and efficiency. The exercise of such authority in respect of disapproved or reduced items by no means vests in the Executive the power to rewrite the entire budget, the leeway granted being delimited to transfers within the department or branch concerned, the sourcing to come only from savings. More importantly, for such a special power as that of augmentation from savings, the same is merely incorporated in the General Appropriations Bill. An Appropriations Bill is “one the primary and specific aim of which is to make appropriation of money from the public treasury”. It is a legislative authorization of receipts and expenditures. The power of augmentation from savings, on the other hand, can by no means be considered a specific appropriation of money. It is a non-appropriation item inserted in an appropriation measure.

Issue:

                whether Section 55 (FY ‘89) and Section 16 (FY ‘90) are provisions, not items, in the appropriation bill

Held:

                No. Section 55 (FY ‘89) and Section 16 (FY ‘90) are not provisions in the budgetary sense of the term. Article VI, Section 25 (2) of the 1987 Constitution provides: “Sec. 25 (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.” Explicit is the requirement that a provision in the Appropriations Bill should relate specifically to some “particular appropriation” therein. The challenged “provisions” fall short of this requirement. Firstly, the vetoed “provisions” do not relate to any particular or distinctive appropriation. They apply generally to all items disapproved or reduced by Congress in the Appropriations Bill. Secondly, the disapproved or reduced items are nowhere to be found on the face of the Bill. To discover them, resort will have to be made to the original recommendations made by the President and to the source indicated by the “Legislative Budget Research and Monitoring Office.” Thirdly, the vetoed Sections are more of an expression of Congressional policy in respect of augmentation from savings rather than a budgetary appropriation. Consequently, Section 55 (FY ‘89) and Section 16 (FY ‘90) although labeled as “provisions,” are actually inappropriate provisions that should be treated as items for the purpose of the President’s veto power.

Issue:

                whether the Legislature’s inclusion of qualifications, conditions, limitations or restrictions on expenditure of funds in the Appropriation Bill was proper

Held:

                There can be no denying that inherent in the power of appropriation is the power to specify how money shall be spent; and that in addition to distinct “items” of appropriation, the Legislature may include in Appropriation Bills qualifications, conditions, limitations or restrictions on expenditure of funds. Settled also is the rule that the Executive is not allowed to veto a condition or proviso of an appropriation while allowing the appropriation itself to stand. The veto of a condition in an Appropriations Bill which did not include a veto of the items to which the condition related was deemed invalid and without effect whatsoever. However, for the rule to apply, restrictions should be such in the real sense of the term, not some matters which are more properly dealt with in a separate legislation. Restrictions or conditions in an Appropriations Bill must exhibit a connection with money items in a budgetary sense in the schedule of expenditures. Again, the test is appropriateness. “It is not enough that a provision be related to the institution or agency to which funds are appropriated. Conditions and limitations properly included in an appropriation bill must exhibit such a connexity with money items of appropriation that they logically belong in a schedule of expenditures . . . the ultimate test is one of appropriateness.” Tested by these criteria, Section 55 (FY ‘89) and Section 16 (FY ‘90) must also be held to be inappropriate “conditions.” While they, particularly, Section 16 (FY ‘90), have been “artfully drafted” to appear as true conditions or limitations, they are actually general law measures more appropriate for substantive and, therefore, separate legislation. Further, neither of them shows the necessary connection with a schedule of expenditures. The reason is that items reduced or disapproved by Congress would not appear on the face of the enrolled bill or Appropriations Act itself. They can only be detected when compared with the original budgetary submittals of the President. In fact, Sections 55 (FY ‘89) and 16 (FY ‘90) themselves provide that an item “shall be deemed to have been disapproved by Congress if no corresponding appropriation for the specific purpose is provided in this Act.” Herein, there is no condition, in the budgetary sense of the term, attached to an appropriation or item in the appropriation bill which was struck out. For obviously, Sections 55 (FY ‘89) and 16 (FY ‘90) partake more of a curtailment on the power to augment from savings; in other words, “a general provision of law, which happens to be put in an appropriation bill.”

Issue:

                whether the legislature has a remedy when it believes that the veto powers by the executive were unconstitutional

Held:

                Yes. If, indeed, the legislature believed that the exercise of the veto powers by the executive were unconstitutional, the remedy laid down by the Constitution is crystal clear. A Presidential veto may be overridden by the votes of two-thirds of members of Congress (1987 Constitution, Article VI, Section 27[1]). But Congress made no attempt to override the Presidential veto. Gonzales et al.’s argument that the veto is ineffectual so that there is “nothing to override” has lost force and effect with the executive veto having been herein upheld. There need be no future conflict if the legislative and executive branches of government adhere to the spirit of the Constitution, each exercising its respective powers with due deference to the constitutional responsibilities and functions of the other. Thereby, the delicate equilibrium of governmental powers remains on even keel.

Note:

SC ruled that Congress cannot include in a general appropriations bill matters that should be more properly enacted in separate legislation, and if it does that, the inappropriate provisions inserted by it must be treated as “item,” which can be vetoed by the President in the exercise of his item-veto power. The SC went one step further and rules that even assuming arguendo that “provisions” are beyond the executive power to veto, and Section 55 (FY ‘89) and Section 16 (FY ‘90) were not “provisions” in the budgetary sense of the term, they are “inappropriate provisions” that should be treated as “items” for the purpose of the President’s veto power.

Note: Executive Impoundment

Definition: This refers to a refusal by the President, for whatever reason, to spend funds made available by Congress. It is the failure to spend or obligate budget authority of any type.

Argument against executive impoundment: Those who deny to the President the power to impound argue that once Congress has set aside the fund for a specific purpose in an appropriations act, it becomes mandatory on the part of the President to implement the project and to spend the money appropriated therefor. The President has no discretion on the matter, for the Constitution imposes on him the duty to faithfully execute the laws.

Argument for executive impoundment: Proponents of impoundment have invoked at least three principal sources of the authority of the President. Foremost is the authority to impound given to him either expressly or impliedly by Congress. Second is the executive power drawn from the President’s role as Commander-in-Chief. Third is the Faithful Execution Clause which ironically is the same provisions invoked by petitioners herein.

The proponents insist that a faithful execution of the laws requires that the President desist from implementing the law if doing so would prejudice public interest. An example given is when through efficient and prudent management of a project, substantial savings are made. In such a case, it is sheer folly to expect the President to spend the entire amount budgeted in the law.