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



H.L.C.

                                                                       
104th Congress                                             Rept. 104-11
                        HOUSE OF REPRESENTATIVES

 1st Session                                                     Part 2
_______________________________________________________________________


 
                           LINE ITEM VETO ACT

_______________________________________________________________________


January 30, 1995.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______


  Mr. Clinger, from the Committee on Government Reform and Oversight, 
                        submitted the following

                              R E P O R T

                             together with

                     MINORITY AND ADDITIONAL VIEWS

                         [To accompany H.R. 2]

      [Including cost estimate of the Congressional Budget Office]
  The Committee on Government Reform and Oversight, to whom was 
referred the bill (H.R. 2) to give the President line-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.
                              I. CONTENTS

                                                                   Page
  I. Contents.........................................................1
 II. Background and need for the legislation..........................7
III. Legislative history and committee actions.......................12
 IV. Committee hearings..............................................12
  V. Explanation of the bill as reported: Section-by-section analysis13
 VI. Compliance with Rule XI.........................................17
VII. Budget analysis and projections.................................17
VIII.
     Cost estimate of the Congressional Budget Office................17
 IX. Inflationary impact statement...................................18
  X. Changes in existing law.........................................18
 XI. Committee recommendation........................................18

    The amendments (stated in terms of the page and line 
numbers of the introduced bill) are as follows:
  Page 3, lines 4, 5, and 6, strike ``twenty calendar days (not 
including Saturdays, Sundays, or holidays)'' and insert ``ten 
calendar days (not including Sundays)''.
  Page 3, line 6 and 7, strike ``a regular or supplemental 
appropriation Act or a joint resolution making continuing 
appropriations'' and insert ``an appropriation Act''.
  Page 3, lines 9 and 12 insert ``or reconciliation'' after 
``revenue'' each place it appears.
  Page 3, after line 10, insert the following new subsection:
  (b) Deficit Reduction.--In each special message, the 
President may also propose to reduce the appropriate 
discretionary spending limit set forth in section 601(a)(2) of 
the Congressional Budget Act of 1974 by an amount that does not 
exceed the total amount of discretionary budget authority 
rescinded by that message.
  Page 3, line 11, before ``The'' insert ``
  (c) Separate Messages.--''.
  Page 3, line 11, strike ``rescission'' and insert 
``special''.
  Page 4, line 5, after ``session'' insert ``, beginning on the 
first calendar day of session after the date of submission of 
the special message,''.
  Page 4, line 23, strike ``day'' and insert ``Monday in 
February''.
  Page 5, strike lines 16 through 19, and insert the following:

          (3) The term ``targeted tax benefit'' means any 
        provision of a revenue or reconciliation Act determined 
        by the President to provide a Federal tax deduction, 
        credit, exclusion, preference, or other concession to 
        100 or fewer beneficiaries. Any partnership, limited 
        partnership, trust, or S corporation, and any 
        subsidiary or affiliate of the same parent corporation, 
        shall be deemed and counted as a single beneficiary 
        regardless of the number of partners, limited partners, 
        beneficiaries, shareholders, or affiliated corporate 
        entities.

    Page 5, after line 19, insert the following new paragraph:

          (4) The term ``appropriation Act'' means any general 
        or special appropriation Act, and any Act or joint 
        resolution making supplemental, deficiency, or 
        continuing appropriations.

  Page 9, after line 9, add the following new section:
SEC. 6. REPORTS OF THE GENERAL ACCOUNTING OFFICE.

  Beginning on January 6, 1996, and at one-year intervals 
thereafter, the Comptroller General shall submit a report to 
each House of Congress which provides the following 
information:
          (1) A list of each proposed Presidential rescission 
        of discretionary budget authority and veto of a 
        targeted tax benefit submitted through special messages 
        for the fiscal year ending during the preceding 
        calendar year, together with their dollar value, and an 
        indication of whether each rescission of discretionary 
        budget authority or veto of a targeted tax benefit was 
        accepted or rejected by Congress.
          (2) The total number of proposed Presidential 
        rescissions of discretionary budget authority and 
        vetoes of a targeted tax benefit submitted through 
        special messages for the fiscal year ending during the 
        preceding calendar year, together with their total 
        dollar value.
          (3) The total number of Presidential rescissions of 
        discretionary budget authority or vetoes of a targeted 
        tax benefit submitted through special messages for the 
        fiscal year ending during the preceding calendar year 
        and approved by Congress, together with their total 
        dollar value.
          (4) A list of rescissions of discretionary budget 
        authority initiated by Congress for the fiscal year 
        ending during the preceding calendar year, together 
        with their dollar value, and an indication of whether 
        each such rescission was accepted or rejected by 
        Congress.
          (5) The total number of rescissions of discretionary 
        budget authority initiated and accepted by Congress for 
        the fiscal year ending during the preceding calendar 
        year, together with their total dollar value.
          (6) A summary of the information provided by 
        paragraphs (2), (3) and (5) for each of the ten fiscal 
        years ending before the fiscal year during this 
        calendar year.

    The bill reported out, as amended, is as follows:
SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Line Item Veto Act''.

SEC. 2. LINE ITEM VETO AUTHORITY.

    (a) In General.--Notwithstanding the provisions of part B 
of title X of The Congressional Budget and Impoundment Control 
Act of 1974, and subject to the provisions of this section, the 
President may rescind all or part of any discretionary budget 
authority or veto any targeted tax benefit which is subject to 
the terms of this Act if the President--
          (1) determintes that--
                  (A) such rescission or veto would help reduce 
                the Federal budget deficit;
                  (B) such rescission or veto will not impair 
                any essential Government functions; and
                  (C) such rescission or veto will not harm the 
                national interest; and
          (2) notifies the Congress of such rescission or veto 
        by a special message not later than ten calendar days 
        (not including Sundays) after the date of enactment of 
        an appropriation Act providing such budget authority or 
        a revenue or reconciliation Act containing a targeted 
        tax benefit.
    (b) Deficit Reduction.--In each special message, the 
President may also propose to reduce the appropriate 
discretionary spending limit set forth in section 601(a)(2) of 
the Congressional Budget Act of 1974 by an amount that does not 
exceed the total amount of discretionary budget authority 
rescinded by that message.
    (c) Separate Messages.--The President shall submit a 
separate special message for each appropriation Act and for 
each revenue or reconciliation Act under this paragraph.

SEC. 3. LINE ITEM VETO EFFECTIVE UNLESS DISAPPROVED.

    (a)(1) Any amount of budget authority rescinded under this 
Act as set forth in a special message by the President shall be 
deemed canceled unless, during the period described in 
subsection (b), a rescission/receipts disapproval bill making 
available of the amount rescinded is enacted into law.
    (2) Any provision of law vetoed under this Act as set forth 
in a special message by the President shall be deemed repealed 
unless, during the period described in subsection (b), a 
rescission/receipts disapproval bill restoring that provision 
is enacted into law.
    (b) The period referred to in subsection (a) is--
          (1) a congressional review period of twenty calendar 
        days of session, beginning on the first calendar day of 
        session after the date of submission of the special 
        message, during which Congress must complete action on 
        the rescission/receipts disapproval bill and present 
        such bill to the President for approval or disapproval;
          (2) after the period provided in paragraph (1), an 
        additional ten days (not including Sundays) during 
        which the President may exercise his authority to sign 
        or veto the rescission/receipts disapproval;
          (3) if the President vetoes the rescission/receipts 
        disapproval bill during the period provided in 
        paragraph (2), an additional five calendar days of 
        session after the date of the veto.
    (c) If a special message is transmitted by the President 
under this act and the last session of the Congress adjourns 
sine die before the expiration of the period described in 
subsection (b), the rescission or veto, as the case may be, 
shall not take effect. The message shall be deemed to have been 
retransmitted on the first Monday in February of the succeeding 
Congress and the review period referred to in subsection (b) 
(with respect to such message) shall run beginning after such 
first day.

SEC. 4. DEFINITIONS.

    As used in this Act:
          (1) The term ``rescission/receipts disapproval bill'' 
        means a bill or joint resolution which--
                  (A) only disapproved a rescission of 
                discretionary budget authority, in whole, 
                rescinded, or
                  (B) only disapproved a veto of any targeted 
                tax benefit,
        in a special message transmitted by the President under 
        this Act.
          (2) The term ``calendar days of session'' shall mean 
        only those days on which both Houses of Congress are in 
        session.
          (3) The term ``targeted tax benefit'' means any 
        provision of a revenue or reconciliation Act determined 
        by the President to provide a Federal tax deduction, 
        credit, exclusion, preference, or other concession to 
        100 or fewer beneficiaries. Any partnership, limited 
        partnership, trust, or S corporation, and any 
        subsidiary or affiliate of the same parent corporation, 
        shall be deemed and counted as a single beneficiary 
        regardless of the number of partners, limited partners, 
        beneficiaries, shareholders, or affiliated corporate 
        entities.
          (4) The term ``appropriation Act'' means any general 
        or special appropriation Act, and any Act or joint 
        resolution making supplemental, deficiency, or 
        continuing appropriations.

SEC. 5. CONGRESSIONAL CONSIDERATION OF LINE ITEM VETOES.

    (a) Presidential Special Message.--Whenever the President 
rescinds any budget authority as provided in this Act or vetoes 
any provision of law as provided in this Act, the President 
shall transmit to both Houses of Congress a special message 
specifying--
          (1) the amount of budget authority rescinded or the 
        provision vetoed;
          (2) any account, department, or establishment of the 
        government to which such budget authority is available 
        for obligation, and the specific project or 
        governmental functions involved;
          (3) the reasons and justifications for the 
        determination to rescind budget authority or veto any 
        provision pursuant to this Act;
          (4) to the maximum extent practicable, the estimated 
        fiscal, economic, and budgetary effect of the 
        rescission or veto; and
          (5) all actions, circumstances, and considerations 
        relating to or bearing upon the rescission or veto and 
        the decision to effect the rescission or veto, and to 
        the maximum extent practicable, the estimated effect of 
        the rescission upon the objects, purposes, and programs 
        for which the budget authority is provided.
    (b) Transmission of Messages to House and Senate.--
          (1) Each special message transmitted under this Act 
        shall be transmitted to the House of Representatives 
        and the Senate on the same day, and shall be delivered 
        to the Clerk of the House of Representatives if the 
        House is not in session, and to the Secretary of the 
        Senate if the Senate is not in session. Each special 
        message so transmitted shall be referred to the 
        appropriate committees of the House of Representatives 
        and the Senate. Each such message shall be printed as a 
        document of each House.
          (2) Any special message transmitted under this Act 
        shall be printed in the first issue of the Federal 
        Register published after such transmittal.
    (c) Referral of Rescission/Receipts Disapproval Bills.--Any 
rescission/receipts disapproval bill introduced with respect to 
a special message shall be referred to the appropriate 
committees of the House of Representatives or the Senate, as 
the case may be.
    (d) Consideration in the Senate.--
          (1) Any rescission/receipts disapproval bill received 
        in the Senate from the House shall be considered in the 
        Senate pursuant to the provisions of this Act.
          (2) Debate in the Senate on any rescission/receipts 
        disapproval bill and debatable motions and appeals in 
        connection therewith, shall be limited to not more than 
        ten hours. The time shall be equally divided between, 
        and controlled by, the majority leader and the minority 
        leader or their designees.
          (3) Debate in the Senate on any debatable motions or 
        appeal in connection with such bill shall be limited to 
        one hour, to be equally divided between, and controlled 
        by the mover and the manager of the bill, except that 
        in the event the manager of the bill is in favor of any 
        such motion or appeal, the time in opposition thereto 
        shall be controlled by the minority leader or his 
        designee. Such leaders, or either of them, may, from 
        the time under their control on the passage of the 
        bill, allot additional time to any Senator during the 
        consideration of any debatable motion or appeal.
          (4) A motion to further limit debate is not 
        debatable. A motion to recommit (except a motion to 
        recommit with instructions to report back within a 
        specified number of days not to exceed one, not 
        counting any day on which the Senate is not in session) 
        is not in order.
    (e) Points of Order.--
          (1) It shall not be in order in the Senate or the 
        House of Representatives to consider any rescission/
        receipts disapproval bill that relates to any matter 
        other than the rescission of budget authority or veto 
        of the provision of law transmitted by the President 
        under this Act.
          (2) It shall not be in order in the Senate or the 
        House of Representatives to consider any amendment to a 
        rescission/receipts disapproval bill.
          (3) Paragraphs (1) and (2) may be waived or suspended 
        in the Senate only by a vote of three-fifths of the 
        members duly chosen and sworn.

SEC. 6. REPORTS OF THE GENERAL ACCOUNTING OFFICE.

    Beginning on January 6, 1996, and at one-year intervals 
thereafter, the Comptroller General shall submit a report to 
each House of Congress which provides the following 
information:
          (1) A list of each proposed Presidential rescission 
        of discretionary budget authority and veto of a 
        targeted tax benefit submitted through special messages 
        for the fiscal year ending during the preceding 
        calendar year, together with their dollar value, and an 
        indication of whether each rescission of discretionary 
        budget authority or veto of a targeted tax benefit was 
        accepted or rejected by Congress.
          (2) The total number of proposed Presidential 
        rescissions of discretionary budget authority and 
        vetoes of a targeted tax benefit submitted through 
        special messages for the fiscal year ending during the 
        preceding calendar year, together with their total 
        dollar value.
          (3) The total number of Presidential rescissions of 
        discretionary budget authority or vetoes of a targeted 
        tax benefit submitted through special messages for the 
        fiscal year ending during the preceding calendar year 
        and approved by Congress, together with their total 
        dollar value.
          (4) A list of rescissions of discretionary budget 
        authority initiated by Congress for the fiscal year 
        ending during the preceding calendar year, together 
        with their dollar value, and an indication of whether 
        each such rescission was accepted or rejected by 
        Congress.
          (5) The total number of rescissions of discretionary 
        budget authority initiated and accepted by preceding 
        calendar year, together with their total dollar value.
          (6) A summary of the information provided by 
        paragraphs (2), (3) and (5) for each of the ten fiscal 
        years ending before the fiscal year during this 
        calendar year.
              ii. background and need for the legislation

    This bill keeps faith with an important commitment in the 
Republican ``Contract with America.'' Part of the Contract 
includes the Fiscal Responsibility Act, which calls for a 
balanced budget amendment and a legislative line-item veto to 
restore fiscal responsibility to an out-of-control Congress. 
The purpose of H.R. 2 is to change the tilt of the game from 
one that favors spending to one that favors saving.
    Over the past fourteen years, the national debt has 
quintupled. By 1981 the total national debt--accumulated since 
1789--had reached one trillion dollars. As we report this bill 
from committee, the total national debt is approaching five 
trillion dollars. Almost like clockwork, whether the President 
is Republican or Democrat, a trillion dollars is added to the 
national debt every four years. It took 192 years (from 1789 to 
1981) to reach the first trillion dollars. That staggering sum 
is now tackled on with each four-year cycle.
    This astonishing growth in federal deficits has fueled 
public support for the balanced budget amendment and the 
granting of item-veto authority to the President. The public 
wants curbs on the size of government and an end to unnecessary 
and wasteful spending. A poll conducted on November 28-29, 
1994, by CNN, USA Today, and Gallup, shows 77 percent of the 
public in favor of legislation that would allow the President 
to veto individual parts of a proposed spending bill rather 
than having to accept or veto the entire bill. In 1992, a joint 
poll by NBC and the Wall Street Journal asked citizens whether 
they favored giving the President a line-item veto to make it 
easier for him to cut wasteful spending. 68 percent responded 
affirmatively. Support for the item veto has been consistently 
strong over the past two decades.

                     enhanced rescission authority

    H.R. 2 gives the President an important tool for 
eliminating or reducing wasteful governmental programs. 
Enhanced presidential authority will be one method, used in 
concert with others, to move the nation toward a balanced 
budget. Our bill strengthens the President's ability to rescind 
(cancel) appropriated funds. It also allows the President to 
eliminate targeted tax benefits (any provision of a revenue act 
the President determines would provide a Federal tax benefit to 
one hundred or fewer taxpayers). Under H.R. 2, after the 
President signs an appropriations bill or a tax measure, he may 
recommend to Congress that some of the funds or tax provisions 
be terminated. Those recommendations will automatically become 
law after a fixed period of time unless Congress, during a 
designated review period, votes by bill or joint resolution to 
disapprove. The President could veto that bill or joint 
resolution, forcing Congress to obtain a two-thirds vote in 
each House to override the veto. Our bill permits the President 
to choose between using the rescission process afforded under 
H.R. 2 or the existing impoundment process contained in title X 
of the Congressional Budget Act.
    Enhanced rescission authority is needed to check 
congressional raids on the Treasury. Every year outlandish 
projects and tax benefits are concealed in appropriations bills 
and revenue measures. On their own it is unlikely that these 
items would survive scrutiny either in Congress or when the 
bill reached the President's desk. Tucked away in omnibus 
bills, however, they survive. Appropriations and tax bills are 
used to profit a favored few at the expense of the average 
taxpayer. For example, the Revenue Act of 1992 was passed to 
create enterprise zones in the aftermath of the Los Angeles 
riots. As the bill made its way through Congress, it contained 
over 50 special tax breaks that completely outspent the cost of 
the enterprise zones themselves and resulted in a President's 
veto. The special tax benefits Congress added covered such 
interests as special exemptions for certain rural mail 
carriers, special rules for Federal Express pilots, deductions 
for operators of licensed cotton warehouses, exemptions for 
some small firearms manufacturers, and exemptions for certain 
ferry operators. Under the Impoundment Control Act of 1974, the 
President cannot reach these special tax benefits and has 
limited ability to rescind funds for narrow, parochial 
purposes.
                    impoundment control act of 1974

    The purpose of H.R. 2 is to avoid the delays and inaction 
that are inherent in the current rescission process. Under the 
Impoundment Control Act of 1974, Congress must complete action 
on a President's rescission package within forty-five days of 
continuous session. Otherwise, the funds must be released to 
the agencies and spent. There is no obligation on the part of 
Congress to consider or act on the President's proposals. 
Congress may, and often does, ignore a President's proposal to 
rescind funds. From 1974 to the present time, Presidents have 
recommended $72.8 billion in rescissions. Of that amount, 
Congress has agreed only to $22.9 billion, although additional 
congressional rescissions have been adopted.
    Congress enacted the Impoundment Control Act in response to 
large-scale impoundments that occurred during the early 1970s. 
Federal programs were reduced and in some cases eliminated when 
the administration refused to spend funds that Congress had 
appropriated. The President's authority to impound funds was 
challenged in a number of court cases, with most of the rulings 
decided against the administration. The Impoundment Control Act 
represented a compromise between different versions of House 
and Senate bills intended to restrain impoundment and protect 
legislative priorities.
    Over the years, the rescission procedure has proven to be 
too cumbersome and unworkable. The burden is on the President 
to obtain congressional approval during a fixed time period. 
Congress need only sit on its hands and do nothing to defeat a 
President's proposal. Our legislation reverses the burden. 
Presidential proposals will now become law unless Congress 
takes action to stop them. The burden will be on Congress, not 
the President. With access to enhanced rescission authority, 
Presidents can weed out wasteful pork-barrel spending or 
special tax benefits that are tucked away in otherwise good 
bills.

                   procedures for enhanced rescission

    Under the procedures established in this bill, the 
President must submit rescission proposals within ten calendar 
days (not including Sundays) after Congress passes an 
appropriations bill or tax measure. A separate rescission 
proposal will be required for each piece of legislation. 
Rescissions proposed under this bill will take effect unless 
Congress disapproves them in an up-or-down vote within twenty 
calendar days of session after receipt of the proposal. If the 
President vetoes the disapproval bill, Congress would have five 
days to override it by a two-thirds vote in each House.
    The bill establishes procedures for Senate consideration of 
a proposed rescission, including limiting debate time on a 
disapproval bill to ten hours. It shall not be in order in the 
Senate or the House of Representatives to consider any 
disapproval bill that relates to any matter other than the 
rescission of budget authority or the cancellation of a 
targeted tax benefit as transmitted by the President under this 
legislation. It shall not be in order in the Senate or the 
House of Representatives to consider any amendment to a 
rescission/receipts disapproval bill. These points of order may 
be waived or suspended in the Senate only by a vote of three-
fifths of the members duly chosen and sworn.
                          expedited rescission

    Our reported bill differs fundamentally from legislation 
passed by the House in 1992, 1993, and 1994, giving the 
President ``expedited rescission'' authority. Under that 
procedure, the burden remained on the President to obtain the 
approval of both Houses within a specified number of days. Most 
of the House-passed bills applied solely to appropriations, 
although in 1994 the House agreed to an amendment that extended 
rescission procedures to presidential proposals to repeal 
targeted tax benefits in revenue bills. However, the central 
change to the existing procedure in the Impoundment Control Act 
was modest. Expedited rescission had the intention of forcing 
at least one House to act. If the House of Representatives 
supported the President's rescission proposal, the Senate would 
take up the measure. If the House defeated the rescission 
package, no Senate action would be necessary because under 
expedited rescission the President still needed the approval of 
both Houses within the allotted time.
    Thus, the purpose of expedited rescission was an attempt to 
force the hand of one chamber to act. The burden of proof 
remained on the President. We think this procedure is too weak 
to yield significant budget savings and too weak to discourage 
wasteful legislative habits. The same majority in Congress that 
logrolled pork barrel projects in the first place would retain 
control over their survival. Enhanced rescission authority 
provides genuine item-veto power. Budget authority or targeted 
tax benefits will be automatically terminated after a fixed 
number of days unless Congress acts by bill or joint resolution 
to disapprove the President's proposal. The President may veto 
the bill or joint resolution and trigger an override effort, 
requiring a two-thirds majority in each House to prevail.

                         objections to the bill

    Among the arguments against the line-item veto, is that the 
measure will not solve the deficit problem. No one claims that 
it will. However, enhanced rescission authority will permit the 
President to eliminate pork and special tax breaks in bills 
passed by Congress. To that extent, H.R. 2 will help move the 
nation toward a balanced budget. Moreover, the line-item veto 
bill represents one of several measures that can produce 
greater control over federal spending and improve governmental 
accountability.
    Unnecessary or wasteful projects and programs in 
appropriations bills, or special tax benefits in revenue 
measure, may be returned by the President to Congress for 
elimination. Instead of being able to hide narrow, limited-
interest provisions in omnibus bills with the assurance that 
they will ride to safety, legislators will now be held 
accountable. The President can return those provisions to 
Congress and have their merits, or demerits, examined in the 
light of day. Rather than trading deals to slip provisions in a 
bill as part of time-honored logrolling, legislators will have 
to make a public and visible effort to enlist the support of 
their colleagues to disapprove a President's recommendation. 
This type of heightened accountability will be a healthy check 
on wasteful legislative habits.
    Will enhanced rescission authority give the President too 
much power and tilt the balance toward executive control of the 
purse? We think that will not be the case. Greater presidential 
authority to rescind funds will create a better balance between 
executive and legislative interests. The Impoundment Control 
Act of 1974 was too restrictive. Enhanced rescission will 
protect the public's interest by providing a tool for 
eliminating wasteful, unnecessary spending and for terminating 
unfair, narrow special tax benefits.
    Because of recent litigation, the procedures in the 
Impoundment Control Act have become even more restrictive on 
presidential action. Under the terms of the 1974 legislation, 
Presidents could defer (delay) the obligation of budget 
authority. Either chamber of Congress, through a one-House 
legislative veto, could disapprove presidential deferrals. When 
the legislative veto was struck down as unconstitutional in INS 
v. Chadha (1983), it invalidated the one-House check on 
presidential deferrals. Several years later a court challenge 
successfully argued that if the legislative veto was invalid, 
so was the deferral authority attached to it. The two were 
inseverable. The effect was to limit deferrals to routine 
administrative actions. Presidents could no longer propose 
deferrals for policy reasons (disagreeing with the purpose of a 
program). Congress promptly enacted that policy into law.\1\
    \1\INS v. Chadha, 462 U.S. 919 (1983); City of New Haven, Conn. v. 
United States, 809 F.2d 900 (D.C. 1987); 101 Stat. 785, sec. 206 
(1987).
---------------------------------------------------------------------------
    Certainly Presidents may use the existing veto power to 
challenge wasteful appropriations and revenues measures. 
However, the regular veto has been substantially undercut by 
the practice of passing omnibus appropriations, tax, and 
reconciliation measures and passing continuing resolutions at 
the last minute just before the fiscal year ends.
    In light of these developments, H.R. 2 will help restore 
presidential responsibility over the wise and prudent use of 
appropriated funds and revenue provisions. As Chief Executive, 
the President should have a great sense of accountability in 
spending federal funds and resisting special tax benefits. The 
President is the one official responsible to the entire nation. 
The general public interest will be enhanced by strengthening 
presidential authority.

                       state item-veto authority

    H.R. 2 differs fundamentally from the kind of item-veto 
authority granted to governors in 43 states. They exercise 
their vetoes over individual projects and programs before a 
bill becomes law. Some governors can propose that certain items 
be reduced. They can take those actions because appropriations 
bills at the state level are highly itemized. It is not unusual 
to see sums as small as $2,000. Because of item-veto authority 
and itemized bills, governors can literally delete and reduce 
unwanted sums while bills are before them.
    This state model is not appropriate for the Federal 
Government. We do not itemize appropriations bills and see no 
reason to do so. For the most part, Congress provides large 
lump-sum accounts for agencies. Most of the details and 
instructions on how those funds should be spent are included in 
conference reports, agency justification documents, and other 
nonstatutory sources. The details do not appear in the law. It 
makes little sense to talk about item-veto authority unless we 
itemize bills.
    We could take the details from nonstatutory sources and 
place them in appropriations bills, but that would add an 
undesirable rigidity to agency operations. Executive officials 
would have to implement highly detailed bills no matter the 
magnitude of change that occurs over the course of fiscal year. 
Their only opportunity for relief would be to come to Congress 
and request legislation to increase funds for some items and 
eliminate them for others. Agencies would be forced to seek 
large numbers of statutory amendments to the original 
appropriations bill. No one in either branch wants that. Under 
our present system of lump-sum funding, agencies are able to 
make adjustments and shift funds within large appropriations 
accounts. Additional legislation is not required. That practice 
makes sense for agencies and for Congress.
    We decided on enhanced rescission for several reasons. It 
permits Congress to continue appropriating with lump sums. 
After a President signs an appropriations bill, he may propose 
for reduction or elimination any dollar amount specifically 
identified in a bill or committee report or joint explanatory 
statement accompanying a conference report on that Act. Given 
the structure and format of appropriations bills at the Federal 
level, enhanced rescission provides the President with greater 
power and discretion than he would have with item-veto 
authority. Item-veto authority, as practiced at the state 
level, would require the Federal Government to itemize 
appropriations bills. Such a step would disrupt and undermine 
effective agency management.
    There is no authority in this bill for the President to 
take budget authority proposed for rescission and reallocate 
those funds to other purposes. This bill provides for the 
termination of budget authority. There would be no funds to 
reallocate.

             iii. legislative history and committee actions

    H.R. 2 was referred to the Committee on Government Reform 
and Oversight. With the Senate Committee on Governmental 
Affairs, a joint hearing was conducted on January 12, 1995. The 
bill was marked up on January 25 and reported favorably by a 
rollcall vote of 30 to 11, with one Member voting Present. The 
individual rollcall results are placed at the end of this 
report.

                         iv. committee hearings

    A joint hearing was held on January 12, 1995 by the House 
Committee on Government Reform and Oversight and the Senate 
Committee on Governmental Affairs. In the first panel, 
testimony was received from Senators John McCain and Dan Coats 
and from Representatives Gerald Solomon, Jack Quinn, Mark 
Neumann, and Michael Castle. All of these witnesses spoke in 
favor of granting the President enhanced rescission authority.
    Governor William Weld of Massachusetts testified on 
experiences at the state level and confirmed the effectiveness 
of the item veto in controlling expenditures. Governor Weld 
discounted concerns that an executive item veto would lead to 
an imbalance in power and unwarranted presidential authority. 
He noted that similar legislation had led to greater 
cooperation and more careful planning between the legislative 
and executive branches in Massachusetts. Dr. Alice Rivlin, 
Director of the Office of Management and Budget, testified on 
behalf of the Clinton administration and expressed support for 
legislation that would enhance the President's authority to cut 
spending. Dr. Robert D. Reischauer, Director of the 
Congressional Budget Office, noted in his testimony that 
enhanced rescission would provide the President with greater 
potential power than a constitutionally approved item veto.
    Judge Gilbert S. Merritt, Chief Judge of the Sixth Circuit 
and chairman of the Executive Committee of the Judicial 
Conference, expressed concern about the policy implication of 
applying a presidential line-item veto to appropriations acts 
for the judiciary. Judge Merritt testified that the judiciary 
should be excluded from the coverage of H.R. 2 because judicial 
independence would be threatened from undue financial pressures 
by the executive branch.
    The final panel consisted of Joseph Winkelmann of Citizens 
Against Government Waste, David Keating of the National 
Taxpayers Union, and Dr. Norman Ornstein of the American 
Enterprise Institute. Mr. Winkelmann and Mr. Keating supported 
enhanced rescission authority, while Dr. Ornstein regarded H.R. 
2 as more of a transfer of power from Congress to the President 
than a question of spending restraint.

  V. EXPLANATION OF THE BILL AS REPORTED: SECTION-BY-SECTION ANALYSIS

Section 1. Short title

    This bill, when enacted, may be cited as the ``Line Item 
Veto Act.''

Sec. 2. Line item veto authority

    Notwithstanding the provisions of part B of title X of The 
Congressional Budget and Impoundment Control Act of 1974, and 
subject to the provisions of this section, the President may 
rescind all or part of any ``discretionary budget authority'' 
or veto any targeted tax benefit subject to the terms of this 
Act if the President complies with the standards set forth in 
this bill and notifies Congress by special message. The special 
message should specify whether the President intends to use the 
process established under H.R. 2 or the Impoundment Control 
Act. With regard to appropriations bills, the language 
``discretionary budget authority'' limits the President's 
rescission authority solely to dollar amounts. There is no 
authority to propose the rescission of provisos, conditions, or 
other language, nor may the President reallocate rescinded 
funds. Moreover, ``discretionary'' budget authority applies to 
funds that may be altered by Congress through the 
appropriations process, with the exception of direct-spending 
(entitlement) programs.
    The standards set forth in this bill include a 
determination by the President that a proposed rescission of 
discretionary budget authority or a veto of a targeted tax 
benefit (1) would help reduce the Federal budget deficit, (2) 
will not impair any essential Government functions, and (3) 
will not harm the national interest. These standards provide 
sufficient guidance for the delegation of authority to the 
President.
    When the President intends to rescind discretionary budget 
authority or veto a targeted tax benefit, he must notify the 
Congress by a special message not later than ten calendar days 
(not including Sundays) after the date of enactment of a 
regular or supplemental appropriation Act, a joint resolution 
making continuing appropriations, or a revenue or 
reconciliation Act containing a targeted tax benefit. The 
President must submit a separate rescission message for each 
appropriation Act and for each revenue Act under this 
paragraph.

Sec. 3. Line item veto effective unless disapproved

    Any amount of budget authority rescinded under this Act, as 
set forth in the President's special message, shall be deemed 
canceled unless, during the period set aside in the bill, a 
rescission/receipts disapproval bill is enacted into law. The 
disapproval bill would make available all of the amount 
proposed for rescission. It applies to the entire special 
message submitted by the President. Disapproval bills for 
rescissions may not seek to overturn selected items in a 
special message, nor may the disapproval bills for rescissions 
seek to restore some but not all of the amounts proposed for 
rescission. The President's rescission proposal comes as a 
package and must be disapproved as a package.
    Any provision of law, as set forth in a President's special 
message, shall be deemed repealed unless a rescission/receipts 
disapproval bill restoring that provision is enacted into law. 
If the President seeks to veto nine separate targeted tax 
benefits, the disapproval bill would be directed at all nine 
provisions, not a portion of them.
    After the President submits a special message, Congress 
would have twenty calendar days of session to complete action 
on the rescission/receipts disapproval bill and present that 
bill to the President for signature or veto. At that point the 
President would have ten days (not including Sundays) to decide 
whether to sign or veto the bill. If the President vetoes the 
rescission/receipts disapproval bill, Congress would have five 
calendar days of session to consider a vote to override the 
veto.
    Thus, approximately forty-five days are provided for this 
procedure: ten calendar days for the President to submit a 
special message, twenty calendar days of session for Congress 
to act on the rescission/receipts disapproval bill, ten days 
(not including Sundays) for the President to sign or veto the 
disapproval bill, and five calendar days of session for 
Congress to consider a vote to override the veto.
    If the President transmits a special message under this Act 
and the last session of a Congress adjourns sine die before the 
expiration of the thirty-five days provided for congressional 
action, presidential signature/veto, and congressional 
override, the rescission or veto shall not take effect. The 
President's message shall be deemed to have been retransmitted 
on the first Monday in February of the succeeding Congress, and 
the review period of thirty-five days shall run beginning after 
such first day.
    For example, if Congress considers an override at the end 
of the second session and adjourns sine die before the 
expiration of the five days set aside for that consideration, 
at the start of the next Congress the entire period of thirty-
five days (twenty for congressional review, ten for 
presidential signature/veto, and five for override) begins 
anew. On the other hand, if Congress considered an override at 
the end of the first session and adjourned before the 
expiration of the five-day period, the calculation is 
different. Whatever time Congress consumed would be deleted 
from the period of thirty-five days. If Congress used thirty-
three of the Thirty-five days, when the second session began 
Congress would have two days remaining to consider the 
override.

Sec. 4. Definitions

    As used in this Act, the term ``rescission/receipts 
disapproval bill'' means a bill or joint resolution that only 
disapproves a rescission of discretionary budget authority (in 
whole) or only disapproves an effort to veto any targeted tax 
benefit as transmitted in a presidential special message. 
Discretionary budget authority means budgetary resources 
(except to fund direct-spending programs) provided in 
appropriations Acts. In either case, on a rescission action or 
a targeted tax benefit, the bill or joint resolution of 
disapproval applies to the entire package of rescissions or the 
entire package of targeted tax benefits submitted by the 
President.
    The term ``calendar days of session'' shall mean only those 
days on which both Houses of Congress are in session. This 
definition excludes periods of recess and adjournment.
    The term ``targeted tax benefits'' means any provision of a 
revenue or reconciliation Act which the President determines 
would provide a Federal tax benefit to one hundred or fewer 
taxpayers. As defined by the bill, any partnership, limited 
partnership, trust, or S corporation, and any subsidiary or 
affiliate of the same parent corporation, would be counted as a 
single beneficiary.

Sec. 5. Congressional consideration of line item vetoes

    (a) Presidential Special Message. Whenever the President 
rescinds any budget authority as provided in this Act or vetoes 
any provision of law as provided in this Act, the President 
shall transmit to both Houses of Congress a special message 
specifying:
          (1) the amount of budget authority rescinded or the 
        provision vetoed;
          (2) any account, department, or establishment of the 
        Government to which such budget authority is available 
        for obligation, and the specific project or 
        governmental functions involved;
          (3) the reasons and justifications for the 
        determination to rescind budget authority or veto any 
        provision pursuant to this Act;
          (4) to the maximum extent practicable, the estimated 
        fiscal, economic, and budgetary effect of the 
        rescission or veto; and
          (5) all actions, circumstances, and considerations 
        relating to or bearing upon the rescission or veto and 
        the decision to effect the rescission or veto, and to 
        the maximum extent practicable, the estimated effect of 
        the rescission upon the objections, purposes, and 
        programs for which the budget authority is provided.
    (b) Transmission of Messages to House and Senate. Each 
special message transmitted under this Act shall be transmitted 
to the House of Representatives and to the Senate on the same 
day. It shall be delivered to the Clerk of the House of 
Representatives if the House is not in session, and to the 
Secretary of the Senate if the Senate is not in session. Each 
special message so transmitted shall be referred to the 
appropriate committees of the two chambers. Each message shall 
be printed as a document of each House. Any special message 
transmitted under this Act shall be printed in the first issue 
of the Federal Register published after the President's 
transmittal.
    (c) Referral of Rescission/Receipts Disapproval Bills. Any 
rescission/receipts disapproval introduced with respect to a 
special message shall be referred to the appropriate committees 
of the House of Representatives and the Senate.
    (d) Consideration in the Senate. Any rescission/receipts 
disapproval bill received in the Senate from the House shall be 
considered in the Senate pursuant to the provisions of this 
Act. Debate in the Senate on any rescission/receipts 
disapproval bill and debatable motions and appeals in 
connection therewith, shall be limited to not more than ten 
hours. The time shall be equally divided between, and 
controlled by, the majority leader and the minority leader or 
their designees.
    Debate in the Senate on any debatable motions or appeal in 
connection with such bill shall be limited to one hour, to be 
equally divided between, and controlled by the mover and the 
manager of the bill. There is one exception to this procedure. 
In the event the manager of the bill favors any such motion or 
appeal, the opposition time shall be controlled by the minority 
leader or that leader's designee. Such leaders, or either of 
them, may, from the time under their control on the passage of 
the bill, allot additional time to any Senator during the 
consideration of any debatable motion or appeal.
    A motion to further limit debate is not debatable. A motion 
to recommit (except a motion to recommit with instructions to 
report back within a specified number of days not to exceed 
one, not counting any day on which the Senate is not in 
session) is not in order.
    (e) Points of Order. It shall not be in order in the Senate 
or in the House of Representatives to consider any rescission/
receipts disapproval bill that relates to any matter other than 
the rescission of budget authority or veto of the provisions of 
law transmitted by the President under this Act. It shall not 
be in order in either chamber to consider any amendment to a 
rescission/receipts disapproval bill. The above points of order 
may be waived or suspended in the Senate only by a vote of 
three-fifths of the members duly chosen and sworn.

Sec. 6. Reports of the General Accounting Office

    Beginning on January 6, 1996, and at one-year intervals 
thereafter, the Comptroller General shall submit to each House 
a report detailing each proposed presidential rescission and 
veto submitted for the prior fiscal year, together with its 
dollar value and whether it was accepted or rejected by 
Congress. The report by the Comptroller General shall also 
include the total number and dollar value of presidential 
proposals, the total number and dollar value of presidential 
rescissions and vetoes approved by Congress, and a list of 
rescissions initiated by Congress.

                      vi. compliance with rule xi

    Pursuant to rule XI, clause 2(l)(3), of the Rules of the 
House of Representatives, under the authority of rule X, clause 
2(b)(1) and clause 3(f), the results and findings from those 
oversight activities are incorporated in the recommendations 
found in the bill and amended in this report.

                  vii. budget analysis and projections

    This Act provides for no new authorization or budget 
authority or tax expenditures. Consequently, the provisions of 
section 308(a) of the Congressional Budget Act are not 
applicable.

         viii. cost estimate of the congressional budget office
                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, January 27, 1995.
Hon. William F. Clinger,
Chairman, Committee on Government and Oversight, 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 Government Reform and Oversight on 
January 25, 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 or 
reconciliation bill that provides a federal tax benefit to 100 
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 veto, and--to the extent practicable--the estimated fiscal, 
economic, and budgetary effect of the action. The President's 
message may also propose to reduce the discretionary spending 
caps by up to the amount of budget authority rescinded. This 
message must be transmitted within 10 calendar days (excluding 
Sundays) of enactment of the legislation containing the vetoed 
items. All budget authority rescinded would be canceled 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. A disapproval bill 
could propose overruling one or more of the rescissions (or 
vetoes of tax provisions) proposed by the President in a single 
message. Because there could be a number of disapproval bills 
dealing with different combinations of the rescissions or 
vetoes proposed in a single Presidential message, the Congress 
could act on more than one such bill for each message. Those 
disapproval bills would themselves be subject to veto, with the 
usual two-thirds vote in each house required to override.
    Additionally, the General Accounting Office would be 
required to submit a report to the Congress detailing each 
proposed Presidential rescission and veto, its dollar value, 
and whether it was accepted or rejected by the Congress. The 
GAO report would also list all rescissions initiated by the 
Congress, along with the corresponding financial and 
legislative information.
    The budgetary impact of this bill 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. Because GAO already compiles 
data on proposed rescissions, the costs of the reporting 
requirements would not be significant.
    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. Reischauer, Director.
                   ix. inflationary impact statement

    In accordance with rule XI, clause 2(l)(4) of the Rules of 
the House of Representatives, this legislation is assessed to 
have no inflationary effect on prices and costs in the 
operation of the national economy.

                       x. changes in existing law

    Clause 3 of rule XIII of the Rules of the House of 
Representatives requires that any change in existing law made 
by the bill, as reported, be shown with the existing law 
proposed to be omitted enclosed in black brackets, new matter 
printed in italic, and existing law in which no change is 
proposed shown in roman. This provision is inapplicable for the 
reported bill, which makes no change in existing law. Instead, 
it adds a new, freestanding procedure to the rescission 
process.

                      xi. committee recommendation

    On January 25, 1995, a quorum being present, the Committee 
ordered the bill favorably reported.




























                        MINORITY VIEWS ON H.R. 2

    One thing that we all agree upon is that reducing the 
Federal deficit is one of the most important tasks that faces 
the nation. During the past two years, the amount of the annual 
deficit is declining, but much more needs to be done. The 
question on this bill, like several others moving forward in 
this Congress, is whether they will achieve this goal, and 
whether there are hidden consequences that go too far.
    The Constitution vests the power of the purse in the 
Congress. It is a responsibility that we take seriously. Our 
constituents vote for us with the understanding that we are 
expected to use this power carefully, and that we must be held 
accountable.
    The Constitution also gives the President certain powers, 
including the right to veto legislation. Over the years, we 
have looked to various mechanisms to carry out this balance of 
power. These mechanisms have had various degrees of success.
    The bill before us is one such mechanism. As we shall 
discuss further in these views, the bill is one of the most 
extreme mechanisms tilting the balance of power radically to 
the Executive Branch. Its tilt may well be unconstitutional. At 
a minimum, it is a serious error.
    Before proceeding to a discussion of the bill's provisions, 
and our concerns, it is important to place the spending covered 
by the bill in perspective. The bill deals only with 
discretionary budget authority (and to an extremely limited 
degree, targeted tax benefits).
    Our total Federal debt has grown enormously, from $900 
billion in 1980 to a projected $4.9 trillion this year. This 
problem did not stem from a lack of a line item veto. Instead, 
spending way beyond our means produced this debt.
    The large tax cuts requested by the President in 1981 cost 
the government nearly $270 billion in lost revenues by 1988. At 
the same time, at the President's request, defense spending 
more than doubled, and deficits soared.
    As a result, 28 cents out of every income tax dollar goes 
just to pay the interest on the debt accumulated in just the 
past 13 years.
    The line-item veto will never touch these interest payments 
on the debt. Nor will this legislation touch mandatory 
spending. Interest on the debt and mandatory spending have 
grown from nearly 48 percent of total Federal outlays in 1985, 
to a projected 55 percent this year.
    Instead, this bill only covers discretionary spending that 
is subject to the appropriations process. Ironically, this is 
the one area of the Federal budget that has been held in check. 
Discretionary spending as a percentage of total federal outlays 
has fallen from 44 percent in 1985 to a projected 36 percent 
this year.
    The report accompanying this bill suggests that all of the 
spending problems seem to be with the Congress, and not with 
the executive branch. The presumption is that Congress has been 
particularly irresponsible in dealing with rescissions.
    The facts paint a different picture. Over the past 20 years 
in which the President has had authority to rescind 
appropriations, Presidents have proposed just $72 billion in 
rescissions. During that same time, the Congress passed 
rescissions of $92 billion--$20 billion more than Presidents 
requested.
    Nonetheless, concern over the deficit would cause all of us 
to look carefully at any proposal to reduce spending. The 
question remains whether H.R. 2 is the answer.
    It has often been stated that 43 Governors have a line-item 
veto authority. That is correct. However, H.R. 2, despite its 
title, is not a line-item veto. It is instead a much greater 
executive branch power known as enhanced rescission authority.
    Section 2 of the bill permits the President to ``rescind 
all or part of any discretionary budget authority.'' The 
President's authority to look behind line-items, to see what is 
funded, to define the project or category of spending to 
target, and then to reduce the spending to the level of his 
wish is a broad power that is a best analogous to the power of 
just 10 Governors.
    A draft of the Committee Report which was provided at 
markup stated the following:

          H.R. 2 differs fundamentally from the kind of item-
        veto authority granted to governors in 43 states * * *
          This state model is not appropriate for the Federal 
        Government * * *
          We decided on enhanced rescission for several 
        reasons. It permits Congress to continue appropriating 
        with lump sums. Moreover, after a President signs an 
        appropriations bill, he may go as deep as he likes 
        within an appropriations account to propose specific 
        rescissions.

    In other words, the bill is not a line item veto. It is an 
extremely powerful authority to reduce, not just eliminate an 
item, and to define what the item is.
    The bill gives the President no guidelines on these broad 
authorities to rescind appropriations. The President need only 
make three meaningless determinations. The first determination 
is that the rescission would help reduce the deficit. By 
definition, less spending reduces the deficit. The other two 
determinations--that the rescission will not impair essential 
government functions nor harm the national interest--mean 
nothing. No President would admit that a Presidential action 
would harm the national interest or the operation of 
government.
    This broad shift of power can easily lead to abuses. The 
President could target the rescissions against elements of the 
judicial branch, if their opinions were not to his liking. It 
could be directed at particular parts of the country, or at 
particular legislators. It is unclear whether the power would 
be used as a bargaining chip to force the Congress to pay for a 
pet Presidential project, thus increasing spending.
    The shift of power to the executive branch means that a 
``one-third plus one'' minority working with the President 
would now control spending. If the President rescinded an item, 
an override bill could be vetoed, and the veto could be 
sustained by a one-third plus one minority.
    The fundamental power shift in this bill would be 
permanent. It is hard to imagine any President willingly giving 
back this new found power. Thus, if Congress determined that it 
had erred in giving the executive branch too much power, it 
would take a two-thirds majority in both bodies in order to 
override a veto of a bill that took back the power.
    An amendment by Congressman Kanjorski to place a sunset on 
this bold transfer of power to the executive branch, so that 
Congress could review its decision, and could renew the 
authority with a simple majority vote, was defeated in 
committee.
    We urge our colleagues to review H.R. 2 carefully before 
voting. We were surprised to learn during the markup of the 
bill that many of our colleagues appeared to have a limited or 
widely varying views on the nature of the rescission authority 
being granted to the President. Few appeared to realize that 
the rescission authority was far different, and far broader, 
than a line-item veto.
    Some of us would oppose any transfer of Congressional 
responsibilities to the executive branch. Other would be 
willing to delegate certain rescission authorities that are 
clearly defined. Unfortunately, H.R. 2 is an extreme, and 
perhaps unconstitutional, transfer of power to the executive 
branch that may do little to reduce the deficit.
    As with may of the bills in the Contract with America, the 
one missing element is an honest description of how the budget 
deficit will actually be reduced. That should be the first 
priority of this Congress.
                                   Cardiss Collins.
                                   Edolphus Towns.
                                   Louise Slaughter.
                                   Eleanor Holmes Norton.
                                   Bob Wise.
                                   Henry A. Waxman.
                                   Barbara-Rose Collins.
                                   Paul E. Kanjorski.
                                   Chaka Fattah.
                                   Carolyn Maloney.
  ADDITIONAL VIEWS SUBMITTED BY MR. MORAN, MS. NORTON, MS. MEEK, MS. 
                       SLAUGHTER, AND MR. FATTAH

    In its haste to report the ``Line Item Veto Act'', the 
committee did not adequately consider the impact this 
legislation would have on the traditional separation of powers 
among the executive, legislative, and judicial branches of 
government.
    The ``Line Item Veto Act'' will give the President 
authority over the spending and resource allocation of the 
Judiciary, authority he does not currently enjoy. We are 
concerned about this new executive power because it may subject 
the Judiciary to undue and unacceptable interference from a 
party who is the chief litigant in the federal courts, the 
executive branch.
    There is precedent for our concern. In fact, before the 
Congress created the Administrative Office in 1939, the 
Judicial branch was subjected to undue influence from a strong 
President. Prior to 1939, the Courts were administered through 
the Justice Department and had to submit their budgets through 
the executive branch. As any student of history will remember, 
this relationship was not always cordial. The Supreme Court 
particularly came under attack during the Roosevelt 
Administration when they objected to a number of New Deal 
programs. The antagonism between the branches of government 
culminated in an effort to ``pack the court'' by increasing the 
number of Justices.
    Although this plan ultimately failed, the President was 
successful in more subtle efforts to diminish the authority, 
effectiveness, and autonomy of the courts. As the Committee 
heard through testimony offered by the Honorable Gilbert 
Merritt, Chairman of the Executive Committee of the Judicial 
Conference of the United States, the Justice Department in the 
1930s repeatedly rejected the Judiciary's requests for funding. 
The Justice Department refused to pass on requests for new 
judgeships, cut judge's travel funds, eliminated funding for 
bailiffs, criers, and messengers, and otherwise interfered with 
the Judiciary's autonomy.
    In 1939, Congress acted to protect and isolate the judicial 
branch from partisan politics explicitly directing that the 
budgets of the lower courts be submitted to the Congress 
without change. The intent of this action was to give the 
Courts the power and authority to conduct their own affairs and 
end a situation in which the chief litigant before the court 
had the authority over the fiscal affairs of the courts.
    If we pass this Act as currently written, we will negate 
the Budget and Accounting Act of 1921, and, once again, allow 
the executive branch to punitively and arbitrarily cut the 
Judiciary's budget. During the Committee mark-up of H.R. 2, 
there was significant confusion about how deep the President 
could ``reach into'' the Judiciary accounts to cut different 
programs. Members of the Majority thought the President could 
only veto an entire line item and thus could not easily or 
subtly impact Judiciary appropriations. This interpretation was 
incorrect and inconsistent with the actual language of the 
bill. In fact, as the Majority writes in its own Committee 
report, ``after a President signs an appropriations bill, he 
may go as deep as he likes within an appropriations account to 
propose specific rescissions.''
    With H.R. 2, we are seriously undermining the effectiveness 
of the Budget and Accounting Act and other actions by Congress 
that ensured the independence of the Judiciary. This Act may 
unintentionally compromise the autonomy of the courts by 
subjecting the Judiciary to Presidential review and approval. 
If this Act were to pass, the President could easily jeopardize 
the effectiveness and authority of the courts by reducing 
appropriations for clerk salaries, cutting key administrative 
personnel, or reducing funds for the upkeep and maintenance of 
the Supreme Court itself. The President could also directly 
reduce the line items for courts whose cases and opinions 
interact with ongoing federal policy, such as the Court of 
International Trade or the Court of Appeals for the Federal 
Circuit without explanation. Such a reduction could easily 
compromise the operations of these overburdened and critically 
important courts.
    We all know the current President would never abuse his 
authority or act arbitrarily. We hope that future Presidents 
would share his restraint. We can all imagine a President, 
however, who would not limit his use, and potential abuse, of 
this authority. The issues before the courts are never easy and 
often complicated. We must ask ourselves whether we really want 
this branch subjected to the whims and influences of partisan 
politics.
    Defenders of H.R. 2 argue that any rescission is subject to 
Congressional review and could be disapproved by a simple 
majority. The Act, however, seriously restricts Congress' 
ability to overturn a rescission because any resolution of 
disapproval will require a \2/3\ vote of both bodies of 
Congress to override the inevitable Presidential veto. Such a 
threshold will be hard to meet particularly since the President 
need not completely and overtly line out an entire account to 
cripple the operations of the Judiciary.
    The importance of our amendment cannot be overstated. The 
federal courts have traditionally been the guarantor of 
individual rights and the repository of mercy in our legal 
system. The courts have dispensed justice and ensured the full 
rights of citizenship for millions of African Americans and 
other minorities. The courts also deal with the most 
controversial and oftentimes emotional issues in our society. 
The danger our amendment sought to address is that a President 
may succumb to the temptation to use the line-item veto to 
pressure or intimidate the Judiciary and thereby exercise 
improper influence over its decisions.
    The judicial branch is not part of the problem that gives 
rise to this legislation. There are no unauthorized projects 
appropriated in Judiciary accounts. There are no special 
interests using the judicial branch to benefit their individual 
cause. The Judiciary is unique in requiring absolute 
independence but essential contact with the other branches 
because of the nature of its mission to judge individual cases 
and controversies by the rule of law alone. The Judiciary 
serves only the American people and we, in turn, are all served 
by its independence. We must not violate that contract in our 
haste to pass another.
                                   James P. Moran.
                                   Eleanor Holmes Norton.
                                   Carrie P. Meek.
                                   Louise M. Slaughter.
                                   Chaka Fattah.
             ADDITIONAL VIEWS OF REPRESENTATIVE TOM BARRETT

    I am a strong supporter of the line-item veto. The line-
item veto can be a powerful tool in efforts to reduce the 
Federal deficit.
    The bill before us, H.R. 2, however, only does half the 
job. The President of the United States should be able to take 
out pork barrel projects and special targeted tax breaks that 
have been garnered through backroom deals in the U.S. Capitol. 
As amended, H.R. 2 would give the President sufficient power to 
veto appropriations spending, but would limit the power of the 
President to take out special tax breaks hidden in revenue 
bills.
    Both special appropriations projects and targeted tax 
breaks are serious problems. Tax pork is as bad as spending 
pork. In many ways the problem of having items hidden in 
revenue bills is more serious, because as we all know, over the 
next five years, the amount of discretionary spending under the 
purview of the Appropriations Committees will shrink. Under 
this bill, those who desire sweetheart deals with Congress 
would concentrate their pursuit of benefits through special tax 
breaks beyond the reach of the Presidential veto pen and 
sometimes out of view of budgetary snapshots.
    The American people are justifiably outraged to hear of 
special give-aways, special tax breaks and special sweetheart 
deals Congress makes to special friends. H.R. 2, even as 
amended in the Government Reform and Oversight Committee, 
cannot ensure the public that there is an adequate tool to 
remove the pork that appears in legislation.
    During the mark up of H.R. 2 an amendment was offered by 
Rep. Slaughter that would have given the President the power to 
veto ``targeted tax credits'' that would provide a ``benefit in 
the form of a different treatment for a particular taxpayer or 
limited class of taxpayers whether or not such provision is 
limited by its terms to a particular taxpayer of a class of 
taxpayers. Such term does not include any benefit provided to a 
class of taxpayers distinguished on the basis of general 
demographic conditions such as income, number of dependents or 
marital status.'' The amendment was defeated.
    During the mark up of H.R. 2, Chairman Clinger opposed this 
language as being too broad. I disagree. To truly address our 
deficit problems, the President must have the authority to go 
after tax loopholes and tax carve-outs brokered by special 
interests and slipped into revenue bills.
    In addition, the exact language Rep. Slaughter offered has 
a long history of Republican support. The same language was in 
the definition of ``targeted tax benefit'' that was part of an 
amendment offered by former Minority Leader Bob Michel in the 
103d Congress as an amendment to the Castle substitute on H.R. 
1578.
    Indeed, Chairman Clinger spoke strongly in favor of this 
provision at the time. The House voted 257-157 in favor of this 
language. Many Republicans currently serving on this Committee 
voted in favor of this language on April 29, 1993.
    With tighter constraints on appropriations spending, I 
believe the veto power over special tax breaks contained in the 
language of the Slaughter amendment--the same language as in 
the Michel amendment in the 103d Congress, is the way to bring 
confidence back to the American people that the day of the 
``backroom deal'' has truly ended.
                                   Tom Barrett.