[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]



 
           THE ADMINISTRATION'S EXPEDITED RESCISSION PROPOSAL

=======================================================================

                                HEARING

                               before the

                        COMMITTEE ON THE BUDGET
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

             HEARING HELD IN WASHINGTON, DC, JUNE 17, 2010

                               __________

                           Serial No. 111-27

                               __________

           Printed for the use of the Committee on the Budget


                       Available on the Internet:
       http://www.gpoaccess.gov/congress/house/budget/index.html




                  U.S. GOVERNMENT PRINTING OFFICE
56-984                    WASHINGTON : 2010
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC 
area (202) 512-1800 Fax: (202) 512-2104  Mail: Stop IDCC, Washington, DC 
20402-0001



                        COMMITTEE ON THE BUDGET

             JOHN M. SPRATT, Jr., South Carolina, Chairman
ALLYSON Y. SCHWARTZ, Pennsylvania    PAUL RYAN, Wisconsin,
MARCY KAPTUR, Ohio                     Ranking Minority Member
XAVIER BECERRA, California           JEB HENSARLING, Texas
LLOYD DOGGETT, Texas                 SCOTT GARRETT, New Jersey
EARL BLUMENAUER, Oregon              MARIO DIAZ-BALART, Florida
MARION BERRY, Arkansas               MICHAEL K. SIMPSON, Idaho
ALLEN BOYD, Florida                  PATRICK T. McHENRY, North Carolina
JAMES P. McGOVERN, Massachusetts     CONNIE MACK, Florida
NIKI TSONGAS, Massachusetts          JOHN CAMPBELL, California
BOB ETHERIDGE, North Carolina        JIM JORDAN, Ohio
BETTY McCOLLUM, Minnesota            DEVIN NUNES, California
JOHN A. YARMUTH, Kentucky            ROBERT B. ADERHOLT, Alabama
ROBERT E. ANDREWS, New Jersey        CYNTHIA M. LUMMIS, Wyoming
ROSA L. DeLAURO, Connecticut,        STEVE AUSTRIA, Ohio
CHET EDWARDS, Texas                  GREGG HARPER, Mississippi
ROBERT C. ``BOBBY'' SCOTT, Virginia  CHARLES K. DJOU, Hawaii
JAMES R. LANGEVIN, Rhode Island
RICK LARSEN, Washington
TIMOTHY H. BISHOP, New York
GWEN MOORE, Wisconsin
GERALD E. CONNOLLY, Virginia
KURT SCHRADER, Oregon
DENNIS MOORE, Kansas

                           Professional Staff

            Thomas S. Kahn, Staff Director and Chief Counsel
                 Austin Smythe, Minority Staff Director


                            C O N T E N T S

                                                                   Page
Hearing held in Washington, DC, June 17, 2010....................     1

    Hon. John M. Spratt, Jr., Chairman, Committee on the Budget..     1
    Hon. Paul Ryan, Ranking Minority Member, Committee on the 
      Budget.....................................................     2
        Letters from Messrs. Boehner and Cantor submitted for the 
          record.................................................    13
    Hon. Walt Minnick, a Representative in Congress from the 
      State of Idaho, prepared statement of......................     4
    Jeffrey B. Liebman, Acting Deputy Director, Office of 
      Management and Budget......................................     4
        Prepared statement of....................................     6
        Responses to questions submitted for the record..........    39
    Hon. Russell D. Feingold, a U.S. Senator from the State of 
      Wisconsin, prepared statement of...........................    17
    Hon. Robert B. Aderholt, a Representative in Congress from 
      the State of Alabama, questions for the record.............    39
    Hon. James R. Langevin, a Representative in Congress from the 
      State of Rhode Island, prepared statement and questions for 
      the record.................................................    40


           THE ADMINISTRATION'S EXPEDITED RESCISSION PROPOSAL

                              ----------                              


                        THURSDAY, JUNE 17, 2010

                          House of Representatives,
                                   Committee on the Budget,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 10:04 a.m., in room 
210, Cannon House Office Building, Hon. John M. Spratt, Jr. 
[Chairman of the Committee] presiding.
    Present: Representatives Spratt, Becerra, Doggett, Berry, 
Etheridge, McCollum, Scott, Connolly, Schrader, Ryan, Austria, 
Djou.
    Also Present: Representative Minnick.
    Chairman Spratt. I call the Committee to order. The 
Committee meets today to examine the Administration's proposal 
for expedited rescission authority.
    Expedited rescission is not a new idea. I introduced a bill 
myself on the subject it seems like 20 years ago, it was at 
least the early 1990s, as did others like Charlie Stenholm. But 
it may just be that it is an idea whose time has finally come.
    Expedited rescission enhances fiscal discipline by allowing 
the President to sign spending bills into law or culling out 
unneeded, unjustified, or wasteful items and sending these back 
to Congress with a request that they be rescinded.
    Congress is required to consider these recommendations as 
one package without amendment and on a fast-track basis 
guarantee an up or down vote within an expedited time frame.
    The Administration and Congress inherited a $1.3 trillion 
deficit and an economy reeling from the worst recession since 
the Great Depression. As the economy recovers, we need to see 
that the budget recovers along with it.
    The statutory PAYGO rules that we enacted earlier this year 
are part of that purpose and discipline and so is the 
President's bipartisan fiscal commission.
    Expedited rescission is also an addition to that effort. It 
will not wipe out our deficit, that is for sure, but it will be 
one more tool in our kit for disciplined spending.
    We are bound to be good stewards of the taxpayers' money. 
It must be made clear to the taxpayers that we are spending 
their money wisely and well.
    So the Administration's expedited rescission proposal is a 
welcome step forward. I introduced the Administration's bill by 
request with the caveat that we want to look at it very closely 
and probably we will want to make some improvements. Today's 
hearing is the beginning of that process.
    I was joined by 20 Democratic members as original co-
sponsors of the bill and we have added at least a dozen or so 
more since then. I am pleased that there is such interest in 
expedited rescission on both sides of the aisle.
    The Ranking Member, Mr. Ryan, has a long-standing interest 
in the subject and he has, I believe, filed his own proposal on 
expedited rescission. Other members have introduced expedited 
rescission proposals over the years and in this Congress as 
well.
    Today we focus on the Administration's proposal for 
expedited rescission. Our witness is the Acting Deputy Director 
of the Office of Management and Budget, Jeff Liebman. This is 
his first testimony before the Committee, so we welcome him all 
the more heartily for that reason.
    We are glad to have you and we appreciate your coming.
    Before we turn to you for your testimony, let me recognize 
the Ranking Member, Mr. Ryan, for his statement.
    Mr. Ryan.
    Mr. Ryan. Thank you, Mr. Chairman. And thank you for 
scheduling this hearing.
    Mr. Liebman, welcome to the Committee. Good to have you. 
Look forward to your testimony.
    Four years ago, I introduced a Constitutional version of 
the line item veto. It is a bill that we passed in the House 
with bipartisan support and we marked it up right here in this 
Committee.
    At the beginning of the year when the President visited us, 
the House Republicans, at the Baltimore retreat that we had, I 
asked him for support of the line item veto. And I am very 
excited and pleased that four months later, he has taken us up 
on the idea. That is a step in the right direction from my 
opinion.
    If we actually enacted a line item veto, it could be used 
as an effective tool to eliminate some wasteful spending and 
devote the savings to deficit reduction. In that spirit, I have 
two specific concerns with the Administration's proposals. 
Constructive criticism is my goal here.
    First, savings from the line item veto should be directed 
solely toward deficit reduction. As it stands, the measure 
would simply result in the Administration using this tool to 
fund other priorities and it would not save taxpayers a dime.
    A second problem with this proposal, it does nothing to 
address new entitlement spending or special interest tax 
breaks. Believe me, I serve on the Ways and Means Committee, I 
have seen that stuff come around. Both parties do it.
    Both were subject to the legislative line item veto that 
passed the House four years ago and both would make this a 
stronger tool.
    Now, the bill I have with Senator Feingold does not do 
this, so I understand, you know, in the interest of compromise, 
that is not necessarily possible sometimes. But I think it is a 
better idea to add special interest tax breaks and direct 
spending as well.
    But I have a much deeper concern within the context of this 
recommendation. The President and this Congress has increased 
spending by $1.8 trillion. It passed the so-called Stimulus 
Bill with a price tag that has grown to $862 billion and it has 
failed to hold down unemployment as promised.
    And they twisted the budget reconciliation process to force 
through a government takeover in the U.S. healthcare sector. 
Now, the Majority likes to tout the PAYGO rule in practice. 
With all due respect, it is a sham.
    Take the recent so-called Extenders Bill. According to the 
CBO, this bill would increase the deficit by $54 billion. But 
through the magic of the Majority's PAYGO counting, it is 
recorded as reducing the deficit by $887 million.
    The President's budget we are operating on drives the debt 
held by the public to an alarming 90 percent of GDP in ten 
years, but neither he nor the Democratic Majority have offered 
any specific proposals to tackle the problem. And it appears 
increasing likely that for the first time since the adoption of 
the Modern Budget Act that we operate under, the House will 
fail to even bring a Budget Resolution to the floor.
    What kind of message is this sending to American taxpayers 
and to financial markets around the world? Rather than bringing 
some real discipline to spending, I believe this Administration 
and Congress has opted to budget by press release.
    The Administration recently asked Agency heads to submit 
proposals for a possible five percent reduction in spending 
next year. I just remind people that comes after these agencies 
have received an 84 percent increase in spending. This makes me 
a little more skeptical about getting spending under control in 
this current Congress with this Administration.
    The President could right now send us a proposal cutting 
spending under their existing rescission authority. In fact, 
our leaders, Representative Boehner, Representative Cantor 
promised the President's support for bringing these cuts to the 
floor. Even if the President were serious about reducing 
spending, he faces a Democratic Congress that has zero interest 
in reducing spending or acting on these rescissions.
    Despite my support for a strong Constitutional line item 
veto, much needed process reform is no substitute for actual 
spending restraint. And all the press releases, hearings, and 
Washington talk will not mean a thing if Congress and the 
President do not have the will to actually reduce spending.
    This is an effective tool. It is a good tool if it is used 
correctly. The proceeds ought to go to deficit reduction, but 
let us not kid ourselves that it is some panacea that will get 
our fiscal house where it needs to be. We actually need real 
discipline and reform here.
    But with that, I look forward to your testimony.
    Chairman Spratt. Before proceeding with Dr. Liebman, we 
have a member who has taken a signal interest in this, Walt 
Minnick, who would like to participate in the hearing this 
morning. I would like to ask unanimous consent that he be 
allowed to take one of the empty seats here and when his time 
comes at the end of the process ask questions. If there is no 
objection, so ordered.
    Walt, come up and take a chair. But if somebody arrives to 
claim that chair, you will have to yield to them.
    Walt will have the authority as all members if unanimous 
consent is granted as usual to submit an opening statement for 
the record at this point. Without objection, so ordered.
    [The prepared statement of Walt Minnick follows:]

 Prepared Statement of Hon. Walt Minnick, a Representative in Congress
                        From the State of Idaho

    Chairman Spratt and Ranking Member Ryan, I come before the 
Committee today to speak on behalf of HR 5454, the ``Reduce Unnecessary 
Spending Act of 2010.''
    Mr. Chairman, as a dedicated fiscal hawk and an original co-
sponsor, this proposal creates a potent and critically important 
deficit reduction tool that will help us to restore fiscal discipline 
to federal spending.
    The exploding trillion dollar plus budget deficit is the most 
serious single problem facing our country. It is the gravest threat to 
our future strength as a nation and to our children's standard of 
living. To solve this problem, Congress must change the way it does 
business, which is why I am pleased to offer this important bill along 
with the distinguished chairman and other of my colleagues, both 
liberal and conservative.
    HR 5454 allows the President to propose elimination of wasteful or 
special interest spending within large appropriations bills. And, once 
identified, the bill requires those items be presented to Congress for 
a simple up-or-down vote. Because Congress retains the final say on 
whether these proposed cuts are approved, this process passes 
Constitutional muster.
    Like the line item veto authority possessed by the President for 6 
years in the 1990's, Expedited Rescission, as this process is called, 
should save the taxpayers many billions of dollars and help us to 
reduce the currently out of control federal budget deficit. 
Historically, this process has had bi-partisan support. It is endorsed 
by the Administration and incorporated into a companion bill introduced 
by our colleagues from both parties in the Senate.
    As a longtime Idaho businessman and the primary author of this 
proposal within the 53 member Blue Dog Caucus, I look forward to 
working with the Committee as we move this critically important measure 
through Congress as rapidly as possible. Our children and grandchildren 
deserve no less.
    I urge your support and yield back.

    Chairman Spratt. Let us proceed now with the hearing. Dr. 
Liebman, the floor is yours. We welcome you here and we look 
forward to your testimony and the questions we can put to you 
later. Thank you for coming and thank you for taking this 
initiative.

STATEMENT OF JEFFREY LIEBMAN, ACTING DEPUTY DIRECTOR, OFFICE OF 
                     MANAGEMENT AND BUDGET

    Mr. Liebman. Thank you.
    Chairman Spratt, Ranking Member Ryan, and members of this 
Committee, thank you for inviting me here this morning to talk 
about the President's new proposal, the Reduce Unnecessary 
Spending Act of 2010.
    This legislation would create an expedited procedure that 
guarantees an up or down vote on certain rescissions proposed 
by the President, helping to eliminate unnecessary spending and 
discouraging waste in the first place.
    Since taking office, the Administration has made a priority 
of identifying and cutting wasteful spending, proposing 
approximately $20 billion of terminations, reductions, and 
savings in each of the 2010 and 2011 budgets.
    While recent Administrations have seen between 15 and 20 
percent of their proposed discretionary cuts approved by 
Congress, we worked with Congress last year to enact 60 percent 
of the proposed discretionary cuts in the fiscal year 2010 
President's budget. And for that, I thank you and your 
colleagues.
    Further, the Administration has worked with Congress to 
curb earmarks and the fiscal year 2010 appropriation bills 
enacted a significant decline in earmarks, a drop of 17 percent 
in volume and of 27 percent in dollar value.
    These reductions build on the progress that Congress has 
made on earmarks since 2006, reductions prompted by a series of 
reforms that then Senator Obama helped to write with a 
bipartisan coalition which helped to bring more transparency 
and disclosure to the process.
    In this year's budget, the Administration also committed to 
restraining spending more broadly and has proposed a three-year 
freeze on nonsecurity discretionary spending. This freeze will 
save $250 billion over the next ten years relative to 
continuing the 2010 appropriation levels for these programs 
adjusted for inflation.
    This spending restraint complements other measures in the 
budget that together produce more deficit reduction over the 
next ten years than any budget that has been introduced by any 
President in the last decade.
    Furthermore, the Administration proposed and Congress 
enacted statutory Pay As You Go legislation. PAYGO forces us to 
live by a simple but important rule. The federal government can 
only spend a dollar on entitlement increases or tax cuts if it 
saves a dollar elsewhere which encourages the types of tough 
choices necessary to sustain fiscal discipline.
    Significant progress has been made in cutting unnecessary 
spending including earmarks, but more can be done. The 
President's proposal for expedited rescission authority would 
create an important tool for reducing unnecessary spending. In 
short, the bill would provide the President with additional 
authority to propose a package of rescissions that would then 
receive expedited consideration in Congress and a guaranteed up 
or down vote.
    Here is how it works. Under this new authority, the 
President can propose fast-track consideration of rescissions 
of discretionary and nonentitlement mandatory spending. The 
President is limited to proposing changes that reduce funding 
levels and cannot use this authority to produce any other 
changes in law. The fast-track process is thus limited only to 
simple funding reductions for which a straight up or down vote 
is appropriate.
    After enactment of funding, the President has 45 days 
during which Congress is in session to decide whether to submit 
a rescission package using this expedited procedure. A 
rescission package submitted under this authority receives 
fast-track consideration in Congress. Debate is limited in both 
Houses and the package is guaranteed an up or down vote without 
amendment. From the package's introduction to its final vote in 
the Senate, the process can take no more than 25 days.
    Following submission of a rescission request using this 
expedited procedure, the President may withhold funding for up 
to 25 days, after which funding must be released. This ensures 
the agencies do not obligate funds before Congress has had an 
opportunity to consider the rescission package.
    The proposal has been crafted to preserve the 
Constitutional balance of power between the President and 
Congress. Under our proposal, Congress, which is empowered to 
set its own rules, changes those rules under which it considers 
rescission packages proposed by the President using well-
established fast-track procedures. Rescissions only occur if 
Congress affirmatively enacts them into law. In other words, 
our proposal does not expand the Presidential veto authority in 
any way.
    A number of members have co-sponsored the Chairman's 
legislative version of the President's proposal and other 
members including the Ranking Member have sponsored similar 
proposals that would, like our proposal, target unnecessary 
spending by fast tracking consideration of rescissions.
    Thank you, Chairman Spratt, and the members of your 
Committee who have sponsored the Reduce Unnecessary Spending 
Act. I also want to thank Representative Minnick for his 
leadership on this issue. We applaud these efforts and look 
forward to working with Congress to resolve any differences in 
the details of these various legislative proposals and to enact 
this authority into law.
    Thank you.
    [The prepared statement of Jeffrey Liebman follows:]

   Prepared Statement of Jeffrey B. Liebman, Acting Deputy Director,
                    Office of Management and Budget

    Chairman Spratt, Ranking Member Ryan, and Members of the Committee, 
thank you for inviting me to testify this morning about the President's 
new proposal, the Reduce Unnecessary Spending Act of 2010. This 
legislation would create an expedited procedure that guarantees an up 
or down vote on certain rescissions proposed by the President, helping 
to eliminate unnecessary spending and discouraging waste in the first 
place.
    Since taking office, the Administration has made a priority of 
identifying and cutting unnecessary spending, proposing approximately 
$20 billion of terminations, reductions, and savings for fiscal year 
2010 and 2011. While recent administrations have seen between 15 and 20 
percent of their proposed discretionary cuts approved by Congress, we 
worked with Congress to enact 60 percent of proposed discretionary cuts 
in FY 2010. For that, I thank you and your colleagues.
    Further, the Administration has worked with Congress to curb 
earmarks, and the FY 2010 appropriations bills enacted a significant 
decline in earmarks--a drop of 17 percent in volume and 27 percent in 
dollar value. These reductions build on the progress that Congress has 
made on earmarks since 2006, reductions prompted by a series of reforms 
that then-Senator Obama helped to write with a bipartisan coalition, 
which helped to bring more transparency and disclosure to the process.
    In this year's Budget, the Administration also committed to 
restraining spending more broadly and has proposed a three-year freeze 
on non-security discretionary funding, saving $250 billion over the 
next ten years relative to continuing the 2010 funding levels for these 
programs adjusted for inflation. This spending restraint complements 
other measures in the Budget that, together, produce more deficit 
reduction over the next ten years than any Budget has proposed in over 
a decade. Furthermore, the Administration proposed, and Congress 
enacted, statutory pay-as-you-go (PAYGO) legislation. PAYGO forces us 
to live by a simple but important principle--the Federal Government can 
only spend a dollar on an entitlement increase or tax cut if it saves a 
dollar elsewhere, which encourages the types of tough choices necessary 
to restore fiscal sustainability.
    Significant progress has been made on cutting unnecessary spending, 
including earmarks, but more can be done. That is why, in recent weeks, 
the Administration has put forward additional measures to discipline 
the budget process. This includes tasking agencies with identifying 
their lowest-impact programs, providing agencies with incentives to cut 
administrative expenses, and establishing a process to better use our 
federal property and sell off the property we do not need. And, it 
includes the proposal about which I am here to testify today.
    The President's proposal for expedited rescission authority would 
create an important tool for reducing unnecessary spending. In short, 
the bill would provide the President with additional authority to 
propose a package of rescissions that would then receive expedited 
consideration in Congress and a guaranteed up-or-down vote.
    In more detail, here's how it works:
     Scope. Under this new authority, the President can propose 
fast-track consideration of rescissions of discretionary and non-
entitlement mandatory spending. The President is limited to proposing 
changes that reduce funding levels and cannot use this authority to 
propose other changes in law, including new transfer authority, 
supplemental funding, or changes in authorizing legislation. The fast-
track process is thus limited only to simple funding reductions, for 
which a straight up-or-down vote is desirable.
     Proposing a rescission package. After enactment of 
funding, the President has 45 days during which Congress is in session 
(excluding weekends and national holidays) to decide whether to submit 
a rescission package using this expedited procedure. The President is 
also limited to a single package of rescissions per bill under this 
procedure, and the requested rescissions must be limited to provisions 
in that bill.\1\
---------------------------------------------------------------------------
    \1\ There is one exception to the packaging rule: when a single 
appropriations bill includes funding that is in the jurisdiction of 
more than one appropriations subcommittee such as in an omnibus 
appropriations bill. In that case, the President may submit up to two 
packages.
---------------------------------------------------------------------------
     Congressional procedure. A rescission package submitted 
under this authority receives fast-track consideration in Congress. 
Debate is limited in both houses and the package is guaranteed an up-
or-down vote without amendment. The package is first introduced and 
considered in the House and, if approved there, is taken up in the 
Senate. From the package's introduction to its final vote in the 
Senate, the process can take no more than 25 days. Note that, while 
Congress cannot amend the package, our proposal enables Congress to 
omit from the bill any proposed rescission that it believes goes beyond 
the scope allowed.
     Withholding funding. Following submission of a rescission 
request using this expedited procedure, the President may withhold 
funding for up to 25 days, after which the funding must be released. 
This ensures that agencies do not obligate funds before Congress has 
had an opportunity to consider the rescission package.
    In sum, the proposal provides the President with important, but 
limited, powers that will allow the President and Congress to work 
together more effectively to eliminate unnecessary spending, including 
earmarks. Knowing this procedure exists may also discourage lawmakers 
from enacting such spending in the first place.
    The proposal has been crafted to preserve the constitutional 
balance of power between the President and Congress. In 1996, Congress 
granted the President ``line item veto'' power over certain spending 
and tax bills, allowing the President to use his veto authority to 
strip out select provisions of legislation while signing the rest into 
law. The Supreme Court found this to violate the constitutional 
procedure for presenting a bill to the President for approval or veto 
of the entire bill. The Administration's proposal is fundamentally 
different from this. Under our proposal, Congress, which is empowered 
to set its own rules, changes those rules under which it considers 
rescission packages proposed by the President--using well-established 
fast-track procedures. Rescissions only occur if Congress affirmatively 
enacts them into law. In other words, our proposal does not expand the 
Presidential veto authority in any way.
    Our proposal also preserves the President's two existing 
authorities for proposing rescissions. First, the President would 
retain the Constitutional authority to recommend legislation such as 
rescission packages to be considered under regular order in Congress. 
Second, the President would retain the power to recommend rescissions 
under the procedure already established under the Impoundment Control 
Act of 1974. This existing authority provides more limited fast-track 
protections to a Presidential rescission package than what we have 
proposed and, specifically, allows committee and floor amendments and 
so does not guarantee a clean up-or-down vote on a package submitted by 
the President.
    I am encouraged that the Administration's proposal has received 
bipartisan and bicameral support. I thank Chairman Spratt for 
introducing the Reduce Unnecessary Spending Act and members on this 
Committee--Representatives Boyd, Dennis Moore, Larsen, Connolly, and 
Schrader--for joining as cosponsors. The proposal has also received 
strong support in the Senate from Senators Feingold, Carper, and 
McCain. I also commend Ranking Member Ryan for introducing a proposal 
similar to ours. We applaud these efforts, and look forward to working 
with Congress to hammer out the details and enact this authority into 
law.
    We recognize that our proposal is not a magic bullet. While it 
lifts procedural barriers, the President and Congress will still have 
to make the tough choices to cut back unnecessary spending. 
Furthermore, restoring fiscal sustainability in the medium and long 
term will require not only targeting unnecessary spending in specific 
programs, which our proposal aids, but also making larger choices about 
overall budget priorities and revenue levels--a process now being 
facilitated by the President's National Commission on Fiscal 
Responsibility and Reform.
    The Reduce Unnecessary Spending Act provides a new and important 
way for Congress and the President to ensure that taxpayer dollars are 
spent wisely. The Administration urges prompt and favorable 
consideration of our proposal, and we look forward to working with you 
on this matter in the coming weeks.

    Chairman Spratt. Thank you very much for your testimony. 
And, once again, thank you for coming today and for proposing 
this initiative.
    There are still some features in the bill that are open to 
question in my mind. For example, 45 days it has allowed the 
Administration, those are 45 legislative days.
    Typically it would be twice that many calendar days; would 
it not?
    Mr. Liebman. Yes, that could easily be.
    Chairman Spratt. That is three months which is a long 
period of time during which items in the budget could be 
rescinded.
    Is there an empowerment problem here?
    Mr. Liebman. No. The purpose here is to have a very 
expedited process. And in most circumstances, one would not 
need 45 days.
    The fear we had in trying to decide how long to put into 
this proposal was what happens if an Omnibus Bill comes in on 
December 20th, which is not that rare. And between the holidays 
and putting together the President's budget, we need time for 
our staff to go through the whole bill and find all the things 
that need to be rescinded.
    So apart from that part of the year and that kind of 
Omnibus Bill, one would not need 45 days. So one thing one 
could do, which we did not do for simplicity, but you could do 
if you preferred it, would be to have a shorter time period, 
say 30 days, for general laws and the 45 day for Omnibus Bills 
or something like that so that one could have a much faster 
procedure for standard legislation rather than these big bills 
that come at the end of the year and may need appropriate 
amounts of time to----
    Chairman Spratt. We had this bill in the floor in the 1990s 
at least three times as I can recall. I was a floor manager 
twice, once with Ford and once on the Democratic side.
    One of the ideas added to the bill by Charlie Stenholm, as 
I recall, was that you would guarantee the President an up or 
down vote on his resolution, but you would also be allowed to 
propose a congressional substitute, a pull-up substitute at 
least equal in amount to the President's proposal.
    If the President's proposal were defeated, you could then 
vote upon the substitute. So Congress would have an incentive 
itself to go through spending and decide where it might be 
exorbitant or unnecessary or wasteful.
    Do you have a problem with that idea?
    Mr. Liebman. I do not think so. I would have to see the 
details. But the point here is to work together to get rid of 
unnecessary spending and whatever procedures work for that, 
we're amenable to.
    Chairman Spratt. We have passed several tax bills, too, 
where there was widespread criticism that they would target 
benefits to limited numbers of taxpayers, substantial benefits, 
limited numbers.
    And we offered something and passed it in the Government 
Operations Committee as it was called then which had 
jurisdiction of budget process which included targeted tax 
benefits. And the definition of that varied between ten and a 
hundred taxpayers. It was assumed that JCT could figure out 
which were limited to that few number of taxpayers.
    Is there a reason that you did not include something like 
that in the bill and could you accommodate that idea as well?
    Mr. Liebman. Well, we share your interest in eliminating 
those kind of targeted tax provisions. But the challenge is 
that when one makes changes to the Tax Code, one often needs to 
make amendments to the statute and make legislative changes 
that are not simply a matter of taking a dollar amount and 
reducing it to zero or reducing it to a lower amount.
    And so for tax provisions, tax provisions do not really fit 
into the very streamlined framework we have where the only 
thing that can happen is spending levels can be reduced. And so 
that is the reason we did not include it in this piece of 
legislation.
    But if there is a way to apply a similar streamlined 
procedure to limited purpose tax provisions, we would be very 
much open to that. We just did not think it really worked given 
how we were trying to set up a way that could just simply 
reduce spending levels and do nothing else.
    Chairman Spratt. What about tax expenditures, irrespective 
of the number of beneficiaries, with a tax expenditure that is 
really using the Tax Code to promote some particular purpose or 
policy?
    Mr. Liebman. Yeah. Well, the Administration shares your 
interest in reforming tax expenditures. I think we eliminated 
or significantly reformed over two dozen provisions in our 
current budget. Those are typically proposals that actually 
need changes in legislative language.
    So I do not think the kind of streamlined procedure we are 
talking about here works for that, but we very much think that 
tax expenditures need much more attention than they are getting 
right now in terms of reducing their use in bringing down the 
deficit.
    Chairman Spratt. Now, there are 12 different appropriation 
bills. Is the President seeking the right of rescission, power 
of rescission on each of those 12 so that it could be as many 
as 12 bills at the end of the fiscal year and the beginning of 
a new one?
    Mr. Liebman. Yes. On each bill, one would have the option 
of proposing a rescission package.
    Chairman Spratt. That would be the only bill for that 
particular bill, but still there would be 12, potentially 12. 
What happens if there is a supplemental or if there is a CR, 
continuing resolution? Would the President still have the power 
of rescission?
    Mr. Liebman. Yes. For any piece of legislation, within 45 
days, one could propose rescissions.
    Chairman Spratt. Now, you have included something in your 
testimony about nonentitlement mandatory spending. Would you 
define and illustrate that for us?
    Mr. Liebman. So what happens sometimes is in an 
authorization bill, basically appropriations get accomplished 
just as they would in a standard appropriations bill, but a 
specific spending item will be provided for.
    And in order to prevent there being a loophole in this 
provision where everyone simply shifts all their earmarks or 
their other wasteful spending to authorization bills, we wanted 
to make sure that direct spending that happens in authorization 
bills would be subject to the same procedures.
    Chairman Spratt. You also propose in this bill limited 
debate. To your way of thinking, what is limited debate? And 
does the legislator make the case to you that if I have got 
something in the bill that helps my particular jurisdiction 
that I worked hard to get through and believe that it will 
stand scrutiny if I can just get in the well of the House to 
explain it at adequate length, I do not want to be limited to 
one, two, or three minutes and unable to call supporting 
witnesses and supporting speakers and things like that, what do 
you think is fair debate for a single member with a single 
object?
    Mr. Liebman. I think we are willing to defer to you on that 
part of this bill. What we are trying to do is have a 
streamlined, fast-tracked procedure, something that cannot be 
filibustered in the Senate, something that will guarantee an up 
or down vote within a reasonable amount of time. But in terms 
of the exact time limits, we would absolutely be happy to defer 
to whatever your judgment is on that.
    Chairman Spratt. This is not a concern of the 
Administration because the President would like to have this 
authority, I am sure.
    But Jim Wright used to tell us, Lloyd and the other Texans 
here, that if you really wanted to understand why a line item 
veto or expedited or enhanced rescission was a problem, ceding 
that much power to the President, you needed to serve under 
Lyndon Johnson.
    From a Constitutional viewpoint, have you given any 
consideration to how you keep the scales evenly balanced at the 
same time we make this substantial rescission power to the 
president?
    Mr. Liebman. I think this proposal has been carefully 
crafted to preserve the existing balance of power. What it does 
is it gives the President who currently has the authority to 
propose legislation, the opportunity to propose an expedited 
rescission proposal, and then Congress which currently has the 
authority to alter its rules however it wants to deal with 
things on an expedited basis chooses to alter its rules to deal 
with these kinds of bills on an expedited basis.
    And I think the way to think about this is it is a 
constructive tool for letting the President and Congress work 
together to go after wasteful and duplicative and unnecessary 
spending rather than as an attempt to change the balance of 
power.
    Chairman Spratt. Thank you very much for your testimony.
    Mr. Ryan.
    Mr. Ryan. Thank you. I will pick up where you left off, 
Chairman.
    I have spent a lot of time on this issue over the years. 
When we wrote this bill originally four years ago, we consulted 
the attorney who successfully argued against the line item veto 
in 1996 at the Supreme Court to make sure that it is done in a 
way that is clearly Constitutional.
    As a member of the Legislative Branch and a big fan of the 
Constitution, I very much am interested in preserving the 
Legislative Branch's prerogatives as separation of powers and 
not delegating law-making authority to the Executive Branch.
    I think this bill does that, so I think the way this is 
written, and it is very similar to our bills, I think it fits 
that fine line on the timing issues.
    We spent lots of time with your predecessor agency, with 
the OMB in the last Administration. You have to find a way to 
deal with the Omnibus appropriation bills that hold over over 
the break. So I think the point you made is very, very valid. 
Perhaps you elongate the time for Omnibus bills and then 
shorten it for everything else. Maybe that is a good 
compromise.
    But, you know, a lot of the spending gets done at the end 
of the session right before we leave. It is an Omnibus Bill 
that is ten inches thick that none of us had time to read 
before voting on it. And I think you need to accommodate that. 
I think that is a pretty important point.
    Another point that I think is the targeted tax benefits. 
You get into the tax expenditure area, that is doing tax 
policy. And there is a good argument that tax expenditures have 
gotten out of control. A lot of us serve on Ways and Means and 
that is a good policy argument, but I think you need to limit 
that one to limited and that is why we had this definition of 
ten people. And then, you know, some of those people will not 
think are earmarks, you know, the orphan drug tax credit or 
something like that. But that is something we ought to consider 
on its own merits.
    But I do believe there is a lot of waste in the Tax Code 
that are very narrowed, very limited that is worth considering. 
And I think you ought to consider that.
    One quick question. Why not make sure that the savings go 
to deficit reduction? Now, there is a way to do this which is 
you lower the 302A. If we ever get caps in place, you lower the 
caps by the amount. Supposing the other body does not do it, 
you have some kind of reconciling procedure in a conference to 
lower the A by the lower of the two amounts is what I would do 
or split the difference or something like that. Why not make 
sure that this savings goes to deficit reduction? What is your 
opinion on that?
    Mr. Liebman. The only thing that can happen through the 
enactment of one of these expedited rescission proposals is 
spending can get reduced. It can get reduced to a lower level 
or it can be eliminated altogether. That is the only thing that 
can happen under the President's proposal. You cannot introduce 
new spending into the--at the same time, you cannot alter 
legislative text.
    Mr. Ryan. Right.
    Mr. Liebman. All you can do is reduce spending. So that is 
what we are trying to do here.
    Mr. Ryan. From your perspective. But you understand how it 
works here. That frees up fiscal space within the allocation to 
be spent somewhere else.
    Mr. Liebman. We are happy to talk to you about what the 
best procedures are, but the goal here is to get rid of 
wasteful spending.
    Mr. Ryan. Right.
    Mr. Liebman. And whether one needs to combine this with 
some other procedure or not to accomplish that, we are open to.
    There is also, I think, an interesting question of whether 
one also wants to be able to use this tool in cases where the 
purpose is okay, but the way the money is being spent is wrong. 
So a very heavily earmarked approach to spending where there 
might be a merit-based way to do the same thing.
    If you also want to be able to go after that and reallocate 
spending, then you might not want to be adjusting the 
allocations. But our main purpose here is to reduce spending. 
And so if it seems like this is not going to work for the 
reasons you suggested, we would be happy to have a discussion 
with you about that.
    Mr. Ryan. Yes. Okay. So what I am trying to get is the 
Administration, I know it is not in your proposal, but you are 
not opposed and you are generally supportive of making sure 
that the savings goes to deficit reduction?
    Mr. Liebman. Absolutely.
    Mr. Ryan. Okay. We have, it is not as good as what this 
proposal or this idea offers, but we already have existing 
rescission authority today, meaning the law has that. The 
President can send us a rescission bill. The Committee of 
jurisdiction, if they have not acted in 25 days, the bill can 
just be discharged if 88 members co-sponsor it.
    I would like to include into the record a letter from Mr. 
Boehner and Mr. Cantor, two letters from Mr. Boehner and Mr. 
Cantor to the President if I may.
    Chairman Spratt. Without objection.
    [The attachments follow:]
    
    
    
    
    
    
    
    
    Mr. Ryan. What we are trying to tell you is, and I 
understand the OMB Director said the other day it comes down to 
a question of whether it is a fruitless exercise or not, we are 
extending the olive branch. We need to cut spending now. And we 
are telling you we will get the 88 co-sponsors you need to make 
sure that your rescission requests are acted on here in the 
House.
    So, please, send us some spending cuts. This is not a 
fruitless exercise. You will have the support you need if you 
are sincerely interested in cutting and rescinding spending.
    What say you about that?
    Mr. Liebman. Well, in our last two budgets, we proposed----
    Mr. Ryan. No. But now. I know in your budgets----
    Mr. Liebman. No. Let me be clear. We proposed $20 billion 
in terminations and reductions through the appropriations 
process. We accomplished an historic amount. Sixty percent of 
the discretionary cuts actually happened.
    Mr. Ryan. I understand all that.
    Mr. Liebman. So we think that, you know, where should we 
spend our energy in the next six or eight weeks to control 
spending, it is in making sure this year's appropriation bills 
stick to the freeze and that they cut these unnecessary 
programs.
    And as you know, floor time is very precious, especially in 
the other body. You introduce one of these proposals. It gets 
amended. It goes on and on. What we want to do is control 
spending and we think that right now the best way to do it is 
through the regular appropriations process. But we need this 
tool that we are proposing today so that we can guarantee an up 
or down vote when we send up such a----
    Mr. Ryan. All right. So you are not going to do it is what 
I am getting.
    I would just simply say, first of all, the appropriations 
process is for the next fiscal year, not the current fiscal 
year. We have been on an enormous spending binge. Domestic 
discretionary spending has gone up in this session of Congress 
84 percent.
    I would like to think we could find some savings somewhere 
in this fiscal year to rescind spending to just show the credit 
markets, if anything, you know, we are getting serious about 
this stuff. But it sounds like the effort is not going to be 
expended.
    Last thing I want to ask you--well, I guess the last thing 
I would ask you is let us try and work together to get this 
thing done the right way. I want you to know that we are 
sincerely interested in doing that.
    The timing issues, I think that can be banged out to a 
mutually satisfactory level. The limits of debate, I think it 
is ten hours in the Senate, which I know it seems like a 
nanosecond in the Senate terms, but that is plenty I would 
argue over there in the Senate.
    This is a good start, a good proposal. I think if we just 
finish the job of getting it to deficit reduction, that would 
be helpful.
    Lastly I want to ask unanimous consent to include in the 
record a statement that Senator Feingold asked me to insert. Is 
there objection on the other side of the aisle to that?
    Chairman Spratt. Without objection.
    [The prepared statement of Russ Feingold follows:]

     Prepared Statement of Hon. Russell D. Feingold, a U.S. Senator
                      From the State of Wisconsin

    Mr. Chairman, thank you for permitting me to offer testimony as 
part of your Committee's hearing on the President's expedited 
rescissions proposal, more commonly referred to as his line item veto 
bill. I was pleased to join with Senator Tom Carper (D-DE), Senator 
John McCain (R-AZ), and others to introduce that legislation in the 
Senate as S. 3474, the Reduce Unnecessary Spending Act of 2010, and I 
very much hope we can enact that measure this year to give us another 
tool to go after wasteful spending.
    Just a few weeks ago, I chaired a hearing of the Senate Judiciary 
Committee's Constitution Subcommittee at which this proposal and 
similar proposals were reviewed, and I am pleased to say that the 
consensus of that hearing is that the bill you are reviewing today is 
clearly constitutional.
    When he took office, President Obama was handed perhaps the worst 
economic and fiscal mess facing any administration since Franklin 
Roosevelt took office in 1933. The legacy President Obama inherited 
poses a gigantic challenge.
    There is no magic bullet that will solve all our budget problems. 
Congress has to make some tough decisions, and there will be no 
avoiding them if we are to get our fiscal house in order. But we can 
take some steps that will help Congress make the right decisions, and 
that can sustain the progress we make.
    A line-item veto, properly structured and respectful of the 
constitutionally central role Congress plays, as our legislation is, 
can help us get back on track.
    Mr. Chairman, I have been working on this issue for some time now, 
and have been pleased to partner with my colleague from Wisconsin, the 
Ranking Member of this Committee, Congressman Paul Ryan, on a bill 
strikingly similar to the President's proposal. Congressman Ryan and I 
belong to different political parties, and differ on many issues. But 
we do share at least two things in common--our hometown of Janesville, 
Wisconsin, and an abiding respect for Wisconsin's tradition of fiscal 
responsibility.
    Earlier this year, in a critical moment in the evolution of this 
proposal, Congressman Ryan raised the line item veto issue directly 
with President Obama at a meeting in Baltimore, asking him to consider 
the legislation he and I had introduced. I don't think there is any 
doubt that the Congressman's comments helped develop the 
Administration's thinking in this area, and helped lead to the proposal 
the President made just a few weeks ago. I know the bill before you 
today may not be everything he wants to see in a line item veto 
measure, but Congressman Ryan's efforts have been absolutely central to 
the bill we are now considering, and I very much appreciate his 
dedication to this issue.
    Mr. Chairman, the bill before you today, like the one we have 
introduced in the Senate, is a significant step forward in our efforts 
to provide the President with the kind of authority needed to cut 
wasteful spending. It provides the President the ability to get quick 
and definitive congressional action on cuts to individual programs in 
large spending bills.
    Currently, the President must choose between vetoing a bill in its 
entirety, or signing it and possibly enacting billions of dollars of 
wasteful spending. With this bill, and the one we introduced in the 
Senate, the President will have a third option--signing a spending 
bill, but then submitting a package of proposed cuts from that spending 
bill to Congress for quick review. The package of cuts proposed by the 
President will get an up or down vote in the House and, if it passes 
there, an up or down vote in the Senate.
    Mr. Chairman, our line item veto bills cover earmark discretionary 
spending as well as broader non-entitlement spending accounts. The 
measure excludes entitlement spending and tax expenditures from the 
expedited rescission approach. Spending done through entitlements and 
tax expenditures make up an enormous amount of the total spending done 
by the federal government. However, unlike the programmatic spending 
done in discretionary programs, where cuts can be made by zeroing out 
or reducing a number for a specific account, reducing spending in 
entitlements or tax expenditures often requires a change in the 
underlying policy. Indeed, Congress already has a fast-track procedure 
designed specifically for considering legislation that reduces spending 
done through entitlements and tax expenditures. It is called 
reconciliation, and it was used effectively in the 1990s to reduce the 
deficit.
    As I mentioned, a key target of this new line item veto bill is the 
unauthorized earmark spending that too often finds its way into large 
appropriations bills. Earmark spending was what Congressman Ryan and I 
targeted in our line item veto proposal, and it is the example every 
line-item veto proponent cites when promoting their legislation.
    When President Bush asked for this kind of authority, the examples 
he gave when citing wasteful spending he wanted to target were 
congressional earmarks. When Members of the House or Senate tout a new 
line-item veto authority to go after government waste, the examples 
they give are congressional earmarks. When editorial pages argue for a 
new line-item veto, they, too, cite congressional earmarks as the 
reason for granting the President this new authority.
    Unauthorized congressional earmarks are a serious problem. We won't 
solve our budget problems just by addressing earmarks, but if we are to 
get our fiscal house in order, eliminating earmarks has to be part of 
the solution. For all the lip service Congress pays to this issue, 
there are still thousands of earmarked spending provisions enacted 
every year. Just last year, the Omnibus Appropriations bill for FY 2009 
passed in March of 2009 contained more than eight thousand earmarks 
costing $7 billion, and the Consolidated Appropriations bill for FY 
2010 passed in December of 2009 included nearly five thousand earmarks, 
costing $3.7 billion.
    There is no excuse for a system that allows that kind of wasteful 
spending year after year. And given the unwillingness of Congress to 
discipline itself in this regard, it is appropriate to provide the 
President some additional authority to seek an up or down vote in 
Congress on proposed cuts in this area of spending.
    Mr. Chairman, some will argue that the President's line item veto 
proposal is not a cure-all, and they are right. We will not balance the 
budget just by passing a line item veto-like authority for the 
President. Nor will we balance the budget just by eliminating wasteful 
earmark spending. But we can make real progress in getting our fiscal 
house in order, and in changing the culture of Washington which over 
the last two decades has seen an explosion of spending done through 
unauthorized earmarks that circumvent regular congressional review and 
the scrutiny of the competitive grant process.
    Like the measure Congressman Ryan and I introduced, under the 
President's proposal, wasteful spending doesn't have anywhere to hide. 
It's out in the open, so that both Congress and the President have a 
chance to get rid of wasteful projects before they begin. The 
taxpayers--who pay the price for these projects--deserve a process that 
shows some real fiscal discipline, and that is what this legislation 
promotes.
    President Obama recognizes the pernicious effect earmarks have on 
the entire process. When he asked Congress to take the extraordinary 
step of sending him a massive economic recovery package, he knew such a 
large package of spending and tax cuts would naturally attract 
earmarks. He also recognized that were earmarks to be added to the 
bill, it would undermine his ability to get it enacted, so he rightly 
insisted it be free of earmarks.
    I am delighted he has stepped forward to propose a new line item 
veto-like authority, and I am especially pleased to have joined with 
Senator Carper and others in introducing that proposal in the Senate, 
and to be working with you, Mr. Chairman, as the principal author of 
this measure in the House.
    Thank you again for allowing me to offer testimony before your 
Committee today.

    Mr. Ryan. All right. Thank you.
    Chairman Spratt. Mr. Doggett.
    Mr. Doggett. Thank you very much. I appreciate your 
professed concerned about unnecessary expenditures and I am 
reviewing what you propose to address it. But I am unequivocal 
in my concern and objection to what you and the Office of 
Management and Budget have not addressed in the way of 
expenditures.
    As you well know, the amount of tax expenditures, the tax 
expenditures that are basically entitlement spending since they 
are outside of the budget process, are approximately the same 
as all of the discretionary spending that comes through this 
Committee.
    Just to give you an example of the way this process is 
working today, in consideration over in the Senate, if you were 
to come on behalf of the Administration to this Committee and 
ask us to write a check or through the appropriations process 
for $38 million for this year only to NASCAR, if you were to 
come and say that these big Wall Street banks that control 60 
or 70 percent of our economy are just barely skimping by, can 
only afford to pay a few hundred million dollars in bonuses to 
their top executives, and so we need to write them a check for 
a billion, a couple billion, maybe even $3 billion because of 
their overseas operations, you would be laughed out of this 
room.
    And, yet, that is exactly the position that the 
Administration and a majority of this Congress, certainly not 
me, have taken with reference to the Extenders Bill because 
those provisions are in there as tax expenditures to do just 
that even in this rough economy.
    I have raised this concern about tax expenditures with the 
Office of Management and Budget when Dr. Orszag was here in 
March of 2009, I raised it when the Deputy Director of OMB was 
here in November, I raised it again this year when Dr. Orszag 
came, that as far as evaluating tax expenditures, this 
Administration was doing nothing other than taking a Xerox 
machine and copying the language of nonengagement that the Bush 
Administration had in its last budget.
    Since Dr. Orszag was here before this Committee in February 
of this year, has the Office of Management and Budget done a 
single thing to advance the cause of evaluating tax 
expenditures which keep going up?
    Mr. Liebman. We have been working hard in analyzing tax 
expenditures. I think in the table in the chapter of the budget 
that you are referring to, there are 173 tax expenditures and 
there are more than 20 that in our current budget we propose to 
either end or to significantly reform.
    We propose to eliminate 12 different tax expenditures for 
fossil fuel producers. We propose to cap Schedule A deductions.
    Mr. Doggett. We can discuss the merits of your budget 
proposal. We had that when Peter was here in front of the 
Committee in February. But there was no evaluation process 
going on and no reason to believe that next year when we get 
the budget that that table and that evaluation process will be 
any different than it was when the Bush Administration left 
office.
    What, if anything, is the, other than a couple, three, 
twenty provisions that you propose to eliminate, what has been 
done since February to get into serious and critical evaluation 
of these tax expenditures?
    Mr. Liebman. With all due respect, the way we come up with 
the specific proposals, the over two dozen proposals to either 
eliminate or reform these tax expenditures, is through doing 
careful analysis of these just as we do with other budget 
provisions. And as we go through the year and as we get toward 
the next budget, we will continue to study ways----
    Mr. Doggett. Is there any reason to believe that we will 
see an appendix to the budget as far as evaluation of all of 
these provisions that will look any different next year than it 
did this year or last year or in the last year of the Bush 
Administration?
    Mr. Liebman. Again, that chapter of the budget goes through 
and really the chapter next to it on our tax policies goes 
through the changes we have proposed to lots of tax 
expenditures and explains our rationale for that.
    Mr. Doggett. You are talking about specific provisions and 
I am talking about a critical evaluation process that looks at 
tax expenditures the way we look at direct expenditures. And it 
sounds to me like the answer is not anything.
    On May the 24th, when Dr. Orszag had his conference call 
about this particular proposal, he indicated that you were open 
to the idea of covering some of these tax breaks. Both the 
Chairman and the Ranking Member, in fact, the Chairman, when he 
introduced a proposal similar to this in prior years included 
at least some of the special interest tax breaks that were in 
there.
    Has anything happened since that declaration of openness 
about tax benefits or is the attitude of the Administration 
that it does not want to deal with tax at all in this proposal 
and does not have any other proposals to deal with the 
rescission or even the evaluation of tax provisions?
    Mr. Liebman. If there is a way to preserve the streamlined 
up or down process, fast-track procedure that this legislation 
is meant to achieve and to include tax provisions, we are all 
for it.
    But the question is whether one can simply eliminate levels 
of tax provisions without having to rewrite the Tax Code. And 
many tax provisions interact with each other. And so in order 
to get rid of them, you have to not only zero them out, you 
have to change alternative parts of the Tax Code.
    And once you are into that kind of legislative drafting, we 
fear that one would lose the fast-track ability to get a vote 
quickly, just have an up or down vote. But if there is a way to 
do it, we are completely open to that.
    Mr. Doggett. Well, we kind of look to you for proposals of 
ways to do things. And I gather you do not have one this 
morning. And as long as we continue to draw this distinction 
and add to limitations on direct expenditures but do not apply 
them to tax expenditures, we will have more and more $38 
million unnecessary and unjustified expenditures to NASCAR.
    Thank you.
    Chairman Spratt. Thank you, Mr. Doggett.
    Mr. Djou.
    Mr. Djou. Thank you, Mr. Chairman.
    Dr. Liebman, a few quick questions. First off, I like this 
proposal. It is good. Anything to reduce the overall spending I 
think in our federal government is a positive thing.
    But I have a few questions to begin with, and that is, 
could you explain to me the Administration's position on line 
item veto and why--actually, what is the Administration's 
position on just going forward with line item veto?
    Mr. Liebman. The line item veto, at least as it was enacted 
in the 1990s, was determined by the Supreme Court.
    Mr. Djou. A Constitutional amendment to adopt the line item 
veto.
    Mr. Liebman. I see. I am not sure that we have a formal 
position on that. I mean, we think that the proposal we have 
before us is the best way to move forward because it preserves 
the existing balance of power.
    Mr. Djou. Okay. So the Administration is neutral on a 
Constitutional amendment to line item----
    Mr. Liebman. I do not know that we have explicitly had a 
discussion around it. I will have to check.
    Mr. Djou. Okay. All right. A few other questions.
    Chairman Spratt. Will the gentleman yield?
    Mr. Djou. Yes, Mr. Chairman.
    Chairman Spratt. There was a line item veto proposed in the 
mid 1990s, mainly by Republican supporters, and it was held 
under the Constitution.
    Mr. Djou. So I am asking the Obama Administration's 
position on a Constitutional amendment----
    Chairman Spratt. Oh, I beg your pardon. Okay.
    Mr. Djou [continuing]. For a line item veto. Thank you, Mr. 
Chairman.
    A few other quick questions, Dr. Liebman. Whether or not 
this rescission proposal passes, will the Administration 
voluntarily comply with it and submit proposals for rescission 
whether or not--because you can do it anyway?
    I mean, the Administration can submit these even if this 
measure does not pass. And it is up to the Congress. I mean, at 
least so the public can understand what the Administration 
believes should be cut in a budget.
    So will the Administration voluntarily comply with its own 
proposal whether or not this legislation eventually passes the 
Congress?
    Mr. Liebman. Well, we have a current mechanism for us 
indicating which proposals should be eliminated and that is the 
termination and reduction line of the budget. So that is the 
first step we take.
    Then we try through the appropriations process to get those 
provisions eliminated. And we are working on that at the moment 
now.
    You know, whether at a particular point in time an 
expeditious rescission package is or is not the best way to go 
about getting after wasteful spending will determine, you know, 
depend on the circumstances. But we very much are dedicated to 
finding ways to eliminate duplicative and wasteful and 
unnecessary spending.
    Mr. Djou. I am going to try and pin you down here a little 
bit. So the Administration likes this proposal. I like this 
proposal. I do not think you actually need a law from Congress.
    Nevertheless, after the appropriation bills are done for 
the Administration to come back and say these are the programs 
we think should be eliminated from the budget, will you do that 
regardless of whether this bill is passed?
    Mr. Liebman. Well, we have already indicated which programs 
we want eliminated from the budget. In terms of whether we 
would make a formal rescission request under the existing 
rescission authority, we are concerned that when one does that, 
one does not get an up or down vote and that it basically----
    Mr. Djou. Right, right. I know that that is a----
    Mr. Liebman [continuing]. Sets up a fruitless process. So, 
you know, we want to work at any point in time in whatever the 
best way is to accomplish the terminations and reductions that 
we have proposed.
    Mr. Djou. No, I know you are not going to get an up or down 
vote because you need this law. What I am saying here is will 
you do it anyway? Will you put a proposal so the American 
people can see what the Administration would have wanted to 
have cut anyway regardless because I think highlighting the 
spending is oftentimes as powerful as actually the legislative 
act itself? So I want to know, will the Administration comply 
with this proposal whether or not it passes Congress?
    Mr. Liebman. And the way we tell the American people what 
we want to cut is the volume of the budget that has 
terminations and reductions.
    At times, for example, on some of the weapons systems that 
the Defense Department thinks should be eliminated, we will 
indicate that the President's advisors are issuing a 
recommendation of a veto if those things are included in bills.
    So we have a lot of techniques to go after wasteful 
spending. And at any point in time, we will use the technique 
that we think is likely to be most effective.
    Mr. Djou. Okay. Last follow-up question then and that is 
earmarks. Will the Administration, should this measure pass, 
will you use it on Congressional earmarks?
    Mr. Liebman. Yes. One of the things that this is meant to 
do is to go after programs that are heavily earmarked and have 
there be a way to work with Congress to reduce the level of 
earmarks.
    Mr. Djou. Because I am new, could you explain quickly the 
Administration's position generally on budget earmarks?
    Mr. Liebman. Sure. I mean, in general, our position is we 
need to significantly reduce earmarks.
    Mr. Djou. What is significantly reduce? Cut it by 90 
percent?
    Mr. Liebman. I do not think we have used a specific number. 
I think if you look at the history, you know, there was a real 
surge in earmarks starting in 1995 going through about 2006.
    In the last two Congresses, there was in the first of those 
two Congresses a big movement toward transparency that Senator 
Obama played a big role in bringing about. In the last 
Congress, in the last two years, we have brought down 
significantly the number of earmarks, as I mentioned in my 
opening statement, by 27 percent last year.
    So we have made good progress, but we need to make more 
progress. And, you know, we hope we will make more progress in 
this year's appropriation bills.
    Mr. Djou. Thank you.
    Thank you, Mr. Chairman.
    Chairman Spratt. Mr. Berry.
    Mr. Berry. Thank you, Mr. Chairman.
    Mr. Liebman, the President already has the authority to 
veto a bill; is that not right?
    Mr. Liebman. Absolutely.
    Mr. Berry. And I fail to see how this proposal maintains 
the balance of power. It seems to me that it does give the 
President an advantage when it comes to deciding how the money 
is spent. And right now that is clearly delineated in Article 
1, Section 9 of the United States Constitution.
    Do you agree with that?
    Mr. Liebman. I certainly agree that that is the right 
article to look at. I think that this is crafted to preserve 
the balance of power. What it does is the President sends up a 
piece of legislation which certainly the Constitution provides 
for and Congress chooses to set rules such that that 
legislation gets treated in an expedited way which Congress has 
done for other fast-track procedures. So I do not think there 
is anything that fundamentally upsets the balance of power 
here.
    Mr. Berry. Well, it forces the Congress to take action 
which they had an option to either take action or not take 
action otherwise.
    Mr. Liebman. It lets Congress choose to amend its rules to 
do so, yes.
    Mr. Berry. No. It forces us. If this bill you are talking 
about passes, it forces us to deal with your proposal.
    Mr. Liebman. The purpose is to require an up or down vote, 
absolutely.
    Mr. Berry. Right. You talked about earmarks. How much of 
the discretionary budget is earmarked by the Administration?
    Mr. Liebman. We do not earmark proposals. There are some 
specific things in the budget that are, for example, at a 
specific location, but those all come from either competitive 
or merit-based procedures. So, you know, we do not have 
earmarks per se in our budget.
    Mr. Berry. I would take great exception to that. I do not 
believe it. It seems to me that the Administration is of the 
opinion that they know better how to spend money than we do.
    Mr. Liebman. That is not our point here. Our point is to 
let Congress and the President work together so that we can 
have a way to get rid of wasteful spending.
    Mr. Berry. When was the last time the Office of Management 
and Budget had a conversation with a member of Congress about 
how to spend money?
    Mr. Liebman. Certainly several times a day we are talking 
with Congressional offices.
    Mr. Berry. How is it going?
    Mr. Liebman. Some go well, some go less well.
    Mr. Berry. Well, I would like to register my opposition to 
this idea that we give any President more authority over the 
spending process.
    Now, I can agree that we have not as a Congress for a long 
time have not done a real great job. It has been interesting to 
me to see my colleagues across the aisle since the election of 
2008 suddenly have this attack of fiscal conservatism. And I am 
glad they did. I wish they had gotten the religion a little 
sooner, a few years before that.
    Mr. Ryan. Will the gentleman yield?
    Mr. Berry. No.
    But how this solves any of our problems is beyond me. You 
know, if I had room in my shirt for the city of Chicago, I 
would not be in favor of giving any President any more power 
than they already have. And so I want to formally register my 
opposition to this whole idea.
    And I thank you.
    Chairman Spratt. Any members on your side? Mr. Austria is 
not here.
    Ms. McCollum.
    Ms. McCollum. Thank you, Mr. Chair.
    This country and this Committee is well aware that we are 
facing a budget crisis of historic proportion. And in light 
especially of the European debt crisis, no one thinks the 
federal debt and deficits are problems America can face are 
going to go on much longer.
    Today the national debt is over $13 trillion. Congressional 
earmarks did not dig that hole and reducing earmarks will not 
get us out of it. This budget crisis calls for decisive 
solutions.
    Now, this proposal sounds attractive, but ultimately offers 
little help and may actually make our problem worse. And I am 
going to give an example.
    This is similar to what you are requesting, similar to a 
process that was just recently used in Minnesota where the 
Governor has line item veto. The state budget is in its worse 
crisis in 50 years, if not more. The Governor made cuts using 
his authority to cut transit, healthcare, universities, and 
other investment areas wherein particularly the Governor did 
not get very many votes.
    A much stronger version of this proposal I believe is being 
discussed today and it has failed to deliver back home in 
Minnesota any promise of fiscal responsibility in my State.
    So I want to be clear, Mr. Chairman. I am serious about 
tackling the budget crisis. I stand prepared to make the 
difficult decisions ahead. I have not hesitated to make them in 
the past. I supported Pay As You Go. I voted against President 
Bush's tax cuts in 2001 and in 2003. And I am ready to vote 
against extending them.
    I am an original co-sponsor of Chairman Obey's legislation 
to create a war tax to pay for the cost of the war in Iraq and 
Afghanistan.
    I have never supported the expansion of rescission 
authority because I believe it is a clear violation of the 
separation of powers in the Constitution and it is not a real 
solution to fiscal challenges.
    I want to make clear. I did not support this idea under 
President Bush and I do not support it now.
    And part of what I am hearing from your testimony is that 
there are problems in the other body getting up and down votes. 
I do not see changing the Constitution or the House's 
responsibility to solve a problem that is in the Senate rule 
making is a very wise decision.
    As has been pointed out, the President already has holds 
and sufficient power to restrain spending. He submits budget 
requests. He has veto power and he already has the ability to 
submit rescission proposals to Congress.
    Now, this new authority and this legislation in my opinion 
starts to become a blank check. So here are my points that I 
would like to have for discussion.
    Under this legislation, could the President include farm 
subsidies, highway funding? Tax extenders we hear are not going 
to be possible in this package of rescissions. And I am also 
interested in hearing about other proposals being discussed.
    For example, is there any discussion in OMB about ending 
the practice of requesting funds in the President's budget that 
are not authorized by Congress?
    Mr. Liebman. Well, Congressman, I first want to agree with 
you that this is only one and frankly a small part of what we 
need to do to get the deficit under control. But I think it is 
an important tool and along with statutory PAYGO that we were 
pleased to work with Congress to enact along with the 
President's proposed discretionary freeze. I think it is a tool 
that will be valuable in helping us reduce deficits.
    As you correctly said, there are large classes of spending 
that this would not apply to. And that is why we need other 
tools. That is why statutory PAYGO was important on the 
mandatory side. It is why the fiscal commission is important. 
It is why the President put more than a trillion dollars of 
specific deficit reduction proposals in his budget.
    But I think this is an important tool because so frequently 
one gets a very big bill of which 95 percent, even more of it, 
can be important----
    Ms. McCollum. Sir, my time is limited. Would you answer my 
second part of the question because I have heard your comments 
before.
    The President when he supports his budget proposal moving 
forward quite often asks for money for programs that are not 
authorized by Congress.
    Is the President prepared to not do that? President Bush 
did the same thing as well. I am not singling out President 
Obama. Presidents have done this, asked for money for programs 
that have not been authorized. What is your position on that?
    Mr. Liebman. Well, in our budget, we often request 
authorization for new things. So, I mean, if we think there is 
a piece of legislation that needs to be introduced, even if 
Congress had not moved first, we will often put such a proposal 
in the budget.
    Ms. McCollum. Thank you, Mr. Chairman.
    You know, I appreciate the discussion here. I think it is 
important to have. And I appreciate the fact that you said that 
when the President puts forward their spending ideas that it is 
competitive based and merit based. So are my legislative 
directives of spending, i.e., earmarks.
    Thank you, Mr. Chairman.
    Chairman Spratt. Thank you.
    Mr. Scott.
    Mr. Scott. Thank you, Mr. Chairman.
    Dr. Liebman, I notice the title there was Reduce 
Unnecessary Act of 2010. How does the bill define unnecessary?
    Mr. Liebman. I think there are a range of policies that 
would be in that category. There are programs that duplicate 
other programs, so we are running similar programs in two 
different agencies and maintaining the overhead of both.
    Mr. Scott. Is that defined in the bill? Does the bill 
define unnecessary?
    Mr. Liebman. No, it does not.
    Mr. Scott. If the President lists spending that Congress 
determines is necessary and some unnecessary, what option does 
Congress have?
    Mr. Liebman. They can either vote for the proposal or they 
can vote against it.
    Mr. Scott. So they would have to vote against necessary 
spending? They would have to take it or leave it? They would 
have to actually vote against necessary spending? You would 
have up or down----
    Mr. Liebman. It is a single package. It is a single 
package.
    Mr. Scott. Now, are all----
    Mr. Liebman. And to----
    Mr. Scott. Are all Congressional earmarks presumed to be 
unnecessary, but earmarks proposed by the Administration 
presumed to be necessary and merit based?
    Mr. Liebman. No. There are Congressional earmarks that are 
good programs and good uses of funds and there are ones that 
are bad uses of funds.
    Mr. Scott. Now, in your statement, you said that the 
Administration made a priority of identifying and cutting 
unnecessary spending, proposing approximately $20 billion in 
terminations, reductions, and savings for fiscal year 2010 and 
2011. That is $20 billion.
    Can you remind me what the deficit was in those two fiscal 
years.
    Mr. Liebman. That has been about ten percent of GDP in the 
last couple years.
    Mr. Scott. Compared to $20 billion, what is the number?
    Mr. Liebman. One point five trillion.
    Mr. Scott. Are you talking about this proposal has the 
potential of addressing what, one or two percent of the 
deficit?
    Mr. Liebman. It is true. But it is not just about reducing 
the deficit. We have other aspects of our plan.
    Mr. Scott. Okay. Well, in the early 1990s, we were able to 
make the tough choices to actually balance the budget. I mean, 
100 percent of the deficit, just knock it out.
    This only deals with one side of the equation, that is 
spending. It does not deal with taxes at all as I understand 
it. When we balanced the budget, we cut spending and increased 
taxes, did both.
    If we are willing to make those tough choices, we obviously 
do not need this. And if we are not willing to make the tough 
choices, will this make any difference?
    Mr. Liebman. Well, I agree, first of all, that this is only 
one component of what we need to reduce the deficit. But even 
if we had surpluses, I think this would be an important 
proposal because it is important that we go after unnecessary 
and wasteful spending regardless of the level of the budget.
    And so having a way so that when low-value spending is 
tacked on to a large bill, to be able to separate it out and 
give Congress the option of voting to get rid of it I think is 
a very valuable tool.
    Mr. Scott. Well, I think we and some others have suggested 
that the President is not restrained by present law to veto a 
bill and suggest if you take these out, I will sign the bill. 
All we would have to do is just reprint the bill and pass it 
and send it back. We can essentially do what is in the bill 
now.
    Has the President tried that?
    Mr. Liebman. I think the veto is a very blunt tool. You 
often have a piece of legislation that is essential, needs to 
get passed soon. And you run up against the question of whether 
one vetoes a whole bill over a limited part of the bill that is 
problematic.
    And I think members of Congress face the same issue whether 
you vote for or not vote for a bill that you like the bulk of, 
but there are some things you do not like.
    Mr. Scott. Well, and put us in that box when you send a 
rescission package that we have to vote up or down and cannot 
consider the good parts and bad parts.
    I mean, this whole bill creates that box; does it not?
    Mr. Liebman. Well, I think one of the constraints that will 
operate on the President in proposing such a rescission package 
is that if he proposes one that has things are not wasteful 
spending in it, it is going to go down. And so that will 
provide a strong----
    Mr. Scott. Well, it may go down or may not. It may have a 
lot of wasteful spending and may have a lot of a little bit of 
good spending on a balance. You have to vote it up or down.
    Lyndon Johnson's name has been mentioned. Could you explain 
what Lyndon Johnson would do with a bill like this?
    Mr. Liebman. I think I would probably defer to people on 
the panel here as the experts on the new----
    Mr. Scott. Well, how does it change the balance of power of 
Congress and the power of the President to coerce Congress into 
taking unrelated action?
    Mr. Liebman. I think what this does is it allows the 
President and Congress to work together to go after unnecessary 
spending. This is really not about coercing anybody.
    Mr. Scott. The President would not coerce members of 
Congress into taking unrelated action by using this rescission 
package?
    Mr. Liebman. No. I think you have seen in our terminations 
and reductions volumes that we have proposed, we go after broad 
classes of spending that we think are----
    Mr. Scott. So if the President needed a vote on an 
unrelated bill, he could say that I will leave your earmark 
alone or I will put it in the package? He would not do that?
    Mr. Liebman. The purpose here is not to do anything like 
that. The purpose is to----
    Mr. Scott. Is that in the bill prohibiting the President 
from using that kind of coercion?
    Mr. Liebman. All this bill does is allows the President to 
propose a set of unnecessary spending and let Congress then 
decide what to do with it. Not to mention it is no different 
than being able to have the President send up a piece of 
legislation at other points in time that single out a 
particular member's projects. And we do not see that very 
frequently because I think there are good social norms that 
require the President and Congress to work together that 
prevent that kind of thing from happening.
    Mr. Scott. Thank you, Mr. Chairman.
    Chairman Spratt. Thank you, Mr. Scott.
    Mr. Schrader.
    Mr. Schrader. Thank you, Mr. Chairman.
    I am a big supporter of this bill. I think this is another 
tool in the toolbox that is definitely very, very, very needed. 
And I think the balance that is struck in this bill retains 
clear legislative authority over spending. The President may 
propose and the Congress can dispose of any recommendation that 
comes as a result of this bill.
    I guess a couple of specific questions though. One would be 
during the time that a particular program is targeted for 
potential rescission, what happens to that money? What is the 
Agency going to do be doing in that interim?
    Mr. Liebman. The President has the option of telling an 
Agency to withhold spending that money until Congress has a 
chance to act during the 25 days because you would not want to 
have a procedure where an Agency has started setting up a 
program and then a few weeks later, Congress chose to end that 
program. So it allows that spending to be withheld for those 25 
days.
    Mr. Schrader. Then the only other question I had, a follow-
up of Mr. Ryan's line of questioning and interest, am I to 
understand based on your responses that the Administration be 
friendly to an amendment that the dollars that actually did 
make it through the rescission process supported by Congress, 
that there be a possibility for an amendment to use that money 
solely to reduce the deficit as opposed to being spent 
elsewhere?
    Mr. Liebman. We would be happy to talk about that because, 
again, our purpose here is to reduce the deficit and to reduce 
spending.
    Mr. Schrader. I yield back, Mr. Chair.
    Chairman Spratt. The gentleman yields back.
    Mr. Becerra.
    Mr. Becerra. Thank you, Mr. Chairman.
    Mr. Liebman, let me thank you for coming here and trying to 
help us understand the proposal from the President.
    I am somewhat puzzled that you would be here now talking to 
us about the proposal without being able to define what would 
be unnecessary spending. And I am wondering if that is a sign 
that you all have not thought the proposal out, thought it 
through thoroughly, or it is that you would rather have it be 
vague to be able to decide what is considered unnecessary.
    Mr. Liebman. I do not think it is that we cannot define it. 
It is that----
    Mr. Becerra. Okay. So can you define it?
    Mr. Liebman [continuing]. It applies to a broad set of 
types of programs.
    Mr. Becerra. Okay. So let us----
    Mr. Liebman. It could apply to programs that are not 
allocated based on merit. It could be defined----
    Mr. Becerra. Okay. So let us try to go through that.
    Mr. Liebman [continuing]. As duplicative programs.
    Mr. Becerra. Okay. So let us go through that. The so-called 
bridge to nowhere by a Republican member sending I think it was 
$28 million to Alaska to construct a bridge to a remote area, 
would that be considered unnecessary spending?
    Mr. Liebman. I do not want to comment on specific programs, 
but that sounds like the kinds of programs that one might well 
want to call unnecessary.
    Mr. Becerra. Okay. Would money by a member to a particular 
region of the country to help bolster Head Start programs that 
are having difficulty with their facilities because of the age 
of the facilities, would that be considered unnecessary, an 
unnecessary earmark?
    Mr. Liebman. Let me be clear. This is not meant to go after 
every earmark. It is meant to go against low-value spending and 
one would have to evaluate each proposal on its merits.
    Mr. Becerra. Right. And, see, the concern I have is you are 
using all sorts of code words, low value, unnecessary, but how 
are we to know what you consider low value or unnecessary?
    Mr. Liebman. Well, the proposal----
    Mr. Becerra. If we decide to have a bridge go to nowhere, 
how will we know if you think that is okay or not? And if we 
have a Head Start program that is trying to stay open and meet 
all the local code requirements to keep a facility in place, 
how do we know if that is going to withstand your scrutiny of 
unnecessary?
    Mr. Liebman. The proposal requires us in sending up the 
rescission proposal to explain clearly why it is that we are 
proposing----
    Mr. Becerra. But that is after the fact. That is after we 
have worked the different spending bills to figure out where to 
go.
    Now you are telling us after we have already been working 
with our constituencies back home, with all the families, and 
all the employees of these Head Start programs, you name the 
type of program, whether it is a transportation project to take 
care of potholes that are affecting the freeways and our local 
communities or whether it is trying to bolster up dilapidated 
bridges that are on the verge of falling over.
    How do we know in advance if you do not give us a clear 
definition? So I hope you will work on that so we can get a 
better sense.
    The other concern I have is that, and it was raised by Mr. 
Scott and Mr. Doggett and others, if you really want us to be 
fiscally responsible, and I think you do, I think we all want 
to be able to go back to the public and say we are being 
fiscally responsible and open and transparent which are words 
the President used in his letter to Congress to explain his 
proposal, why would you leave out half of all the expenditures 
that this government makes by excluding tax expenditures?
    Some people would call those tax loopholes. Some people 
would call those tax shelters. Some people would call them tax 
credits. But you leave out over a trillion dollars, about a 
trillion two hundred billion dollars in expenditures at the 
federal level that we cannot touch.
    Let me give you an example. Well, actually, Congressman 
Doggett gave you a great example. But on top of that, why is 
that you do not tell us that you are going to deal with, for 
example, the close to $300 billion in cost overruns that you 
know yourself are occurring in your own house in the Department 
of Defense?
    Now, I should put a caveat. These are cost overruns that 
were found by the auditors to have taken place under the Bush 
Administration. But $295 billion in cost overruns to 95 weapons 
programs. That is a thousand dollars for every man, woman, and 
child in America in extra taxes or put another way, for the 145 
or so million families that file income tax statements, that is 
close to $2,000, it is about $2,000 in extra taxes they are 
paying because we had weapons systems that ran over their 
costs, but they told us they would charge this to the taxpayer 
by close to $300 billion. And we are, by the way, late by about 
two years.
    Why don't we tackle that before you tell us that you want 
to get, say, the $20 billion in savings that you might have out 
of a $1.5 trillion budget?
    Mr. Liebman. Well, we are doing that too. We proposed in 
the budget over $300 billion worth of savings from tax 
expenditures. We are working hard on----
    Mr. Becerra. I do not see it your proposal.
    Mr. Liebman [continuing]. An initiative to cut $40 billion 
and better acquisition.
    Mr. Becerra. Is there a legislative proposal to try to deal 
with tax expenditures?
    Mr. Liebman. Well, again, we proposed it in our budget.
    Mr. Becerra. But that is not legislative language the way 
you gave us on this particular proposal.
    Mr. Liebman. If the thing that is stopping us from enacting 
our tax policies is drafting systems, we would be happy to 
provide it.
    Mr. Becerra. Look forward to working with you on that.
    Thank you, Mr. Chairman.
    Chairman Spratt. Mr. Becerra, thank you.
    Mr. Etheridge.
    Mr. Etheridge. Thank you, Mr. Chairman.
    And let me thank you for being here this morning.
    Let me ask mine a little differently. Before I got in 
public service, I was in small business. So I know the issues 
of balance and budgets. And one of the first major votes I took 
when I came to this body was a vote to get to a balanced budget 
at the federal level and it balanced and we ran a surplus, 
created millions of jobs and the biggest surplus in decades.
    And for the people who are so supportive of things today, 
the Bush/Cheney Administration said deficits did not matter, as 
I remember, and ran up some of the largest budget deficits in 
history that has put us in the crippling situation we find 
ourselves in now.
    And so all of us are concerned about deficits. And we 
worked in the 1990s to do something about it, turned it around, 
and now we find ourselves in a tough situation where my 
children and grandchildren are facing a difficult challenge for 
the future.
    Chairman Bernanke before this Committee just last week 
pointed out that long-term plans for deficits are important. So 
I am proud that Congress has restored PAYGO that was done away 
with by the previous Congress that got this process started 
down the wrong way. But clearly PAYGO is just one tool in the 
path toward budget discipline. We all know that.
    We have also passed in this Congress defense acquisition 
reform that gave the Pentagon some common-sense rules for its 
purchasing that will help cut wasteful spending and make an 
effort. So Congress has been on the watch and is moving.
    So let me ask you that I believe the Administration views 
these expenditure rescission proposals as another tool 
alongside PAYGO and nondiscretionary, et cetera. If you do, and 
you have already heard some of the previous discussion, let me 
ask it a little differently.
    What other tools has the Administration considered to 
promote budget discipline and, finally, could you speak more 
specifically about what kind of spending, and you tried to do 
it and I must confess I am not satisfied, when you think of 
expenditure rescissions that it be used for, what kind of 
spending are you talking about?
    Mr. Liebman. Let me start with the second question and then 
I will come back to the other question about the other tools.
    We put in our terminations and reductions volume lots of 
examples of the kind of spending we would hope to accomplish 
through this procedure if we could not get it done through the 
normal appropriations procedures. That includes heavily 
earmarked programs such as EPA state assistance grants for 
water that duplicate other merit-based ways of allocating 
resources to those kinds of objectives. It would include 
duplicative programs.
    Like, for example, at the moment, we have programs in both 
the Commerce and the Agriculture Department that provide 
assistance to public broadcasting at the same time that we have 
a perfectly effective corporation for public broadcasting. And 
we do not need to have this going on in three places. So those 
are some kinds of examples of the kinds of programs.
    Mr. Etheridge. Well, let me ask the question another way 
because other colleagues have raised it. And I think it is a 
legitimate question.
    The Administration has significant tools currently, any 
Administration does, because a threat of the veto is about as 
big as it gets. That is the biggest pin, I believe, in this 
town. And if the President threatens a veto, he can get a lot 
of things done, I believe.
    Mr. Liebman. And as you know----
    Mr. Etheridge. As I remember, President Bush, it took him a 
long time to decide if he was going to even use it one time.
    Mr. Liebman. Well, the President made clear in the State of 
the Union that if Congress does not stick to his targets of a 
nonsecurity discretionary freeze, he is prepared to use his 
veto pin for that purpose.
    And so I think the veto can be an effective tool at times, 
but there are also times when you have large bills of which the 
bulk of it is necessary and it is essential spending and may 
need to get passed fast. And what gets tacked on are some 
wasteful spending.
    And at the moment, we do not have a good procedure for 
either letting Congress on its own get rid of those procedures 
or for the President afterward.
    Mr. Etheridge. Well, I think we are all concerned about the 
tack-ons. I mean, I do not think anyone likes that.
    But how would you envision the Administration working with 
Congress before they issue a rescission package?
    Mr. Liebman. That is a good point. I mean, if this 
provision works like it should, its biggest impact will not be 
in passing rescission packages, but I think it will be in 
preventing wasteful spending from being added on in the first 
place. It will be enough of a deterrent that in the lead up to 
passing bills, one will be able to avoid getting those tack-ons 
added.
    And my prediction would be that if this ends up saving real 
dollars, it will be more through that avenue than through the 
direct passage of the rescission bills later.
    Mr. Etheridge. Well, I do not think you would disagree with 
people want to save money and balance the budget. I do have 
concerns about the balance of power issues as it relates to 
Congress delegating their authority some place else. I think 
that is a dangerous road to go down.
    Thank you, Mr. Chairman. I yield back.
    Chairman Spratt. Thank you, Mr. Etheridge.
    Mr. Connolly.
    Mr. Connolly. Mr. Chairman, I was necessarily late because 
I was at another hearing. I think my colleague, Mr. Minnick, I 
know is not a member of the Committee, but a guest, and, Mr. 
Chairman, I am certainly willing to wait one more turn to allow 
Mr. Minnick questioning if he would like, if that is all right 
with the Chairman.
    Chairman Spratt. The gentleman proposes to yield to Mr. 
Minnick. How much, for the balance of your time?
    Mr. Connolly. Well, I would defer and hope that I would 
still have my time.
    Chairman Spratt. The gentleman may proceed.
    Mr. Minnick. I thank the gentleman from Virginia.
    And I want to thank the Chairman and Ranking Member Ryan 
for the privilege of being with you today. This is a very 
important issue to me.
    And I would like to thank OMB for working with Congress and 
wanting to proceed in a way that the Administration and the 
Congress can work together to put this authority into effect to 
give the President and the Congress another tool for dealing 
with an absolutely run-away deficit which I believe poses the 
most serious problem to America's children and its future that 
we face as a society today.
    As a dedicated fiscal hawk and original co-sponsor of this 
bill, I cannot think of a more important tool to provide at 
this point in time to the Administration to show that it is 
serious about tackling deficit reduction.
    I am also a member of the 53 member Blue Ribbon Caucus 
which is--it is the Blue Dog Caucus, I apologize, some other 
members of whom are here and have been here today. And we have 
endorsed this proposal and look forward to working with this 
Committee and across the aisle to refine it in a way where we 
give it maximum effectiveness.
    I would like to ask you in response to a question that was 
raised by the Ranking Minority, Ranking Member in his opening 
statement, are you open in addition to the other modifications 
that you said you would be willing to consider to try to extend 
this concept to entitlement legislation and spending as well as 
appropriations?
    Mr. Liebman. To be clear that this does allow one to go 
after spending that is done in authorization bills that is sort 
of discretionary like. But in terms of entitlements, this 
legislation I do not think is well designed for that because it 
is meant to have a simple transparent up or down vote that 
basically zeroes out or lowers spending levels.
    When one makes changes to entitlement programs, one 
typically needs to change statutory language, have an extensive 
legislative process with amendments and the like. And so we 
think it would be very difficult to deal with entitlements.
    Mr. Minnick. The same problem that you have with extending 
it to tax expenditures?
    Mr. Liebman. Yes. And I guess it is even harder with 
entitlements.
    Mr. Minnick. All right. Thank you.
    Another suggestion that was made by several members on both 
sides of the aisle this morning was that whether or not this 
passes, it would be useful to send a signal to the American 
people and I think even more importantly financial markets who 
are nervous about the size and growth of our deficit to propose 
a rescission bill under existing authority.
    It seems to me that it would be a useful way to highlight 
this issue as well as highlight the seriousness of the 
Administration's commitment to reduce expenditures that you 
would work with us to go through the rescission process whether 
or not this bill passes and becomes law and that it might be a 
way for you to develop some momentum for passage of a more 
efficient straight up or down vote to go through the process 
without the benefit of the streamlined legislation.
    Would you be open to considering that?
    Mr. Liebman. Certainly willing to discuss it. I think there 
are a number of things that all of us who share the goal of 
going after wasteful spending could think about doing in the 
next weeks and months, you know, finding things where--there 
are several proposals that are both in our budget termination 
proposal and is also on some of the Minority party's lists of 
proposed cuts. And there may be things where we have the 
opportunity to work together and we can do something in the 
short term that would send an important signal.
    Mr. Minnick. I am very concerned that we are going to wake 
up some morning and the markets are going to be doing to us the 
same thing they did to Greece. And anything we can do to 
demonstrate commitment to reducing unnecessary spending would 
be helpful and salutary and something that perhaps would have a 
prophylactic effect. So I think that would be something worth 
considering.
    Also, I am a little concerned with the objections of some 
of my colleagues to the thought that this involves a massive 
shift of power. All this does is, if I understand it correctly, 
is the power to highlight and to shine the light of publicity 
on particular spending proposals because there is nothing in 
this proposal that, other than publicity, would impair the 
ability or reduce the ability of Congress to vote yes or not on 
a particular proposal; is that correct?
    Mr. Liebman. That is right. It simply lets the President 
propose something and Congress decide what to do with it.
    Mr. Minnick. Thank you.
    My time is expired, Mr. Chairman.
    Chairman Spratt. Thank you, Mr. Minnick.
    Mr. Connolly.
    Mr. Connolly. Thank you, Mr. Chairman.
    I am pleased to join you, Mr. Chairman, in co-sponsoring 
this legislation. I do it with some enthusiasm frankly because 
I feel that it is another tool in the kit bag of trying to get 
at the whole issue of structural deficits. You know, in 74 of 
the last 100 budgets in this country, we had deficits. Only one 
President ever left the White House with the country debt free 
and that was Andrew Jackson. It has been a while. And we have 
to do something about hemorrhaging red ink.
    I would say, however, to you, Dr. Liebman, that you have 
heard here in this Committee the legitimate institutional 
concerns. Now, some of this is the normal dialectics of 
budgets. Some of it is the inherent tension deliberately built 
into the Constitutional framework of checks and balances.
    But I am sure you understand that when phrases such as 
unnecessary spending or low-value spending are used, it clearly 
brings up an element of subjectivity. What the Executive Branch 
or the particular occupant of the Executive Branch in the White 
House may deem unnecessary may be deemed quite warranted here 
or to the sponsors of that particular spending. So it is a 
matter of viewpoint.
    And it seems to me that we have to, if this legislation is 
ever going to have a fighting chance to pass, I think some of 
the concerns you have heard here in the Budget Committee need 
to be addressed. There would have to be some guidelines, not 
rigid guidelines, but some guidelines that minimize that 
element of subjectivity and can reassure members that it will 
not just be an arbitrary wholesale grab of additional authority 
and influence by the Executive Branch at the expense of the 
Legislative Branch particularly when it comes to earmarks.
    After all, when a spending item gets into a bill in most 
cases, it has had some review process, some thought has gone 
into it, and it has stakeholders. It has, you know, advocates.
    And so I do think there has to be some kind of definition 
of what we mean by unnecessary spending or low-value spending 
and what those guidelines would be.
    I would also echo the concern of several of my colleagues 
that I think we need to include tax expenditures moving forward 
as an item for either further consideration or perhaps ultimate 
inclusion in whatever we pass. It is a huge part of the budget, 
and there are some even on this Committee who seem to think 
that a tax reduction is not an expenditure of the budget, but, 
of course, it is. And it needs to be looked at too.
    So I just wonder if you might want to further comment on 
the whole idea of some kind of explicit guidelines that could 
give reassurance to those who are understandably and 
legitimately concerned about the balance of power.
    Mr. Liebman. I think it is a good suggestion to think about 
whether there is a way to develop such guidelines. 
Fundamentally every spending program is in some way different 
from others and there may not be a way to up front say this 
program is definitely going to be on the high-value and this is 
going to be on the low-value list. You have to analyze things 
one by one and look at the costs and benefits of things.
    So it is not obvious to me that there is going to be an 
easy way to make those guidelines, but I think it is something 
we should work to.
    I think there is going to be an important constraint on the 
President misusing this authority which is that the House can 
always amend its rules after this piece of legislation has been 
changed to eliminate the fast-track procedure. And so if a 
President misuses this, first of all, it has an expiration date 
and will not get renewed, but, in fact, the House has the 
ability to amend its rules to end this procedure if it gets 
misused anyway.
    And so I think Presidents will use this responsibly. I am 
sure this Administration will. But there is always going to be 
disagreements about particular spending items and whether they 
are high value or not and that is in the nature of it. I think 
the important thing is that there be the opportunity to 
actually analyze each of these spending programs and determine 
that.
    And so often in large bills right now, spending gets tacked 
on and there really has not been a thorough opportunity for 
people to analyze it. And this would provide that analysis and 
if the analysis finds that it is not a great use of taxpayer 
funds, it would provide a mechanism for the President to 
propose and Congress to decide to take another look at it.
    Mr. Connolly. Thank you. I yield back.
    Chairman Spratt. The gentleman yields back.
    Now we are in the second round of questions. Mr. Ryan 
wanted to ask a question. He is not here. Mr. Scott wants to 
ask a question.
    Mr. Scott. Thank you. I just have one brief question.
    Obviously one of the targets of this would be Congressional 
earmarks. And there has been some misleading discussion about 
saving money by eliminating an earmark because are not most 
earmarks set-asides from larger amounts of money?
    For example, out of $200 million, you would spend $1 
million in my district, that is my little earmark. If you 
eliminate my earmark, instead of me spending $1 million and the 
Administration spending 199, the Administration would spend all 
$200 million resulting in actually no cost savings at all; is 
that not right?
    Mr. Liebman. That is basically right. I think that is why 
some of the members have suggested that one should at the same 
time that one rescinds an earmark, change the 302 allocation. 
But you are right that under existing mechanisms what would 
happen is that the spending would instead be allocated under 
merit or competitive-based method, but it would not alter the 
total.
    Mr. Scott. And you would assume that the Administration 
spending the $200 million would be on merit and that my program 
would not be as meritorious?
    Mr. Liebman. I think there are definitely cases where 
members identify spending that is very high value and it would 
not be identified by the Administration's process. I also think 
there are a lot of cases where that does not happen and we end 
up not subjecting particular proposals to an evaluation 
process.
    Mr. Scott. Mr. Chairman, the point that is often overlooked 
is that elimination of an earmark would only shift the spending 
to the Administration rather than Congressionally directed 
resulting in zero savings. And if this whole thing is to help 
balance the budget, striking earmarks in most cases would not 
make any difference at all.
    And thank you for allowing me to make that point.
    Mr. Liebman. Can I just clarify one thing. It is the case 
that as the expedited rescission bill went through and 
eliminated an earmark, the direct effect of that would be to 
strike the spending on that program by that amount.
    So the way that the President's proposal works is that if 
there was an account with $200 million in it and the President 
chose to strike 20 of that, there would only be 180 left to 
spend and the explanation would explain which programs were 
being eliminated. So the direct effect of this proposal would 
be to reduce spending.
    Mr. Scott. And reduce if you have got an after-school 
program like you are funding boys and girls clubs, the fact 
that you aimed at my program would reduce the amount of money 
for boys and girls clubs nationally?
    Mr. Liebman. It would in this case if that is the 
mechanism. The only thing that can happen in this proposal is 
spending levels can be reduced. And you cannot repurpose money.
    Mr. Scott. Thank you, Mr. Chairman.
    Chairman Spratt. Thank you, Mr. Scott.
    Mr. Ryan.
    Mr. Ryan. Thanks. I will do it pretty fast. I wish some of 
the colleagues were still here.
    Let me try and go back and give the rationale for this 
idea. As some have said, there is existing rescission 
authority. We are offering you to use it and we will help you, 
but apparently, you know, I can tell them the Administration is 
reluctant to spend their time on it because they do not think 
it is going to be worth their while. And I understand that 
argument. That is why I think we ought to beef this authority 
up and make it more effective.
    Let me pick a Republican earmark just so it does not come 
across as partisan. When I first started moving this bill a 
number of years ago, I watched a situation in which a U.S. 
Senator Republican decided to fund a rain forest museum to the 
tune of something like $50 million. And it got tucked into a 
bill, an appropriations bill that had nothing to do with that 
particular type of issue. It got put in in a conference report. 
Never got to see it or vote on it in the House or the Senate 
and it became law.
    Now, what happens obviously around here is all these things 
get thrown in these bills at the end of the process, no 
scrutiny, and it has become a system that both parties have 
abused to load up these appropriation bills with lots of 
wasteful spending.
    Now, there are other authorization bills and other bills 
that do the same thing, but the power of this is the power of 
embarrassment and sunshine. This is not a tool that is going to 
balance the budget. This is not a tool that is going to save 
us, you know, $1.6 trillion.
    This is a tool that is going to make that member of 
Congress think twice before trying to shove a $50 million rain 
forest museum into an Omnibus appropriations bill because they 
know if they can shove it in that appropriations bill, on it 
goes.
    If they know that there is a possibility that they might 
have to go to the floor of the House or the Senate and defend 
this proposal on its own merits, then they might think twice 
before submitting those spending proposals.
    So what I see this doing is bringing some more 
accountability to the process, some more transparency to the 
process, and embarrassing wasteful spending out of these bills 
in the first place. So it is the existence of this tool that 
probably has its best effects versus the actual use of the 
tool.
    That is point number one. Point number two is 
Constitutionality, a very important point. I agreed with the 
Supreme Court in their ruling in 1996 because that line item 
veto I believe was unconstitutional. It did represent the 
Legislative Branch ceding its authority to the Executive 
Branch. That is why this is written and it looks like you have 
written it pretty much the same way, the OMB plan, to make sure 
that that is not the case.
    And it is very important that we remember this is not the 
President executing the spending decision. This is the Congress 
making the decision executing the spending decision. The 
President can write a bill and send it to Congress any day he 
wants to right now. We used to give him fast track on trade 
agreements and many other things. This is no different than 
that. Giving the President the ability and the power and the 
tool to take a piece of spending out, send it back, and then 
we, the Legislative Branch of government, make the final 
decision as to whether or not it is canceled or not.
    So I think it is very clearly Constitutional. It very 
clearly keeps the prerogatives of the Legislative Branch in 
tact. And what this effectively does is it just brings needed 
sunshine to the process and it helps get at the culture of 
spending in Congress.
    I love boys and girls clubs. My wife and I donate our 
private dollars to the boys and girls clubs of Rock County in 
Janesville, Wisconsin. But we cannot fund every good idea that 
is out there. If we keep trying to do that, we are going to 
accelerate the bankruptcy of this country. And the country is 
going bankrupt. That is an irrefutable point.
    So we need to change the culture of spending. And I would 
argue earmarks as small as they are in the aggregate have a 
huge impact on the culture of spending in this place. If we 
cannot get the little spending right, we are not going to get 
the big spending right.
    And so this helps us shift the culture of spending so that 
we are focused on actually trimming the budget, living within 
our means, and making sure that we are scrutinizing the use of 
taxpayer dollars. And under the watch of both political 
parties, that has not been done lately.
    That is the point I would make. Thank you.
    Chairman Spratt. Mr. Scott, do you have further questions?
    Mr. Scott. Just one more briefly. I just wanted to follow-
up on the question I had asked before. And that is on the 
inappropriate use of this by a President using it as a coercive 
technique for unrelated items.
    You have got a major piece of legislation you are trying to 
get out. You could conceivably threaten legislators that their 
projects would be placed in the rescission package.
    Do I understand you to assure us that this would not happen 
in the future?
    Mr. Liebman. That is not the way this is going to be used. 
This is going to be used to work with Congress to eliminate 
spending.
    Mr. Scott. And we can count on that?
    Mr. Liebman. That is the way it is going to be used.
    Chairman Spratt. The gentleman yields back.
    Thank you again for your testimony.
    Let me just leave for you and the record some of our 
concerns. As I told you when we were discussing the bill to 
begin with, we will take exception to some provisions. We think 
that decidedly some improvements can be added.
    Number one, I am concerned and I think legitimately about a 
legislative log jam. If you have 12 bills, potentially 12 
rescission bills following those appropriation bills, if you 
would have a CR and then have the CR expire and have 10 or 11 
appropriation bills separately acted upon, how many rescission 
bills would come up from that? Is 45 days too long? Will that 
stymie the legislative process or create a legislative log jam? 
Those are concerns.
    I think that we could also look at enhancement of incision 
of the expedited rescission bill as we did in the past and 
include things like targeted tax benefits and tax expenditures. 
I do not have a ready definition for tax expenditures that 
would fit in the bill, but I think it should certainly be borne 
in mind.
    And I do think that we should take steps to see that every 
member who fervently believes that what he has passed for his 
constituency as an opportunity, an ample opportunity to go to 
the House and make the case for his particular proposal if it 
is included in your package.
    I am not talking about enough time to tie the process up. I 
am talking about 10 to 15 minutes, but at least the opportunity 
to make the case and call to his aid and assistance some other 
members who would share his support.
    And then I think some definition with funding unnecessary 
which was raised by some. We probably need some criteria for 
what the President would--we expect the President to apply in 
culling out unwarranted, unnecessary, and wasteful spending.
    So these things remain to be worked out, but the bill is in 
active play, as you can see. It is getting support on both 
sides of the House and we will be working to improve it and 
make it something that we can take to the floor and pass with a 
substantial majority.
    Thank you today for your participation. We look forward to 
working with you in the perfection of this bill.
    Mr. Liebman. Thank you very much.
    Chairman Spratt. I ask unanimous consent that members who 
did not have the opportunity to ask questions of the witness be 
given seven days to submit questions for the record. Without 
objection, so ordered.
    This concludes the hearing. Thank you again for coming.
    [Responses by Mr. Liebman to questions submitted for the 
record follow:]

     Responses by Mr. Liebman to Questions Submitted for the Record

                   questions from robert b. aderholt
    1. If Congress ever approves expedited rescission, don't you think 
those funds should go to deficit reduction as opposed to increased 
spending?

    The Administration expects rescissions approved through this 
mechanism to go toward deficit reduction, and specifically restricts 
rescission packages from including any new spending.

    2. Why is the President pushing expedited rescission when he has 
deferred most decision making on the fiscal outlook of the country to 
his fiscal commission? Is the fiscal commission considering expedited 
rescission as a way to reduce federal spending across the Board?

    The President has shown time and again that he is willing to make 
the fiscally responsible decisions that are critical to the future of 
our country. The 2011 President's Budget proposes over $1 trillion in 
deficit reduction, more than any President has put forward in over a 
decade. The Budget proposes terminations, reductions and savings that 
would eliminate more than $20 billion in unnecessary spending. The 
expedited rescission proposal complements these efforts by providing a 
new tool for eliminating duplicative, wasteful, and unnecessary 
spending. The Fiscal Commission's two charges--proposing policies that 
reduce the deficit to 3 percent of GDP by 2015 and meaningfully improve 
the long-term fiscal outlook--are significantly broader in scope than 
the savings that would likely be achieved with the proposed rescission 
authority.

    3. Since taking office, President Obama has signed legislation 
resulting in an 84 percent increase in domestic non-defense 
discretionary spending and the nation is facing a deficit of $1.5 
trillion for FY 2010. Will expedited rescission be an effective tool in 
cutting federal spending when tax and tariff benefits or new 
entitlement spending are not included and the nation faces such a large 
deficit? Would it be better for the Administration or Congress to 
propose a long term fiscal plan to reduce federal spending?

    Expedited rescission is intended to be a tool for the President and 
Congress to work together to eliminate unnecessary spending. The 
authority is designed to be used to expedite a straightforward 
decision--whether to reduce or eliminate funding for specific programs 
or projects. Under the proposal, the President could not propose any 
other changes in law. Given that the decision is a straightforward one, 
the proposal requires an up or down vote and does not permit any 
amendments to the President's proposed package.
    We do not believe this expedited proposal would be appropriate for 
altering entitlement programs or tax policies. Changes to entitlement 
and tax provisions generally involve more than simply a decision about 
funding levels. Because such provisions are often deeply interrelated 
with other provisions, striking or changing entitlement and tax 
provisions generally requires more complex legislation. Nonetheless, 
the Administration is committed to eliminating unnecessary entitlement 
and tax expenditures, and we look forward to working with Congress to 
achieve this.
    Regarding a long term fiscal plan, the President's 2011 Budget 
proposes over $1 trillion in deficit reduction, more than any President 
has put forward in over a decade. The President has also established a 
bipartisan Fiscal Commission. The Commission is charged with proposing 
policies that reduce the deficit to 3 percent of GDP by 2015 and 
meaningfully improve the long-term fiscal outlook.
        prepared statement and questions from james r. langevin
    Fiscal responsibility is vital to our long term economic 
prosperity. As Fed Chair Bernanke testified in front of this committee 
last week, ``unless we as a nation make a strong commitment to fiscal 
responsibility, in the longer run, we will have neither financial 
stability nor healthy economic growth.'' I couldn't agree more. Given 
our significant fiscal challenges, we are naturally interested in 
exploring all options to reduce the federal deficit and achieve a 
balanced budget.
    Today, we are considering a proposal that would make significant 
alterations to the current budgetary process. The proposal uses a 
procedure called ``expedited recession,'' which would allow the 
President to recommend additional cuts to spending bills that he signs 
into law, subject to Congressional approval.
    In order to determine the relative effectiveness of this proposal, 
I think it would be helpful to put it into context and examine some of 
the practicalities.

    1. How much do you anticipate this proposal could save? To put that 
amount into context, what is the total amount of discretionary spending 
enacted in FY2010, and how much of the total federal budget does 
discretionary spending comprise versus mandatory spending? Would this 
proposal address anything on the mandatory side of spending?

    Expedited rescission authority would provide a useful tool for the 
President and Congress to work together to eliminate duplicative, 
wasteful, and unnecessary funding. Since taking office, the 
Administration has prioritized identifying and cutting unnecessary 
spending. For example, the President proposed approximately $20 billion 
in terminations, reductions, and savings in both the FY 2010 and 2011 
Budgets. These proposed cuts are examples of the type and scope of 
savings that we believe could be achieved if Congress enacts the 
Administration's expedited rescission proposal. Knowing this procedure 
exists may also discourage lawmakers from enacting wasteful spending in 
the first place, providing additional savings.
    The expedited rescission proposal targets both discretionary 
spending and non-entitlement mandatory spending, where the decisions 
involve straightforward choices about whether to reduce or eliminate 
spending on a particular program or project. Changes to entitlement 
programs generally require more complex legislation and are more 
appropriately handled through standard legislative procedures.
    We recognize that this proposal is not a magic bullet. Enacted 
discretionary spending in FY 2010 is around $1.4 trillion and mandatory 
spending is around $2.0 trillion. While expedited rescission authority 
lifts procedural barriers, the President and Congress will still have 
to make the tough choices to cut back unnecessary funding. Furthermore, 
restoring fiscal sustainability in the medium and long term will 
require not only reducing unnecessary or excessive funding provided 
annually for specific programs and projects, which the expedited 
rescission proposal aids, but also making larger choices about overall 
budget priorities and revenue levels--a process now being facilitated 
by the President's National Commission on Fiscal Responsibility and 
Reform.

    2. As you mentioned in your testimony, the President announced a 
proposal to freeze non-security discretionary spending levels for three 
years, and Congressional Leadership has been supportive and committed 
to this. In fact, the Senate Budget Committee passed a resolution that 
would go further with an additional $4 billion reduction in 
discretionary spending.

    Given these developments, would you agree that Congress can 
effectively reduce spending without expedited rescission if it has the 
political will? How would this proposal address or change that?
    While expedited rescission lifts procedural barriers, there is no 
substitute for political will. The President and Congress will continue 
to have to make the tough choices to cut back unnecessary spending. The 
purpose of expedited rescission is to give the President and Congress 
an additional tool to eliminate unnecessary spending and to discourage 
waste in the first place.

    3. Under this proposal, the President has 45 ``session'' days to 
send a rescission package to Congress. Congress then has 25 days to 
act. I am concerned this time frame threatens to slow down an already 
time-consuming appropriations process. How would that affect omnibus 
appropriations bills, which tend to come toward the end of the session?

    Since the President would not be able to submit a rescission 
package until the applicable spending bill has already been enacted, 
expedited rescission by itself would not slow down the consideration of 
spending bills. In designing the expedited rescission proposal, it was 
our intention to streamline debate on presidential rescission packages, 
to minimize the use of floor time, and to enable quick Congressional 
consideration of proposed rescissions. We are open to working with 
Congress on other ways to speed the process.

    4. How would a delay in spending affect federal agencies, as well 
as state and local funding recipients, who are unable to engage in 
specific program planning until the appropriations process is complete?

    The Administration's expedited rescission proposal includes a 
number of measures that would limit spending delays, especially 
compared to the President's existing authority under the Impoundment 
Control Act (ICA). Under the Administration's proposal, the President 
would have a deadline of 45 days after enactment of the funding to 
propose a package of rescissions. In contrast, the ICA allows the 
President to propose rescissions any time before the funds expire. In 
addition, under the Administration's proposal, Congress would consider 
the President's package using an expedited procedure that takes no more 
than 25 days. This ensures a shorter period of withholding funds after 
transmittal than under ICA procedures, in which Congressional 
consideration is more drawn out and open-ended.

    5. In the 1990s, the line-item veto was determined to be 
unconstitutional. How does this proposal differ from the line-item 
veto, and do those differences resolve the constitutional concerns?

    The Administration's proposal has been carefully crafted to 
preserve the constitutional balance of power between the President and 
Congress. Under the proposal, the President would submit a legislative 
package and Congress, which has the authority to set its own rules, 
would consider the package using fast-track procedures. This stands in 
contrast to the line-item veto power enacted in 1996 and later struck 
down by the Supreme Court. The 1996 law allowed the President to use 
his veto authority to strip out select provisions of legislation while 
signing the rest into law. The Supreme Court found this to violate the 
constitutional procedure for approving or vetoing laws. The current 
proposal is fundamentally different since it does not expand the 
Presidential veto authority in any way. Rescissions would occur only 
if, as with any other law, they are passed by Congress and signed by 
the President.

    [Whereupon, at 11:34, the Committee was adjourned.]

                                  
