339

Effect of Spending Prohibition on HUD’s Satisfaction 

of Contractual Obligations to ACORN

Section 163 of division B (“Continuing Appropriations Resolution, 2010”) of Public Law 

111-68 does not direct or authorize the Department of Housing and Urban Development to breach a pre-existing binding contractual obligation to make payments to the 

Association of Community Organizations for Reform Now or its affiliates, subsidiaries, or allied organizations where doing so would give rise to contractual liability.

October 23, 2009

MEMORANDUM OPINION FOR THE DEPUTY GENERAL COUNSEL 

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

You have asked whether section 163 of division B (“Continuing Appropriations Resolution, 2010”) of Public Law 111-68, 123 Stat. 2023, 

2053, approved by the President on October 1, 2009, prohibits the Department of Housing and Urban Development (“HUD”) from making a 

payment to the Association of Community Organizations for Reform Now 

(“ACORN”) or its affiliates, subsidiaries, or allied organizations to satisfy 

an existing contractual obligation that arose prior to the enactment of that 

measure. We conclude, in agreement with the views we solicited and 

received, that the language of section 163 is not clear with respect to 

whether its prohibition applies in cases where pre-existing law apart from 

section 163, including the contract itself, compels such a payment and 

where, accordingly, failure to make such a payment would subject the 

federal government to contractual liability. In accord with established

interpretive principles for resolving such lack of clarity, we conclude that 

section 163 does not direct or authorize HUD to refuse payment on binding contractual obligations that predate the Continuing Appropriations 

Resolution.1

I.

Section 163 states: “None of the funds made available by this joint resolution or any prior Act may be provided to the Association of Commu-

 

1 This opinion addresses only pre-existing contracts that create binding obligations 

requiring payment and not those that excuse payment in the relevant circumstances.
33 Op. O.L.C. 339 (2009)

340

nity Organizations for Reform Now (ACORN), or any of its affiliates, 

subsidiaries, or allied organizations.” The term “provided to” has no 

established meaning in appropriations law. As explained by the GAO 

Redbook, “[t]he two basic authorities conferred by an appropriation law 

are the authority to incur obligations and the authority to make expenditures. An obligation results from some action that creates a liability or 

definite commitment on the part of the government to make an expenditure. . . . The expenditure is the disbursement of funds to pay the obligation.” 1 General Accounting Office, Principles of Federal Appropriations 

Law 5-3 (3d ed. 2004) (“GAO Redbook”). Thus, “obligate” and “expend” 

are terms of art that generally describe the commitment and payment of 

funds. See, e.g., 31 U.S.C. § 1341(a)(1) (2006) (Anti-Deficiency Act) 

(providing that no federal officer or employee may “make or authorize an 

expenditure or obligation exceeding an amount available in an appropriation or fund for the expenditure or obligation”). The term “expenditure,” 

in particular, is broadly defined as “[t]he actual spending of money; an 

outlay.” Government Accountability Office, A Glossary of Terms Used 

in the Federal Budget Process 48 (2005) (“GAO Glossary”); see also

1 GAO Redbook at 5-3 (“The expenditure is the disbursement of funds to 

pay the obligation.”). And an opinion by the Comptroller General suggests that the word “expenditure” in the Anti-Deficiency Act prohibits an 

agency from making a payment to satisfy a contractual obligation if a 

statutory or regulatory funding limitation would thereby be exceeded. See 

In re Currency Exchange Rate Fluctuations, 58 Comp. Gen. 46 (1978).

By contrast, as we have noted, the term Congress elected to employ in 

section 163, “provided to,” has no clearly defined meaning in appropriations law. See, e.g., GAO Glossary (containing no definition of “provision” or “provide”). Moreover, appropriations case law and reference 

materials we have consulted, including the GAO Redbook, do not shed 

light on whether “provided to” in section 163 should be understood to 

prohibit a federal agency from making payments to satisfy pre-existing

contractual obligations.

To be sure, some common definitions of “provide,” such as “supply” or 

“furnish,” American Heritage Dictionary 1411 (4th ed. 2006), would 

appear to describe any transfer of funds, presumably including a transfer 

in satisfaction of an existing obligation. Other definitions, however, 

connote a discretionary action. For instance, “provide” may mean “con-
Effect of Spending Prohibition on Contractual Obligations to ACORN

341

tribute,” Webster’s New International Dictionary 1994 (2d ed. 1958), or

“make available,” American Heritage Dictionary 1411 (4th ed. 2006), and 

“offer” is among its synonyms, Roget’s II: The New Thesaurus 780 (3d 

ed. 1995). And in common parlance, the verb “provide” frequently describes discretionary action taken to benefit another. Moreover, several of 

the word’s definitions incorporate a forward-looking aspect, see, e.g.,

Webster’s New International Dictionary 1994 (2d ed. 1958) (“to look out 

for in advance”; “to prepare”); Black’s Law Dictionary 1224 (6th ed. 

1990) (“[t]o make, procure, or furnish for future use, prepare”), consistent 

with the etymology of “provide,” which derives from the Latin providere, 

meaning to see before, foresee, or be cautious, 12 Oxford English Dictionary 713 (2d ed. 1989). Definitions of the word “expend,” we note, do 

not carry a similarly discretionary or forward-looking connotation, in 

keeping with the etymology of that word, which comes from the Latin

expendere, meaning simply to pay or weigh. 5 id. at 561.

Against this background, we find that the relevant text of section 163 

is not clear with respect to the precise question before us. Congress had 

available to it—and yet did not use—appropriations language that had 

previously been construed to prohibit payments even on pre-existing

contractual obligations.2 It instead used a term that could be read to suggest a bar only on payments that result from new discretionary decisions—including, in particular, payments made pursuant to discretionary 

choices to incur new obligations. Accordingly, although one could read 

the phrase “None of the funds made available by this joint resolution or 

any prior Act may be provided to [ACORN], or any of its affiliates, 

subsidiaries, or allied organizations” categorically to prohibit any outlay 

of money to the identified entities, including pursuant to pre-existing 

contractual obligations, one could also read the phrase not to prohibit 

payments made pursuant to a prior binding contractual duty.

II.

In light of the term Congress chose, we turn to other interpretative tools 

to resolve the question before us. The recent Supreme Court case Chero-

 

2 We do not address whether, if Congress had used the phrase “may be expended” in 

section 163, that phrase would necessarily prohibit payment pursuant to pre-existing legal 

obligations—a question that might depend at least in part on extratextual considerations.
33 Op. O.L.C. 339 (2009)

342

kee Nation of Okla. v. Leavitt, 543 U.S. 631 (2005), is instructive. There, 

contracts between the government and Indian tribes provided that the 

tribes would supply health services normally furnished by the government

and that the government would in turn pay the “contract support costs” the 

tribes incurred. The government subsequently refused to pay the full 

contract support costs because, it argued, Congress had not appropriated 

sufficient funds. Part of the government’s argument rested on a laterenacted statute that stated: “Notwithstanding any other provision of law 

[the] amounts appropriated to or earmarked in committee reports for the

. . . Indian Health Service . . . for payments to tribes . . . for contract 

support costs . . . are the total amounts available for fiscal years 1994 

through 1998 for such purposes.” Id. at 645 (quoting section 314 of the 

Department of the Interior and Related Agencies Appropriations Act, 

1999, Pub. L. No. 105-277, 112 Stat. 2681, 2682-232, 2681-288 (1998)).

The Court noted that, because committee reports in 1994 through 1997 

had earmarked funds for contract support costs, and because those funds 

had “long since been spent,” this language was “open to the interpretation 

that it retroactively bars payment of claims arising under 1994 through 

1997 contracts.” Id. In the Court’s view, however, the statutory language 

was also open to a different interpretation that would simply forbid the 

“use of unspent funds appropriated in prior years to pay unpaid ‘contract 

support costs.’” Id. at 646. Thus, the Court concluded:

On the basis of language alone we would find either interpretation 

reasonable. But there are other considerations. The first interpretation would undo a binding governmental contractual promise. A 

statute that retroactively repudiates the Government’s contractual 

obligation may violate the Constitution. And such an interpretation 

is disfavored. This consideration tips the balance against the retroactive interpretation.

Id. (citations omitted); see also Lynch v. United States, 292 U.S. 571, 580 

(1934) (“Congress was without power to reduce expenditures by abrogating contractual obligations of the United States.”); United States v. Winstar Corp., 518 U.S. 839, 875–76 (1996) (plurality opinion) (“[I]t is clear 

that the National Government has some capacity to make agreements 

binding future Congresses by creating vested rights, [although the] extent 

of that capacity, to be sure, remains somewhat obscure.”) (citations omit-
Effect of Spending Prohibition on Contractual Obligations to ACORN

343

ted); cf. Landgraf v. USI Film Prods., 511 U.S. 244, 271 (1994) (“The 

largest category of cases in which we have applied the presumption 

against statutory retroactivity has involved new provisions affecting 

contractual or property rights, matters in which predictability and stability 

are of prime importance.”).

Reading section 163 to prohibit payments to ACORN or its affiliates, 

subsidiaries, or allied organizations to satisfy a binding contractual obligation undertaken before enactment of section 163 would “undo a binding 

governmental contractual promise.” Cherokee Nation, 543 U.S. at 646. In 

accord with Cherokee Nation, the better reading of the section is therefore

that it does not prohibit such payments. This reading of “provided to” is 

especially appropriate here because, consistent with the canon of constitutional avoidance, see, e.g., Edward J. DeBartolo Corp. v. Fla. Gulf Coast 

Bldg. & Constr. Trades Council, 483 U.S. 568, 575 (1988), it not only 

avoids abrogating binding governmental contractual promises but also 

avoids the particular constitutional concerns that may be presented by 

reading the statute, which applies to specific named entities, to abrogate 

such contracts, including even in cases where performance has already 

been completed but payment has not been rendered.3

 

3 See, e.g., United States v. Lovett, 328 U.S. 303, 315 (1946) (“[L]egislative acts, no 

matter what their form, that apply either to named individuals or to easily ascertainable 

members of a group in such a way as to inflict punishment on them without a judicial trial 

are bills of attainder prohibited by the Constitution.”); Selective Serv. Sys. v. Minn. Pub. 

Interest Research Group, 468 U.S. 841, 853 (1984) (stating that a particular provision 

imposed “none of the burdens historically associated with punishment” because “‘the 

sanction is the mere denial of a noncontractual governmental benefit’”) (emphasis added) 

(quoting Flemming v. Nestor, 363 U.S. 603, 617 (1960)); Nixon v. Adm’r of Gen. Servs., 

433 U.S. 425, 475–76 (1977) (“[O]ur inquiry is not ended by the determination that the 

Act imposes no punishment traditionally judged to be prohibited by the Bill of Attainder 

Clause. Our treatment of the scope of the Clause has never precluded the possibility that 

new burdens and deprivations might be legislatively fashioned that are inconsistent with 

the bill of attainder guarantee. The Court, therefore, often has looked beyond mere 

historical experience and has applied a functional test of the existence of punishment, 

analyzing whether the law under challenge, viewed in terms of the type and severity of 

burdens imposed, reasonably can be said to further nonpunitive legislative purposes.”);

see also Consol. Edison Co. v. Pataki, 292 F.3d 338, 346–49 (2d Cir. 2002) (applying the 

Bill of Attainder Clause to a bill that arguably singled out a corporation); cf. Kenneth R. 

Thomas, Cong. Research Serv., The Proposed “Defund ACORN Act”: Is it a “Bill of 

Attainder?” (2009) (considering an earlier bill that would have, inter alia, prohibited the 

award of federal contracts or the provision of federal funds to a “covered organization,” 
33 Op. O.L.C. 339 (2009)

344

III.

In sum, section 163 should not be read as directing or authorizing HUD 

to breach a pre-existing binding contractual obligation to make payments 

to ACORN or its affiliates, subsidiaries, or allied organizations where 

doing so would give rise to contractual liability.

DAVID J. BARRON

Acting Assistant Attorney General

Office of Legal Counsel

 

with “organization” expressly defined as including ACORN and its affiliates, and concluding that “a court may have a sufficient basis to overcome the presumption of constitutionality, and find that the proposed [bill] violates the prohibition against bills of attainder”).