[House Report 104-11]
[From the U.S. Government Publishing Office]



                                                                       
104th Congress                                            Rept. 104-11,
                        HOUSE OF REPRESENTATIVES

 1st Session                                                     Part 1
_______________________________________________________________________


 
                           LINE ITEM VETO ACT

_______________________________________________________________________


                January 27, 1995.--Ordered to be printed

                                _______


               Mr. Solomon, from the Committee on Rules,

                        submitted the following

                              R E P O R T

                             together with

                    ADDITIONAL AND DISSENTING VIEWS

                         [To accompany H.R. 2]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Rules, to whom was referred the bill (H.R. 
2) to give the President item veto authority over appropriation 
Acts and targeted tax benefits in revenue Acts, having 
considered the same, report favorably thereon with amendments 
and recommend that the bill as amended do pass.
  The amendments (stated in terms of the page and line numbers 
of the introduced bill) are as follows:
  Page 5, line 6, strike ``which--'' and strike lines 7 through 
12 and insert the following:

        which only disapproves, in whole, rescissions of 
        discretionary budget authority or only disapproves 
        vetoes of targeted tax benefits in a special message 
        transmitted by the President under this Act and--
                  (A) which does not have a preamble;
                  (B)(i) in the case of a special message 
                regarding rescissions, the matter after the 
                enacting clause of which is as follows: ``That 
                Congress disapproves each rescission of 
                discretionary budget authority of the President 
                as submitted by the President in a special 
                message on ________'', the blank space being 
                filled in with the appropriate date and the 
                public law to which the message relates; and
                  (ii) in the case of a special message 
                regarding vetoes of targeted tax benefits, the 
                matter after the enacting clause of which is as 
                follows: ``That Congress disapproves each veto 
                of targeted tax benefits of the President as 
                submitted by the President in a special message 
                on ________'', the blank space being filled in 
                with the appropriate date and the public law to 
                which the message relates; and
                  (C) the title of which is as follows: ``A 
                bill disapproving the recommendations submitted 
                by the President on ________'', the blank space 
                being filled in with the date of submission of 
                the relevant special message and the public law 
                to which the message relates.

  Page 7, strike lines 13 through 17, and insert the following 
new subsection:

  (c) Introduction of Rescission/Receipts Disapproval Bills.--
The procedures set forth in subsection (d) shall apply to any 
rescission/receipts disapproval bill introduced in the House of 
Representatives not later than the third calendar day of 
session beginning on the day after the date of submission of a 
special message by the President under section 3.

  Page 7, after line 17, insert the following new section:

  (d) Consideration in the House of Representatives.--(1) The 
committee of the House of Representatives to which a 
rescission/receipts disapproval bill is referred shall report 
it without amendment, and with or without recommendation, not 
later than the eighth calendar day of session after the date of 
its introduction. If the committee fails to report the bill 
within that period, it is in order to move that the House 
discharge the committee from further consideration of the bill. 
A motion to discharge may be made only by an individual 
favoring the bill (but only after the legislative day on which 
a Member announces to the House the Member's intention to do 
so). The motion is highly privileged. Debate thereon shall be 
limited to not more than one hour, the time to be divided in 
the House equally between a proponent and an opponent. The 
previous question shall be considered as ordered on the motion 
to its adoption without intervening motion. A motion to 
reconsider the vote by which the motion is agreed to or 
disagreed to shall not be in order.
  (2) After a rescission/receipts disapproval bill is reported 
or the committee has been discharged from further 
consideration, it is in order to move that the House resolve 
into the Committee of the Whole House on the State of the Union 
for consideration of the bill. All points of order against the 
bill and against consideration of the bill are waived. The 
motion is highly privileged. The previous question shall be 
considered as ordered on that motion through its adoption 
without intervening motion. A motion to reconsider the vote by 
which the motion is agreed to or disagreed to shall not be in 
order. During consideration of the bill in the Committee of the 
Whole, the first reading of the bill shall be dispensed with. 
General debate shall proceed without intervening motion, shall 
be confined to the bill, and shall not exceed two hours equally 
divided and controlled by a proponent and an opponent of the 
bill. After general debate the Committee shall rise and report 
the bill to the House. The previous question shall be 
considered as ordered on the bill to final passage without 
intervening motion. A motion to reconsider the vote on passage 
of the bill shall not be in order.
  (3) Appeals from the decisions of the Chair relating to the 
application of the rules of the House of Representatives to the 
procedure relating to a bill described in subsection (a) shall 
be decided without debate.
  (4) It shall not be in order to consider more than one bill 
described in subsection (c) or more than one motion to 
discharge described in paragraph (1) with respect to a 
particular special message.
  (5) Consideration of any rescission/receipts disapproval bill 
under this subsection is governed by the rules of the House of 
Representatives except to the extent specifically provided by 
the provisions of this Act.

  Page 7, line 18, strike ``(d)'' and insert ``(e)''.
  Page 8, line 22, strike ``(e)'' and insert ``(f)''.
  Page 8, lines 23 and 24, and on page 9, lines 4 and 5, strike 
``or the House of Representatives'' each place it appears.

                         purpose of legislation

    H.R. 2 provides for a Presidential line item veto to 
rescind all or part of any discretionary budget authority or 
veto any targeted tax benefit that meets the specifications of 
this Act. H.R. 2 outlines specific procedures for consideration 
by the House and Senate of disapproval of such a special 
Presidential message.

                        committee consideration

    On January 24 the Committee held an informal briefing on 
Section 5 of H.R. 2 (which deals with consideration of a 
disapproval bill in the House and the Senate). Stanley Bach, 
senior specialist in the legislative process at CRS, provided 
members and staff with general background and options for 
applying expedited procedures to consideration of a bill to 
disapprove a Presidential rescission or targeted tax break veto 
message.
    The Committee met on January 26, 1995 to mark-up H.R. 2. 
The Committee ordered H.R. 2 reported with amendments by a 
record vote of 9-4. During the mark-up two amendments 
pertaining to expedited procedures were offered en bloc and 
agreed to by voice vote. An amendment in the nature of a 
substitute was rejected by a record vote of 4-9.

                               background

    In the perennial discussion about the need to reduce the 
mounting federal debt, the line item veto has been a frequent 
and controversial topic of debate. In public opinion surveys, 
most Americans consistently voice support for the line item 
veto, a budgeting tool that is already granted in some form to 
43 of the nation's governors. In recent Congresses, the House 
has considered several variations on the theme of enhancing 
Presidential authority in the budget process by allowing for 
expedited procedures in cancelling specific federal spending or 
targeted tax benefits. But while the House has approved several 
measures under the guise of tightening control over spending, 
it has consistently missed opportunities to implement an 
effective item veto. It is interesting to note that the first 
line item veto proposal introduced in the House occurred in 
1876.
    In the 103rd Congress, the House twice considered and 
approved legislation granting the President ``expedited 
rescission'' authority over appropriations and targeted tax 
measures, first in the form of H.R. 1578 (which passed the 
House 258-157 on April 29, 1993) and then again in the form of 
H.R. 4600 (which passed the House 342-69 on July 14, 1994). The 
expedited procedures established by these bills would require 
the Congress to vote on approval of the President's rescission 
within a specified period, a marginal improvement over current 
law, which essentially allows the Congress to ignore a 
Presidential rescission.
    Although H.R. 4600 began as the identical text to H.R. 
1578, it was amended on the House floor to make the expedited 
procedures permanent, allow the President to utilize the 
procedures at any time, allow 50 representatives or 15 senators 
to offer a motion to strike from a rescissions package an 
individual proposal and allow the President to specify that the 
savings go to deficit reduction. Both H.R. 1578 and H.R. 4600 
died without final action in the Senate upon adjournment of the 
103rd Congress.
    H.R. 1578 and H.R. 4600 would have made incremental 
improvements in the budget process, by requiring Congress to 
vote on rescissions under expedited procedures, but neither 
bill would have established a true line item veto. By placing 
the burden of action on affirming the President's rescissions, 
rather than disapproving them, both H.R. 1578 and H.R. 4600 
would have allowed a simple majority of either House to block 
the President's rescissions.
    On April 29, 1993 Representative Castle of Delaware offered 
a substitute for H.R. 1578 to subject presidential rescissions 
to a congressional disapproval process. The amendment was first 
successfully amended by Representative Michel of Illinois, by a 
vote of 257 to 157, to make targeted tax benefits subject to 
presidential veto authority. However, the Castle amendment as 
amended was subsequently rejected by a vote of 198 to 219.
    On July 14, 1994, Representative Solomon of New York 
offered a substitute for H.R. 4600 to make presidential vetoes 
of both budget authority and targeted tax benefits subject to a 
congressional disapproval process. This time the amendment lost 
by an even closer vote of 205 to 218.
    H.R. 2, a bi-partisan bill introduced by Representatives 
Clinger, Blute, Neumann and Parker on the opening day of the 
104th Congress, is virtually identical to the Solomon, line 
item veto substitute that was narrowly rejected in the second 
session of the 103rd Congress. H.R. 2 requires that, unless the 
Congress acts within a specified period to disapprove the 
President's rescissions, those rescissions will automatically 
take effect and the identified spending or targeted tax benefit 
will be cancelled. If the Congress disapproves the President's 
rescissions, the President would be likely to veto that 
disapproval, forcing the Congress to muster two thirds of both 
Houses to override that veto. In this way, it becomes more 
difficult to sustain spending or targeted tax breaks that the 
President has attempted to cancel. The scales are tilted toward 
cutting spending--which is the purpose of the line item veto.
    While no one would contend that a line item veto on its own 
will be enough to restrain spending and bring the federal 
budget into balance, a recent GAO report indicates that this 
type of fiscal discipline could have a significant impact upon 
federal spending. In a January 1992 report, the GAO concluded 
that, although the effectiveness of a Presidential line item 
veto could vary by Administration and spending areas of the 
budget:

          If Presidential line item veto/line item reduction 
        authority had been applied to all items to which 
        objections were raised in the Statements of 
        Administration Policy during fiscal years 1984 through 
        1989, spending could have been reduced by amounts 
        ranging from $7 billion in 1985 to $17 billion in 1987, 
        for a 6-year total of about $70 billion. This would 
        have reduced federal deficits and borrowing by 6.7 
        percent, from the $1059 billion that actually occurred 
        during that period to $989 billion. (Emphasis added.)

    H.R. 2 is a milestone in the budget reform process. For all 
the rhetoric in past years, the House has never demonstrated 
its commitment to an effective line item veto--until now. H.R. 
2 marks the beginning of a monumental effort to change the way 
Congress does business and restore public confidence in its 
ability to manage the nation's finances.
    The Committee notes with approval President Clinton's 
announcement, as recently as this week in his State of the 
Union address, that he will now support a line item veto, after 
having favored the expedited rescission alternative instead 
over the past two years. With the President's full support this 
can be made a truly effective instrument for pruning both 
wasteful spending and special interest tax breaks.

                      procedures under current law

    Section 1012 of the Congressional Budget and Impoundment 
Control Act of 1974 provides that the President may submit to 
Congress proposed rescissions (the permanent cancellation of 
previously appropriated budget authority) throughout the year. 
If both the House and the Senate have not approved a proposed 
rescission within 45 days of its submission, the funds affected 
are automatically released to be spent.
    Section 1017 of the Budget Act further provides expedited 
procedures which allow one-fifth of either chamber of Congress 
to move to discharge the President's rescission proposal from 
the Appropriations Committee and bring it to the floor for a 
vote if the Committee has not acted on it within 25 days of 
continuous session. However, under Section 904 of the Budget 
Act these provisions are ``an exercise of the rulemaking power 
of the House of Representatives and the Senate,'' meaning that 
they can be waived by the vote of a simple majority. The 
difficulty of exercising these expedited procedures was 
highlighted in April of 1992, when Members of the House 
attempted to invoke sections 1012 and 1017 of the Budget Act to 
obtain votes on 96 of President Bush's rescissions. In a 
successful attempt to block this move, the rules were waived 
and the votes on President Bush's original rescissions never 
occurred. While the House did consider and pass an alternate 
package of rescissions, Members were denied the opportunity to 
debate and vote on the original rescission message.

                        analysis of legislation

    H.R. 2 establishes expedited procedures for consideration 
of a special rescission or veto message by the President. It 
sets forth a detailed timetable of action by the Congress 
(including specified procedures for Senate floor debate and 
action) in considering a rescission or receipts disapproval 
bill triggered by such a special Presidential message. The 
Rules Committee amendments to H.R. 2 expressly define a 
disapproval bill as one that encompasses an entire special 
message of the President, disapproving each rescission of 
discretionary budget authority or each veto of targeted tax 
benefits sought by the President. This amendment to H.R. 2 is 
designed to ensure that there is no confusion about the content 
of such a disapproval bill. The Congress must vote on 
disapproval of a President's entire rescission or targeted tax 
benefit veto package. The specific outline of what a 
disapproval bill must include ensures that no unrelated matter 
could be incorporated into this process and members could not 
``cherry-pick'' from a President's special message.
    The term targeted tax benefit is specifically defined in 
H.R. 2 to mean any provision of a revenue act that the 
President determines would provide a federal tax benefit to 5 
or fewer taxpayers. Calendar days of session in H.R. 2 are 
defined as those days in which both Houses of Congress are in 
session.
    Under the provisions of H.R. 2, the President must notify 
the Congress of his intent to rescind spending or veto a 
targeted tax break within 20 calendar days of the date of 
enactment of a regular or supplemental appropriation act, or a 
joint resolution making continuing appropriations providing 
such budget authority or a revenue act containing a targeted 
tax benefit. The President must submit to the Congress a 
separate rescission message for each appropriation act and for 
each revenue act subject to veto.
    The Presidential message must specify: (1) the amount of 
budget authority rescinded or the targeted tax provision 
vetoed; (2) any account, department or establishment of the 
government to which the budget authority is available for 
obligation and the specific project or government functions 
involved; (3) the reason for the President's decision to 
rescind that budget authority or veto that tax benefit; (4) the 
estimated fiscal, economic and budgetary effect of the 
President's action; and (5) the circumstances bearing upon the 
President's decision to seek the rescission or veto and the 
likely impact of this action on relevant projects, purposes and 
programs.
    Any such special Presidential message shall be transmitted 
to each House of Congress on the same day, referred to the 
appropriate committees of the House and the Senate and printed 
as a document of each House. The special message shall also be 
printed in the first published Federal Register after 
transmittal.
    The Rules Committee amendment to H.R. 2 outlines specific 
expedited procedures in the House to guarantee the opportunity 
for a vote on a disapproval bill. The purpose of these 
procedures is to ensure that Members of Congress have a means 
to express their disapproval of a President's rescissions or 
veto of a targeted tax benefit. These procedures do not require 
a vote; they allow for one if members seek one and fulfill the 
established requirements.
    Specifically, the Rules Committee amendment to H.R. 2 
provides that, in order to qualify for expedited procedures, a 
disapproval bill must be introduced in the House within 3 days 
of submission of a Presidential special message. The bill would 
be referred to the appropriate committee (either Appropriations 
or Ways & Means as the case may be). The committee would have 8 
days in which to report the disapproval bill. This period is 
granted to allow adequate time for the committee to consider 
the bill, order it reported and provide the required 3-day 
opportunity for members to file views.
    If the relevant committee fails to report the disapproval 
bill within that time-frame, any Member in support of the 
disapproval bill may announce his or her intention to offer a 
motion to discharge the bill on the following day. This sets in 
motion a process whereby a majority of the House would have to 
vote three times (on the motion to discharge, the motion to 
consider and passage of the bill) in order to approve the 
disapproval bill and send it to the Senate. Under these 
procedures, debate is limited, and no amendments are allowed.
    The Rules Committee amendment to H.R. 2 also provides 
procedures for floor consideration of the disapproval bill if 
the relevant committee does report the disapproval bill in 
timely fashion. These procedures would require the House to 
pass two hurdles: the first being a vote on the motion to 
consider and the second being passage of the disapproval bill.
    In addition, the amendment provides that all points of 
order against the disapproval bill and its consideration shall 
be waived to ensure that parliamentary maneuvering on the floor 
does not block members' opportunity to have a vote on the 
President's rescissions or targeted tax benefit vetoes.
    H.R. 2 also provides that spending and targeted tax breaks 
will be deemed to have been cancelled if the Congress does not 
act to disapprove the President's special rescission or veto 
message within 20 calendar session days. If the Congress does 
act, the President would have 10 days (not including Sundays) 
during which to exercise his veto authority of such a 
rescission or receipts disapproval bill, the same period as is 
granted to a President by the constitution for a traditional 
veto. Should he exercise that authority, both Houses of 
Congress would have an additional 5 calendar days in which to 
override the veto by two-thirds majority.
    If the second session of a Congress has adjourned sine die 
before the expiration of the time period established under this 
act, H.R. 2 allows the President's special rescission or veto 
message to be deemed to have been retransmitted on the first 
day of the next Congress. The review period established by this 
act shall commence after that day. If the first session of a 
Congress has adjourned sine die in the midst of this timetable, 
H.R. 2 provides that the clock shall stop ticking and resume on 
the first day of the second session of the Congress.
    H.R. 2 outlines specific procedures for consideration in 
the Senate of any rescission/receipts disapproval bill received 
from the House. Debate in the Senate on such a bill and related 
debatable motions and appeals shall be limited to no more than 
ten hours, with debate on any debatable motion or appeal 
limited to one hour.
    The bill further specifies that it shall not be in order in 
the Senate to consider any rescission/receipts disapproval bill 
that relates to any matter other than the rescission of budget 
authority or veto of the tax benefit transmitted by the 
President under this Act. H.R. 2 also specifies that it shall 
not be in order in the Senate to consider any amendment to a 
rescission/receipts disapproval bill. Finally, H.R. 2 specifies 
that the two above described points of order may only be waived 
or suspended in the Senate by a three-fifths vote of its 
members.
    An analysis of the draft bill prepared for this committee 
by the American Law Division of the Congressional Research 
Service and dated December 30, 1994 concludes, despite 
contentions by critics to the contrary, that the line item veto 
as established by H.R. 2 is constitutional. The CRS analysis 
explores the precedents of constitutional law with respect to 
delegation of Congressional authority, concluding that--

        [T]he precedents establish no constitutional barrier to 
        delegation of a power to the President, or in fact to 
        any other permissible recipient of delegated authority, 
        to set aside or void an act of Congress.

    The CRS report goes on to assert that--

        [N]othing in delegation doctrine suggests that Congress 
        may not delegate power over appropriations or taxes, 
        and in fact the breadth of the language and the results 
        in delegation cases provide more than adequate support 
        for the conclusion that delegation in this context is 
        proper under the constitution.

    In noting that there must be some standards and clear 
Congressional intent accompanying a delegation of Congressional 
power, the CRS report notes that--

        [W]hile insisting on standards, the [Supreme] Court has 
        contented itself with the most minimal of policy 
        direction and statement of goals. It has emphasized 
        practicality * * * Apparently, general statements of 
        policy that Congress hopes to see effectuated will 
        suffice.

    Ultimately, the CRS report concludes that--

        [I]t seems, therefore, on the basis of textual analysis 
        and precedent that it would be constitutionally 
        permissible for Congress to delegate to the President 
        the power to reduce or omit various items from 
        appropriations acts under the terms set out in the 
        draft bill.

                      section-by-section analysis

Section 1. Short title

    Section 1 provides that the bill's short title is the 
``Line Item Veto Act.''

Sec. 2. Line item veto authority

    Section 2 specifies that the President may rescind all or 
part of any discretionary budget authority or veto any targeted 
tax benefit if: the President determines that this action would 
help reduce the Federal budget deficit; will not impair any 
essential government functions; and will not harm the national 
interest. This recission or veto would take effect if: the 
President notifies Congress of such action by a special message 
not later than 20 calendar days (not including Saturdays, 
Sundays or holidays) after the date of enactment of a regular 
or supplemental appropriation act or a joint resolution making 
continuing appropriations providing such budget authority or a 
revenue act containing a targeted tax benefit. This section 
further specifies that the President shall submit a separate 
rescission message for each appropriation act and for each 
revenue act affected by this action.

Sec. 3. Line item veto effective unless disapproved

    Section 3 establishes that a Presidential rescission or 
veto action as outlined in section 2 will take effect, 
cancelling the spending and/or targeted tax benefit specified 
unless a rescission/receipts disapproved bill is enacted into 
law within the period specified. In order to disapprove a 
rescission or targeted tax veto, within 20 calendar session 
days of receipt of a Presidential rescission or veto message, 
both Houses of Congress must complete action on a rescission/
receipts disapproved bill and present such a bill to the 
President. The President will then have an additional ten days 
(not including Sundays) to exercise his authority to sign or 
veto the rescission/receipts disapproval bill. If the President 
vetoes the rescission/receipts disapproval bill then both 
Houses of Congress have an additional five calendar days of 
session in which to override the veto.
    This section further specifies that if the last session of 
Congress adjourns sine die before this period expires, the 
rescission or veto shall not take effect but the message will 
be deemed to have been retransmitted on the first day of the 
succeeding Congress and the entire review period as specified 
will run beginning after that day.

Sec. 4. Definitions

    Section 4 defines ``rescission/receipts disapproval bill'' 
as a bill which: only disapproves rescissions of discretionary 
budget authority, in whole, rescinded or only disapproves 
vetoes of any targeted tax benefits as transmitted in a special 
message by the President. The Rules Committee amendment to this 
section includes specific language for the text of such 
disapproval bills. This section further defines ``calendar days 
of session'' as only those days in which both Houses of 
Congress are in session. It defines ``targeted tax benefit'' as 
any provision of a revenue act which the President determines 
would provide a federal tax benefit to 5 or fewer taxpayers.

Sec. 5. Congressional consideration of line item vetoes

    Section 5 specifies the content of the special message the 
President shall submit if he intends to rescind any budget 
authority or veto any targeted tax benefit. Such a special 
message must include the amount of budget authority rescinded 
or the provision vetoed; identification of accounts, 
departments or other government establishments and specific 
projects or government functions impacted; the reasons for his 
decision to take this action; estimated fiscal, economic and 
budgetary effect of this action; considerations bearing upon 
his decision to take this action and the estimated effect this 
action will have upon related objects, purposes and programs. 
This section also outlines procedures for transmitting the 
special message to both Houses of Congress and printing the 
message in the Federal Register.
    The Rules Committee amendment establishes a series of 
expedited procedures for House consideration of a disapproval 
bill. In order to qualify for these expedited procedures, a 
disapproval bill must be introduced in the House not later than 
3 calendar days of session after the submission of a special 
Presidential message. If the committee to which such a 
disapproval bill is referred fails to report the bill within 8 
calendar days of session after its introduction, a Member in 
support of the disapproval bill may announce his or her 
intention to make a motion to discharge the bill from committee 
after that legislative day. Such a motion to discharge is 
highly privileged and debate is limited to one hour, equally 
divided and controlled by a proponent and an opponent. The 
previous question shall be considered as ordered on the motion 
to its adoption without intervening motion. It is not in order 
to move to reconsider the vote on the motion.
    The Rules Committee amendment to this section further 
provides that once the disapproval bill is reported or the 
committee is discharged, a motion to resolve the House into the 
Committee of the Whole is in order, and all points of order 
against the bill and its consideration are waived. This motion 
is highly privileged and is not debatable. The previous 
question shall be considered as ordered on that motion through 
its adoption without intervening motion. A motion to reconsider 
is not in order.
    If that motion is agreed to, the first reading is dispensed 
with and general debate shall be limited to 2 hours, equally 
divided and controlled, without intervening motion. After the 
debate the committee shall rise and report the bill to the 
House, the previous question shall be considered as ordered to 
final passage without intervening motion. A motion to 
reconsider the vote on passage of the bill shall not be in 
order.
    Appeals from the decisions of the Chair relating to the way 
House rules are applied to this procedure shall be decided 
without debate. The House may not consider more than one bill 
or more than one motion to discharge with respect to any given 
presidential special message. Except as stated in H.R. 2, the 
rules of the House shall apply to consideration of any 
disapproval bill as described in this act.
    Finally, Section 5 outlines specific procedures for 
consideration of such a disapproval bill in the Senate. It 
establishes points of order against consideration of unrelated 
matters in context with consideration of the bill, and against 
consideration of any amendments to the bill, and provides for 
waivers of these points of order in the Senate only by a three-
fifths vote.

             Matters required under the rules of the house

                             committee vote

    Clause 2(l)(2)(B) of rule XI requires, with respect to each 
roll call vote on a motion to report any measure or matter of a 
public character, and on any amendment offered to the measure 
or matter, each committee report include the total number of 
votes cast for and against, and the names of those members 
voting for and against.
    On January 26, 1995, the Committee ordered H.R. 2 reported 
to the House with amendments by a record vote of 9-4, a quorum 
being present.

Rules Committee Roll Call No. 31

    Date: January 26, 1995.
    Measure: H.R. 2, Line Item Veto Act.
    Motion By: Mr. Moakley.
    Summary of Motion: Amendment in the nature of a substitute 
to provide for an expedited rescission process subject to 
congressional approval (as opposed to disapproval).
    Results: Rejected, 4 to 9.
    Vote by Member: Quillen--Nay; Dreier--Nay; Goss--Nay; 
Linder--Nay; Pryce--Nay; Diaz-Balart--Nay; McInnis--Nay; 
Waldholtz--Nay; Moakley--Yea; Beilenson--Yea; Frost--Yea; 
Hall--Yea; Solomon--Nay.

Rules Committee Roll Call No. 32

    Date: January 26, 1996.
    Measure: H.R. 2, Line Item Veto Act.
    Motion By: Mr. Quillen.
    Summary of Motion: Order bill reported to the House as 
amended with recommendation that it pass.
    Results: Adopted, 9 to 4.
    Vote by Member: Quillen--Yea; Dreier--Yea; Goss--Yea; 
Linder--Yea; Pryce--Yea; Diaz-Balart--Yea; McInnis--Yea; 
Waldholtz--Yea; Moakley--Nay; Beilenson--Nay; Frost--Nay; 
Hall--Nay; Solomon--Yea.

                        committee cost estimate

    Clause 2(l)(3)(B) of rule XI requires each committee report 
that accompanies a measure providing new budget authority, new 
spending authority, or new credit authority or changing 
revenues or tax expenditures to contain a cost estimate, as 
required by section 308(a)(1) of the Congressional Budget Act 
of 1974, as amended, and, when practicable with respect to 
estimates of new budget authority, a comparison of the total 
estimated funding level for the relevant program (or programs) 
to the appropriate levels under current law.
    Clause 7(a) of rule XIII requires committees to include 
their own cost estimates in certain committee reports, which 
include, when practicable, a comparison of the total estimated 
funding level for the relevant program (or programs) with the 
appropriate levels under current law.
    H.R. 2 would have no direct cost to the federal government.

                 congressional budget office estimates

    Clause 2(l)(3)(C) of rule XI requires each committee to 
include a cost estimate prepared by the Director of the 
Congressional Budget Office, pursuant to section 403 of the 
Congressional Budget Act of 1974, if the cost estimate is 
timely submitted. The following is the CBO cost estimate as 
required:

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, January 27, 1995.
Hon. Gerald B.H. Solomon,
Chairman, Committee on Rules, House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed H.R. 2, the Line Item Veto Act, as ordered reported by 
the House Committee on Rules on January 26, 1995.
    H.R. 2 would grant the President the authority to rescind 
all or part of any discretionary budget authority or veto any 
targeted tax benefit (defined as any provision of a revenue 
bill that provides a federal tax benefit to five or fewer 
taxpayers). To exercise this authority, the President must 
transmit a special message to both houses of Congress 
specifying each amount rescinded (or provision vetoed) from 
appropriations (or tax provisions) within a particular bill 
just signed by the President. Furthermore, the message must 
include the governmental functions involved, the reasons for 
the rescission or veto, and--to the extent practicable--the 
estimated fiscal, economic, and budgetary effect of the action. 
This message must be transmitted within 20 calendar days 
(excluding Saturdays, Sundays, and holidays) of enactment of 
the legislation containing the vetoed items. All budget 
authority rescinded would be cancelled and any targeted tax 
benefit vetoed would be repealed unless Congress, within 20 
working days, passes a rescission/receipts disapproval bill to 
restore the provisions. Such a rescission/receipts disapproval 
bill would overturn all of the rescissions or vetoes proposed 
by the President in a single special message to the Congress. 
That disapproval bill would itself be subject to veto, with the 
usual two-thirds vote in each house required to override.
    The budgetary impact of this proposal is uncertain, because 
it would depend on the manner in which the line item veto is 
used by the President and the success of the Congress in 
overriding vetoes; however, potential savings or costs are 
likely to be relatively small. Discretionary spending currently 
accounts for only one-third of total outlays and is already 
tightly controlled. Mandatory spending, by far the larger part 
of the budget, is not affected by H.R. 2.
    By itself, this bill would not affect direct spending or 
receipts, so there would be no pay-as-you-go scoring under 
section 252 of the Balanced Budget and Emergency Deficit 
Control Act of 1985.
    Enactment of this legislation would not directly affect the 
budgets of state and local governments. However, the exercise 
of line item veto authority could affect federal grants to 
states, federal contributions towards shared programs or 
projects, and the demand for state and local programs to 
compensate for increases or reductions in federal programs.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact on this issue is 
Jeffrey Holland.
            Sincerely,
                                     Robert D. Reischaur, Director.

                       inflation impact statement

    Clause 2(l)(4) of rule XI requires each committee report on 
a bill or joint resolution of a public charter to include an 
analytical statement describing what impact enactment of the 
measure would have on prices and costs in the operation of the 
national economy. The Committee determines that H.R. 2 has no 
inflationary impact of the nation's economy.

                           oversight findings

    Clause 2(l)(3)(A) of rule XI requires each committee report 
to contain oversight findings and recommendations required 
pursuant to clause 2(b)(1) of rule X. Clause 2(b)(1) of rule X 
calls on each standing committee, other than the Committee on 
Appropriations and Budget, to review and study the 
effectiveness of laws and other matters within its 
jurisdiction.
    The Committee makes no oversight findings or 
recommendations.

 oversight findings and recommendations of the committee on government 
                          reform and oversight

    Clause 2(l)(3)(D) of rule XI requires each committee report 
to contain a summary of the oversight findings and 
recommendations made by the Government Reform and Oversight 
Committee pursuant to clause 4(c)(2) of rule X, whenever such 
findings have been timely submitted.
    The Committee has received no such findings or 
recommendations.

         changes in existing law made by the bill, as reported

    Clause 3 of rule XIII of the Rules of the House of 
Representatives requires that changes in existing law made by 
the bill, as reported, be included in the report.
    This bill makes no direct amendments to any Act.

                           comparative print

    Clause 4(d) of rule XI requires that, whenever the 
Committee on Rules reports a resolution amending or repealing 
the Rules of the House of Representatives, the accompanying 
report must contain a comparative print showing the changes in 
existing rules proposed to be made by the resolution.
    This bill makes no direct change in any rule of the House.

                       views of committee members

    Clause 2(l)(5) of rule XI requires each committee, except 
the Committee on Rules, to afford a three-day opportunity for 
members of the committee to file additional, minority, or 
dissenting views and to include the vies in its report. 
Although the requirement does not apply to the Rules Committee, 
the Committee always makes the maximum effort to provide its 
members with an opportunity to submit their views.
    The following views were submitted:
                            ADDITIONAL VIEWS

    I support passage of the Line Item Veto Act (H.R. 2), as 
reported by the House Committee on Rules, because it will give 
the Congress and the Executive Branch another important tool 
with which to restore fiscal responsibility to the federal 
budget process.
    The fact that the federal debt is nearing $5 trillion 
dollars, and that the federal government has run budget 
deficits in 33 of the past 34 years, clearly points to the need 
for new rules to control Congress' often indomitable appetite 
for spending. The Republican freshman class of the 103rd 
Congress recognized the need for new methods of imposing fiscal 
restraint when it included both a line item veto and a 
constitutional balanced budget amendment in its 19-point 
congressional reform proposal.
    H.R. 2 accomplishes these essential goals in several 
important ways. First, the legislation enables the President to 
rescind all or part of any discretionary budget authority in 
appropriations bills or to veto any targeted tax benefit in 
revenue bills, and requires the President to notify the 
Congress of these actions in a special message. Second, the 
bill requires the Congress to disapprove the President's 
actions through appropriate legislation, allowing the line item 
veto to take effect automatically unless Congress acts within a 
specified period of time. Finally, under changes made by the 
House Rules Committee during its mark-up session on January 26, 
1995, H.R. 2 establishes an expedited process in the House to 
guarantee Members the opportunity for a timely vote on 
disapproving a President's rescissions.
    Of all the issues raised during the most recent federal 
elections, I firmly believe that the American people were most 
concerned about reducing the level of federal spending and the 
need to avoid saddling future generations of Americans--our 
children and grandchildren--with an increasingly larger debt 
burden. In the past, I have heard from constituents who have 
become disillusioned with a Congress which has consistently 
found ways to circumvent the few budgetary restraints it has 
set for itself. In my view, H.R. 2, with its expedited 
procedures, will help Congress and the Executive Branch 
effectively identify and remove unnecessary or wasteful federal 
spending, without unduly restricting the hand of either branch 
of our government in performing its duties. Perhaps more 
importantly, H.R. 2 places the burden on Congress to act 
initially to reject a President's rescission message.
    While this is not the first time that the House has 
considered effective line item veto legislation, I am confident 
that the 104th Congress will not overlook this important 
opportunity to respond to the American public's call for a 
leaner, more efficient, and less costly federal government. I 
congratulate Chairman Solomon and the Republican leadership for 
moving H.R. 2 forward in such a timely manner.
                                                     Deborah Pryce.
                            DISSENTING VIEWS

    While we understand that many members of this House, on 
both the majority and minority sides of the aisle, wish to see 
a mechanism in place that will allow for a more careful 
scrutiny of spending and revenue bills that are enacted, we do 
not believe that H.R. 2, as reported, deserves the support of 
the House.
    Section 8 of Article I of the Constitution of the United 
States grants to the Legislative Branch of government the ``* * 
* Power to lay and collect Taxes, Duties, Imports and Excises, 
to pay the Debts and provide for the common Defense and general 
Welfare of the United States * * *''.
    These specifically enumerated duties granted to the 
Congress by the framers of the Constitution, along with the 
provisions of Section 9 of Article I which states ``* * * no 
Money shall be drawn from the Treasury but in consequence of 
Appropriations made by Law: * * *'', have provided Congress 
with what has commonly come to be termed the ``powers of the 
purse''. It is this grant of power which enables the 
Legislative Branch to set the spending priorities of the United 
States Government. Article II grants the President, or the 
Executive Branch, the authority to carry out the laws.
    The historical conflict between the enactment of 
legislative proposals and their execution and implementation by 
the President give rise, in 1974, to the passage of the 
Impoundment Control Act of 1974 (Title X of the Congressional 
Budget and Impoundments Control Act.) At that time, former 
President Nixon's use of impoundments--the refusal to fund 
certain Congressionally mandated programs--reordered the 
priorities established by the Congress under the grant of 
authority of Article I of the Constitution.
    While a number of court challenges arose to the President's 
authority to impound appropriated funds in that period, 
Congress decisively responded by passing the Impoundment 
Control Act. That Act requires the President to notify the 
Congress of any and all proposed rescissions and deferrals of 
appropriated funds and compels the President to release and 
expend those funds unless the Congress specifically takes 
action to approve the proposed rescission or deferral.
    This requirement that the Congress take a positive action 
to approve the rescission or a portion thereof, preserves the 
integrity of the prerogatives of the Congress to control the 
purse which funds the activities of the Federal Government. It 
requires the Congress to take affirmative action in order for 
those rescissions to take effect. By taking such affirmative 
action, the Congress retains its authority to set the spending 
priorities of the government.
    We believe that the grant of authority to the Congress 
found in Article I should not be cast aside in haste. The 
tension between the Executive and the Legislative branch, while 
difficult and sometimes burdensome, has essentially worked 
since it was designed by the Founding Fathers. We see no 
compelling reason to tamper with it at this time.
    Under the terms of this bill, the President's proposed 
rescissions or targeted tax benefit repeals would automatically 
take effect unless the Congress specifically passes a 
resolution disapproving this special message. Even if Congress 
overturned the Administration's disapproval, the President 
could then veto the disapproval which, in turn, would have to 
be overridden by two-thirds of both Houses. Effectively, the 
President could cancel any spending or tax benefits with 
support of only a minority of the members of either House.
    This approach to line-item veto legislation would result in 
a dramatic shift in responsibility and power from the 
Legislative Branch to the Executive Branch. We believe that a 
far more appropriate route for Presidential analysis is through 
an expedited rescission/targeted tax benefit measure which 
would provide an effective way to cut certain spending without 
drastically altering the carefully constructed powers between 
the two branches of Government. We believe that the alternative 
legislation offered by the Democratic Members during the markup 
of this bill strikes a balance in the desire to reduce Federal 
spending while still protecting against the Constitutional 
concerns raised by H.R. 2.
    Our proposal would permit the President to propose to 
rescind all or part of any discretionary budget authority and 
to repeal any targeted tax provision passed by the Congress. 
This request could only be enacted by approval by both Houses 
of Congress. The proposal guarantees a vote on the President's 
proposals and establishes an expedited procedure for 
consideration by the Congress. Specifically, the bill would 
give the President twenty days after an appropriations law is 
enacted to submit a special message and draft a bill to rescind 
any portion of that law. The Congress would then determine, 
upon an affirmative majority vote, whether to agree to the 
rescission or tax benefit repeal. Failure of either House to 
approve the rescission/receipts repeal package would cause the 
release of funds or tax benefits one day after defeat in either 
House.
    Similar legislation passed the House twice in the 103rd 
Congress. The House passed H.R. 1578 on April 29, 1993, by a 
vote of 258-157 but further progress was stalled in the Senate. 
The House subsequently passed a similar bill, H.R. 4600, on 
July 14, 1994, by a vote of 342-69. We believe that the 
strength of this bipartisan vote supports enacting this type of 
rescission process to help restore public confidence in the 
ability of our legislators and our chief executive to make 
responsible spending decisions. It will permit the President to 
identify--and the Congress to reconsider--individual spending 
and tax items to determine whether these items can stand on 
their own individual merit. Most importantly, the final 
decision would be made by a majority and not a minority vote.
    We share the majority's interest in reducing unnecessary 
and wasteful federal spending; however, we believe that H.R. 2 
in its current form proposes a dangerous--and potentially 
unconstitutional--grant of authority to the Executive branch. 
For this reason, the Democratic members opposed reporting the 
bill for Floor consideration. We urge Members to support our 
expedited rescission procedure as a far more favorable 
alternative to the rescission measure reported by this 
Committee.

                                   Joe Moakley.
                                   Anthony C. Beilenson.
                                   Martin Frost.
                                   Tony P. Hall.