[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
THE CONSTITUTION AND THE LINE ITEM VETO
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HEARING
BEFORE THE
SUBCOMMITTEE ON THE CONSTITUTION
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
__________
APRIL 27, 2006
__________
Serial No. 109-102
__________
Printed for the use of the Committee on the Judiciary
Available via the World Wide Web: http://judiciary.house.gov
______
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27-223 WASHINGTON : 2006
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COMMITTEE ON THE JUDICIARY
F. JAMES SENSENBRENNER, Jr., Wisconsin, Chairman
HENRY J. HYDE, Illinois JOHN CONYERS, Jr., Michigan
HOWARD COBLE, North Carolina HOWARD L. BERMAN, California
LAMAR SMITH, Texas RICK BOUCHER, Virginia
ELTON GALLEGLY, California JERROLD NADLER, New York
BOB GOODLATTE, Virginia ROBERT C. SCOTT, Virginia
STEVE CHABOT, Ohio MELVIN L. WATT, North Carolina
DANIEL E. LUNGREN, California ZOE LOFGREN, California
WILLIAM L. JENKINS, Tennessee SHEILA JACKSON LEE, Texas
CHRIS CANNON, Utah MAXINE WATERS, California
SPENCER BACHUS, Alabama MARTIN T. MEEHAN, Massachusetts
BOB INGLIS, South Carolina WILLIAM D. DELAHUNT, Massachusetts
JOHN N. HOSTETTLER, Indiana ROBERT WEXLER, Florida
MARK GREEN, Wisconsin ANTHONY D. WEINER, New York
RIC KELLER, Florida ADAM B. SCHIFF, California
DARRELL ISSA, California LINDA T. SANCHEZ, California
JEFF FLAKE, Arizona CHRIS VAN HOLLEN, Maryland
MIKE PENCE, Indiana DEBBIE WASSERMAN SCHULTZ, Florida
J. RANDY FORBES, Virginia
STEVE KING, Iowa
TOM FEENEY, Florida
TRENT FRANKS, Arizona
LOUIE GOHMERT, Texas
Philip G. Kiko, General Counsel-Chief of Staff
Perry H. Apelbaum, Minority Chief Counsel
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Subcommittee on the Constitution
STEVE CHABOT, Ohio, Chairman
TRENT FRANKS, Arizona JERROLD NADLER, New York
WILLIAM L. JENKINS, Tennessee JOHN CONYERS, Jr., Michigan
SPENCER BACHUS, Alabama ROBERT C. SCOTT, Virginia
JOHN N. HOSTETTLER, Indiana MELVIN L. WATT, North Carolina
MARK GREEN, Wisconsin CHRIS VAN HOLLEN, Maryland
STEVE KING, Iowa
TOM FEENEY, Florida
Paul B. Taylor, Chief Counsel
E. Stewart Jeffries, Counsel
Hilary Funk, Counsel
Kimberly Betz, Full Committee Counsel
David Lachmann, Minority Professional Staff Member
C O N T E N T S
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APRIL 27, 2006
OPENING STATEMENT
Page
The Honorable Steve Chabot, a Representative in Congress from the
State of Ohio, and Chairman, Subcommittee on the Constitution.. 1
The Honorable Jerrold Nadler, a Representative in Congress from
the State of New York, and Ranking Member, Subcommittee on the
Constitution................................................... 2
The Honorable Tom Feeney, a Representative in Congress from the
State of Florida, and Member, Subcommittee on the Constitution. 4
The Honorable Robert C. Scott, a Representative in Congress from
the State of Virginia, and Member, Subcommittee on the
Constitution................................................... 4
WITNESSES
The Honorable Paul Ryan, a Representative in Congress from the
State of Wisconsin
Oral Testimony................................................. 6
Prepared Statement............................................. 8
The Honorable Mark Kennedy, a Representative in Congress from the
State of Minnesota
Oral Testimony................................................. 11
Prepared Statement............................................. 12
Ms. Cristina Martin Firvida, Senior Counsel, National Women's Law
Center
Oral Testimony................................................. 13
Prepared Statement............................................. 15
Mr. Charles J. Cooper, Partner, Cooper and Kirk, PLLC
Oral Testimony................................................. 20
Prepared Statement............................................. 22
THE CONSTITUTION AND
THE LINE ITEM VETO
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THURSDAY, APRIL 27, 2006
House of Representatives,
Subcommittee on the Constitution,
Committee on the Judiciary,
Washington, DC.
The Subcommittee met, pursuant to notice, at 2:07 p.m., in
Room 2141, Rayburn House Office Building, the Honorable Steve
Chabot (Chairman of the Subcommittee) presiding.
Mr. Chabot. The Committee will come to order. This is the
Subcommittee on the Constitution and we welcome everyone here
this afternoon for our oversight hearing on ``The Constitution
and the Line Item Veto.''
We face serious budget problems. Congress is simply
spending too much money. Our national debt is now $8.3
trillion, with hundreds of billions being added every year.
That future--future generations of Americans will have to pay
for this debt that continues to be built up. Fiscal sanity, the
simple common sense process of not spending more than you take
in, must be restored in Washington and we need to balance the
budget.
We also need reform measures, such as the Stop Omnibus Pork
Bill that I happen to have introduced to prohibit the bundling
together of appropriations bills that leads to deficits. I and
many others are committed to stopping this spending and the
line item veto is a very good first start.
The notion of a line item veto has intrigued those
concerned with wasteful Federal spending for a long time.
Presidents at least since Thomas Jefferson have asserted that
the Executive has some discretion in the expenditure of monies
appropriated by Congress. Forty-three governors have some form
of line item veto to reduce spending. Yet until 1996, no such
mechanism existed at the Federal level.
In that year, Congress enacted the Line Item Veto Act, of
which I happened to be a cosponsor, with overwhelming
bipartisan support. However, the United States Supreme Court
ultimately held that the Line Item Veto Act was
unconstitutional because it gave the President the power to
rescind a portion of a bill as opposed to an entire bill, as he
is authorized to do by article I, section 7 of the
Constitution.
Despite the Supreme Court's actions, the notion of the line
item veto has remained very popular. During its brief life,
President Clinton used the line item veto to cut 82 projects
totaling nearly $2 billion. President Bush has repeatedly
requested that Congress enact a legislative line item veto and
for the first time has submitted a specific legislative
proposal. President Bush's proposal has been warmly received by
such disparate editorial boards as the Washington Post and the
Wall Street Journal.
That proposal embodied in H.R. 4890, introduced by
Representative Paul Ryan, of which I happen to also be a
cosponsor, would give the President the authority to recommend
to Congress that it rescind certain dollar amounts of
discretionary budget authority or any item of direct spending.
The bill provides for certain expedited procedures to take up
such rescission bills. The President may withhold the spending
of those funds for a period of no more than 180 days. However,
only Congress can pass a bill that will rescind the initial
spending measures. If Congress does not act, the spending
provision will still remain law.
As disappointed as many of us were with the Supreme Court's
ruling on the original line item veto, many of us are heartened
to see that Chuck Cooper, who argued to the Court that the 1996
law was unconstitutional, is testifying today that this bill
is, in his opinion, in fact, constitutional.
However, despite Mr. Cooper's support, some have argued
that provisions in this bill could potentially be abused by a
President and, as such, raise certain separation of powers
concerns. I know that we all look forward to hearing from all
of our witnesses on how these concerns can be addressed.
We also look forward to the testimony of Congressman Mark
Kennedy, who has introduced a constitutional amendment to give
the President the authority to reduce or disapprove any
appropriation. Congress could override the veto in the manner
prescribed in Article I, Section 7 of the Constitution. This
proposal, if enacted, would be clearly constitutional and would
give the President the authority to directly disapprove of
specific spending requests.
Again, we want to welcome all of our witnesses and look
forward to hearing all your views on how Congress can
effectively address its problems with rampant spending.
And at this time, I would like to yield 5 minutes to the
gentleman from New York, Mr. Nadler, the Ranking Member of this
Committee.
Mr. Nadler. Thank you, Mr. Chairman. I want to join you in
welcoming our witnesses and especially our distinguished
colleagues. Any proposed legislation that would so radically
alter the balance of power between two branches of Government
deserves close scrutiny by our Subcommittee. The Supreme Court
has already struck down the line item veto and I think Members
should think long and hard about the constitutional issues as
well as the institutional issues.
I have to admit, I was a little incredulous when I saw the
subject of the hearing. Didn't the Supreme Court settle this
issue in 1998? But this is no laughing matter. The fact is that
this Republican Congress and this Republican President have the
unenviable distinction of having taken record surpluses and
turned them into record deficits in record time. The Congress
and President Clinton made hard and sometimes unpopular
budgetary choices and tackled the deficit. We have started to
tackle the national debt. If you recall the debate in the 2000
campaign was how are we to deal with the anticipated $5.6
trillion budget surplus over the next 10 years. They were
talking about paying off the entire national debt. So we know
it can be done if there is the political will.
Now, this Republican Congress and this Republican President
have become spending maniacs and tax-cutting people, and when
you combine huge tax cuts, mostly for rich people, with
maniacal spending, you get huge deficits. Surprise. But it is
not a constitutional question, it is a question of political
will.
And talking about political will, why should we give a
President a line item veto when he never uses the regular veto?
I would suggest that it is political will and perhaps political
courage that is lacking, not a line item veto.
The fault of your colleagues is not in our laws but in
ourselves. The line item veto, like the balanced budget
amendment, is an admission on the part of its supporters that
they are incapable of doing the job they were sent here to do.
Instead, we are told we need some gimmick to force us to do
what we are unwilling to do ourselves. We lied to the public
about our intentions. We tell them that we can have huge tax
cuts and not cut the budget too much, and then we act shocked
when there is a huge deficit.
Even if the line item veto would really have a substantive
effect on the deficit, and all evidence indicates it will not,
it is plainly unconstitutional and it will, if somehow upheld,
break down the checks and balances between the branches of our
Government which have preserved our freedom. The threat of a
line item veto would give a President even greater ability to
coerce Members of Congress into supporting his pet legislation
or his pet spending priorities. If you think the arm twisting
during the vote on the Medicare prescription drug benefit, for
example, was a scandal, and it was a scandal according to the
Ethics Committee, that will be nothing when compared with the
stick we would be handing this and future Presidents. You vote
for my bill to do this and that or I will veto everything in
your district.
Rather than destroying our system of Government and making
the Executive more powerful, which is essentially what the line
item veto would do, I would encourage my colleagues to resolve
here and now to do our jobs correctly. You blew the Nation's
nest egg--you Republicans. We are now in hock to the Chinese.
We are still arguing over whether to do something about the oil
industry's ridiculously enviable tax situation, all those extra
tax breaks we voted them last year because they're not making
enough money. I am sure the American people will forgive you if
you admit you blew it and turn over a new leaf.
I have a rather unusual perspective on earmarks. When I
first came to Congress, I tried to kill an egregious earmark in
my own district, a proposal to tear down a highway that had
recently been rebuilt to move it a few yards inland and to bury
it to accommodate the needs of a private developer, Mr. Trump.
Senator Roth, take note. I was not successful. Let me repeat
that. I was not successful.
Although I opposed the earmark on the floor of the House, I
was not successful in stopping it, even though the vast
majority of my constituents did not want this outrageous waste
to go forward. In the end, the Republican majority, at the
behest of a Republican Member, who was not even from New York
City but for whom the developer, Mr. Trump, had held a
fundraiser, put this outrage back into the budget. What is this
world coming to when you can't even kill a pork barrel project
in your own district?
With that, Mr. Chairman, I want to welcome our witnesses. I
want to repeat that the fault is not in the stars, not in the
lack of a line item veto, but in ourselves and in the
President. I look forward to the testimony of the witnesses,
although I must say I think this hearing entirely unnecessary
because we know all the answers. We know this is ridiculous,
and I yield back the balance of my time.
Mr. Chabot. Thank you. As you can see, we try to avoid
getting political in this Committee. [Laughter.]
Are there any other Committee Members that wish----
Mr. Nadler. Mr. Chairman, can I comment on that briefly?
Mr. Chabot. Of course.
Mr. Nadler. Let me say that the Judiciary Committee is a
very political and a very ideological Committee. The other
Committee I serve on, the Transportation Committee, is also a
very ideological Committee, but the ideology is a different
nature. Instead of debating abortion or gay rights or line item
vetoes, the ideology is more money for my State, less money for
yours, but that's the other Committee. [Laughter.]
Mr. Chabot. Are there any other Members who would like to
make a brief statement? Any on this side? Mr. Feeney, you are
recognized for 5 minutes.
Mr. Feeney. Yes, just briefly. I want to thank our
panelists. I'm really looking forward to this discussion. I
worked closely with Congressman Kennedy and Congressman Ryan
and both of them, I think, have recognized that there is a
problem. Mr. Nadler says it's all one party. I'd suggest that
the other party's problems have been infinitely worse
historically.
But he does make a point. The culture and the organization
of Congress rewards spending and irresponsible behavior, and
not just on this issue, but on a host of other reforms. People
like Congressman Kennedy, especially Paul Ryan, have been
leaders to try to change our organization, to change our rules
and change our culture. This is one part of that that I really
am grateful that you're here today.
Mr. Chabot. Thank you very much.
The gentleman from Virginia would like to make a statement,
is that correct?
Mr. Scott. Yes. Yes, Mr. Chairman, just very briefly. I
hope as we discuss this line item veto we discuss it in terms
of esoteric constitutionality and not by anything that is going
to do anything about the budget.
This chart shows the budget deficit over the last few
years. It shows that we don't need this thing to balance the
budget. We did that during the 8 years of President Clinton.
And you have to show the chart, because if I tried to use an
adjective to describe what happened to the budget when this
Administration came in, no one would believe the adjective. You
would assume that I was just exaggerating, but let this chart,
as they say at the poker table, let the cards speak for
themselves.
The deterioration in the budget has been from January 2001,
we projected the next 10 years, $5.6 trillion surplus. Now,
after we have messed up the budget, those same 10 years are
going to come in at a $3.2 trillion deficit, a swing of $8.8
trillion.
Now, if we are talking earmarks, let's talk earmarks. I
understand you might have $20 billion a year in earmarks.
Twenty billion a year, $8.8 trillion, well, 10 percent of $8.8
trillion would be $800 billion. One percent would be $88
trillion [sic]. I mean, you are into minuscule percentage of
the $8.8 trillion deterioration.
Now, you keep talking about eliminating a couple of little
pork projects. You don't talk about tax cuts. You ought to be
able to strike some of those out, because this blue line is
expenditures. The red line is taxes. You notice that toward the
end of the Clinton administration, we got the red line revenues
above the blue line expenditures. The red line revenues went
above the expenditures. We had a surplus. The revenues have
collapsed. The spending has still gone up, and that is the
problem, but you don't have anything in here where you can
whack a tax cut. You just talk about the spending, which had
gotten under control, so that's not--you don't have anything in
there for that.
Now, if you want to balance a budget next year, this is the
cost of the tax cuts for the first couple of years, and the
reason you are having trouble with this year's budget is the
fifth year, you all of a sudden had to incorporate this year
into your 5-year budget, which means you've got to find about
$150 billion more. Next year, you've got to find another $100
billion to deal with your budget next year. This little line
item veto isn't going to be able to deal with that at all.
If you want to find $20 billion, here is a tax cut, a
couple of tax cuts, I think, can find it. This is the chart,
standard deduction and itemized deductions, when fully phased
in, who gets the $20 billion. If you are a millionaire, you get
$20,000 of it. Two-hundred-thousand to $500,000, you get a
couple of hundred. On average, $75,000 to $100,000, you get
about ten cents a week. And under $75,000, on average, you
don't get anything. So if you are looking for $20 billion,
which happens to be more than all the earmarks all together,
this would be a place to look at it.
This just shows debt held by foreigners and foreign
countries, what happens to the debt. That little black line
there is we are going to pay off the debt by about 2013, the
whole national debt, at the rate we are going. But instead, we
are skyrocketing out of control with foreign debt.
Line item veto won't have anything to do with any of this,
and I would hope, Mr. Chairman, that we would keep that in
perspective as we discuss the esoterics of the line item veto.
Mr. Chabot. Are there any other Members that wish to make
an opening statement? If not, we will go ahead and get to our
panel here, then.
We welcome the panel very much for their coming forward
this afternoon. In fact, I would also like to preface that by
saying, without objection, all Members will have 5 legislative
days to submit additional materials for the hearing record.
Our first witness this afternoon will be Congressman Paul
Ryan, who represents Wisconsin's First Congressional District.
Representative Ryan is the sponsor of H.R. 4890, the
``Legislative Line Item Veto Act of 2006,'' which has 101
cosponsors, including many Members of this Committee. We
welcome you here this morning, Congressman.
Our second witness is Congressman Mark Kennedy, who
represents the Sixth Congressional District of Minnesota.
Representative Kennedy has introduced H.J. Res. 71, a
constitutional amendment that would give the President the
authority to reduce or disapprove any appropriation made by
Congress, and we welcome you here this afternoon, Congressman
Kennedy.
Our third witness is Ms. Cristina Martin Firvida, am I
pronouncing that right? Thank you. She is a Senior Counsel at
the National Women's Law Center, where she focuses on Federal
tax and budget policy. Ms. Firvida is a graduate of Yale
University and Cornell Law School. We welcome you here this
afternoon.
Our fourth and final witness is Mr. Chuck Cooper, who is a
partner at Cooper and Kirk. Mr. Cooper has had a long and
distinguished career, including a stint as the Assistant
Attorney General of the Office of Legal Counsel of the
Department of Justice under President Reagan. Mr. Cooper also
had the distinction of representing the plaintiffs in the two
suits that challenged the constitutionality of the 1996 Line
Item Veto Act.
Again, we welcome you all here this afternoon. I would draw
your attention to the two boxes there. I know the Members are
very familiar with that. We have what's called the 5-minute
rule. We'd ask you to keep your testimony within that time. The
lights sort of help us to make that happen. The green light
will be on for 4 minutes. The yellow light will be on 1 minute.
The red light means you're supposed to wrap it up. I won't cut
you off immediately, but we hope that you would try to stay
within the confines of those rules if at all possible.
And finally, it's the practice of this Committee to swear
in all witnesses, including Members of Congress, who appear
before us, so if you would all stand, please, and raise your
right hands.
Do you each swear that in the testimony that you are about
to give, you will tell the truth, the whole truth, and nothing
but the truth, so help you, God?
Mr. Ryan. I do.
Mr. Kennedy. I do.
Ms. Firvida. I do.
Mr. Cooper. I do.
Mr. Chabot. All witnesses have indicated in the
affirmative, including the Members of Congress.
We appreciate your testimony here this afternoon, and
Congressman Ryan, you are recognized for 5 minutes.
TESTIMONY OF THE HONORABLE PAUL RYAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF WISCONSIN
Mr. Ryan. Thank you, Chairman, and Mr. Nadler, it is nice
to be with you today. I serve on Ways and Means and the Budget
Committee and I thought for a moment after hearing the opening
speeches I was in one of those two Committees. We have similar
dialogues taking place in those Committees. I will try and be
brief, and if I could have my written testimony submitted to
the record, I'd appreciate that.
Mr. Chabot. Without objection.
Mr. Ryan. I introduced this bill on March the Seventh. We
have 102 bipartisan cosponsors, including four prominent ``Blue
Dog'' Democrats. In 2004, I offered this as an amendment with
my Democrat sponsor at the time, Charlie Stenholm of Texas. We
received 174 votes on the House floor, including 45 Democrats.
In the Senate, this bill has 29 bipartisan cosponsors,
including the lead Democrat sponsor, Senator Kerry.
What this bill does is it provides the President with the
authority to single out wasteful spending items and, to Mr.
Scott's question, narrow special interest tax breaks included
in legislation that the President signs into law and sends
these specific items back to Congress.
I'm very excited that we have Mr. Cooper with us here
today, who argued the Clinton v. New York case. Unlike the line
item veto authority provided in 1996 to President Clinton, this
one is constitutional because it brings the power back to
Congress. It preserves the separation of powers and the
presentment--and it conforms with the Presentment Clause
because this is like an expedited rescissions process whereby
the President can single out and pull out individual items, but
that's not the end of the process like it was with the earlier
line item veto. The President then sends it back to Congress
and both Houses have--within a short period of time have to act
on it and vote on it. If Congress chooses to rescind, then it
is rescinded. If they choose not to rescind the particular
program, then it is funded.
Now, I agree with the Supreme Court ruling in 1996. I
wasn't in Congress at the time, but I agree with that Supreme
Court ruling. I do believe Mr. Cooper was right in his
arguments at the time. But just as that legislation was
unconstitutional, I believe this particular piece is
constitutional.
Let me tell you why we are proposing this. We are proposing
this because earmarks have gotten out of control, because
wasteful spending is getting out of control. And I am a
Republican saying this. Last year, according to Citizens
Against Government Waste, the FY 2006 budget included nearly
10,000 pork barrel spending items at a total cost of $29
billion to taxpayers. That is not small change no matter what
numbers you are looking at. This is a significant increase over
the last 10 years, where 10 years ago the number was set at $2
billion.
Now, many of these spending projects are inserted at the
end of the process. The reason why I think this is so important
is because we do have a level of accountability and
transparency at the beginning of the tax and spending process.
Members can go to the floor with amendments and try and go
after things. Mr. Nadler had that opportunity to go after that
pork project in his district. He was outvoted, but he had the
opportunity to go after it.
Where we don't have that level of transparency and
accountability is at the end of the process, at the conference
report level. Typically, a lot of these provisions get inserted
in the conference report in the conference. What do we have as
Members of Congress the choice to do? We can vote up or down on
the entire piece of legislation. That's it. What option does
the President have? He or she can vote or can veto the entire
bill or sign the entire bill. So it is at that end of the
spending and taxing process where we don't have much
transparency. We don't have enough accountability, I would
argue. This restores that.
Now, what's important when you think of all these things is
what effect will this have? I believe this will have a couple
of effects. Number one, it will have us go after the truly
egregious items that can't stand a full vote by Congress.
Number two, I think it's going to embarrass a lot of things out
of these bills in the first place. That will save money.
Now, what is the process? Here is exactly how we envision
this process. The President signs a bill into law, a tax bill,
spending bill, and it could be authorization or appropriations,
like a transportation bill or an appropriation bill. He sends a
recission request down to Congress, where the leadership of
both the House and the Senate have the opportunity to introduce
a bill to pass it into law. If neither leadership introduces
the bill after 2 days, on the third day, any Member of the
House or the Senate can introduce a bill to approve the
recission request. The bill must be reported out of the
appropriate Committee within 5 days without any significant
changes, and within 10 days of its original introduction, it
must be given an up or down vote on the floor with debate set
so you don't have a filibuster issue. All that is required to
pass or defeat the recission is a simple majority.
So what this does is it has Congress inserted at the end of
the process, as well. Congress has the final say so. Separation
of powers is maintained. The Presentment Clause is conformed
with. That is why I decided to do it this way. I have been
pushing this version since I've been elected to Congress.
Traditionally, we call these enhanced decisions.
Why is it necessary? Because the rescission process we have
today is virtually meaningless because the President, no matter
who the President is, can send a rescission request to Congress
and Congress doesn't have to do anything. They can virtually
ignore--they can ignore the recission request. This forces us
to act on these requests, but it gives us the power to make the
final decision.
I will conclude with this. I have asked for comment from
various interested parties. We have gotten a lot of good
comments and criticisms to which I think we can address in this
bill to satisfy some of the concerns from constitutionalists
and others, and I'd be happy to answer those questions during
the time of questions.
I thank the Committee for this very important hearing.
Mr. Chabot. Thank you very much.
[The prepared statement of Mr. Ryan follows:]
Prepared Statement of the Paul Ryan, a Representative in Congress from
the State of Wisconsin
Chairman Chabot, Ranking Member Nadler, and Members of the
Subcommittee, thank you for the opportunity to testify before you today
on H.R. 4890, the Legislative Line-Item Veto Act of 2006. This
legislation would help the President and Congress work together to
reduce our budget deficit by providing the President with the authority
to single out wasteful spending items and narrow special-interest tax
breaks included in legislation that he signs into law and send these
specific items back to Congress for a timely vote. Unlike the line-item
veto authority provided to President Clinton in 1996, H.R. 4890 is
constitutional because it requires an up-or-down vote in both chambers
of Congress under an expedited process in order to effectuate the
President's proposed rescissions. It is important that Congress act now
to give the President this tool to bring greater transparency,
accountability and a dose of common sense to the federal budget
process.
THE PROBLEM:
The amount of pork-barrel spending included in the federal budget
continues to increase every year. According to Citizens Against
Government Waste (CAGW), the federal government spent $29 billion on
9,963 pork-barrel projects in Fiscal Year 2006 (FY 2006), an increase
of 6.3% from 2005, and an increase of over 900% since 1991. Overall,
the federal government has spent $241 billion on pork-barrel projects
between 1991 and 2005, an amount greater than two-thirds of our entire
deficit in FY 2005. This includes irresponsible spending on items such
as the $50 million Rain Forest Museum in Iowa; $13.5 million to pay for
a program that helped finance the World Toilet Summit; and $1 million
for the Waterfree Urinal Conservation Initiative.
Many of these pork-barrel spending projects are quietly inserted
into the conference reports of appropriations bills where Congress is
unable to eliminate them using the amendment process. In fact, the only
time that Congress actually votes on these items is during an up-or-
down vote on the entire conference report, which includes spending for
many essential government programs in addition to the pork-barrel
earmarks. In this situation, it is very difficult for any Member to
vote against an appropriations bill that, as an overall package, may be
quite meritorious, despite the inclusion of wasteful spending items.
Unfortunately, the current tools at the President's disposal do not
enable him to easily combat these wasteful spending items either. Even
if the President identifies numerous pork-barrel projects in an
appropriations bill, he is unlikely to use his veto power because it
must be applied to the bill as a whole and cannot be used to target
individual items. This places the President in the same dilemma as
Members of Congress. Does he veto an entire spending bill because of a
few items of pork when this action may jeopardize funding for our
troops, for our homeland security or for the education of our children?
The President's ability to propose the rescission of wasteful
spending items under the Impoundment Control Act of 1974 has been
equally ineffective at eliminating wasteful spending items. The problem
with the current authority is that it does not include any mechanism to
guarantee congressional consideration of a rescission request and many
Presidential rescissions are ignored by the Congress. In fact, during
the 1980's, Congress routinely ignored President Reagan's rescission
requests, failing to act on over $25 billion in requests that were made
by the Administration. The historic ineffectiveness of this tool has
deterred Presidents from using it with any regularity.
SUMMARY OF H.R. 4890, THE LEGISLATIVE LINE-ITEM VETO ACT OF 2006:
I introduced H.R. 4890, the Legislative Line-Item Veto Act of 2006,
on March 7, 2006. This legislation, which currently has the support of
101 bipartisan cosponsors in the House, is based on the
Administration's proposal to provide line-item veto authority to the
President and is the product of discussions that I and my congressional
colleagues have had with the White House since the President announced
his intent to seek line-item veto authority in the State of the Union
Address on January 31, 2006.
The Legislative Line-Item Veto Act is very similar to an expedited
rescissions amendment that I offered during the consideration of H.R.
4663 on June 24, 2004, with my former colleague Representative Charlie
Stenholm, a Democrat from Texas. Like H.R. 4890, this amendment would
also have allowed the President to propose the elimination of wasteful
spending items subject to congressional approval under an expedited
process. Although this amendment failed to pass the House, it attracted
the support of 174 Members of Congress, including 45 Democrats. A
similar provision is also included in Section 311 of the Family Budget
Protection Act, legislation that I introduced along with Congressman
Jeb Hensarling of Texas, Congressman Chris Chocola of Indiana, and
former Congressman Christopher Cox of California during 2004 and again
in 2005.
If passed, H.R. 4890 would give the President the ability to put on
hold wasteful discretionary spending, wasteful new mandatory spending,
or new special-interest tax breaks (those that affect less than 100
beneficiaries) after signing a bill into law. The President could then
ask Congress to rescind these specific items. The requirement that both
the House and Senate approve all proposed rescissions means that
Congress will continue to control the power of the purse and will have
the final word when it comes to spending matters. However, unlike the
current rescission authority vested in the President under the
Impoundment Control Act of 1974, the bill also includes a mechanism
that would virtually guarantee congressional action in an expedited
time frame.
Using the Legislative Line-Item Veto, the President and Congress
will be able to work together to combat wasteful spending and add
transparency and accountability to the budget process. This tool will
shed light on the earmarking process and allow Congress to vote up or
down on the merits of specific projects added to legislation or to
conference reports. Not only will this allow the President and Congress
to eliminate wasteful pork-barrel projects, but it will also act as a
strong deterrent to the addition of questionable projects in the first
place. On the other hand, Members who make legitimate appropriations
requests should have no problem defending them in front of their
colleagues if they are targeted by the President. With H.R. 4890, we
can help protect the American taxpayer from being forced to finance
wasteful pork-barrel spending and ensure that taxpayer dollars are only
directed toward projects of the highest merit.
The process under H.R. 4890 would begin with the President
identifying an item of wasteful spending or a special-interest tax
break in legislation that is being signed into law. The President would
then submit a special message to Congress, asking for Congress to
rescind this wasteful item or items. House and Senate leadership would
have the opportunity to introduce the President's rescission requests
within two days following receipt of the President's message. After
that time period, any Member of Congress would be able to introduce the
President's rescission proposal, virtually guaranteeing congressional
action. Once the bill is introduced, it would be referred to the
appropriate committee, which would then have five days to report the
bill without substantive revision. If the committee fails to act within
that time period, the bill would be automatically discharged to the
floor. The bill would have to be voted on by the full House and Senate
within 10 legislative days of its introduction, with a simple majority
required for passage.
Since introducing H.R. 4890, I have received substantial feedback
from interested Members of Congress on ways to improve the legislation
to ensure that it best meets its intent of controlling federal spending
while keeping the power of the purse squarely in the legislative
branch. Among the changes that I think may improve the legislation are
the following: limiting the time period available to the President to
make a rescission request after signing a bill into law; limiting the
number of rescission requests that can be made for each piece of
legislation signed into law; allowing for the bundling of rescission
requests; explicitly prohibiting duplicative requests; and tightening
the language that allows the Administration to defer spending while a
rescission request is being considered by Congress. These changes will
strengthen the bill and better ensure that the legislative branch
retains all of the powers delegated to it by our founding fathers. I am
committed to continuing to work with my colleagues in Congress and the
Administration throughout the legislative process to make sure that
H.R. 4890 is narrowly drafted in order to best achieve its goals.
CONSTITUTIONAL ISSUES:
H.R. 4890 passes constitutional muster because it requires both the
House and Senate to pass rescission legislation and send it to the
President for his signature before the rescissions become law. In
Clinton v. City of New York, the U.S. Supreme Court held that the line-
item veto authority provided to President Clinton in 1996 violated the
Presentment Clause of the U.S. Constitution (Article I, Section 7,
Clause 2), which requires that ``every bill which shall have passed the
House of Representatives and the Senate, shall, before it become a Law,
be presented to the President of the United States.'' The problem with
this version of the line-item veto was that the President's requested
rescissions would become law by default if either the House or Senate
failed to enact a motion of disapproval to stop them from taking
effect. The lower court in Clinton v. City of New York also held that
this version of the line-item veto upset the balance of power between
the executive and legislative branches. Unlike the 1996 line-item veto
legislation, H.R. 4890 leaves Congress in the middle of the process
where it belongs and follows the procedure and balance of power
outlined in our Constitution.
H.R. 4890 also withstands constitutional scrutiny under the U.S.
Supreme Court's holding in I.N.S. v. Chadha. In I.N.S. v. Chadha, the
Supreme Court invalidated part of the Immigration and Nationality Act
that allowed a single house of Congress to override immigration
decisions made by the Attorney General. The Legislative Line-Item Veto
Act of 2006 is consistent with this holding because the President's
authority to defer funds would not explicitly be terminated by the
disapproval of a proposed rescission by one of the houses of Congress.
I agree with the Supreme Court's rulings in Clinton v. City of New
York and I.N.S. v. Chadha. It is extremely important that Congress does
not cede its law-making power to the President. I believe that this
violates the Separation of Powers in addition to the Presentment
Clause. In contrast, H.R. 4890 would withstand constitutional scrutiny
because it requires both houses of Congress to act on any rescission
request and for this legislation to be sent back to the President for
his signature.
CONCLUSION:
In 2006, the federal government will once again rack up an annual
budget deficit of over $300 billion, and our debt is expected to
surpass $9 trillion. Meanwhile, the retirement of the baby boom
generation looms on the horizon, threatening to severely exacerbate
this problem. Given these dire circumstances, it is essential that we
act now to give the President all of the necessary tools to help us get
our fiscal house in order. By providing the President with the scalpel
he needs to pinpoint and propose the elimination of wasteful spending,
H.R. 4890 takes an important first step toward achieving this goal.
Mr. Chabot. Congressman Kennedy, you are recognized for 5
minutes.
TESTIMONY OF THE HONORABLE MARK KENNEDY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MINNESOTA
Mr. Kennedy. Mr. Chairman, Ranking Member, as someone who
spent 20 years in the business world before coming to Congress,
I understand that really for any organization to be successful,
it needs to have leadership that establishes priorities. The
owners of the businesses big and small know this. But over the
past couple of decades, Congress has decided it follows a
different set of rules.
You don't have to look any further than the proliferation
of earmarks, which have grown from 958 in fiscal year 1996 to
nearly 14,000 in fiscal year 2005. There are many egregious
examples, whether it be the $2 million relocating a kitchen in
Fairbanks, Alaska, or the $950,000 for the Please Touch Museum
in Philadelphia, or the $150,000 for the Therapeutic Horseback
Riding Program at the Lady B Ranch in California.
These no longer come as a surprise to us, unfortunately, so
we shouldn't be surprised that in FY 06, spending is projected
to reach an all-time high of $23,638 per U.S. household, of
which $3,800 is being borrowed.
All of this uncontrolled spending on non-necessities has
led to a budget deficit that is simply at unsustainable
proportions. That's why I introduced H.J. Res. 71, the Line
Item and Reduction Veto Amendment. This constitutional
amendment would provide a President with a proven mechanism to
cut the junk out of spending bills.
My bill would restore the same authority that was provided
to President Clinton in the 1996 Line Item Veto Act. This
authority already is held by 40 governors, was used by
President Clinton a total of 82 times to get those nice numbers
that Bobby was talking about, in part, and produced savings of
nearly $2 billion before it was ruled unconstitutional by the
Supreme Court on June 25, 1998.
Both Representative Ryan's bill and my constitutional
amendment would make a significant step toward restoring fiscal
sanity to the Federal budget. I happen to believe a
constitutional amendment is the stronger approach because it
eliminates any question of the constitutionality of a line item
and will halt another round of time consuming separation of
powers lawsuits. While Congress may be able to address the
concerns in Ryan's bill, my legislation, which mirrors
constitutional authority held by governors across the country,
offers a clear and decisive answer free of tinkering from
activist judges.
A line item veto in any workable form will help restore
some sorely needed fiscal discipline to Washington, but I
believe more needs to be done. I believe we must go further and
look at other tried and true measures, including the
restoration of Presidential impoundment authority. This
authority was used by Presidents for almost two centuries and
it reduced excessive spending by simply deciding not to spend
when there is a questionable value. President Jefferson was the
first to use an impoundment authority when he--and it was used
by FDR in World War II to block Congressional spending he
determined, quote, ``interferes with the defense program by
diverting manpower and materials,'' unquote.
Unfortunately, the 1974 Congressional Budget and
Impoundment Control Act not only stripped the executive branch
of constitutional authority to impound or reduce spending, but
with no one to guard the cookie jar, Congress's appetite has
increased, including items that are not national priorities,
relating to more waste and larger Government.
Mr. Chairman, after adjusting for inflation, since the 1974
act was enacted into law, our Federal debt has grown by over
1,600 percent. As perhaps the only former chief financial
officer serving in Congress, I cannot comprehend how we expect
to sustain this situation.
It is my belief that by passing the line item veto and by
restoring the President's impoundment power, we would take a
much needed step in the right direction of restoring spending
discipline in Washington.
I thank you for the leadership in holding these hearings.
We must cut wasteful spending to control our deficit so we
don't burden our grandchildren with our debt.
Mr. Chabot. Thank you very much, Congressman Kennedy. We
appreciate that.
[The prepared statement of Mr. Kennedy follows:]
Prepared Statement of the Honorable Mark Kennedy, a Representative in
Congress from the State of Minnesota
Mr. Chairman, as someone who spent 20 years in the business world
before coming to Congress, I understand that for any business to be
successful, it needs to have leadership that establishes priorities.
The owners of businesses big and small know this, but, over the
past couple of decades Congress has decided to follow a different set
of rules.
You don't have to look any further than the proliferation of
earmarks, which have grown from 958 in FY1996 to nearly 14,000 in
FY2005.
Egregious examples of waste are easy to see: $2,000,000 to relocate
a kitchen in Fairbanks, Alaska; $950,000 for the Please Touch Museum in
Philadelphia; and $150,000 for the Therapeutic Horseback Riding Program
at the Lady B Ranch in California.
These no longer come as a surprise to us. So we shouldn't be
surprised that FY2006 spending is projected to reach an all-time high
of $23,638 per U.S. household, of which $3,800 will be borrowed.
All of this uncontrolled spending on non-necessities has led to
budget deficit of simply unsustainable proportions. That's why I have
introduced H.J. Res. 71, the Line Item and Reduction Veto Amendment.
This Constitutional Amendment would provide the president with a proven
mechanism to cut the junk out of spending bills.
My bill would restore the same authority as was provided to
President Clinton through the 1996 Line Item Veto Act.
This authority, already held by 40 governors, was used by President
Clinton a total of 82 times, and produced savings of nearly $2 billion
before it was ruled unconstitutional by the Supreme Court on June 25,
1998.
In addition, H.J. Res. 71, unlike the 1996 Line Item Veto Act,
allows the president to reduce objectionable spending items contained
in the non-legislative text of conference reports.
This mechanism, currently used by 11 states, reduces the lump-sum
accounts that contain hundreds and thousands of individual items that
are often hidden in unamendable form.
Both Representative Ryan's bill, H.R. 4890, and my Constitutional
Amendment, will make a significant step to restoring fiscal sanity to
the federal budget.
I happen to believe the Constitutional Amendment is the stronger
approach because it eliminates any question of its legality and will
halt another round of time-consuming separation of powers lawsuits. As
CRS has noted in a recent report, there are still concerns about the
enhanced rescission authority provided to the President in HR4890.
While Congress may be able to address these concerns, my
legislation, which mirrors constitutional authority held by governors
across the country, offers a clear and decisive answer free from the
tinkering of activist judges.
A Line Item Veto Constitutional Amendment will help restore some
sorely needed fiscal discipline in Washington, but there is still more
we can do to stop runaway spending.
I believe we must also look at other tried and true measures,
including Impoundment Authority.
This authority was used by presidents for almost two centuries to
reduce excessive spending.
President Jefferson was the first to use impoundment authority in a
significant way, and it was used by FDR during World War 2 to block
Congressional spending he determined ``interferes with the defense
program by diverting manpower and materials.''
Unfortunately, impounding funds ceased to be an option for
presidents in 1974 when Congress passed the Congressional Budget and
Impoundment Control Act.
This Act not only stripped the executive of constitutional
authority to impound spending, but also increased Congress's appetite
toward waste and larger government.
Mr. Chairman, after adjusting for inflation, since the 1974 Act was
enacted into law, federal spending as grown by over 250 percent.
As perhaps the only former CFO serving in Congress, I cannot
comprehend how we expect to sustain this situation.
It is my belief that by passing the Line Item Veto, and by
restoring the President's Impoundment Power, we would take a much
needed step in the right direction to restoring spending discipline in
Washington.
Mr. Chairman, I thank you for your leadership in holding this
hearing. We must cut wasteful spending to control our deficit so we
don't burden our grandchildren with our debts.
Mr. Chabot. Ms. Firvida, you are recognized for 5 minutes.
TESTIMONY OF CRISTINA MARTIN FIRVIDA, SENIOR COUNSEL, NATIONAL
WOMEN'S LAW CENTER
Ms. Firvida. Thank you. Chairman Chabot, Ranking Member
Nadler, and Members of the Subcommittee, thank you for this
opportunity to testify on behalf of the National Women's Law
Center.
H.R. 4890 would dramatically expand the powers of the
President relative to Congress, presenting serious policy and
constitutional questions while doing very little, if anything,
to control growing deficits. This bill has sometimes been
described as a means of eliminating unnecessary earmarks, but
its scope is far broader than that. The rescission power
granted to the President under this bill would apply not only
to appropriations, which are already covered under current law,
but also to direct spending, including the reauthorization of
entitlement programs, such as the State Children's Health
Insurance Program and the farm bill, which contains food
stamps, both up for reauthorization next year.
H.R. 4890 would also give the President extraordinary power
to suspend and effectively cancel provisions of law enacted by
Congress and to control the legislative agenda of Congress.
This power raises significant policy issues and effectively
confers upon the President the power to amend or repeal duly
enacted legislation, in violation of the Separation of Powers
Doctrine and the Presentment and Bicameralism Clauses of
Article I, Section 7 of the Constitution.
To cap it off, empirical evidence suggests that the
proposed legislative line item veto would not result in
substantial savings that would reduce our nation's record
deficits and may paradoxically actually increase spending.
H.R. 4890 would give the President unprecedented new
authority to suspend funding for a period of 180 days and
possibly more after sending a rescission request to Congress,
even if Congress explicitly rejected the President's decision.
In addition, H.R. 4890 grants the President extremely broad
discretion to determine when, in what fashion, and how often to
rescind spending.
Significantly, H.R. 4890 does not prohibit the President
from resubmitting a rejected rescission in a subsequent request
to Congress. In contrast, both current law and the Line Item
Veto Act of 1996 explicitly require that the President
immediately reinstate canceled spending if Congress rejects the
President's rescission request and bar the President from
resubmitting previously rejected rescissions.
The extraordinary new powers that H.R. 4890 would confer
upon the President raise serious constitutional powers under
the Separation of Powers Doctrine. Separation of powers is a
fundamental feature of our Constitution and system of
Government, and as such, the Supreme Court has historically
taken a very strict approach to analyzing potential violations
of this doctrine. There is no provision in the Constitution
that authorizes the President to enact, to amend, or to repeal
statutes. In the case that invalidated the Line Item Veto Act
of 1996, the Court ruled that allowing the President to cancel
spending unilaterally amounted to an impermissible exercise of
the power to amend or repeal statutes, a legislative power that
is explicitly and exclusively reserved for the Congress under
the Constitution.
Like the power to cancel spending items already struck down
by the Court, the powers granted to the President in this bill
allow him to amend or repeal duly enacted legislation. Under
H.R. 4890, the President can suspend provisions of law even if
Congress rejects the President's proposal to do so. The
President could time a package of rescissions so that he could
withhold funding until the end of the fiscal year, when
spending authority would cease for many items. The bill would
also allow the President to resubmit already rejected
rescissions, which likewise also could effectively terminate
spending authority.
Because all these actions together would end duly enacted
programs in both legal and practical effect, the President
would have the power to amend and repeal legislation and that
is unconstitutional under the Separation of Powers Doctrine as
well as under the Bicameralism and Presentment Clauses of
Article I.
The fact that Congress is considering granting the
President such extraordinary power does not resolve the
constitutional issues. The Constitution does not authorize
Congress to cede to the executive that power which is properly
its own.
While no amount of deficit reduction could justify a
violation of the Constitution, numerous commentators and
analysts, including CBO, CRS, and George Will, have concluded
that the line item veto is an ineffective tool for controlling
spending and that could, in fact, increase spending under some
circumstances.
In addition, H.R. 4890 is ill-equipped to eliminate special
interest tax breaks and, in fact, renders broad-based tax
policies funded by direct spending, such as the Earned Income
Tax Credit and the Additional Child Tax Credit, vulnerable to
cancelation.
In conclusion, our Constitution does not authorize the
President to enact, amend, or repeal statutes. Granting the
President that authority, as H.R. 4890 would effectively do,
would be unwise as well as unconstitutional for the reasons set
forth in this testimony.
I thank the Chair for scheduling this important oversight
hearing and for the opportunity to testify today.
Mr. Chabot. Thank you very much.
[The prepared statement of Ms. Firvida follows:]
Prepared Statement of Cristina Martin Firvida
Chairman Chabot, Ranking Member Nadler, and members of the
Subcommittee, thank you for this opportunity to testify on behalf of
the National Women's Law Center on H.R. 4890, the Legislative Line Item
Veto Act of 2006. The bill would dramatically expand the powers of the
President in relation to Congress, presenting serious policy and
constitutional questions while doing little, if anything, to control
growing deficits.
The bill has sometimes been described as a means of eliminating
unnecessary earmarks, but its scope is far broader. H.R. 4890 would
give the President unprecedented power to suspend, and effectively
cancel, provisions of law enacted by Congress, even after Congress has
rejected the President's rescission proposal. The expanded rescission
power would apply not only to appropriations, currently subject to a
more limited rescission authority, but also to direct spending for
programs upon which millions of Americans rely, and, on its face, some
targeted tax benefits. In addition, the bill would enable the President
to control the legislative agenda of Congress, because the President
would have the ability to control the timing and number of rescission
bills sent to Congress, and the expedited rescission process would
require that Congress respond. These sweeping new provisions raise
significant policy issues and effectively confer upon the President the
power to amend or repeal duly enacted legislation, in violation of the
separation of powers doctrine and the presentment and bicameralism
clauses of Article I, Section 7 of the Constitution of the United
States.
In addition, empirical evidence suggests that the proposed
Legislative Line Item Veto would not result in substantial savings that
would reduce our nation's record deficits. Indeed, the potential for
Congress to agree to fund the President's priorities in exchange for
the President's promise not to exercise the veto suggests that spending
may increase as a result of this legislation.
H.R. 4890 GRANTS THE PRESIDENT SWEEPING POWERS TO SUSPEND--AND
EFFECTIVELY CANCEL--COVERED SPENDING AND TAX PROVISIONS
This bill would give the President the unilateral power to suspend,
and in some cases, effectively cancel, spending and tax provisions
enacted by Congress. This Presidential power to essentially amend or
repeal duly enacted legislation is bad public policy and presents the
clearest constitutional violation in H.R. 4890.
H.R. 4890 would give the President sweeping new authority to
suspend covered spending and tax provisions even after Congress had
rejected the proposed rescission. The bill would allow the President to
suspend funding for a period of 180 days (and possibly more) after
sending a special message to Congress seeking legislative approval of
the rescission, even if Congress explicitly rejects it. This is a
dramatic departure from current rescission authority. Current law gives
the President authority to withhold appropriated funds for up to 45
session days while Congress considers a proposed rescission, but
explicitly requires that the President's suspension of funding
immediately end if one legislative house rejects the President's
rescission request (or at the end of the 45-day period if no action is
taken) and that budget authority be made available for obligation
immediately. The Line Item Veto Act of 1996 likewise required the
President to immediately reinstate cancelled funding if Congress
adopted a joint resolution of disapproval. Giving the President the
power to ignore the expressed will of Congress as H.R. 4890 would do is
unprecedented.
In addition, H.R. 4890 grants the President extremely broad
discretion to determine when, in what fashion, and how often to rescind
covered provisions of law. While H.R. 4890 requires Congress to act
upon a rescission request sent by the President within 13 session days,
the bill permits the President to send his proposed rescissions to
Congress up to one year after enacting a spending or tax bill. In
addition, the bill allows the President to send rescissions from one
spending or tax law in numerous rescission bills to Congress, or to
send rescissions from several spending or tax laws in one rescission
bill. Finally, in contrast to current law, the bill does not appear to
prohibit the President from resubmitting the rejected rescission in a
different rescission request, and continuing to suspend the operation
of the provision.
The powers granted to the President under H.R. 4890, taken
together, would effectively grant the President the ability not merely
to delay, but to cancel provisions of law unilaterally. For example,
the President could submit a package of rescissions to Congress in the
spring and withhold funding until the end of the fiscal year, when
spending authority would cease for many items, terminating the program
even if Congress explicitly rejected the rescission. As a result of the
broad new powers granted to the President in H.R. 4890, federal
agencies, state and local governments, and individuals who administer
or receive federal funding through a variety of programs and benefits,
would be unable to rely on funding approved by Congress.
h.r. 4890 would allow the president to rescind direct spending as well
as appropriations, but do little to control special interest tax breaks
The breadth of the cancellation power granted to the President
under H.R. 4890 is matched by the breadth of the spending items to
which it can apply, compounding the constitutional and policy concerns
raised by the new power. Despite the fact that H.R. 4890 has been
justified as a mechanism for controlling earmarks and tax benefits for
powerful special interests, the bill also would apply to broad-based
items of direct spending, and render low-income recipients of mandatory
spending programs especially vulnerable to program cuts.
The expanded rescission powers authorized by H.R. 4890 would apply
not only to appropriations, to which more limited rescission authority
currently applies, but also to new items of mandatory spending,
allowing the President to override individual entitlements enacted into
law. The expansion of the President's rescission authority to apply to
direct spending items is especially troubling because the broad
definition of ``direct spending'' in the bill may be claimed to allow
the cancellation of existing entitlement spending in reauthorizations,
rather than only new spending. For example, if H.R. 4890 were to be
enacted, it is possible that a significant number of provisions in the
reauthorizations next year of the State Children's Health Insurance
Program and the Farm Bill (which authorizes Food Stamps) could be
subject to rescission even if those provisions were not new and did not
add to the costs of the legislation.
Conversely, the definition of targeted tax benefit in the bill is
so narrowly constructed as to virtually guarantee that no carefully
drafted tax benefit will be subject to the new cancellation power. The
definition used in the bill would apply to tax provisions that benefit
100 or fewer beneficiaries, except that it would not apply if the
provision treats all persons engaged in the same industry or activity
or owning the same type of property similarly. The Joint Committee on
Taxation analyzed this definition (which was included as part of the
Line Item Veto Act of 1996), and concluded that the exceptions were
vague and poorly defined.\1\ As a result, this creates the potential to
altogether exempt tax breaks from the line item veto. For example, had
the Legislative Line Item Veto Act of 2006 been in effect when the 2004
corporate tax bill was passed, the President might have been powerless
to cancel special interest tax breaks for ceiling fan importers and
tackle-box manufacturers,\2\ among others, which were criticized by
many observers as pork, and which presumably would be the type of
targeted tax benefit H.R. 4890 is supposed to eliminate.
---------------------------------------------------------------------------
\1\ Staff of Joint Comm. on Taxation, Analysis of Provisions
Contained in the Line Item Veto Act (Public Law 104-130) Relating to
Limited Tax Benefits 20 (Joint Comm. Print 1997).
\2\ Edmund L. Andrews, How Tax Bill Gave Business More and More,
N.Y. Times, Oct. 13, 2004, at A1.
---------------------------------------------------------------------------
While some justify limiting the definition of ``targeted tax
benefits'' to ensure that only special interest tax breaks and not
broad-based tax policies are subject to cancellation, no similar
limitation exists to ensure that broad-based direct spending policies
are also not subject to cancellation. In fact, the only broad-based tax
policies that may be subject to the Legislative Line Item Veto are
those that include items of direct spending. The two most prominent tax
credits that trigger direct spending are the Earned Income Credit and
the Additional Child Tax Credit. Both of these credits assist low-
income families. Should H.R. 4890 be adopted, the President may be
authorized to cancel portions of these credits should Congress, for
example, vote to extend improvements to the credits passed in 2001 and
2003. There is no justification for giving the President the authority
to suspend tax provisions that help millions of poor children but not
tax provisions that benefit a few thousand multi-millionaires.
H.R. 4890 ALLOWS THE PRESIDENT TO CONTROL THE CONGRESSIONAL AGENDA
The process for Congress to respond to the President's proposed
rescissions set forth by H.R. 4890 creates the potential for the
President to exercise considerable control over the congressional
schedule and agenda, above and beyond budget and spending bills. This
ability to reorder congressional legislative priorities in and of
itself will result in a bad policy outcome, and when combined with the
broad authority to cancel spending granted by H.R. 4890, exacerbates
the constitutional breach contained in this proposal.
Under current law, if Congress fails to approve the President's
rescission proposal within 45 session days, including by inaction,
spending authority must be restored. Given that Congress has the power
of the purse under our constitutional structure of separation of
powers, it is appropriate to leave to Congress the discretion to act on
the President's suggested rescissions, to act instead on its own
package of rescissions, or to do nothing at all. However, H.R. 4890
would strip Congress of this discretion and would amend House and
Senate rules to provide for fast-track consideration of presidential
rescission messages.
Under the new fast-track rules in H.R. 4890, a bill encompassing
the President's rescission package must be introduced by congressional
leadership no later than two session days after the President sends a
special message to Congress proposing the rescissions. If no bill is
introduced by the second session day, any member may introduce the bill
thereafter. Once the rescission bill is introduced, the appropriate
committees are required to approve the bill without any change no later
than the fifth session day, or, if the appropriate committees fail to
do so by that day, the bill is automatically discharged from the
committees. Both the House and Senate must have an up or down vote on
the rescission bill, without amendment, by the end of the tenth session
day after introduction of the bill. In summary, if the procedures are
adhered to and are not waived by rule or otherwise ignored, Congress
would be compelled to complete action on the President's rescissions
within 13 session days of the President's sending the proposal to
Congress.
In combination with the broad discretionary authority granted to
the President to send rescission messages at any time and in any manner
that the President sees fit, these fast-track procedures are an
invitation to allow the President to control the entire Congressional
legislative agenda. For example, a President could exercise the
rescission authority as a parliamentary tool to tie up the
Congressional schedule indefinitely or until the President receives the
concessions he or she seeks. The President could send over a series of
bills that rescind spending items from bills that were passed and
signed at different times, bundling the rescission of spending items
that are popular in Congress with those that are unpopular with the
public, in order to compel Congress to turn away from other work and
dispose of the rescissions. This would enable the President to control
the timing of votes in Congress on other pending legislation. If
deployed during the second half of a second session of any given
Congress, the tactic could run out the clock on other pending
legislation. It is important to note that H.R. 4890 could affect
consideration of all pending legislation in this way, not just
legislation related to spending items.
THE EXPANSIVE POWERS GRANTED TO THE PRESIDENT BY H.R. 4890 RAISE
SERIOUS CONSTITUTIONAL PROBLEMS
The extraordinary new powers that H.R. 4890 would confer upon the
President raise serious constitutional problems under the separation of
powers doctrine, as well as the presentment and bicameralism
requirements of Article 1, section 7 of the Constitution of the United
States.
The separation of powers is a fundamental feature of our
Constitution and our system of government. It was designed to and does
play a crucial role in safeguarding the liberties and freedoms that the
Constitution created and which the founding fathers endeavored to
protect. As Justice Kennedy so succinctly put it in his concurrence in
Clinton v. City of New York: \3\
---------------------------------------------------------------------------
\3\ Clinton, 524 U.S. 417 (1998).
Liberty is always at stake when one or more of the branches
seek to transgress the separation of powers. Separation of
powers was designed to implement a fundamental insight:
Concentration of power in the hands of a single branch is a
threat to liberty. The Federalist states the axiom in these
explicit terms: ``The accumulation of all powers, legislative,
executive, and judiciary, in the same hands . . . may justly be
pronounced the very definition of tyranny.'' \4\
---------------------------------------------------------------------------
\4\ Id. at 450 (Kennedy, J., concurring) (citation omitted).
The Supreme Court has historically taken a strict approach to
analyzing potential violations of the separation of powers doctrine. A
long line of cases demonstrates that the Court is extremely skeptical
of any encroachment on the power of each branch and consequently will
apply a strict formal analysis frequently resulting in the invalidation
of the Congressional act. As the court stated in Mistretta v. United
---------------------------------------------------------------------------
States:
Accordingly, we have not hesitated to strike down provisions of
law that either accrete to a single Branch powers more
appropriately diffused among separate Branches or that
undermine the authority and independence of one or another
coordinate Branch. For example, just as the Framers recognized
the particular danger of the Legislative Branch's accreting to
itself judicial or executive power, so too have we invalidated
attempts by Congress to exercise the responsibilities of other
Branches or to reassign powers vested by the Constitution in
either the Judicial Branch or Executive Branch.\5\
---------------------------------------------------------------------------
\5\ Mistretta v. United States, 488 U.S. 361, 382 (1989) (citing
Bowsher v. Synar, 478 U.S. 714 (1986), INS v. Chadha, 462 U.S. 919
(1983), Northern Pipeline Construction Co. v. Marathon Pipe Line Co.,
458 U.S. 50 (1982)).
In Clinton v. City of New York, the Court emphasized that while
some lawmaking responsibilities are assigned to the President in
Articles I and II of the Constitution, ``there is no provision in the
Constitution that authorizes the President to enact, to amend, or to
repeal statutes.'' \6\ In addition, the lack of a Constitutional
provision assigning the President such a role was interpreted to be the
equivalent of an express prohibition.\7\ The Court ruled in Clinton
that allowing the President to cancel spending unilaterally amounted to
an impermissible exercise of the power to amend or repeal statutes, a
power that is explicitly reserved for the Congress under the
Constitution.\8\
---------------------------------------------------------------------------
\6\ Clinton, 524 U.S. at 438.
\7\ Id. at 439.
\8\ Id. at 438-441.
---------------------------------------------------------------------------
Like the power to cancel items of spending struck down by the Court
in Clinton, the powers granted to the President by H.R. 4890 constitute
an amendment or repeal of a statute by the President. Under H.R. 4890,
the President can suspend the operation of provisions of law for 180
days even if Congress rejects the proposed rescission. H.R. 4890 gives
the President the power to decide when to submit a rescission request,
and, depending when the rescission is submitted, the ``suspension''
could result in the permanent elimination of spending authority. H.R.
4890 also would allow the President to resubmit proposed rescissions
that Congress had previously rejected, which likewise could effectively
terminate spending authority. Because the broad powers granted to the
President by H.R. 4890 could end, as a practical matter, programs
funded by discretionary spending, direct spending programs, or tax
benefits previously approved by Congress, ``[i]n both legal and
practical effect, the President [would have] amended . . . Acts of
Congress by repealing a portion of each.'' \9\ As the Congressional
Research Service concluded, these provisions may reach ``far enough to
be considered an effective grant of authority to cancel provisions of
law . . . ,'' \10\ and that was proscribed by the Supreme Court in
Clinton v. City of New York.
---------------------------------------------------------------------------
\9\ Clinton, 524 U.S. at 438.
\10\ Morton Rosenberg, Line Item Veto: A Constitutional Analysis of
Recent Proposals, Congressional Research Service, Apr. 17, 2006, at 1,
2.
---------------------------------------------------------------------------
In addition, because the cancellation authority the President is
granted by H.R. 4890 is legislative in nature, it also violates the
provisions of Article I, Section 7 of the Constitution of the United
States, namely, the presentment and bicameralism clauses. These clauses
provide that no law can take effect without the approval of both Houses
of Congress and that all legislation must be presented to the President
before becoming law. As INS v. Chadha makes clear, the amendment and
repeal of statutes, no less than their enactment, must conform with
Article I.\11\ Pursuant to H.R. 4890, the President would have the
ability to create a different law from one duly enacted by Congress and
signed by the President, temporarily and possibly permanently, without
Congressional approval and despite Congressional disapproval.
---------------------------------------------------------------------------
\11\ 462 U.S. 919, 954 (1983).
---------------------------------------------------------------------------
The fact that Congress is considering granting the President such
extraordinary power does not resolve the constitutional issues. The
Constitution does not authorize Congress to cede to the executive that
power which is properly its own. As Justice Kennedy stated in his
concurrence in Clinton:
That a congressional cession of power is voluntary does not
make it innocuous. The Constitution is a compact enduring for
more than our time, and one Congress cannot yield up its own
powers, much less those of other Congresses to follow. . . .
Abdication of responsibility is not part of the constitutional
design.'' \12\
---------------------------------------------------------------------------
\12\ Clinton, 524 U.S. at 452 (citations omitted).
h.r. 4890 is unlikely to reduce and could even increase spending
The experience with line item vetoes at the federal and state level
does not suggest that enacting H.R. 4890 will significantly reduce the
deficit. Moreover, by significantly increasing the President's ability
to negotiate for the Administration's own budget priorities, the line
item veto may actually increase spending. While no amount of savings or
deficit reduction could justify a violation of the Constitution, the
very poor track record of the line item veto as a tool to control
spending should alone be grounds to reject the proposal.
The President's current rescission authority has not produced
significant savings over time.\13\ In fact, the current administration
(in contrast to other administrations) has never used current
rescission authority (nor the constitutional veto power) to curtail
spending. Nonetheless, frustration with current rescission authority
has suggested to some that a line item veto is needed to give the
President the power to control spending.
---------------------------------------------------------------------------
\13\ Statement of Donald B. Marron, Acting Director, Congressional
Budget Office, CBO's Comments on H.R. 4890, the Legislative Line Item
Veto Act of 2006, Hearing before the Subcomm. on the Legislative and
Budget Process of the House, Comm. on Rules 2 (Mar. 15, 2006),
available at http://www.cbo.gov/ftpdocs/70xx/doc7079/03-15-
LineItemVeto.pdf [hereinafter CBO Testimony].
---------------------------------------------------------------------------
However, the evidence on the effect of a more aggressive--and
unconstitutional--rescission authority, the Line Item Veto Act of 1996,
shows minimal impact on budget savings. According to the Congressional
Research Service, the implementation of the 1996 Act produced modest
savings.\14\ In one year, the President successfully vetoed $355
million in spending out of a $1.7 trillion budget. The total savings
produced by President Clinton's line item vetoes amounted to less than
$600 million over five years. The savings would have been greater had
Congress approved all of the President's request to cancel funding--but
even if each and every cancellation had been accepted, the amount would
still have come to well under $1 billion over five years.
---------------------------------------------------------------------------
\14\ Louis Fisher, A Presidential Item Veto, Congressional Research
Service, Dec. 2, 2004, at 1.
---------------------------------------------------------------------------
The picture from the states also provides little evidence that the
line item veto is an effective means of controlling spending.
Currently, 43 states have line item veto authority for their
governors.\15\ State budget practices are fundamentally different from
federal budgeting practices, in part because the constitutions of most
states provide very explicit details on how budgets are to be enacted,
and most give the executive branch of government a much stronger role
in budgeting than is constitutionally permissible at the federal
level.\16\ However, even governors with significant line item veto
power are unable to secure significant savings through it. Douglas
Holtz-Eakin, former director of the Congressional Budget Office, in a
survey of evidence from the states concluded ``that long run budgetary
behavior is not significantly affected by the power of an item veto.''
\17\ In testimony last month before the House Rules Committee, the CBO
renewed the observation that in some states the line item veto has not
decreased spending, as the result of governors and legislatures
negotiating to include a governor's spending priorities in a state's
budget in exchange for a promise that the governor will not exercise
line item veto authority.\18\ The CBO expressed concern that a similar
dynamic at the federal level would result in higher spending.\19\
---------------------------------------------------------------------------
\15\ Budget Process in the States, National Association of State
Budget Officers, Sept. 1997, at 1.
\16\ Louis Fisher, Line Item Veto Act of 1996: Lessons from the
States, Congressional Research Service, Dec. 26, 1996, at 1.
\17\ Douglas Holtz-Eakin, The Line Item Veto and Public Sector
Budgets: Evidence from the States 2 Working Paper No. 2531, National
Bureau of Economic Research (March 1988).
\18\ CBO Testimony, supra note 12, at 6.
\19\ Id at 5-6.
---------------------------------------------------------------------------
Indeed, the concerns expressed by the CBO have been echoed and
expanded upon by other observers. George Will, in an insightful column
examining the line item veto, stated that, ``knowing the president can
veto line items, legislators might feel even freer to pack them into
legislation, thereby earning constituents' gratitude for at least
trying to deliver.'' \20\ He went on to describe how the President
could buy the support of members of Congress on his legislative
priorities in exchange for a promise that he would not veto the
spending priorities of the members.\21\ The Congressional Research
Service came to a similar conclusion in a 2005 report. Warning that
savings would be very limited under a line item veto, the Congressional
Research Service went on to state, ``Under some circumstances, the
availability of an item of veto could increase spending. The
Administration might agree to withhold the use of an item veto for a
particular program if Members of Congress agreed to support a spending
program initiated by the President.'' \22\ The concern that the
Legislative Line Item Veto will not only fail to decrease spending but
may exacerbate the record deficits that we face is one that must be
taken seriously.
---------------------------------------------------------------------------
\20\ George Will, The Vexing Qualities of a Veto, N.Y. Times, Mar.
16, 2006, at A23.
\21\ Id.
\22\ Louis Fisher, Item Veto: Budgetary Savings, Congressional
Research Service, May 26, 2005, at 3.
---------------------------------------------------------------------------
CONCLUSION
The separation of powers is fundamental to our Constitution and
system of government. Our Constitution does not authorize the President
to enact, amend, or repeal statutes. Granting the President that
authority--as H.R. 4890 would effectively do--would be unwise as well
as unconstitutional for the reasons set forth in this testimony. I
thank the Chair for scheduling this important oversight hearing and for
the opportunity to testify.
Mr. Chabot. I commend all the witnesses so far in keeping
so close to within the time limits. That doesn't always happen,
so an excellent job. You have got a high standard to follow
here, Mr. Cooper. We are very pleased to have you, as well,
here this afternoon and you are recognized for 5 minutes.
TESTIMONY OF CHARLES J. COOPER, PARTNER,
COOPER AND KIRK, PLLC
Mr. Cooper. Thank you very much, Mr. Chairman. I appreciate
that very much. I will try to keep with that tradition.
And I also very much appreciate your reference to my role
in the Clinton case in your introduction. I do think the
Clinton case is controlling in the analysis of the
constitutionality of this measure, so I will focus
substantially on that.
At issue in the Clinton case was the Line Item Veto Act of
1996, which provided that the President may cancel--cancel in
whole the same types of provisions that are at issue in this
measure. Cancellation took effect under that act when Congress
received his special message to that effect. The act defined
cancel as ``to rescind and to prevent from having legal force
or effect.'' The Congress used those words quite deliberately.
Its purpose was to make clear that the President's action would
be permanent and irreversible, and so it was, because in order
to restore a canceled item, Congress had to pass a disapproval
bill, in other words, a new law which had to satisfy,
obviously, bicameralism and present to the President for his
approval.
In striking down the Line Item Veto Act of 1996, the
Supreme Court in Clinton concluded that vesting the President
with unilateral power to cancel a provision of duly enacted law
could not be reconciled with the single finely wrought and
exhaustively considered procedure established under article I,
section 7, for enacting or repealing a duly enacted law, that
is, bicameral passage and presentment to the President. Those
words, ``finely wrought,'' that formulation, of course, is
familiar to all legislators, I am sure, from Chadha.
President Clinton's cancelation, however, and these are the
Court's words, ``presented one section of the Balanced Budget
Act of 1997,'' the provision at issue there, ``from having
legal force or effect while the remaining provisions of the act
continued to have the same force and effect that they had when
signed into law.'' So the Supreme Court concluded that, again,
its words, ``cancellations pursuant to the Line Item Veto Act
are the functional equivalent of partial appeals of Acts of
Congress.'' That failed to satisfy article I, section 7.
The Legislative Line Item Veto Act of 2006, in contrast, is
framed in careful obedience to article I, section 7, and to the
Supreme Court's teachings in Clinton. The President is not
authorized by that bill to cancel any spending or tax provision
or otherwise to prevent such provision from having legal force
and effect. To the contrary, any spending or tax provisions
duly enacted into law remain in full force and effect until the
bill and unless the bill is repealed in accordance with article
I, section 7 process.
To be sure, this measure would authorize the President to
defer or suspend execution of the spending or tax provision at
issue for up to 180 calendar days from the date that the
President transmits his rescission proposal, but the President
will also be authorized to terminate that referral if he
believes that continuing it would be inconsistent with the
purposes of the act. At the end of the deferral period, the
President would be required to make the funds or tax benefits
available.
The Congressional practice of vesting discretionary
authority in the President to defer or even to decline the
expenditure of appropriated funds has been commonplace since
the beginning of the republic and its constitutionality has
never been seriously questioned. My written testimony trudges
through quite a few examples of this and I won't belabor them.
But suffice it to say that when Congress has passed such
appropriations bills or when it has given the President general
authority to reduce Government spending below appropriated
levels, Congress has largely freed the President to exercise
his own judgment regarding which spending programs to reduce
and how much to reduce them. While the scope of that authority
has varied in response to changing legislative judgments about
the need for executive branch discretion, the extent of the
Executive's spending discretion has always been regarded both
by Congress and by the Court as a matter for this body, for
Congress itself to decide through the legislative process.
The Supreme Court in Clinton acknowledged Congress's
venerable and non-controversial practice of vesting this kind
of broad discretion in the President. But the critical
difference with the Line Item Veto Act of 1996, as the Court
said, is that unlike any of those prior precedents, this act
gives the President unilateral power to change the text of duly
enacted statutes. There is nothing of that consequence in the
measure that is before you, I would submit.
The short of my testimony, Mr. Chairman, is this--and I am
just going to be a few seconds over--is this. The Supreme
Court's decision in Clinton recognizes and enforces the
constitutional line established by article I, section 7 between
the power to exercise discretion in the making or the unmaking
of law, on the one hand, and the power to exercise discretion
in the exercise of law on the other. Congress cannot
constitutionally vest in the President the former, but it can
the latter, and it has done so repeatedly throughout our
Nation's history. I believe that the measure that is now
pending for your consideration falls safely on the
constitutional side of that line.
Thank you again for having me today.
Mr. Chabot. Thank you very much.
[The prepared statement of Mr. Cooper follows:]
Prepared Statement of Charles J. Cooper
Good afternoon Mr. Chairman and Members of the Subcommittee. My
name is Charles J. Cooper, and I am a partner in the Washington, D.C.,
law firm of Cooper & Kirk, PLLC. I appreciate the Subcommittee's
invitation to present my views on ``The Constitution and the Line Item
Veto.'' I shall focus my testimony on the constitutionality of the
``Legislative Line Item Veto Act of 2006,'' which has been proposed by
President Bush and has been introduced in this body as H.R. 4890 by
Representative Paul Ryan. For reasons that I shall discuss at length
below, I believe that the President's proposal is constitutional. But
first I would like to outline my experience in this esoteric area of
constitutional law.
I have spent the bulk of my career, both as a government lawyer and
in private practice, litigating or otherwise studying a broad range of
constitutional issues. On several different occasions, strangely
enough, I have been involved in matters relating to the
constitutionality of measures designed to vest the President with
authority to exercise a line item veto or its functional equivalent. In
early 1988, while I was serving as the Assistant Attorney General of
the Office of Legal Counsel of the Department of Justice, President
Reagan asked the Justice Department for its opinion on the question
whether the Constitution vests the President with an inherent power to
exercise an item veto. Certain commentators at that time had advanced
the proposition that the President did indeed have such inherent
constitutional power. See Steven Glazier, Reagan Already Has Line-Item
Veto, WALL ST. J., Dec. 4, 1987, at 14, col. 4. After exhaustive study,
the Justice Department reluctantly concluded that the proposition was
not well-founded and that the President could not conscientiously
attempt to exercise such a power. I suspect that many of the Members of
this body can recall how fervently President Reagan longed to exercise
a line item veto authority, and during my time in government, I had no
task less welcome than advising him against it. The opinion of the
Office of Legal Counsel is publicly available at 12 Op. Off. Legal
Counsel 128 (1988).
In April of 1996, Congress enacted the Line Item Veto Act of 1996,
which authorized the President to ``cancel'' certain spending and tax
benefit measures after he had signed into law the bill in which they
were contained. Shortly thereafter, I was retained, along with Lloyd
Cutler, Alan Morrison, Lou Cohen, and Michael Davidson, to represent
Senators Byrd, Moynihan, and Levin, and Congressmen Waxman and Skaggs
to challenge the constitutionality of the Line Item Veto Act. Although
the district court invalidated the Act, the Supreme Court held that the
Members of Congress lacked standing to litigate their constitutional
claims. Adjudication of the Act's constitutionality would therefore
have to await the suit of someone who had suffered judicially
cognizable injury resulting from an actual exercise of the President's
statutory cancellation power. See Raines v. Byrd, 521 U.S. 811 (1997).
That did not take long.
Less than two months after the Supreme Court's decision in Raines,
President Clinton exercised his authority under the Line Item Veto Act
to cancel ``one item of new direct spending'' in the Balanced Budget
Act of 1997, which had the effect of reducing the State of New York's
federal Medicaid subsidies by almost $1 billion. I represented the City
of New York and certain healthcare associations and providers, which
lost many millions of dollars in federal matching funds as a direct
result of the President's cancellation, in a suit challenging the
constitutionality of the Line Item Veto Act. The Supreme Court struck
down the Line Item Veto Act, concluding that ``the Act's cancellation
provisions violate Article I, Sec. 7, of the Constitution.'' Clinton v.
City of New York, 524 U.S. 417, 448 (1998). The Clinton case controls
the analysis of the constitutionality of the Legislative Line Item Veto
Act of 2006, and so an extended discussion of the case is warranted.
The Line Item Veto Act of 1996 provided that the President may
``cancel in whole'' any (1) ``dollar amount of discretionary budget
authority,'' (2) ``item of new direct spending,'' or (3) ``limited tax
benefit'' by sending Congress a ``special message'' within five days
after signing a bill containing the item. 2 U.S.C. Sec. 691(a).
Cancellation took effect when Congress received the special message. 2
U.S.C. Sec. 691b(a).
The Act defined ``cancel'' as ``to rescind'' (with respect to any
dollar amount of discretionary budget authority) and to ``prevent . . .
from having legal force or effect'' (with respect to items of new
direct spending or limited tax benefits). Id. Sec. 691e(4). The purpose
of the term and its definition was to make it clear that the
President's action would be permanent and irreversible: ``The term
`cancel' was specifically chosen, and is carefully defined. . . . The
conferees intend that the President may use the cancellation authority
to surgically terminate federal budget obligations.'' H.R. Rep. No.
104-491, at 20 (1996) (Conf. Rep.) (emphasis added). For taxes,
cancellation mandated ``collect[ion of] tax that would otherwise not be
collected or . . . den[ial of] the credit that would otherwise be
provided.'' Id. at 29.
In order to restore a canceled item, Congress had to pass a
``disapproval bill,'' 2 U.S.C. Sec. Sec. 691d, 691e(6), and the Act
provided for expedited consideration of such disapproval bills. 2
U.S.C. Sec. 691d. But a disapproval bill was a new law, which had to be
passed by both Houses and presented to the President in the manner
prescribed by Article I, Section 7, of the Constitution.
In striking down the Line Item Veto Act of 1996, the Supreme Court
in Clinton concluded that vesting the President with unilateral power
to ``cancel'' a provision of duly enacted law could not be reconciled
with the `` `single, finely wrought and exhaustively considered,
procedure' ``established under Article I, Section 7 for enacting, or
repealing, a law--bicameral passage and presentment to the President.
524 U.S. at 439-40, quoting INS v. Chadha, 462 U.S. 919, 951 (1983). As
the Court explained, Article I, Section 7 ``explicitly requires that
each of . . . three steps be taken before a bill may `become a law.'
``: ``(1) a bill . . . [is] approved by a majority of the Members of
the House of Representatives; (2) the Senate approve[s] precisely the
same text; and (3) that text [is] signed into law by the President.''
524 U.S. 448. And if the President disapproves of the Bill, he must
``reject it in toto.' ``Id. at 440, quoting 33 Writings of George
Washington 96 (J. Fitzpatrick ed., 1940).
President Clinton's cancellation, however, ``prevented one section
of the Balanced Budget Act of 1997 . . . `from having legal force or
effect,' ``while the remaining provisions of the Act ``continue to have
the same force and effect as they had when signed into law.'' 524 U.S.
at 438. Accordingly, the Court concluded that ``cancellations pursuant
to the Line Item Veto Act are the functional equivalent of partial
repeals of Acts of Congress that fail to satisfy Article I, Sec. 7.''
Id. at 444.
The Legislative Line Item Veto Act of 2006, in contrast, is framed
in careful obedience to Article I, Section 7 and to the Supreme Court's
teaching in Clinton. The President is not authorized by the bill to
``cancel'' any spending or tax provision, or otherwise to prevent such
a provision ``from having legal force or effect.'' To the contrary, the
purpose of H.R. 4890, as President Bush put it in proposing the
legislation, is simply to ``provide a fast-track procedure to require
the Congress to vote up-or-down on rescissions proposed by the
President.'' Message of President George W. Bush to the Congress, March
6, 2006. Thus, any spending or tax provisions duly enacted into law
remains in full force and effect under the bill unless or until it is
repealed in accordance with the Article I, Section 7 process--bicameral
passage and presentment to the President.
To be sure, H.R. 4890 would authorize the President to ``defer'' or
``suspend'' (hereinafter ``defer'') execution of the spending or tax
provision at issue for up to 180 calendar days from the date that the
President transmits his rescission proposal to Congress. But the
President would also be authorized to terminate the deferral ``if the
President determines that continuation of the deferral would not
further the purposes of this Act.'' H.R. 4890, 109th Cong.
Sec. Sec. 1021(e)(2), 1021(f)(2) (2006).1 At the end of the deferral
period--which, again, cannot exceed 180 days--the President would be
required to make the funds or tax benefits available. The purpose of
this deferral authority, obviously, is simply to allow the Congress
adequate time to consider the President's rescission proposals and to
vote them up-or-down.
The congressional practice of vesting discretionary authority in
the President to defer, and even to decline, expenditure of
appropriated funds has been commonplace since the beginning of the
Republic, and its constitutionality cannot seriously be questioned.
Indeed, the First Congress enacted at least three general
appropriations laws that appropriated ``sum[s] not exceeding''
specified amounts for the government's operations. See Act of Sept. 29,
1789, ch. 23, Sec. 1, 1 Stat. 95; Act of Mar. 26, 1790, ch. 4, Sec. 1,
1 Stat. 104; Act of Feb. 11, 1791, ch. 6, Sec. 1, 1 Stat. 190. See
Ralph S. Abascal & John R. Kramer, Presidential Impoundment Part I:
Historical Genesis and Constitutional Framework, 62 Geo. L.J. 1549,
1579 (1974). By appropriating sums ``not exceeding'' specified amounts,
Congress gave the President discretion to spend less than the full
amount of the appropriation, absent some other statutory restriction on
that discretion. See, e.g., H.R. Rep. No. 1797, 81st Cong., 2d Sess. 9
(1950) (``Appropriation of a given amount for a particular activity
constitutes only a ceiling upon the amount which should be expended for
that activity.'')
The First Congress also enacted laws providing for ``lump-sum''
appropriations--that is, appropriations for the operation of a
department that do not specify the particular items for which the funds
were to be used. The President was thereby given discretion not only
with respect to the amount of the appropriated sum that would be spent,
but also with respect to its allocation among authorized uses.
Cincinnati Soap Co. v. United States, 301 U.S. 308, 322 (1937)
(``Appropriation and other acts of Congress are replete with instances
of general appropriations of large amounts, to be allotted and expended
as directed by designated governmental agencies.''). As the Supreme
Court has noted, ``a fundamental principle of appropriations law is
that where Congress merely appropriates lump-sum amounts without
statutorily restricting what can be done with those funds, a clear
inference arises that it does not intend to impose legally binding
restrictions.'' Lincoln v. Vigil, 508 U.S. 182, 192 (1993) (internal
quotation marks omitted). And the constitutionality of such lump-sum
appropriations ``has never been seriously questioned.'' Cincinnati Soap
Co., 301 U.S. at 322.
Congress has typically enacted lump-sum appropriations when
Executive Branch discretion and flexibility were viewed as desirable,
particularly during periods of economic or military crisis. See Louis
Fisher, Presidential Spending Discretion and Congressional Controls, 37
Law & Contemp. Probs. 135, 136 (1972). During the Great Depression, for
example, Congress granted the President broad discretion to ``reduce .
. . governmental expenditures'' by abolishing, consolidating, or
transferring Executive Branch agencies and functions. Act of Mar. 3,
1933, ch. 212, Sec. 16, 47 Stat. 1517-1519 (amending Act of June 30,
1932, ch. 314, Sec. Sec. 401-408, 47 Stat. 413-415)). All
appropriations ``unexpended by reason of'' the President's exercise of
his reorganization authority were to be ``impounded and returned to the
Treasury.'' 47 Stat. 1519.
In 1950, Congress vested the President with general authority to
establish ``reserves''--that is, to withhold the expenditure of
appropriated funds--in order ``to provide for contingencies, or to
effect savings whenever savings are made possible by or through changes
in requirements, greater efficiency of operations, or other [post-
appropriation] developments.'' General Appropriation Act, 1951, ch.
896, Sec. 1211, 64 Stat. 765-766. Similarly, the Revenue and
Expenditure Control Act of 1968, Pub. L. No. 90-364, Sec. Sec. 202(a),
203(a), 82 Stat. 271-72, authorized the President to reserve as much as
$6 billion in outlays and $10 billion in new obligation authority, with
no restrictions on the President's discretion regarding what spending
to reduce. Sec. Sec. 202(b), 203(b), 82 Stat. 272. See also Second
Supplemental Appropriations Act, 1969, Pub. L. No. 91-47, Sec. 401, 83
Stat. 82; Second Supplemental Appropriations Act, 1970, Pub. L. No. 91-
305, Sec. Sec. 401, 501, 84 Stat. 405-407.
And in the Impoundment Control Act of 1974 (ICA), 2 U.S.C. 681 et
seq., Congress distinguished between two forms of impoundment:
deferrals (delays in spending during the course of a fiscal year, or
other period of availability) and rescissions (permanent withholdings
of spending of appropriated funds). See 2 U.S.C. 682(1), 682(3). While
generally authorizing the President to carry out deferrals, see 2
U.S.C. 684 (1982), the Act prohibited the President from engaging in
unilateral rescissions. Instead, it authorized the President to propose
rescissions to Congress under a mechanism for expedited legislative
consideration. 2 U.S.C. 683 (1982).
In sum, when Congress has passed lump-sum appropriations bills, or
when it has given the President general authority to reduce government
spending below appropriated levels, Congress has largely freed the
President to exercise his own judgment regarding which spending
programs to reduce and how much to reduce them. And while the scope of
authority vested in the President has varied in response to changing
legislative judgments about the need for Executive Branch discretion,
the extent of the Executive's spending discretion has always been
regarded, both by Congress and by the courts, as a matter for Congress
itself to decide through the legislative process.
The Supreme Court in Clinton acknowledged Congress's venerable and
noncontroversial practice of vesting the President with ``broad
discretion over the expenditure of appropriated funds,'' but it
concluded that the President's cancellation power under the Line Item
Veto Act crossed the constitutional line between discretionary spending
authority and lawmaking: ``The critical difference between [the Line
Item Veto Act] and all of its predecessors . . . is that unlike any of
them, this Act gives the President a unilateral power to change the
text of duly enacted statutes.'' 524 U.S. at 446-47. In contrast,
nothing in the Legislative Line Item Veto Act of 2006 even arguably
grants the President the unilateral power to change the text of a duly
enacted statute. Indeed, the deferral authority that would be vested in
the President under the bill is actually narrower than the spending
discretion that Congress has accorded the President on numerous
occasions throughout the Nation's history. Again, a deferral under the
Bill can last no more than 180 calendar days, and immediately
thereafter the President is obliged to execute the spending or tax
provision for which he has unsuccessfully sought congressional
rescission. The possibility that the appropriation authority could
lapse during the period in which spending has been deferred is of no
constitutional moment, as the historical precedents described above
make clear.
The constitutional validity of the President's deferral authority
under H.R. 4890 can be brought into sharper focus by hypothesizing an
appropriations statute in which each individual spending or tax benefit
item is accompanied by its own specific proviso authorizing the
President to defer its execution for up to 180 days pending
congressional resolution of a presidential rescission proposal. Surely
no one would question the constitutional authority of Congress to
condition the expenditure or obligation of federal funds in this
matter. The bill would merely make such presidential deferral authority
generally applicable rather than specifically targeted. And it is clear
that the President's deferral authority under H.R. 4890 would act only
as a default rule, for nothing in the bill purports to prevent Congress
from determining that the President's deferral authority shall not
apply to a particular spending or tax benefit measure or any portion
thereof in the future. See Raines, 521 U.S. at 824 (Congress may
``exempt a given appropriations bill (or a given provision in an
appropriations bill) from the Act.'').
The short of my testimony is this: The Supreme Court's decision in
Clinton recognizes and enforces the constitutional line established by
Article I, Section 7, between the power to exercise discretion in the
making, or unmaking, of law and the power to exercise discretion in the
execution of law, which in the spending context has historically
included the power to defer, or to decline, expenditure of appropriated
funds. Congress cannot constitutionally vest the President with the
former, but it can the latter, and has done so repeatedly throughout
our Nation's history. In my opinion, the powers granted the President
under the Legislative Line Item Veto Act of 2006 fall safely on the
constitutional side of that line.
Again, Mr. Chairman, I appreciate this opportunity to share my
views with the Subcommittee.
1 Continuing to defer execution of a spending or tax provision
after a rescission proposal is voted down by one or both Houses of
Congress would presumably not further, except in the most unusual of
circumstances, the purposes of the Act. Statutorily requiring or
triggering termination of the deferral, however, on a negative vote on
the President's rescission proposal in either House of Congress would
raise a serious constitutional issue under Chadha, which held that any
action by Congress that has ``the purpose and effect of altering the
legal rights, duties, and relations of persons . . . outside the
Legislative Branch'' is a legislative action that must conform to the
bicameralism and presentment requirements of Article I, Section 7, of
the Constitution. INS v. Chadha, 462 U.S. 919, 952 (1983). As framed in
the bill, however, the deferral provisions would not raise this concern
under Chadha even if the President felt bound in good faith (as he
presumably would) to terminate any deferral at the moment that either
House voted down his rescission proposal.
Mr. Chabot. We appreciate all the witnesses' testimony. The
Members of this panel up here now will have an opportunity to
ask questions and we will try to stay within the 5-minute rule,
as well, and I recognize myself for that purpose at this time.
Congressman Ryan, let me start with you, if I can. In your
written testimony, you state that the current rescission
procedures in the Impoundment Control Act of 1974 have been
largely ineffective at controlling Congressional spending. How
would your bill encourage greater fiscal restraint and prevent
wasteful spending?
Mr. Ryan. In one major way. Congress couldn't ignore it.
The President can send a rescission authority. Let's just
assume we have divided Government. We've had these requests
before. President Reagan sent to Congress a large rescission
request. Congress just ignored it. Under this system, Congress
can't ignore it. Congress has to act on it and deliberate.
Congress will have the final say so with a majority vote in
both Houses, but Congress will have to act on these rescission
requests within 10 days of introduction.
Mr. Chabot. Thank you very much.
Congressman Kennedy, let me move to you at this point, if I
can. As you note in your testimony, your proposed
constitutional amendment has the advantage of clearly being
constitutional. Could you please amplify your remarks on how
your approach would differ from the line item veto that was
found unconstitutional in the Clinton case, as we have
previously referred to, as well as the line item veto that
we're referring to here today, the act?
And then, finally, Congressman Phil English had talked to
me a number of times over the years about his line item veto,
and I think Congressman Andrews also had one, and I believe
Bill Archer had one years ago, as well. Is yours along those
lines or are there differences, and if you don't know, we can
follow up on that later.
Mr. Kennedy. Well, Chairman, I don't really understand the
key differences between some of the other ones you mentioned,
but let me just say relative to the Clinton veto power that was
set aside by the Supreme Court, this, being a constitutional
amendment, therefore would be constitutional, but the
difference is that it lets you reach within the non-legislative
text of the bill and instead of having to veto a whole
category, can dip down and more easily find the specific item
to veto. So it has that improvement for really targeting the
need to control spending, which I think is also shared in
Congressman Ryan's proposal, as well.
The difference, I think, was really outlined by Mr. Cooper.
Whereas under this constitutional amendment, once the President
vetoes it, it is vetoed and no longer would have effect,
Congress would have to act in order for that to be put back
into place, would have to pass new legislation, whereas under
Congressman Ryan's approach, there would be still the need for
Congress to act or, in fact, the spending item to be
terminated, and that would be the key differences between
Congressman Ryan and my own.
Mr. Chabot. Thank you very much.
Ms. Firvida, let me turn to you, if I can. In your written
testimony, you argued that a line item veto might have little
budgetary effect. Is it your position that such savings,
regardless of their size relative to an admittedly astronomical
Federal budget, are just not worth having?
Ms. Firvida. No. I think the point that we are trying to
make is that it is not worth assuming the risk of violating the
Constitution, especially when the savings are so limited. It is
never justified to, of course, pass an unconstitutional act,
but especially when what is before you is balancing a proposal
that might present these constitutional questions and you are
looking at limited savings, that should really give everyone
pause.
In addition, there already exists many constitutional means
of reducing the deficit. For example, the President easily
could veto bills, but for reasons that I would not want to get
into because I don't know what they are, he does not.
Certainly, Congress in its rulemaking capacity could reinstate
some budget rules that were very effective in the mid-1990's
and were not declared unconstitutional, like the pay-go rule,
and that would result also in greater savings.
So there's any number of constitutional tools available
that we know save more money than this one, and this one may
present constitutional issues and may not save that much money.
Mr. Chabot. Thank you, and let me conclude with you, Mr.
Cooper, in the time that I have remaining. I think you've had
the opportunity to review in the Congressional Research Service
their critique of this particular piece of legislation. Could
you comment on two issues that were raised in that report? One,
should there be a limitation on the President's ability to
submit multiple rescission requests with respect to a single
item of spending? And second, is the President's 180-day hold
on funds automatically terminated upon Congress's rejection of
the President's rescission request?
Mr. Cooper. First, with respect to your first question,
it's not altogether clear to me that the President would have
authority to submit a second or serial rescission proposal with
respect to the same item. The statute doesn't prohibit that,
but it certainly doesn't explicitly authorize it and it's--I
think it could be interpreted as being possibly inconsistent
with the general purpose of this measure.
But assuming that the President would have discretion to
submit such serial proposals, whether or not Congress should
prevent that from happening, it seems to me that is entirely up
to Congress as a matter of policy. I think Ms. Firvida has
identified some scenarios under which a willful President could
abuse the authorities that this statute affords to him in a
method that--in a manner that a limit on the President's
ability to send serial proposals would prevent.
By the same token, one might be able to envision a
situation in which a President would be perfectly in good
faith, even after, say, a body in Congress had negatively voted
on one of his rescission proposals, to resubmit it, and that
would be if some unusual circumstance took place to change
the--possibly change the legislative attitude with respect to
that matter.
Mr. Chabot. Okay. Thank you very much. My time has expired.
The gentleman from New York is recognized for 5 minutes.
Mr. Nadler. Thank you. Congressman Ryan, you talked about
the abuse where we never have the opportunity to vote on things
because they're put in at the last moment in the conference
Committee and we can only vote yes or no. But isn't the simple
way to fix that to amend the rules of the House so that you
can--so that, in fact, our rules are followed, which they
haven't been because they're waived all the time, and the
conference Committee can only deal with conferenceable items,
that is, items where the two Houses differ----
Mr. Ryan. Yes.
Mr. Nadler [continuing]. And that nothing can be put in
that wasn't in one House or the other at that point?
Mr. Ryan. I think there are a number of things we can do to
address those issues. We call these air-dropped earmarks. That
is something that wasn't in the House or the Senate----
Mr. Nadler. Air dropped?
Mr. Ryan. Yes.
Mr. Nadler. So why don't we just prohibit air drops,
period, never mind earmarks in the conference----
Mr. Ryan. Because I think there are situations that arise
where Congress needs to maintain its discretion. And we are not
talking about just appropriation bills. We are talking about
tax legislation, we are talking about authorization legislation
where new evidence may come to light--when you pass a bill
through the House and the Senate and go to conference, that can
take an entire year. Congress probably, I believe, needs to
have the discretion to be able to address circumstances that
occur in those times in conference reports.
Mr. Nadler. Let me just say----
Mr. Ryan. To ban the ability of Congress to put something
in a conference report----
Mr. Nadler. Let me just say I disagree with you. We break
those rules routinely, but we shouldn't, and I think if
something happens, you should go back to the House and the
Senate.
Second question, Congressman Kennedy. Your testimony is
that we shouldn't be surprised that the spending is projected
to reach an all-time high of $23,000 per household with $3,800
to be borrowed, but given what Congressman Scott pointed out,
that the earmarks, which is what you're talking about, are less
than 1 percent of the budget, isn't this a red herring, as if
the earmarks are really a substantial part of the deficit case
when the real problem is either that we're overall spending too
much or that we're, not with earmarks but overall, or that our
tax cuts are too high? In other words, if you took care of all
these earmarks, you're dealing with 1 percent of the problem.
Mr. Kennedy. I would agree with what Congressman Ryan said
before, that there's a cultural issue there that says, are you
for more spending or are you for less spending, that it would
have a chilling effect on some of the non-earmarked ones where
they just wouldn't bring it forth.
You brought up some other budget control measures that we
ought to be looking at it in terms of identifying who has
requested an earmark and those other things.
Mr. Nadler. We should.
Mr. Kennedy. But if you look at, for example, the
impoundment authority, really, the line item veto is kind of
impoundment authority on a diet. We need to make sure that when
you're looking at which way do the rules tilt, do they tilt
toward more spending or less spending, that it is putting some
constraints----
Mr. Nadler. Okay. I hear your answer----
Mr. Kennedy [continuing]. On spending and this is a step in
the right direction----
Mr. Nadler. Let me just say that I think the rules should
not tilt toward more spending or less spending. The rules
should tilt toward transparency. People should vote for
Congressmen they want to who will do more or less spending, as
the people want. The President, ditto. And it ought to be
transparent and Congressmen ought to be able to vote on these
things and not have them air-dropped into conference reports at
the end. The rules should not tilt, because when the rules tilt
one way or another, you are inhibiting the democratic ability,
with a small ``d'', of people to get what they want out of
Congress and the President.
Mr. Kennedy. In----
Mr. Nadler. That's not a question, it's a statement,
because I want to ask a few more questions.
Ms. Firvida, could you discuss briefly the kinds of
programs that might be vulnerable under this legislation? Is it
limited to earmarks in appropriations bills?
Ms. Firvida. No. This extends current rescission authority
to a far broader set of spending programs, including
entitlement programs like the SCHIP program, like the food
stamps, other programs that--anything, essentially, that is
reauthorized after the enactment of this line item veto would
be subject to that power as long as it had some budgetary
effect. In other words, it would not even have to result in new
spending. It would not need to be a new benefit.
Mr. Nadler. Right. So it would just tilt the power to the
President in that. How could this bill be applied in the tax
arena, Ms. Firvida?
Ms. Firvida. There are provisions here that would get to
some targeted tax breaks. However, the term is so narrowly
defined--for the benefit of fewer than 100 individuals--that
almost no tax benefit, if it was carefully crafted by the
appropriate Committees would ever meet that definition. And, in
fact, we know that the Joint Committee on Taxation analyzed
this very definition, which was in the veto of '96, and stated
that it was so vague and poorly defined, it was problematic.
Mr. Nadler. Let me ask Congressman Ryan the last question
I'll have time to ask, which may illustrate what Ms. Firvida
was just saying. In your bill, Congressman, you have on page 15
two provisions. You say, the term targeted tax benefit means
any revenue losing provision that provides a Federal tax
deduction, credit, exclusion, or preference to 100 or fewer
beneficiaries, et cetera. And then a few lines down, you say, a
provision shall not be treated as described in the paragraph I
just read if the effect of that provision is that all persons
in the same industry or engaged in the same type of activity
receive the same treatment. That sounds wonderful.
However, a special tax benefit given to the oil industry,
it is given to fewer than 100 beneficiaries because there are
less than 100 large oil companies. There are, in fact, five or
six of them. And yet if ExxonMobil and Shell were treated the
same way, or engaged in the same type of activity and received
the same treatment, it would seem that a special tax break that
would be given only to the five big oil companies or to the--
well, to the five big oil companies or to the entire industry--
--
Mr. Ryan. Sure.
Mr. Nadler [continuing]. Would not be subject to the line
item veto.
Mr. Ryan. No----
Mr. Chabot. The gentleman's time has expired, but you can
answer the question.
Mr. Ryan. No, ExxonMobil has thousands of shareholders.
Those tax benefits would accrue to all those shareholders, so
it wouldn't--this doesn't limit it to, say, five oil
companies--individual people, taxpayers, shareholders.
Mr. Nadler. But the benefit----
Mr. Ryan. A tax benefit like that----
Mr. Nadler. But the benefit goes to the company, not to the
individuals.
Mr. Ryan. No, the way our legislative counsel--the
intention of this and our interpretation of this is that we are
talking about individuals. It would not apply in a case like
that where you're talking about, say, five companies. We're
talking about individuals.
Mr. Nadler. That's not what it says.
Mr. Ryan. As a Member of Ways and Means, I can tell you,
there are tax laws that pass that accrue to small numbers of
individual taxpayers. Those are the targeted types of tax
breaks that we're talking about.
Mr. Nadler. But it doesn't say individuals. It says
beneficiaries.
Mr. Ryan. That is what--that is the intention and our
interpretation of that language.
Mr. Chabot. The gentleman's time has expired. Never argue
with a Member of the Ways and Means Committee on a tax issue.
Mr. Nadler. Whether he is right or wrong.
Mr. Chabot. Whether he is right or wrong is right.
[Laughter.]
The gentleman from Arizona, Mr. Franks, is recognized for 5
minutes.
Mr. Franks. Thank you, Mr. Chairman. You know, there was
some previous discussion related to the tax breaks that passed
in this Congress as having a negative effect, and it just
occurred to me that that debate is really over, given the fact
that we have nearly $100 billion more in revenues than we did
prior to those tax breaks. I just--it occurs to me that that's
the way that we really affect the deficit, is to spur the
economy to greater productivity and greater tax revenue.
Having said that, Ms. Firvida in her testimony said that a
line item veto might have little budgetary effect and cites as
evidence the fact that President Clinton only effected savings
of about $600 million over 5 years with his use of the line
item veto. Of course, the Wall Street Journal and others have
said that it might do a lot more. But none of these really
amounts to anything more than $2 or $3 billion. But you have
given testimony that you think that the ancillary effects could
be significantly more than that. Could you just go ahead and
reexpand on that a little?
Mr. Ryan. Sure. Two points I would make. Number one, there
are a lot more earmarks these days than there were in those
days.
Number two, it depends on the President. It depends on who
the President is and how aggressive they want to go after
individual line item spending provisions, tax provisions. If
the President is aggressive and pursues this aggressively, the
President can save billions of dollars. If the President
chooses not to use it, he can't.
One more point on this, on foods like SCHIP and things like
that. Congress will have the final say so. If Congress passes a
broad-based program like refundable tax credit for low-income
taxpayers, if they pass SCHIP for health care for low-income
children, that's a bill Congress passes. If the President tries
to veto that, Congress by a simple majority will rescind that
veto.
So again, I do not believe this tips the power in the hands
of the President. This preserves the power of the Congress, but
it gives the President and the Congress the ability to go after
wasteful spending items with a scalpel instead of a meat axe
and vetoing an entire piece of legislation.
Mr. Kennedy. And if I may add, if you take the Clinton
example as the only case you are looking at, I think the number
is close to $2 billion. But again, you have got a comparison
there from a Republican Congress versus a Democrat President.
If you had the reverse of that, you might see that there might
be a dramatically higher impact from having this power.
Mr. Ryan. Good point.
Mr. Franks. Congressman Kennedy, let me just ask you, then,
constitutional amendments are pretty notoriously difficult to
pass and certainly you have the advantage, once it passed, the
constitutional argument goes away because it becomes part of
the Constitution itself. Having said that, do you favor the
passage of H.R. 4890 along with the effort to pass your
constitutional amendment?
Mr. Kennedy. I absolutely favor the proposal that
Congressman Ryan has put forth, but I would also suggest that
if you look at the impoundment authority that the President had
for 200 years, it would grant far broader ability for the
President to control spending than even what Congressman Ryan
is proposing. That would be something that was within our power
to rescind what we took away from the President that he had for
200 years as part of the 1974 Budget and Impoundment Act and
something, if we are not going to go the full length of a
constitutional amendment, some further step that we ought to be
taking to keep control of spending.
Mr. Franks. Maybe just to expand that, would your
constitutional amendment apply only to discretionary spending
or could the President use it, the authority, to strike new
mandatory spending or perhaps ongoing mandatory spending
related to the so-called entitlements and the special interest
tax breaks, and if so, how does it differ from Congressman
Ryan's bill?
Mr. Kennedy. My interpretation of it is that it would apply
to both discretionary as well as mandatory. As crafted, though,
Congressman Ryan's goes further in having the ability to reach
into specific tax proposals and rescind those, as well.
Mr. Franks. Thank you. Mr. Cooper, I might get this last
question with you, sir. You indicate that the fact that an
appropriation authority of this type could lapse during the
180-day period in which the President is authorized to defer
spending is of, quote, ``no-constitutional moment.'' Can you
give the less intelligent among us a little explanation of
that?
Mr. Cooper. I am happy to try to do that, Congressman. The
central point of my testimony is that Congress has throughout
history given the President the power not to spend. And when he
doesn't spend, the money doesn't leave the Treasury. And so the
basic proposition is that if through operation of this
mechanism Congress, with eyes wide open, created a mechanism
through which the President through the good faith exercise of
his discretionary powers ends up suspending a spending measure
while Congress is considering it and the authority to spend
expires during that period, it is the equivalent of the
President simply exercising his discretion which Congress could
give him not to spend at all. That's the reality of it.
The difference is this. The President could spend--could
exercise his discretion, which this body would give him, to
spend right up until that moment. That was not true under the
Line Item Veto Act. After the President canceled the law on the
sixth day, he could not change his mind. The only thing that
could change that was this body passing a new law. Here, the
President has that authority right up until this body acts to
rescind the statute, if it decides to do that, or by operation
of the spending provision itself, the authority lapses. But
either way, the law is in place. It's in full force and effect.
Mr. Chabot. The gentleman's time has expired.
Mr. Franks. Thank you, Mr. Chairman.
Mr. Chabot. Thank you. The gentleman from Virginia, the man
with the charts, Mr. Scott, is recognized for 5 minutes.
Mr. Scott. Thank you. Thank you, Mr. Chairman. Mr.
Chairman, we keep talking about the President can only sign or
veto. He can actually veto and resend the bill back with
instructions, like I told you I wasn't going to sign a bill
with more than $100 billion in it. You sent it $110. Here is a
veto. Get $10 billion out and I will sign it. Or, he can say, I
will sign it with these provisions not in it. Just give the
message back and you are essentially right back where we are if
one of these things had passed. So he can do pretty much, if
the President really wanted to get tough on the budget, then
create this purple line up here, as President Clinton did,
vetoing it, even closing down the Government if you keep
sending back stuff he's not going to sign, or you can just sign
what's sent to you and get that red line.
Let me ask a question. Mr. Ryan, you say he could line item
veto the narrow special interest tax cuts. What about a big,
fat, irresponsible tax cut? [Laughter.]
Mr. Ryan. If it's a big, fat, irresponsible tax cut that
applies to 100 or fewer beneficiaries, the answer is yes. If
it's a big, fat, irresponsible tax cut that he did sign into
law that applies to more than that, the answer is no. I just
wanted to be clear with you.
Mr. Scott. I'm sorry. He could not veto a big, fat,
irresponsible----
Mr. Ryan. Well, he can veto an entire tax bill. He wouldn't
be able to line item an individual tax cut within a tax bill
that applied to more than 100 beneficiaries. Shareholders are
beneficiaries----
Mr. Scott. Just to be clear, if he gave--if we sent up
there a provision that had a tax cut just for ExxonMobil,
nobody else----
Mr. Ryan. Well, remember, ExxonMobil has shareholders. It's
a publicly-traded company.
Mr. Scott. Okay. So he couldn't line item that. So Exxon--
--
Mr. Ryan. I don't know how you would write--I literally
would not know how you would write a tax cut to apply to just
ExxonMobil unless you literally put in law only ExxonMobil gets
this tax cut.
Mr. Scott. You can do it that it applies----
Mr. Ryan. I write a lot of tax bills, I can tell you.
Mr. Scott [continuing]. To only those oil companies with
revenues over--with profits more than $40 billion. It would
only apply to ExxonMobil. They get the big fat tax cut. That
would be okay. He couldn't touch it because they've got more
than 100 shareholders.
Mr. Ryan. Well, if you're passing a tax bill like that,
then you'd pass a tax cut for ExxonMobil. Congress would have
to pass that. Then the President would have to sign that. You
basically would have that power to veto it by signing it or not
signing it in the first place.
Mr. Scott. If it was just part of the bill. When you talk
about these earmarks and the fact that they cost $20-some-
billion, a lot of the earmarks are earmarks that out of the
$300 million, $1 million goes to this project. That is a
million-dollar earmark. If you didn't have that earmark, you
would still have the $300 million, so you didn't save any money
or spend any money more than would be spent, is that right?
Mr. Ryan. Sure. In your example, yes. I think the issue at
stake here is the culture of Congress and a culture that is
growing where, to borrow a phrase from a Senator from Oklahoma,
earmarks are the gateway drug to more spending. I think
earmarks and the proliferation of earmarks are----
Mr. Scott. The point I am making, just----
Mr. Ryan [continuing]. Putting a bias toward much, much
higher spending in Congress, and I think that bringing more
transparency and accountability to the earmarking process will
do more than just cut out wasteful earmarks. I think it will do
a lot to bring more transparency and accountability to all of
the dollars we spend.
Mr. Scott. Which means, in answer to my question, just
because you have an earmark did not mean you increased
spending. If out of the $300 million, $1 million goes to my
special project----
Mr. Ryan. If you got rid of the $1 million earmark, you
would then spend $299 million and you would reduce spending.
Mr. Scott. No, you would spend the $300 million and I just
wouldn't be guaranteed at getting the first million.
Mr. Ryan. It depends on how you write it.
Mr. Scott. That is how they are written a lot.
Mr. Ryan. Well, just to answer your question specifically,
if there's a $300 million spending bill and there's a $1
million earmark in it, the President sends the rescission on
the $1 million, Congress passes that rescission, then you save
$1 million and you end up spending only $299 million.
Mr. Scott. Does this bill allow you to reduce the spending,
or you have to eliminate the whole line? Do you have to
eliminate the whole line?
Mr. Ryan. I don't understand the question.
Mr. Scott. Can you reduce the item, or do you have to
just----
Mr. Ryan. Oh, no, it is eliminate. Yes. You can't change
the spending numbers. Right. You mean, so could you make the $1
million a $500,000 earmark?
Mr. Scott. Yes.
Mr. Ryan. No.
Mr. Scott. Okay. Ms. Firvida, you said you might actually
increase spending. What in the legislation would produce that
result?
Ms. Firvida. Well, it goes a little bit to this problem of
the culture of spending that Congressman Ryan is talking about.
The culture would change in the following way, and we already
see this in the State legislatures. The President, by simply
threatening veto action, can essentially exact a legislation
tax from Congress and say, I will not line item these
particular projects or these important compromises that you
have reached in your bill as long as you give me my spending
priorities, and overall, spending increases because the
President gets his spending priorities and Congress continues
to maintain their spending priorities. This is a dynamic that
is a recipe for disaster and increased deficits.
Mr. Chabot. The gentleman's time has expired.
The gentleman from Florida, Mr. Feeney, is recognized for 5
minutes.
Mr. Feeney. I thank all of you for your testimony.
Congressman Ryan, on your bill, since one Congress can't
bind a future Congress, and even in Mr. Cooper's testimony on
page 13 he says that Congress may exempt any given
appropriation bill or a given provision from the act, I mean,
theoretically, every appropriations bill we see in the future
may contain some phrase that basically says, you know,
notwithstanding any provision of the Congressional Impoundment
or Control Act as amended by the Ryan Act, the President is not
able to rescind any spending in the bill herein. I mean, is
that a practical possibility?
Mr. Ryan. I don't think, because that would be a rule
change. I don't think that that would be a practical
possibility because this is a statutory change that gives the
President the ability to pull out specific items. Then Congress
passes a rescission bill. And so Congress will follow up with a
new law that will rescind the taxing or taxing----
Mr. Feeney. Well, maybe Mr. Cooper understood my question.
Supposing we passed the Ryan Act tomorrow, and I am a
cosponsor. I love the idea of what we are trying to get at
here. But can't the next appropriations bill that comes down
the pike just say, we are exempted from the Ryan Act?
Mr. Cooper. I believe it could.
Mr. Feeney. I think so. I think----
Mr. Ryan. Congress can always undo what it does.
Mr. Feeney. Yes. I think that is the point of----
Mr. Cooper. I don't think this Congress could prevent a
future Congress from doing exactly like that. So the lesson of
that point, it seems to me, is that any legislation depends
upon the good faith of all the branches.
Mr. Feeney. Well, the Members are going to have to exercise
some self-discipline and say things like, we are not going to
vote for an appropriations bill that excludes ourselves from
the Ryan proposal.
Congressman Ryan, you said that you couldn't veto a portion
of a spending item. On page three of the act, subsection (i),
it says the President could send a rescission message
concerning the amount of budgetary authority or the specific
item of direct spending. That would imply to me, and maybe you
will want to take a look at the language as we move forward,
the President theoretically could veto half of the bridge to
nowhere as opposed to the whole bridge to nowhere if we are not
careful here. We need to decide what exactly it would empower
him to do.
Congressman Ryan, do you think that your bill, and for that
matter, Congressman Kennedy's constitutional amendment, which
is also a great idea, do you think it might have a chilling
effect, talking about the culture in Congress, of people who
are thinking about building a museum to Groundhog Punxatawney
Phil or a bridge to nowhere or a railroad to nowhere? Do you
think there may be a sort of a chilling effect? My colleague
from New York was concerned about a road or a tunnel or a
bridge built for a developer in his district. Do you think
somebody in Mr. Nadler's position may be happy to know that
there's one more whack at the apple, and not only that, but
Congress may, in fact, discipline itself knowing that the
President may pick on and outrage and embarrass the entire
proposal? Maybe both the Congressmen can comment on that.
Mr. Ryan. I believe it will have that effect because at the
end of the process, a Member is able to slip in a spending item
which doesn't go through general order, doesn't go through a
hearing process, doesn't go through ordinary scrutiny, cannot
be susceptible to an amendment on the floor, and that is where
a lot of the more unjustifiable spending items occur. I think
this will have the practical effect of embarrassing those
things out because these items may have to be voted on. The
Member will have to go to the floor to defend these things.
There are a number of points that are brought up, if I
could just quickly----
Mr. Feeney. Well, I will tell you what. I will recognize
you. This is my time's over, so I can get one more in.
Mr. Ryan. Yes.
Mr. Feeney. Congressman Kennedy?
Mr. Kennedy. You know, I would say the same thing. There is
a difference between having some talk show folks point out that
this is ridiculous as opposed to having the President with the
big light that shines on it saying that this is not a priority.
So I do believe it would have a chilling effect. It would reach
beyond just those that he vetoed and call for more responsible
spending.
Mr. Feeney. Madison, when he describes the separation of
powers, actually gives credit to Montesquieu, a French
philosopher, and even Publius, going back to Roman days. But
separation of powers, we don't have three branches that do not
interact. There is a lot of gray and overlap. I would like to
point out that this is certainly true in the spending area. I
think Mr. Cooper's entire testimony is devoted to the overlap
between the executive and the Congress which appropriates.
I would like to point out and then get Mr. Ryan to comment
on my experience at the State level. Some 40 governors have
some version of a line item veto. I once got basically, in my
view, held hostage by a Senate President who refused to pass an
appropriations bill unless he had certain largess equivalent in
the State of Florida to bridges to nowhere. He had a bunch of
them. I basically picked up the phone when I was the Speaker of
the House and told the governor that we needed an
appropriations bill and I was stuck, being held hostage. I
thought that some of these things were jokes. Would he take a
look at them?
My governor looked at him and he said, ``You know, I think
they're jokes, Speaker Feeney.'' I said, well, what happens if
I pass this appropriations bill with these jokes in there? Will
you veto it? And he said, ``Speaker, I'm not going to make a
commitment to you. That might be a little disingenuous. But
I'll tell you, I think they're jokes and I've got a good record
of vetoing jokes.'' It actually helped the process move along.
Otherwise, we might have had a long hot summer not doing an
appropriations bill. Me knowing that we had one more whack at
the things that Mr. Nadler was concerned about in his district
and in a lot of Congress has been--so, Congressman Ryan, how
else can this bill perhaps help the culture in Congress?
Mr. Ryan. The deferral question. This has been raised quite
a bit. It's important to remember that the President has
deferral authority right now. He has a 45-day decision
authority.
Why did we pick 180 days? We chose 180 days because we
believe we have to have a calendar deadline. My preference was
30 legislative days. The reason I wanted to do that is because
you have to go over recesses. Often, we have large
appropriation bills that we pass at the end of the legislative
session in the fall. Then we go into recess. There's
Thanksgiving, Christmas, don't come back until January for a
pro forma session for the State of the Union. Then in February,
we start legislating. You have to have the ability to defer
over those long recess periods. Otherwise, Congress could just
stall out the clock and over-wait, you know, outlast the
President's deferral authority.
Now, I think that there are other ways of probably
accomplishing this. The more important point is once Congress
acts, the President's done. I mean, if Congress decides to
spend the money, the money's spent. If they decide to rescind
it, it's rescinded.
I think a way of probably addressing this that I'm looking
at is limiting the amount of time in which after a bill is
passed the President could submit a rescission request to
Congress. That's something I don't have in the bill but
something we're looking at, which is after a certain number of
days--the President couldn't wait 100 days and defer and defer.
I also think there's an important part of duplication. Mr.
Cooper mentioned our bill doesn't have a provision expressly
repealing or preventing duplication. That is not the intention,
to encourage duplication. I think that's obviously something we
could figure out.
The other thing that I think is really important are
politics. That's the other mention. Can a President use
leverage over a Member of Congress with this power? The
President has all sorts of ways of using leverage over a Member
of Congress. If the President abuses this, it will be seen as
that abuse and Congress will act accordingly. President Clinton
was repudiated with some of his in the mil con bill in 1996.
So I believe that this is a tool that will be visible. It's
a tool that the President can use to effect a culture of change
and save taxpayer dollars. And ultimately, at the end of the
day, Congress will have the final say so. If things are
outright political, if things are hostage-taking political
events, Congress will have the ability to repudiate that kind
of activity, and I think in the end of the balance, a good
cause will be served.
Mr. Chabot. The gentleman's time has expired.
Before we get to the final questioner here, Mr. Van Hollen
from Maryland, the gentleman from New York is recognized for 2
minutes to ask a quick question and get a quick response from
two of the witnesses.
Mr. Nadler. Thank you. I'd like to ask Mr. Cooper and Ms.
Firvida the following question. Let's assume that Congressman
Kennedy's constitutional amendment were adopted or that
Congressman Ryan's legislation were adopted. If a Congressional
majority had the intention to do the following, could they do
it? Let's assume you pass the budget and it said that, with
respect to the following 600 items, if any of these 600 items
end up reduced, the White House budget is hereby reduced by 80
percent. [Laughter.]
Would that be effective or would there be something
constitutionally stopping you? In other words, could the line
item veto be totally frustrated by what could become boiler-
plate language in a budget where the Congress said, well,
here's our list of things we're worried about. You touch that,
you have no budget for the White House or for the Central
Intelligence Agency or whatever. Would that be constitutional?
Is there anything that----
Ms. Firvida. For myself, I would say I would want to have
more time to consider that, but it certainly presents some--
it's a conundrum. That presents some curious questions.
Mr. Cooper. I, too, would---- [Laughter.]
I would appreciate more time to consider that more
carefully, but off the top of my head, I can't think of a
reason why that--I can't think of anything in the Constitution
that would prevent that, and I do think the Congress could much
more, you know, in a much more straightforward fashion exempt
either items within an appropriations measure or the
appropriations measure as a whole from the reach of this bill
in the future. That's----
Mr. Nadler. Or this constitutional amendment, in effect?
Mr. Cooper. No, no, it couldn't do that.
Mr. Nadler. No, no, but under the constitutional amendment,
could it do what I just suggested, and as a practical matter,
make it impossible for a President to exercise the line item
veto?
Mr. Cooper. I was focusing on Mr. Ryan's proposal. Again, I
would want to think that through.
Mr. Nadler. Thank you.
Mr. Chabot. Thank you very much.
The gentleman from Maryland, Mr. Van Hollen, is recognized
for 5 minutes.
Mr. Van Hollen. Thank you. Thank you, Mr. Chairman. Thank
you and Mr. Nadler for holding this hearing. Thank you to all
our witnesses. I appreciate your testimony.
Let me just ask a couple of questions, if I could, with
respect to your proposal, Mr. Ryan, and first, let me just
agree with many of the comments that were made by Mr. Nadler
with respect to the air-dropping issue and the fact that if we
were serious within our institution, without any Presidential
activity, we could pass some rule changes that would address
the many air drops in the middle of conference, and I think you
acknowledged that fact.
I am concerned about the ability of the President, who
already, of course, has lots more tools, but giving even more
tools with respect to the ability to exert political pressure
on Members of Congress, and I understand your argument about
the self-correcting aspect of that over time. I am not sure of
that.
But in that regard, let me ask you, as I understand your
proposal, there is no time limit with respect to when the
President has to submit. Why not? I mean, why let him--and
second, if you could address the issue of at least there is
nothing in the bill that prohibits the serial air-dropping by
the President----
Mr. Ryan. Sure.
Mr. Van Hollen [continuing]. Of different provisions.
Mr. Ryan. Those are two suggestions that I think would be
improvements to the bill. I think the serial issue, it wasn't
our intention to encourage it. We didn't outright specifically
prohibit it. Mr. Cooper believes that it still may be
prohibited, or he doesn't know if it's prohibited or not. I
think we should just explicitly prohibit that you can't
duplicate rescission messages to Congress. That would be an
improvement in this bill, I think.
I also think the time limit--we ought to insert a time
limit as to when the President--how many days the President has
to act, to send a rescission message to Congress. I think that
would be an improvement in this bill, as well.
Mr. Van Hollen. Good.
Mr. Ryan. Another question that a lot of people have
mentioned to me, appropriators especially, is what if the
President sends 500 rescission requests. That is that many
hours of debate. That is that many considerations. That is that
many bills. They could just tie us up. I think that is a
legitimate concern.
So I think we need to--we're looking at different ways of
allowing--either limiting the number of rescission messages the
President can send to the Congress or allowing possibly some
bundling of these things. I think there are some pitfalls in
the way we would do that, but some bundling of these requests
so that a President couldn't tie Congress up in the works.
Those are the other concerns that I think are very legitimate
that have been raised where I think we can make improvements in
this bill.
Mr. Van Hollen. Well, not just tie Congress up, but, I
mean, the political mischief that would be involved with
sending up a series of small bundles and negotiating on
different----
Mr. Ryan. Sure. I think there are ways of fixing those.
Mr. Van Hollen. It seems to me one bundle, maybe.
Let me ask you a question with the differential treatment
here with respect to appropriation provisions and tax breaks,
and let me make sure I understand your bill. If the President
wanted to essentially use a veto over a tax break, the
President could only do that with respect to tax breaks that
benefit ten or fewer----
Mr. Ryan. Right.
Mr. Van Hollen. Is that right?
Mr. Ryan. Yes.
Mr. Van Hollen. And then there's even an exception to that
if they're treated equally, is that right?
Mr. Ryan. Right.
Mr. Van Hollen. But as I understand it, with respect to
spending provisions, there is no such numerical limit, is that
right?
Mr. Ryan. The intention----
Mr. Van Hollen. Okay.
Mr. Ryan. No, I think I----
Mr. Van Hollen. Here's my question. I mean, as I understand
it under this bill, if you passed a tax break that benefitted
the 101 wealthiest people in this country, that would not be
subject to Presidential veto. But if you passed the SCHIP bill
to help thousands of families, low-income families, that would
be eligible for it. And if the objective here is deficit
reduction, it seems to me I'm not sure I understand the
differential treatment.
Mr. Ryan. Because there is a big difference between tax law
and tax bills and spending law and spending bills. I think if
you expanded that tax policy--and believe me, I'm a Member of
the Ways and Means Committee who put this provision in there,
not at the request of the Ways and Means Committee, I'll tell
you that--I believe that you could radically change Congress's
intent under the entire tax law. If you widen the scope of this
type of tax policy where the President could veto that tax
bill, you could substantially change the entire economic
policy, the effect of the entire tax bill.
It doesn't work that way with spending. On spending, the
President has to go after a line item program and that line
item program which Congress could choose to rescind or not to
rescind affects that program. It doesn't affect the rest of the
bill.
You see, tax policy affects other tax policy. It ripples
through the entire code and ripples through the entire economy.
Spending policy affects that spending program and it doesn't
ripple through the rest of the bill. Let's say it's SCHIP----
Mr. Van Hollen. Let me just, because I don't know how much
time I've got. I understand your argument, but if the--all
right. Let me ask it this way. Look, the President could wipe
out the education funding, I understand, but your whole
argument has been----
Mr. Ryan. Okay. Let me----
Mr. Chabot. Thirty seconds.
Mr. Van Hollen. All right. Your whole argument has been
that Congress gets that extra bite at the apple.
Mr. Ryan. Yes. The Congress----
Mr. Van Hollen. If the President is going to exercise this
authority to affect thousands of taxpayers, as you said, he's
still got to come back to the Congress. So why the differential
treatment between programs----
Mr. Ryan. The point----
Mr. Van Hollen [continuing]. That help lots of low-income
people and----
Mr. Ryan. The point of this----
Mr. Chabot. The gentleman's time has expired, but the
gentleman can respond.
Mr. Ryan. The point of this is not to change radical policy
changes and give the President the power to go after radical
policy changes. The point is to go after pinpoint spending and
pinpoint tax cutting or tax increasing. That's the point. So
the point is to go after line item individual items, not to
radically change the policy of these bills, which is what you
would do if you broadened that definition.
Mr. Chabot. The gentleman's time has expired.
We want to thank the witness panel for excellent testimony,
all four of you, this afternoon. I think on both sides of the
aisle, Members of Congress agree that there is a spending
problem, has been under Republican control or under Democratic
control. We might disagree somewhat on who's more responsible
for that, but nonetheless, it's an issue that needs to be dealt
with and I would commend these Members of Congress for their
efforts in doing something about it and I'd also commend these
witnesses for participating in this discussion this afternoon.
If there's no further business to come before this
Committee, we're adjourned. Thank you.
[Whereupon, at 3:30 p.m., the Subcommittee was adjourned.]