[Congressional Record Volume 143, Number 160 (Thursday, November 13, 1997)]
[Senate]
[Pages S12570-S12572]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    PRESIDENT'S LINE ITEM VETO OF THE OPEN SEASON FOR CIVIL SERVICE 
  RETIREMENT SYSTEM EMPLOYEES IN THE TREASURY AND GENERAL GOVERNMENT 
                        APPROPRIATIONS ACT, 1998

  Mr. STEVENS. Mr. President, last year the Congress enacted, and the 
President signed into law, the Line Item Veto Act--Public Law 104-130. 
This act delegated specific authority to the President to cancel in 
whole any dollar amount of discretionary budget authority identified by 
Congress, new direct spending, and limited tax benefits. As the 
chairman of the Governmental Affairs Committee at that time, I was 
chairman of the conference committee and one of the principal authors 
of the act. Another principal author was the Senator from New Mexico, 
my good friend and chairman of the Senate Budget Committee. We are here 
on the floor today to say that the President exceeded the authority 
delegated to him when he attempted to use the Line Item Veto Act to 
cancel section 642 of the Treasury and General Government 
Appropriations Act of 1998, which is Public Law 105-61.
  Section 642 of that law would allow a six month open season for 
employees currently under the Civil Service Retirement System (CSRS) to 
switch to the Federal Employee Retirement System (FERS). The last such 
open season was in 1988.
  On October 16 President Clinton sent a special message to Congress in 
which he claims to have canceled section 642 pursuant to the authority 
delegated to him by Congress in the Line Item Veto Act. Under the Act 
the President is permitted to cancel in whole any dollar

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amount of discretionary budget authority, any item of new direct 
spending, or any limited tax benefit if the President determines that 
such cancellation will reduce the Federal budget deficit, not impair 
any essential government function, and not harm the national interest. 
A cancellation must be made and Congress must be notified by special 
message within five calendar days of the date of enactment of the law 
providing the dollar amount of discretionary budget authority, item of 
new direct spending, or limited tax benefit that was canceled.
  The President's special message number 97-56 on the Treasury and 
General Government Appropriations Act of 1998 states that the President 
is canceling $854 million in discretionary budget authority provided by 
section 642. The President arrives at this figure by estimating the 
dollar amount that employee contributions to the CSRS would be reduced 
as a result of Federal employees shifting to FERS. Unfortunately for 
the President, these contributions do not represent a ``dollar amount 
of discretionary budget authority'' as defined by the Line Item Veto 
Act. Therefore those funds could not be canceled pursuant to that Act.
  Mr. DOMENICI. I agree with my colleague from Alaska. Congress added 
the Line Item Veto Act as Part C of title X of the Congressional Budget 
and Impoundment Control Act of 1974, which is more commonly referred to 
as the Budget Act. This was done deliberately, so that the cancellation 
authority provided by the Line Item Veto Act is part of a larger, 
established system of budgetary tools that Congress imposes on itself 
or has delegated to the President to control federal spending.

  The Line Item Veto Act provides a detailed definition of what 
represents a ``dollar amount of discretionary budget authority.'' The 
definition specifically allows the President to cancel the ``entire 
dollar amount of budget authority required to be allocated by a 
specific proviso in an appropriation law for which a specific dollar 
figure was not included,'' which appears to be the definition which the 
President used to justify the cancellation of section 642. However, in 
doing so it appears that the President's advisors failed to realize 
that section 642 does not constitute ``budget authority'' as defined in 
section 3 of the Budget Act. That definition also applies to Part C of 
title X of the Budget Act, which as I mentioned is the Line Item Veto 
Act.
  ``Budget authority'' is defined in the Budget Act as ``provisions of 
law that make funds available for obligation and expenditure * * * 
borrowing authority * * * contract authority * * * and offsetting 
receipts and collections * * *.'' Section 642 does not make any funds 
specifically available, so it does not meet that definition of budget 
authority. Nor does it provide authority to borrow money or the 
authority to obligate funds for future expenditure. This means that in 
order to qualify as budget authority, the $854 million reduction in 
CSRS employee contributions the President purported to cancel using the 
Line Item Veto Act would have to be offsetting receipts.
  Unfortunately for the President, his advisors seem to have overlooked 
that employee contributions to retirement accounts are considered 
governmental receipts, and not offsetting receipts, so they do not meet 
the definition of budget authority.
  Mr. STEVENS. The senator from New Mexico is making my point exactly. 
The President's advisors cannot change the definition of budget 
authority to permit him to reach this provision. As a senior member of 
the Appropriations Committee I was particularly concerned with the 
precise nature of the authority delegated to the President, and worked 
very hard along with my staff to ensure that the definitions were clear 
and unambiguous. That is the reason for the detailed definition in 
section 1026 of the Budget Act, as added by the Line Item Veto Act, 
which incorporates the long established definition of budget authority 
in section 3 of the Budget Act. Is it the Senator from New Mexico's 
understanding that prior to the attempted cancellation of section 642 
that the President's own documents classified employee contributions to 
retirement accounts as governmental receipts that are counted as 
revenue and not offsetting receipts that offset budget authority and 
outlays?
  Mr. DOMENICI. The Senator from Alaska is correct. In the President's 
Budget for Fiscal Year 1998 there is a proposal to increase employee 
contributions to both CSRS and FERS. This proposal is shown on page 317 
of the Budget, in Table S-7 that shows the impact of tax relief 
provisions and other revenue measures, as an increase in governmental 
receipts. This same proposal is listed under ``miscellaneous receipts'' 
in Table 3-4 showing Federal receipts by source on page 59 of the 
Analytical Perspectives document that accompanied the FY 98 Budget. The 
fact that section 642 would have resulted in a reduction in employee 
contributions to CSRS does not alter their treatment under the Budget 
Act; they are still governmental receipts collected from employees 
through the government's sovereign powers and not offsetting receipts 
collected as a result of a business-like or market oriented activity.

  Mr. STEVENS. I thank the Senator from New Mexico for that 
explanation. In closing, I would like to take this opportunity to 
clarify further how the Line Item Veto Act operates. Section 
1021(a)(3)(B) of the Budget Act--the section of the Line Item Veto Act 
that provides the cancellation authority--makes it clear that the 
authority is limited to the cancellation of a dollar amount of 
discretionary budget authority that is provided in the just-signed law 
before the President. Under the specific terms and definitions provided 
in the Line Item Veto Act, the President cannot reach a dollar amount 
of discretionary budget authority provided in some other law that is 
not the one before the President. The Treasury and General Government 
Appropriations Act did not provide $854 million in discretionary budget 
authority for section 642, so that amount could not be rescinded under 
the terms of the Line Item Veto Act. The $854 million figure came from 
the President's estimates of the loss of employee contributions to CSRS 
government-wide. As we have explained above that loss is not budget 
authority, so it cannot be canceled. But even if it were, the President 
could not reach dollar amounts of discretionary budget authority 
government-wide unless the dollar amount of budget authority needed 
government-wide was provided in the specific appropriations law before 
him.
  As the definition of cancel in section 1026 of the Budget Act clearly 
states, in the case of a dollar amount of discretionary budget 
authority the term ``cancel'' means ``rescind''--a term which itself 
has a long history in congressional-executive branch relations. The 
recission of budget authority in a specific law does not change the 
operative effect of a general provision in that specific law with 
respect to budget authority provided in another law. As the statement 
of managers accompanying the Line Item Veto Act makes clear, the 
delegated authority in the Act does not permit the President to strike 
out or rewrite the law. It merely allows him discretionary authority to 
close the doors to the Federal Treasury and refuse to spend funds 
appropriated by Congress in that particular law.
  In contrast, the definition of ``cancel'' with respect to new direct 
spending, which also results in the expenditure of budget authority, is 
to prevent the specific provision of law or legal obligation from 
``having legal force or effect.'' This distinction recognizes that 
provisions of law that result in new direct spending may not actually 
provide budget authority that can be canceled at that time--say for 
example a provision of law that simply increases the amount an 
individual will receive at a future date under an existing benefit 
program provided in a law enacted years before. Such provisions create 
a legal obligation or right that may be exercised in the future, or 
which result in a future increase in expenditures from budget authority 
provided elsewhere. If the President wishes to remove the legal force 
or effect of a specific provision of law that applies to budget 
authority provided in a law other than the appropriations law the 
provision is in, then he may only do so if that provision is new direct 
spending under the Line Item Veto Act.
  Section 642 is not an ``item of new direct spending'' as defined in 
section 1026 of the Budget Act because it results in savings to the 
government

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when compared to the present budget baseline. As explained above, the 
President's wish to the contrary notwithstanding, it does not result in 
a dollar amount of discretionary budget authority. Thus, the President 
has exceeded his delegated authority by violating the terms of the 
statute, and I would urge the Justice Department to concede that the 
cancellation of section 642 was outside the authority provided by the 
statute.
  Mr. DOMENICI. I concur in the Senator's analysis and recommendation. 
The Line Item Veto Act is a carefully crafted delegation of authority. 
The President undermines that delegation when he attempts to reach 
outside the clear limits of that Act.
  Mr. STEVENS. I thank the Senator from New Mexico for joining me in 
this colloquy, and I yield the floor.

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