[Senate Report 104-10]
[From the U.S. Government Publishing Office]
104th Congress 1st SENATE Report
Session
104-10
_______________________________________________________________________
LEGISLATIVE LINE ITEM VETO ACT
__________
R E P O R T
of the
COMMITTEE ON THE BUDGET
UNITED STATES SENATE
on
S. 14
together with
ADDITIONAL AND MINORITY VIEWS
February 27 (legislative day, February 22), 1995.--Ordered to be
printed
COMMITTEE ON THE BUDGET
PETE V. DOMENICI, New Mexico,
Chairman
CHARLES E. GRASSLEY, Iowa
DON NICKLES, Oklahoma
PHIL GRAMM, Texas
CHRISTOPHER S. BOND, Missouri
TRENT LOTT, Mississippi
HANK BROWN, Colorado
SLADE GORTON, Washington
JUDD GREGG, New Hampshire
OLYMPIA J. SNOWE, Maine
SPENCER ABRAHAM, Michigan
J. JAMES EXON, Nebraska BILL FRIST, Tennessee
ERNEST F. HOLLINGS, South Carolina
J. BENNETT JOHNSTON, Louisiana
FRANK R. LAUTENBERG, New Jersey
PAUL SIMON, Illinois
KENT CONRAD, North Dakota
CHRISTOPHER J. DODD, Connecticut
PAUL S. SARBANES, Maryland
BARBARA BOXER, California
PATTY MURRAY, Washington
G. William Hoagland, Staff
Director
William G. Dauster, Democratic
Chief of Staff and Chief Counsel
C O N T E N T S
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Page
I. Purpose..........................................................1
II. Background.......................................................2
III. Legislative History..............................................8
IV. Section-by-Section Analysis......................................9
V. Cost Estimate...................................................14
VI. Regulatory Impact Statement.....................................16
VII. Committee Votes.................................................16
VIII.
Additional and Minority Views...................................19
IX. Changes to Existing Law.........................................27
104th Congress Report
SENATE
1st Session 104-10
_______________________________________________________________________
LEGISLATIVE LINE ITEM VETO ACT
_______
February 27 (legislative day, February 22), 1995.--Ordered to be
printed
_______________________________________________________________________
Mr. Domenici, from the Committee on the Budget, submitted the following
R E P O R T
[To accompany S. 14]
The Committee on Budget, to which was referred the bill (S.
14) a bill to amend the Congressional Budget and Impoundment
Control Act of 1974 to provide for the expedited consideration
of certain proposed cancellations of budget items, having
considered the same, reports thereon an amendment in the nature
of a substitute without recommendation.
I. Purpose
The purpose of S. 14, the Legislative Line Item Veto Act,
is to provide the President with a legislative procedure to
delete funding from appropriations Acts and targeted tax
benefits from revenue Acts. While the Congressional Budget and
Impoundment Control Act of 1974 provided legislative procedures
for the consideration of the President's proposed spending
reductions in a rescission bill, Congress has routinely ignored
these procedures.
Many charge that the President's control over spending
decisions has been diluted and Congress has escaped
accountability for individual programs and projects by
incorporating these items in large appropriations bills. S. 14
would increase the President's power over spending and the
accountability of Congress by creating an expedited procedure
that would guarantee a vote by Congress on the President's
proposed rescissions and repeals of targeted tax benefits.
Unless Congress votes against the President's proposed
rescissions or repeal of targeted tax benefits, they would
become law. S. 14 achieves these objectives without giving
complete control over spending reductions to the President.
The major provisions of S. 14, as reported by the
Committee, are as follows:
Within 20 days of the enactment of an appropriations
bill or a revenue bill, the President could propose the
reduction or repeal of new appropriations or the repeal
of a targeted tax benefit;
A rescission bill limited to the President's
proposals would be introduced in Congress and within 10
days Congress would have to vote on that bill;
No amendments are allowed to the President's
rescission bill, but motions to strike are allowed with
sufficient support; and
If Congress passes the bill and the President signs
it into law, a lock box provides that any savings be
devoted to deficit reduction by lowering the
discretionary caps on spending.
II. Background
Overview
The United States Constitution entrusts the ``power of the
purse'' to the legislative branch of the United States.
Pursuant to Article I, Section 8 Congress is empowered ``[t]o
lay and collect Taxes, Duties, Imposts, and Excises to pay the
Debts and provide for the common Defence and General Welfare of
the United States.'' The power of the purse is made more clear
by Article I, Section 9 which provides that ``[n]o money shall
be drawn from the Treasury, but in Consequence of
Appropriations made by Law.''
However, the expenditure of funds pursuant to Congressional
authorization is an executive function, consistent with the
President's obligation under Article II, Section 3, that he
``take Care that the Laws be faithfully executed''. Presidents,
at least since Thomas Jefferson, have asserted that the
executive has some discretion in the expenditure of monies
appropriated by Congress. This tug-of-war goes to the most
basic tenet of the American democratic system of government--
the balance of powers between the executive and the legislative
branches of government--the power of the purse versus the
impoundment power.
A review of writings on this subject shows that this
conflict dates back to the earliest days of the Republic. The
conflict has been made manifest through executive action,
congressional legislation, and decisions of federal courts,
including the United States Supreme Court.
The first significant impoundment of appropriated funds,
was made by the third President, Thomas Jefferson, who in 1803
refused to spend $50,000 appropriated by Congress to provide
gun boats to operate on the Mississippi River. The conflict
came to a head in the early 1970's when the 37th President,
Richard Nixon, withheld from expenditure over $12 billion for
highway, water, and sewer projects, and millions of dollars in
appropriated funds for housing, education, and health programs.
It was President Nixon's challenge to Congress' power of
the purse that was a major impetus to the enactment of the
Congressional Budget and Impoundment Control Act of 1974. Title
X of this Act, the Impoundment Control Act of 1974, limited the
President's management of appropriated funding by establishing
procedures for the deferral or rescission of budget authority.
In addition, title X provided legislative procedures for
congressional action on these proposals.
Pre-1970 Impoundment Action \1\
Following President Jefferson's withholding of $50,000 for
Mississippi river gun boats because he thought their use
unnecessary, the next major action on impoundment authority did
not occur until the U.S. Supreme Court decided a case entitled
Kendall v. United States ex rel. Stokes, 37 U.S. (12 Pet.) 524
(1938). In that case, the Supreme Court held that the President
could not withhold payment of a contract for delivery of the
mail which Congress had authorized. The court saw this as a
``ministerial'' function which the President could not refuse
in the faithful execution of the law. Just two years later in
Decatur v. Pauling, 39 U.S. (12 Pet.) 497 (1840), the Court
upheld a decision by the Secretary of the Navy to refuse
payment to a window whose claim was based on a congressional
resolution. The Court found that the Secretary of the Navy's
duty in this case was not merely ministerial but required
discretion and judgment and, so, the court refused the writ of
mandamus.
\1\ The documentation for this section is largely taken from an
article entitled ``History and Practice of Executive Impoundment of
Appropriated Funds,'' by Niles Stanton, printed in the Nebraska Law
Review, v. 53, no. 1, 1974, pp. 1-30.
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In 1876 President Grant took up the impoundment mantle when
he notified Congress that he did not intend to spend the total
amount appropriated for harbor and river improvement projects
because they were of a private or local interest rather than in
the national interest. This mirrors the current debate over
line item veto because proposed Presidential rescissions are
often targeted to funding provided by Congress for specific
projects (i.e. ``pork barrel'' projects) or for funding added
by Congress above amounts requested by the Administration.
However, Congress did not challenge Grant's action.
In the years following Grant's impoundment, U.S. Attorneys
General stated in formal opinions that congressional intent had
to be considered, and not just statutory language, in
determining whether the Congress was mandating an expenditure
of funds or simply permitting the President to spend these
funds.
The executive impoundment of funds gained some legal status
with the enactment of the Anti-Deficiency Acts of 1905 and
1906. In addition to providing a method to prevent excessive
expenditures that could necessitate supplemental funding later
in the fiscal year, these Acts allowed the waiver of spending
appropriated funds in cases of unforeseen emergencies.
President Roosevelt used this authority during the Great
Depression and World War II. He also impounded flood control
funding, which did evoke a legislative response from Congress
in 1943 to prohibit any agency or official (other than the
Commissioner of Public Roads) from impounding funds
appropriated for highway construction. Although limited in
scope, Congress had responded to executive impoundment of
congressionally provided funding.
In the 1960s, Presidential impoundment of funds were
largely limited to defense programs and projects as the
President exercised his authority as ``Commander in Chief'' of
the armed forces. However, President Johnson did withhold
billions of dollars in funding for highway projects, which
Congress had no mechanism to address.
Nixon Impoundments
President Richard Nixon brought the impoundment issued to
the fore by withholding congressionally appropriated funds and
claiming that historic precedent affirmed this authority.
Two court cases in 1973 addressed the impoundment of
highway funds and water pollution control funds, but did not
settle the legal question about the President's authority to
impound funds. In Missouri Highway Commission v. Volpe, 479
F.2d 1099 (8th Cir 1973), affirmed 347 F. Supp. (W.D. Mo.
1972), the court of appeals held that highway funds could not
be impounded for the stated purpose of trying to control
inflationary pressures on the economy. In City of New York v.
Ruckelshaus, 358 F. Supp. 669 (D.D.C. 1973), the court held
that the Nixon Administration had not authority to direct the
Environmental Protection Agency not to allocate appropriated
funds to the states because this was determined to be
ministerial duty.
The Administration and Congress again came to conflict when
the President targeted rural loan and grant programs for
termination through the mechanism of impounding the funds.
Congress acted legislatively to thwart these actions but left
the impoundment issue squarely before Congress for further
action.
Impoundment Control Act
The 1974 Impoundment Control Act was preceded by the 1972
Federal Impoundment and Information Act, which required the
President to submit reports to Congress and the General
Accounting Office on funding which had been withheld. Such
information, however, did not address what was perceived as a
misuse of executive authority in refusing to spend funds
appropriated by the Congress. Congress addressed this issue by
establishing the current impoundment control procedures.
Title X of the Congressional Budget and Impoundment Control
Act of 1974 requires that the President submit messages to the
Congress if he proposes to defer (temporarily withhold) or
rescind (permanently cancel) appropriated funds. A reading of
the general history shows that executive impoundments have
largely have undertaken to establish spending priorities.
Presidents have tended to impound funds appropriated for
programs that exceed his budget request or that represent
specific projects of interest to Congress. With the exception
of President Nixon's actions, the impoundment of funds has not
traditionally been viewed as a significant tool to reduce
federal spending.
Deferrals
The President can temporarily withhold from expenditure or
delay the obligation of funds that are not currently needed.
Congress can disapprove the deferral of funds through enactment
of an impoundment resolution. However, since deferrals are now
made largely for management rather than policy reasons, it is
unusual for Congress to act to disapprove deferrals, and the
funds are generally released for expenditure.
Rescissions
The President can propose to rescind (permanently cancel)
budget authority. In the case of rescissions, Congress has 45
calendar days (of continuous session excluding 3-day recess
periods) within which to approve these rescissions. If Congress
does not enact legislation to approve the proposed rescissions,
in whole or in part, the President must make the funds
available for expenditure. The Congress can substitute its own
rescissions for the President's proposal, and often has. Under
this process, there is no requirement that Congress consider
and vote on the President's proposed rescissions.
The General Accounting Office (GAO) recently reported that
since enactment of the Congressional Budget and Impoundment
Control Act in 1974 through October 7, 1994, U.S. Presidents
have officially proposed 1,084 rescissions of budget authority
totaling $72.8 billion. Congress has adopted only 399, or 37
percent, of the proposed rescissions in the amount of $22.9
billion. Congress has also initiated 649 rescissions totaling
$70.1 billion, largely in response to the President's proposals
and often to pay for other federal spending. In total, over the
twenty years of the current budget process, Congress has
enacted 1,048 rescissions totaling $92.9 billion.
Mandatory Spending and Tax Expenditures
With rescission authority applying to only one-third of the
overall federal budget, rescission authority, no matter what
the form, is not the cure-all for reducing the federal deficit
and balancing the budget. The remaining two-thirds of the
federal budget is largely uncontrollable in that funding goes
to mandatory or entitlement programs established by law and to
payment of interest on the public debt.
Since the enactment of the 1974 Impoundment Control Act,
discretionary spending (annual spending approved in
appropriations acts) as a percentage of the total budget has
shrunk from 53 percent to 37 percent of total outlays. During
this same period (1974 to the present), mandatory spending
(spending outside the direct control of the appropriations
process) excluding net interest outlays has grown as a
percentage of the total budget from 39 percent to 49 percent.
The Congressional Budget Office estimates this disparity will
grow over the next 10 years. By 2005, CBO estimates that
mandatory spending will consume 62 percent of total outlays,
with discretionary spending contributing to 27 percent of total
outlays.
In recognition of this fact, some Members of Congress have
sought to expand the scope of proposals for a legislative line
item veto to mandatory spending. In addition, many argue that
``special interest'' tax expenditures inserted in large revenue
bills also should be subject to the line item veto.
The Congressional Budget Act defines a tax expenditure as
revenue losses resulting from provisions of law that grant
special tax relief.\2\ These tax expenditures, or so-called tax
breaks, include the net exclusion of pension contributions and
earnings, home mortgage interest deductions, employer-paid
health benefits exclusion, Social Security and Railroad
Retirement benefits exclusion, State and local income and
personal property tax deductions, and the charitable
contribution tax deduction.
\2\ Sec. 3(3) of the Budget Act defines the term tax expenditure.
For more information on tax expenditures, see Tax Expenditures:
Compendium of Background Material on Individual Provisions, Committee
on the Budget, U.S. Senate, S. Prt. 103-101, December 1994 (prepared by
the Congressional Research Service).
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In 1971, tax expenditures totaled approximately $52
billion, or 5 percent of GDP. The 1986 Tax Reform Act sought to
eliminate many such tax breaks, and that effort was largely
successful, taking tax expenditures down to $293 billion in
1989. By 1994, however, the estimated level of tax expenditures
is approximately $429 billion and is leveling off at about 6.5
percent of GDP.
Line Item Veto
The current debate over the legislative line-item veto
proposals transcends the historical context of executive
impoundment of funds to set spending priorities other than
those approved by Congress. The debate has now centered on the
granting of additional authority to the President to reduce
federal spending as Congress seeks to balance the federal
budget.
According to the Congressional Research Service of the
Library of Congress, at least ten Presidents since the Civil
War have stated support for the line-item veto, including
Presidents Grant, Hayes, Arthur, Franklin Roosevelt, Truman,
Eisenhower, Nixon, Ford, Reagan, and Bush. More recently,
President Clinton campaigned on a line item veto, claiming that
he could reduce spending by $9.8 billion over four years, and
urged Congress again in this year's State of the Union address
to give him the line item veto. Two Presidents--Taft and
Carter--opposed the line-item veto authority for the President.
It is also documented that the Governors of 43 of the 50 states
have some form of line-item veto authority (see table I).
TABLE I.--GOVERNORS' VETO AUTHORITY
------------------------------------------------------------------------
No Item
State Item Veto No Veto Veto
------------------------------------------------------------------------
Alabama................................ X ......... .........
Alaska................................. X ......... .........
Arizona................................ X ......... .........
Arkansas............................... X ......... .........
California............................. X ......... .........
Colorado............................... X ......... .........
Connecticut............................ X ......... .........
Delaware............................... X ......... .........
Florida................................ X ......... .........
Georgia................................ X ......... .........
Hawaii................................. X ......... .........
Idaho.................................. X ......... .........
Illinois............................... X ......... .........
Indiana................................ ......... ......... X
Iowa................................... X ......... .........
Kansas................................. X ......... .........
Kentucky............................... X ......... .........
Louisana............................... X ......... .........
Maine.................................. ......... ......... X
Maryland............................... X ......... .........
Massachusetts.......................... X ......... .........
Michigan............................... X ......... .........
Minnesota.............................. X ......... .........
Mississippi............................ X ......... .........
Missouri............................... X ......... .........
Montana................................ X ......... .........
Nebraska............................... X ......... .........
Nevada................................. ......... ......... X
New Hampshire.......................... ......... ......... X
New Jersey............................. X ......... .........
New Mexico............................. X ......... .........
New York............................... X ......... .........
North Carolina......................... ......... X .........
North Dakota........................... X ......... .........
Ohio................................... X ......... .........
Oklahoma............................... X ......... .........
Oregon................................. X ......... .........
Pennsylvania........................... X ......... .........
Rhode Island........................... ......... ......... X
South Carolina......................... X ......... .........
South Dakota........................... X ......... .........
Tennessee.............................. X ......... .........
Texas.................................. X ......... .........
Utah................................... X ......... .........
Vermont................................ ......... ......... X
Virginia............................... X ......... .........
Washington............................. X ......... .........
West Virginia.......................... X ......... .........
Wisconsin.............................. X ......... .........
Wyoming................................ X ......... .........
TOTAL............................ 43 1 6
------------------------------------------------------------------------
Source: Senate Budget Committee. Compiled from information in House
Committee on Rules, 99th Cong., 2d Session, Item Veto: State
Experience and its Application to the Federal Situation, Appendix C-1
(Comm. Print 1986), and Advisory Commission on Intergovernmental
Relations, Significant Features of Fiscal Federalism, Vol. 1, p. 12,
June 1994.
Congress has stopped short of considering a constitutional
amendment to grant the President this authority, and has chosen
to address the line-item veto authority by statute. During the
1980s three statutory approaches developed on the line-item
veto.
Separate enrollment legislation would require each
item in an appropriations or tax bill be enrolled as a
separate Act, allowing the President to veto these
individual items.
Enhanced rescission legislation would delegate to the
President unilateral authority to rescind budget
authority provided in appropriations Acts or repeal tax
expenditures in revenue acts. The President's
rescissions or repeals could only be overturned by
passage of a separate law. Assuming the President's
veto of a law overturning his own rescissions or
repeals, it would take a two-thirds vote of each House
to overturn his actions.
Expedited recession legislation, such as S. 14, would
establish fast-track procedures for the consideration
of the President's proposals to rescind budget
authority provided in an appropriations act or repeal
tax expenditures in revenue acts. These proposals would
only go into effect if passed by a majority of each
House and signed into law.
Table II shows Senate action over the past 12 years on
these three approaches to the line-item veto. Even the
legislative granting of such authority puts issues of the power
of the purse and the balance of powers between the Congress and
the President squarely before the Congress.
TABLE II.--SELECTED SENATE FLOOR VOTES ON OR RELATING TO MEASURES TO PROVIDE EXPANDED RESCISSION AUTHORITY OR
SEPARATE ENROLLMENT SINCE ENACTMENT OF THE IMPOUNDMENT CONTROL ACT
----------------------------------------------------------------------------------------------------------------
Congress Measure Sponsor Date/Chamber Vote Type of proposal
----------------------------------------------------------------------------------------------------------------
103rd....... Amendment 542 to S. 1134...... Bradley......... 6/24/93..... 53-45........... Separate
Senate (Budget Act enrollment.
waiver)
103rd....... Amendment 264 to S. Con. Res. Bradley......... 3/25/93..... 73-24........... Separate
18. Senate enrollment.
103rd....... Amendment 200 to S. Con. Res. Cohen........... 3/25/93..... Voice vote...... Expedited
18. Senate rescission.
103rd....... Amendment 200 to S. Con. Res. Cohen........... 3/25/93..... 34-65........... Expedited
18. Senate (to table) rescission.
103rd....... Amendment 73 to S. 460........ McCain.......... 3/10/93..... 45-52........... Expedited
Senate (Budget Act rescission.
waiver)
102nd....... Amendment 3013 to H.R. 5677... McCain/Coats.... 9/17/92..... 40-56........... Enhanced
Senate (Budget Act rescission.
waiver)
102nd....... Amendment 1698 to S. 479...... McCain.......... 2/27/92..... 44-54........... Enhanced
Senate (Budget Act rescission.
waiver)
101st....... Amendment 1955 to S. 341...... McCain.......... 6/6/90...... 43-50........... Enhanced
Senate (Budget Act rescission.
waiver)
101st....... Amendment 1092 to H.R. 3015... Coats et al..... 11/9/89..... 40-51........... Enhanced
Senate (Budget Act rescission.
waiver)
100th....... Amendment 650 to H.J. Res. 324 Evans........... 7/31/87..... 41-48........... Separate
Senate enrollment.
100th....... Amendment 1294 to H.J. Res. Evans........... 12/11/87.... 44-51........... Separate
395. Senate enrollment.
99th........ S. 43......................... Mattingly et al. 7/18/85..... 57-42........... Separate
Senate (cloture) enrollment.
99th........ S. 43......................... Mattingly et al. 7/24/85..... 58-40........... Separate
Senate (cloture) enrollment.
99th........ Amendment 2853 to S. 2706..... Quayle/Exon..... 9/19/96..... 34-62........... Expedited
Senate (Budget Act rescission.
waiver)
98th........ Amendment 2625 to H.J. Res. Armstrong....... 11/16/83.... 49-46........... Enhanced
308. Senate (to table) rescission.
98th........ Amendment 3045 to H.R. 2163... Mattingly....... 5/3/84...... 56-34........... Separate
Senate (out of order) enrollment.
----------------------------------------------------------------------------------------------------------------
Source: Memorandum to the Senate Budget Committee on the Line-Item Veto, Virginia McMurtry, Specialist in
American National Government, Congressional Research Service, Library of Congress, February 14, 1995.
III. Legislative History
Senator Domenici introduced S. 14, the Legislative Line
Item Veto Act, on January 4, 1995. S. 14 was the product of an
effort to consolidate proposals that provided for expedited
procedures for the consideration of reductions in spending or
repeals of targeted tax benefits. Senators Exon, Craig,
Bradley, and Cohen--all principal authors of such legislation--
are original cosponsors of S. 14. In addition, Senators Dole
and Daschle cosponsored the legislation.
The Senate Budget Committee first took action on line item
veto legislation in 1990. During the markup of budget process
reform legislation, the Committee defeated two proposals
proposed by Senator Armstrong to grant the President enhanced
rescission authority. The Committee did approve legislation put
forward by Senator Hollings and reported S. 3181, the
Legislative Line Item Veto Separate Enrollment Authority Act,
on October 10, 1990 (Report No. 101-518).
During the 103rd Congress, the House passed two bills that
were similar to S. 14. On April 29, 1993, the House passed H.R.
1578, the Expedited Rescissions Act of 1993. A little over a
year later the House passed a stronger expedited rescission
bill, H.R. 4600, on July 14, 1994. Although both House-passed
bills were referred to the Senate Budget Committee, the
committee did not take action on the legislation. The Committee
did hold a hearing on line item veto legislation on October 5,
1994, 3 days prior to the date the Senate adjourned,
essentially, to end the 103rd Congress. (The Senate did return
on November 30 and December 1, but only for the purposes of
consideration of legislation on the General Agreement on
Tariffs and Trade).
The 104th Congress saw immediate action on line item veto
legislation. On January 18, 1995, the Senate Budget Committee
held hearings on line item veto legislation. The House passed
H.R. 2, legislation that would grant the President enhanced
rescission authority, on February 6, 1995.
The Senate Budget Committee marked up S. 14 and ordered it
reported, without recommendation, on February 14. Senator
Domenici offered a substitute amendment that was modified by
amendments offered by Senators Exon and Nickles. The Exon
amendment extended the rescission procedures to targeted tax
benefits. The Nickles amendment narrowed the definition of
targeted tax benefits as a benefit to 100 taxpayers or less.
The Committee adopted the Domenici substitute with these
amendments. The bill, as reported, modified S. 14 as follows:
narrowed the definition of targeted tax benefits and
dropped direct spending from the expedited rescission
procedures;
tightened the congressional procedures for
consideration of rescissions; and,
extended the sunset date to September 30, 2002.
IV. Section-by-Section Analysis
section 1. short title
This Act may be cited as the ``Legislative Line Item Veto
Act''.
section 2. expedited consideration of certain proposed rescissions and
repeals of tax expenditures and direct spending
Subsection (a) adds a new section, 1012A, to Title X of the
Congressional Budget Act of 1974. This new section sets forth
procedures under which the President proposes the rescission of
budget authority and Congress considers and votes on such
proposals. These procedures are also available to the President
to repeal targeted tax benefits contained in revenue or
reconciliation Acts.
This section is an optional avenue for the President to
ensure Congressional disposition of his proposals for
rescission of discretionary budget authority. The existing
rescission procedures under section 1012 of the Budget Act are
not superseded by this section.
Subsection (a) of Section 1210A. Proposed Rescissions
The President many transmit a special message and a draft
bill proposing the rescission of any budget authority in an
appropriation Act. The President may also propose the repeal of
a targeted tax benefit contained in a revenue Act or a
reconciliation Act. [The terms ``budget authority'',
``appropriation Act'', ``rescission of budget authority'' and
``targeted tax benefit'' are defined in subsection (f)].
Once the President proposes rescission of budget authority
or repeal of a tax benefit under this new section, the
President may not propose the same rescission or repeal again
under title X of the Congressional Budget Act. This language
requires the President to choose between transmitting his
proposed rescission under current law or under the new
procedures. A rescission proposal transmitted under the
expedited authority in section 1210A could not be transmitted
subsequently under section 1210.
Subsection (b) of Section 1210A. Transmittal of the Special Message
(1) In General
The President may transmit a special message proposing
rescission of budget authority contained in an appropriations
Act or repeal of a targeted tax benefit contained in revenue or
reconciliation Act. The President is prohibited from
transmitting more than one message under this section per Act
and is prohibited from including rescissions or repeals from
more than one Act in a special message. The language requires
the President, if he chooses to transmit a message under this
section, to include all of the rescissions or repeals that the
proposes from that single Act. In addition, the language
prohibits the President from packaging rescissions/repeals from
more than one Act into one special message.
(2) Time Limitations
The President may transmit a special message during the 20
calendar day period after enactment of the provision proposed
to be rescinded or repeals. The 20 day count excludes
Saturdays, Sundays, and legal holidays.
A problem arises if this time limitation runs up against an
adjournment date. Therefore, the President may also transmit a
special message on the first day of a session of Congress where
an Act was enacted after the sine die adjournment of preceding
session of a Congress. In addition, the President is authorized
to retransmit, notwithstanding the prohibition in subsection
(a), a special message where the special message was originally
transmitted within the 20-day time limited and Congress
adjourned sine die prior to the expiration of the 10 days
within which the Houses have to vote on the proposal.
(3) Draft Bill
A draft bill is required to be included with the special
message. The draft bill must include all of the rescissions of
budget authority or repeals of targeted tax benefits that are
proposed for rescission or repeal in that special message. The
bill is to clearly identify the budget authority proposed for
rescission or the tax benefit proposed for repeal and, where
applicable, the program, project, or activity to which the
rescission/repeal related. The President's discretion is
limited to proposing the rescission, in whole or in part, of
budget authority or the repeal of a targeted tax benefit only--
no other matter shall be included in the text of the draft
bill.
(4) Contents of the Special Message
The special message is required to specify, for each
rescission and, where applicable, for each repeal: 1) the
amount proposed for rescission/repeal, 2) the account,
department, project, or function for which the budget authority
was available, 3) the reasons for the rescission/repeal, 4) the
affects of such rescission/repeal, and 5) all such other
information relating to or bearing on the proposed rescission/
repeal.
(5) Deficit Reduction
This paragraph establishes a lockbox. Five days after
enactment of a bill under this section rescinding budget
authority, the President is required to reduce the
discretionary spending limits under section 601 of the Budget
Act to reflect the savings in budget authority and outlays
resulting from that rescission. The Chairman of the Senate and
House Budget Committees are also required to adjust appropriate
allocations to reflect that rescission.
Subsection (c) of Section 1210A. Procedures for Expedited Consideration
(1) In General
(A) Introduction. The Majority Leader or Minority Leader of
the House or Senate is required to introduce the President's
draft bill, by request, before the close of the second day of
session following receipt of a special message. If the bill is
not so introduced, then any Member of the House or Senator may
introduce that bill on the following day of session. A ``day of
session'' is intended to be a calendar day on which that House
is in session.
(B) Referral and Reporting. The bill introduced following
receipt of a special message shall be referred to the
appropriate committee. The committee has five days of session
in which to report, or the committee will be discharged from
further consideration of the bill. The committee must not make
substantive revisions to the bill and may report the bill, with
or without recommendation.
(C) Final Passage. A vote on passage shall be taken in the
House and Senate before the close of the 10th day of session
following introduction of the bill in that House. This
provision requires the Presiding Officer to lay the bill before
the Senate on his own initiative prior to the recess or
adjournment of the Senate on the appropriate day and requires
an ``up-or-down'' vote on the bill.
(2) Consideration in the House
Subparagraph (A) provides that the motion to proceed is
highly privileged and it not subject to debate, amendment, or a
motion to reconsider. Subparagraph (B) provides that the only
amendment in order is a motion to strike a rescission or repeal
in the bill, if it is supported by 49 Members. Subparagraph (C)
limits debate in the House to four hours, equally divided,
provides for a non-debatable motion to further limit debate and
prohibits motions to recommit or to reconsider. Subparagraph
(D) provides that appeals are not debatable. Finally,
subparagraph (E) provides that it is not in order to consider
the bill under Suspension of the Rules or under a Special Rule.
Except as provided above, the Rules of the House shall govern
consideration of the bill.
(3) Consideration in the Senate
Subparagraph (A) provides that a motion to proceed is not
debatable and is not subject to a motion to reconsider.
Subparagraph (B) provides that the only amendment in order is a
motion to strike a rescission or repeal in the bill, if it is
supported by 11 Members. Subparagraphs (C) and (D) limit debate
in the Senate. Debate on the bill, debatable motions and
appeals, is limited to ten hours, while debate on those motions
or appeals is limited to one hour. Debate is equally divided
and controlled in the usual form. Subparagraphs (E) and (F)
provide that a motion to further limit debate is not debatable
and no motion to recommit is in order.
Subparagraph (G) provides procedures for consideration of
the House bill. If the Senate receives the House companion bill
prior to the vote required under this subsection, the Senate
may consider and vote on the House bill. This provision
clarifies that the vote required on passage in the Senate is
not necessarily required to be on the bill that was introduced
in the Senate; however, the Senate, presumably, will not
consider the House bill unless no rescissions/repeals have been
struck from that bill. If the Senate considers and votes on the
Senate bill, then immediately following that vote the House
bill will be considered.
If the House bill is identical to the Senate bill as voted
upon, then the vote on the Senate bill will be deemed to be the
vote on the House bill. If the House bill is not identical, the
Senate will proceed to consideration of the House bill under
the provisions of paragraph (3), except that a motion to strike
all after the enacting clause and substitute the text of the
Senate bill, as voted upon, is in order.
If the House bill has not been received in the Senate prior
to the vote required under subsection (c), then upon receipt of
the House bill the same procedures stated in the preceding
paragraph apply.
Subparagraph (H) provides that overall debate on the
motions necessary to resolve amendments between Houses,
including the motions necessary to send the bill to conference,
is limited to two hours. Debate on each motion, appeal, or
point of order submitted to the Senate, is limited to 30
minutes. The time is equally divided and controlled in the
usual form.
(4) Conference
(A) Authority of the Conferees. Where a motion to strike or
a series of such motions is before the conference, the
conferees may only recommend that a House recede from its
disagreement and concur or recede from its amendment. Where an
amendment in the nature of a substitute is before the
conference, the conferees must retain all provisions that both
Houses agreed to, and may include provisions that were included
by either House, but may not include any other matter.
Where the two Houses cannot reach agreement concerning
motions by the Houses to strike proposed rescissions or
repeals, a conference, then, becomes necessary. This
subparagraph limits the discretion of the conferees so that the
conference agreement must contain all of the rescissions or
repeals that both Houses agreed to, must not contain those
rescissions and repeals that both Houses struck, and may
contain those rescissions or repeals that either House had
agreed to.
(B) Consideration of Conference Reports. Debate on the
conference report and any amendments in disagreement is limited
to two hours, equally divided and controlled in the usual form.
A motion to further limit debate is in order and is not
debatable, and no motion to recommit or to reconsider the vote
is in order.
(C) Failure of Conference to Act. A conference report is
required to be filed within five calendar days. If the
conference fails to report in that time, any Member of either
House may introduce the bill as originally drafted by the
President on the next day of session and the bill shall be
considered under the provisions of this section, except that a
motion to strike is not in order.
subsection (d) of Section 1210A. Amendments and Divisions Prohibited
Amendments to the bill considered under section 1210A are
not in order, except an amendment to strike a rescission or a
repeal or an amendment to strike all after the enacting clause
of the House bill and substitute the text of the Senate bill.
In the House of Representatives, a demand for division of the
question is prohibited, as is a motion or a unanimous consent
request to suspend this subsection.
Subsection (e) of Section 1210A. Temporary Presidential Authority to
Rescind
This language permits the President to delay 1) the
obligation of budget authority that he proposes to rescind or
2) the effectiveness of a repeal of a tax benefit that he
proposes for repeal under section 1210A for a period up to 45
days. The President may make budget authority available or make
the tax benefit effective at a date earlier than the 45 days
upon a determination that continuation of the delay would not
further the purposes of this Act.
For example, if Congress rejects a President's proposed
rescission prior to the expiration of the 45 day period, the
committee expects the President to make that budget authority
available after such rejection and this subsection provides the
authority to the President to make that available at that
earlier date.
subsection (f) of Section 1210A. Definitions
Appropriations Act means any general or special
appropriations Act, and any Act or joint resolution making
supplemental, deficiency, or continuing appropriations.
Budget authority means any amount, in whole or in part, of
budget authority provided in an appropriations Act. The term
does not include budget authority in an appropriations Act to
fund a direct spending program. The definition limits the
budget authority to discretionary budget authority provided in
an appropriation Act.
Rescission of budget authority means the rescission, in
whole or in part, of budget authority provided in an
appropriation Act.
Targeted tax benefit means any provision in a revenue Act
or a reconciliation Act that the President determines provides
a Federal tax deduction, credit, exclusion, preference, or
other concession to 100 or fewer beneficiaries. The definition
clarifies that partnerships, limited partnerships, trusts, S-
corporations, and any subsidiary or affiliate of the same
parent corporation is a single beneficiary, regardless of the
number of partners, beneficiaries of the trust, or affiliated
corporate entities.
subsection (g) of Section 1210A. Application to Targeted Tax Benefits
Permits the President to propose the repeal of any targeted
tax benefit, under the same conditions, and subject to the same
Congressional consideration as a proposal under this section to
rescind budget authority.
Subsection (b) of Section 2. Exercise of Rulemaking Powers
This subsection amends Section 904 of the Congressional
Budget Act to include new Section 1210A as enacted as an
exercise of the rulemaking powers of Congress. They are
considered as part of the rules of each House or to the rules
of the House to which they specifically apply. They are also
enacted with full recognition of the constitutional right of
either House to change such rules.
Subsection (c) of Section 2. Clerical Amendments
This subsection amends the table of sections for subpart B
of title X of the Congressional Budget and Impoundment Control
Act to reflect the addition of the new section 1210A.
Subsection (d) of Section 2. Effective Period
The new section 1210A and other amendments in section 2
take effect on the date of enactment, apply only to budget
authority or targeted tax benefits provided in Acts enacted on
or after the date of enactment of this Act, and is sunset on
September 30, 2002.
V. Cost Estimate
Paragraph 11 of Rule XXVI of the Standing Rules of the
Senate require reports accompanying measures to include an
estimate of the costs that would be incurred in carrying out
that measure. In accordance with that rule, the Congressional
Budget Office has submitted the following cost estimate to the
committee:
U.S. Congress,
Congressional Budget Office,
Washington, DC, February 22, 1995.
Hon. Pete V. Domenici,
Chairman, Committee on the Budget, U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
reviewed S. 14, the Legislative Line Item Veto Act, as ordered
reported without recommendation by the Senate Committee on the
Budget on February 14, 1995.
S. 14 would grant the President the authority to propose
legislation that would rescind all or part of any discretionary
budget authority or repeal 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) provided
within a bill that has just been enacted. S. 14 would also
establish procedures ensuring that the House and Senate vote on
that legislation.
To exercise this authority, the President must transmit a
special message to both houses of Congress specifying each
amount proposed to be rescinded (or provision repealed) 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. This message must
be transmitted within 20 calendar days (excluding Saturdays,
Sundays, and holidays) of enactment of the legislation
containing the vetoed items.
Along with the special message, the President must submit a
draft bill that, if enacted, would carry out the proposed
rescissions or vetoes. That draft bill must be introduced in
each House within three days of its receipt. Within five days
of session thereafter, the committee of jurisdiction in each
house must report the bill. A vote on final passage shall be
taken in each chamber within 10 days of session after
introduction of the legislation. The only amendments allowed
would be motions to strike proposed rescissions. S. 14 also
provides procedures to expedite the resolution of any
differences between the versions of bills passed by the House
and Senate. If a recission bill considered pursuant to this
legislation is enacted, the President shall reduce the
discretionary spending caps for all affected years to reflect
the rescission. The provisions of S. 14 would be effective
through September 30, 2002.
The budgetary impact of this bill is uncertain, because it
would depend on the manner in which the President exercises the
authority granted and the response of the Congress to the
proposed bills; however, potential savings or costs are likely
to be relatively small. Discretionary spending currently
accounts for only one-third of total outlays and is ready
tightly controlled. Mandatory spending, by far the larger part
of the budget, is not affected by S. 14. By the same token,
repealing a tax break that benefits fewer than 100 people is
unlikely to generate large savings.
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, exercising the
new 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, who can be reached at 226-2880.
Sincerely,
James L. Blum
(For Robert D. Reischauer, Director).
VI. Regulatory Impact Statement
Paragraph 11(b) of Rule XXVI of the Standing Rules of the
Senate requires the committee report accompanying each reported
bill to include an evaluation of the regulatory impact of the
reported legislation. That evaluation is to include an estimate
of the economic, paperwork, and privacy impact on individuals,
businesses, and consumers.
S. 14 provides for expedited consideration by Congress of
rescission of new budget authority and repeals of new targeted
tax benefits proposed by the President. The legislation
addresses Federal legislative process and will affect only that
process.
The legislation has no direct economic, paperwork, or
privacy impact on individuals, businesses, or consumers. These
groups are not involved in the processes covered by the
legislation's requirements.
S. 14 could have a regulatory or paperwork impact only to
the extent that its process permitted the rescission of budget
authority or the repeal of a targeted tax benefit that resulted
in such a regulatory or paperwork impact.
VII. Committee Votes
Paragraph 7(b) of Rule XXVI of the Standing Rules of the
Senate requires the committee report accompanying a measure
reported from the committee to include the results of each roll
call vote taken on the measure and any amendments thereto. In
addition, paragraph 7(c) requires the report to include a
tabulation of the vote cast by each member of the committee on
the question of reporting the measure.
In accordance with the Standing Rules of the Senate, the
following are roll call votes taken during Senate Budget
Committee mark-up of S. 14, the Legislative Line-Item Veto Act,
held on Tuesday, February 14, 1995.
(1) Exon amendment, to the Chairman's substitute, providing
a legislative line-item veto for targeted tax benefits.
Amendment adopted by: Yeas 12 Nays 10.
YEAS NAYS
Brown Domenici
Gregg Grassley
Exon Nickles
Hollings Gramm
Johnston \1\ Bond \1\
Lautenberg Lott
Simon Gorton
Conrad Snowe
Dodd Abraham
Sarbanes Frist
Box\1\
Murray
(2) Exon amendment, to the Chairman's substitute, changing
the sunset date to September 30, 1998.
Amendment rejected by: Yeas 10 Nays 12.
YEAS NAYS
Exon Domenici
Hollings Grassley \1\
Johnston \1\ Nickles
Lautenberg Gramm
Simon Bond \1\
Conrad Lott
Dodd Brown
Sarbanes Gorton
Boxer\1\ Gregg
Murray Snowe
Abraham
Frist
(3) Hollings amendment, to the Chairman's substitute,
codifying the existing Pay-as-you-go point of order in the
Budget Act.
Amendment tabled by: Yeas 12 Nays 10.
YEAS NAYS
Domenici Exon
Grassley Hollings
Nickles Johnston \1\
Gramm Lautenberg
Bond \1\ Simon
Lott Conrad
Brown Dodd
Gorton Sarbanes
Gregg \1\ Boxer \1\
Snowe Murray
Abraham
Frist
(4) Nickles amendment, to the Chairman's substitute,
defining ``targeted tax benefit''.
Amendment adopted by: Yeas 12 Nays 10.
YEAS NAYS
Domenici Exon
Grassley \1\ Hollings \1\
Nickles Johnston \1\
Gramm\1\ Lautenberg
Bond\1\ Simon
Lott\1\ Conrad
Brown Dodd
Gorton Sarbanes
Gregg\1\ Boxer
Snowe Murray
Abraham
Frist
(5) Dodd amendment, to the Chairman's substitute,
permitting relevant amendments.
Amendment rejected by: Yeas 9 Nays 12.
YEAS NAYS
Exon Domenici
Hollings \1\ Grassley \1\
Lautenberg \1\ Nickles
Simon \1\ Gramm \1\
Conrad Bond \1\
Dodd Lott \1\
Sarbanes Brown
Boxer Gorton
Murray Gregg
Snowe \1\
Abraham
Frist
Not voting: Johnston.
(6) Motion to report S. 14, as amended, without
recommendation.
Motion adopted by: Yeas 13 Nays 8.
YEAS NAYS
Domenici Exon
Grassley \1\ Hollings \1\
Nickles Johnston \1\
Bond \1\ Lautenberg \1\
Lott Dodd
Brown Sarbanes
Gorton Boxer
Gregg Murray
Snowe \1\
Abraham
Frist
Simon \1\
Conrad
Not voting: Gramm.
\1\ Indicates vote by proxy
VIII. Additional and Minority Views
----------
ADDITIONAL VIEWS OF SENATOR SPENCER ABRAHAM
During my campaign for the U.S. Senate, I strongly
supported enactment of a line-item veto. Forty-three governors
use the line-item veto to strike egregious ``pork-barrel''
spending from budget bills. I believe the President of the
United States should have the same authority.
The Senate Budget Committee has reported two versions of
the line-item veto--S. 4, the McCain-Coats bill and S. 14, the
Domenici bill. I voted with the majority to report S. 4 and S.
14--as amended--out of the Committee without recommendation. I
believe that the line-item veto should apply only to government
spending. The original version of S. 14 would have allowed the
President to rescind not only appropriated and new mandatory
spending, but new ``targeted tax benefits'' as well. In other
words, under S. 14 the President would have been empowered to
raise taxes by striking new tax deductions, credits, and
exclusions.
I certainly oppose wasteful tax loopholes designed to
benefit one taxpayer or a narrow group of taxpayers. However, I
believe the general concept of ``tax expenditures'' is
fundamentally flawed because it assumes that taxpayers' income
belongs to the Federal government first. The fact is that the
government does not create money with which to spend on tax
credits, deductions and exclusions. Tax dollars belong to
American people first. Many of the so-called ``tax
expenditures'' simply allow people to keep more of their own
hard-earned tax dollars. Some examples include the home
mortgage interest deduction, Individual Retirement Accounts,
and the 25 percent health insurance deduction for self-employed
individuals.
Further, the definition of what would constitute a
``special tax benefit'' in the original version of S. 14 was
too broadly-defined. During the Committee's January 18th
hearing on the line-item veto, I asked Sen. Bill Bradley, one
of the lead co-sponsors of S. 14, to provide his view of what
would qualify as a special tax benefit that could be rescinded
by the President. In response to my questioning, Sen. Bradley
said that a capital gains tax reduction would qualify. In my
judgement, a capital gains tax reduction is not a special tax
benefit. In addition to directly benefitting millions of
American families, retirees, homeowners, small businessowners
and farmers, a capital gains tax cut would significantly
enhance investment, productivity, job creation and U.S.
international competitiveness. Further, the capital gains tax
is an unfair ``double tax'' on the same stream of income. The
government taxes income when it is earned. If this after-tax
income is invested in a capital asset, the government taxes it
again when that asset is sold and a capital gain is realized.
During the Committee mark-up, I voted for an amendment to
S. 14 offered by Sen. Don Nickles that limited the definition
of special tax benefits to those that benefit 100 or fewer
taxpayers. This language is identical to the targeted tax
benefit language in the House-passed version of the line-item
veto. I voted to report S. 14, as amended, to keep the process
moving and to bring the line-item veto before the full Senate.
But my clear preference would be to enact a line-item veto that
is limited to spending because our Nation's budget deficit is
caused by overspending, not undertaxation. In 1960, both
Federal tax receipts and outlays as a percentage of Gross
Domestic Product (GDP) stood at 18.3 percent. Although tax
receipts had increased to 18.8 percent of GDP by 1994, spending
had increased even more, rising to 22.3 percent of national
income.
In summary, the American people believe that $1.5 trillion
that they spend on government programs is more than enough.
They want us to make it work by reducing spending instead of
raising taxes. A line-item veto would help restore fiscal
responsibility to the budget process.
Spencer Abraham.
MINORITY VIEWS OF SENATOR JIM EXON
I have been an ardent and long-time supporter of line-item
veto legislation as a means to combat pork-barrel spending.
Ideally, Congress should exhibit the type of self restraint and
sacrifice that would swiftly put this wasteful practice to an
end. We owe that to future generations of Americans and to our
commitment to reduce the deficit.
However, I am a realist and I know that while some Members
would voluntarily refrain from pork-barrell spending, others
would continue with business as usual.
As of now, an enormous dilemma also faces the President.
Pork-barrel spending projects are carefully woven into the
appropriations legislation, or as Senator Bradley rightly
observed, through targeted tax credits and expenditures in
revenue acts. The President cannot simply pull out one thread
without unraveling the entire bill. He does not have that
authority.
The President must look at each bill as a whole,
determining whether to accept the bad with the good--whether
the bad outweighs the good. More often than not, it is a case
of the President holding his nose and signing the spending
bill.
The obvious solution is to grant the President the line-
item veto. Today, 43 of the 50 State Governors have some form
of veto authority. As Governor of the State of Nebraska, I was
privileged to have the line-item veto authority. To me, it was
an invaluable weapon in my arsenal to effectively control the
spending of my state legislature.
I have long believed that the President too should have
this power to challenge wasteful Government spending and keep
us on the path of deficit reduction. All but two Presidents in
the 20th century have supported some type of line-item veto
authority. It is time we grant the President this power.
a bi-partisan compromise
On the first day of the 104th Congress, I joined in
introducing the legislative line-item veto proposal, S. 14. It
was co-sponsored by the distinguished Majority Leader and
Democratic Leader, and by my colleagues, the Chairman of the
Budget Committee, Senator Domenici, and Senators Bradley, Craig
and Cohen.
The original S. 14 stood in stark contrast to some of the
other line-item veto proposals, especially S. 4, sponsored by
the Majority Leader, and Senators McCain and Coats, which was
reported out of the Senate Budget Committee on February 14,
1995.
S. 14 bill would have forced Congress to vote on the
cancellation of a budget item proposed by the President, but
would still required approval of a simple majority of both
Houses of Congress to put the President's proposed cancellation
into effect.
In contrast, S. 4, Senator McCain's bill, would require a
two-thirds vote of both Houses to stop a Presidential
rescission from taking effect. And while Senator McCain's bill
applies only to appropriations, my bill applies to
appropriations, new entitlements, and new targeted tax
benefits.
I believed that through S. 14--the Domenici-Exon bi-
partisan compromise--we could finally move forward on the line-
item veto. In S. 14, I had hoped that we had finally found the
vehicle to carry us to the finish line. Unfortunately, S. 14,
as originally written, was derailed during the markup.
the committee failed to address tax expenditures
I will not conceal my disappointment about what occurred
during the Budget Committee markup of S. 14. I am convinced it
is the only concept that has a chance of passing the Senate.
The language in the original bill was weakened to the point
that I could not support the Domenici substitute.
My greatest concern about the Domenici substitute centered
on one glaring absence: new tax expenditures would not be
subject to a line-item veto. If we are serious about reducing
the deficit, tax expenditures should be included in any line-
item veto legislation. Anything else would be a half-measure.
However, even though I voted against reporting out the flawed
version of S. 14 in Committee, I still nurture the hope that
the scope and bite of the legislation can be restored on the
Senate floor.
On February 3, 1993, the Budget Committee held a hearing on
the impact of tax expenditures on the Federal budget. What we
found was startling. At that time, tax expenditures were
projected to cost more than $400 billion and were slated to
increase to $525 billion by 1997. Today, they are $450 billion
and are projected to rise to $565 billion in 1999.
As with entitlement programs, tax expenditures cost the
Treasury billions of dollars each year. And like entitlements,
they receive little scrutiny once they are enacted into law.
Even though they increase the deficit just like mandatory
programs, tax expenditures escape any sort of fiscal control or
oversight. Indeed, by masquerading as a tax expenditure, a
program or activity that could not pass Congressional muster,
could be indirectly funded.
Office of Management and Budget Director Dr. Alice Rivlin
correctly summed up the situation: ``Tax expenditures add to
the Federal deficit in the same way that direct spending
programs do.''
However, not all tax expenditures are wrong, or unworthy.
Some are aimed at the wealthy; others are certainly worthwhile.
Regardless, all these shadow entitlements deserve the same kind
of scrutiny and attention as we would devote to other Federal
activities that increase the deficit. If we are willing to
subject annual appropriations to the President's veto pen, then
that same oversight should be granted to the President on tax
expenditures. Pork is pork. We should be willing to say ``no''
to both spending pork and and tax pork.
During the markup of S. 14, the Committee, by a vote of 12
to 10, wisely restored the tax expenditure language that was
stripped from the substitute bill offered by Chairman Domenici.
I would point out that the restored language dealing with tax
expenditures closely tracks that contained in the so-called
``Contract With America.'' I was encouraged that my amendment
was adopted.
However, as we took an important step forward to reinstate
the bite of this bill, we later took a big step backwards with
an amendment sponsored by Senator Nickles. His amendment, which
was ultimately accepted by the Committee along party lines,
would limit line-item veto authority to targeted tax provisions
that benefit 100 or fewer taxpayers. In addition, the President
would determine whether the tax expenditure benefits 100 or
more individuals. In effect, this gutted my successful
amendment referenced in the preceding paragraph.
The American people do not need vague, fuzzy language
subject to Presidential interpretation and vagaries. The
Nickles amendment would also provide a ``cottage industry'' for
tax attorneys who would somehow find a way to expand the pool
beyond the 100 threshold. A proliferation of new tax loopholes
is the last thing America needs. It's an open invitation to
abuse and caused my eventual decision to oppose S. 14, as
amended.
Tax expenditures are far too important an issue to be
watered down in this manner. Once the bill reaches the Senate
floor, I will do everything in my power to strip the Nickles
Committee Amendment. With that, I could still vigorously
support the measure.
the committee failed to address entitlements
I will also not conceal my frustration that the Domenici
latter-day version of S. 14 was confined only to appropriated
spending. Its limited scope underscores the enormous problem we
face today.
For too long, many of our colleagues have clung to the thin
reed that we can solve the deficit my cutting only appropriated
spending. Unfortunately, the reed has given way and we are
sinking in an ocean of red ink.
In spite of the pay-as-you-go provisions of the 1990 Budget
Enforcement Act, entitlement spending is the largest and
fastest growing part of the Federal budget. The terrible truth
is that mandatory spending is projected to grow from about 55
percent of Federal spending in the current fiscal year to 62
percent in 2005.
The real surge occurs in Federal health care programs. They
are the only programs that will grow at a rate significantly
faster than the economy, increasing from 3.8 percent of GDP in
Fiscal Year 1995 to 6 percent of GDP in 2005.
On the other hand, discretionary spending, which currently
makes up only about one-third of all Federal spending, has been
significantly curbed and is expected to decline as a percent of
the economy over the same time period.
However, we cannot take much comfort in this success story.
As much as we strip and shave away the fat and waste in
appropriated spending, we get to a point of diminishing
returns. The numbers tell us that we can only harvest so much
deficit reduction from this field. We will not be able to
balance the budget if we rely strictly on appropriated
spending, and I would vigorously oppose greater cuts in defense
spending, which could jeopardize our readiness.
We have to look to other pastures--greener pastures with
much higher grass for deficit reduction--and direct spending is
one of them. Facts are facts. Sooner or later, we will have to
look the deficit squarely in the eye and make some tough and
painful choices. Entitlement spending and tax expenditures are
two we can no longer avoid. Like ``Pac Man,'' they are
devouring everything in sight.
a sunset provision helps the bill
I do not want to leave the impression that there are only
flaws in S. 14 because there is much to praise. I am gratified
that the legislation still contains a sunset provision,
although the date has been pushed back from 1998 to 2002.
I have never understood why my colleagues get so vexed
about sunset provisions. They are a common sight. We have had
sunset provisions in everything from the crime bill, to school-
to-work, to the 1990 farm bill. A sunset provision demonstrates
our commitment to quality legislation that meets not only
today's needs, but tomorrow's needs as well. I believe that
they work well and have served the American people well.
In fact, a sunset provision will help, not hurt this bill.
First, this is brand new legislation which is untried and
untested. We only have the designers' assurances as to how it
will work. The sunset provision gives us the equivalent of a
shake-out cruise.
It will enable us to see how well the legislation is
working. We will be able to look at any bugs, glitches and
problems that may arise. In addition, if for some reason, the
line-item veto does not perform to our expectations, we can
trade it in and start anew.
Second, I have been stressing for some time that the only
way to bring down the deficit is on a bipartisan basis. I
support this legislation, but some of my colleagues have their
reservations. They envision a lot of problems cropping up over
time.
I believe a sunset provision will ease some of those
concerns, because this bill will not be cast in stone. If my
colleagues' fears are realized, we will be able to revisit the
bill at a date certain and make changes. The sunset provision
gives us the benefit of the doubt.
During the markup, I offered an amendment restoring the
original 1998 sunset date. The legislative line-item veto does
not exist in a vacuum. We will have to revisit the entire
Budget Act in 1998. That is when the caps and the other major
provisions, including the one that creates a 60-vote point of
order and the entire system of sequesters, expire. What better
time to reexamine the legislative line-item veto? The extended
2002 sunset date turns a blind eye to this opportunity.
conclusion
In conclusion, the substitute S. 14 is terribly flawed, but
it is not fatally flawed. I believe that during Senate floor
consideration, we can undo the damage that was done during
markup and pass a legislative line-item veto bill that is as
good as its promise to the American people.
Jim Exon.
MINORITY VIEWS SENATOR BARBARA BOXER
I believe that the ``enhanced rescissions'' and ``expedited
rescissions'' proposals voted out of this Committee create a
dangerous shift of power from the Legislative to the Executive
branch. The Constitution provides that Congress has the ``power
of the purse.'' Under Article I, Section 9, ``No Money shall be
drawn from the Treasury but in Consequence of Appropriations
made by Law.'' In Federalist No. 48, James Madison stated that
``the legislative department alone has access to the pockets of
the people.''
The power of the purse, Madison said in Federalist No. 58,
represents the ``most complete and effectual weapon with which
any constitution can arm the immediate representatives of the
people for obtaining a redress of every grievance and for
carrying into effect every just and salutary measure.'' Through
this power, Congress--as the directly elected representatives
of the people--can serve as a check on the Executive branch.
These expedited and enhanced rescissions proposals would
dilute this power. The President would have the power to pick
and choose which programs he likes and which he does not. This
power could be used for political retribution or for political
reward. For instance, will a state that traditionally votes
Democratic see more of its programs in a Republican President's
rescissions request? Will a state that is traditionally
Republican face an overwhelming number of cuts under a
Democratic President?
Under both of these proposals, Congress would have an
opportunity to vote on the President's proposed rescissions,
but neither the enhanced rescissions nor the expedited
rescissions proposals would allow Congress to substitute its
spending cuts for those proposed by the President. In effect,
part of the power of the pursue is being handed over to the
President.
The goal of these process changes is to bring us closer to
a balanced budget. I support this goal. But, no ``expedited''
or ``enhanced'' process change will serve as a substitute for
changing spending priorities and making the tough choices. No
amount of process change will reduce the pain of tough budget
cuts.
The implication of these proposals is much broader than
simply stemming the flow of federal red ink. They undermine our
constitutional balance of powers. For this reason, I oppose
these expedited and enhanced rescissions proposals.
Barbara Boxer.
MINORITY VIEWS OF SENATOR PATTY MURRAY
I oppose both S. 4 and S. 14, two bills that grant the
President line-item veto authority. I have read these bills and
am convinced that they will achieve little to put this
country's fiscal house in order.
I have experience with line-item veto authority. I served
in my State legislature and saw first-hand the kind of horse-
trading that can occur when the Executive has this power.
I came to the United States Senate as a representative of
the people of my home State of Washington. They elected me to
be their voice on a wide array of issues--from funding the
Hanford clean-up to providing economic relief to our hard-hit
timber communities. Under no circumstances do I want to
transfer my power to fight for the people of Washington State
to any administration. That is precisely what these bills would
do.
Reducing our deficit takes courage. We must take tough
votes. There is no assurance these bills will reduce the
deficit. However, they definitely will just turn over more
power to the White House. I say this at a time when the
President is my friend and a member of my party.
Line-item veto authority for the President is not what the
framers of our Constitution envisaged. These bills go against
the grain of our traditional balance of power.
A number of amendments which would have gone a long way to
improve these bills were voted down--largely on party lines--in
this Committee. For that and all the abovementioned reasons, I
voted against these bills in Committee.
Patty Murray.
IX. Changes to Existing Law
Paragraph 12 of rule XXVI of the Standing Rules of the
Senate requires the report to accompany a bill repealing or
amending a statute to include a comparative print showing the
proposed changes to existing law. Existing law proposed to be
omitted is enclosed in black brackets while existing law to
which no change is proposed is shown in roman. New matter is
shown in italic.
THE CONGRESSIONAL BUDGET AND IMPOUNDMENT CONTROL ACT OF 1974
Section 1. (a) Short Titles.--* * *
(b) Table of Contents.--
* * * * * * *
TITLE X--IMPOUNDMENT CONTROL
* * * * * * *
Part B--Congressional Consideration of Proposed Rescissions,
Reservations, and Deferrals of Budget Authority
Sec. 1011. Definitions.
Sec. 1012. Rescission of budget authority.
Sec. 1012A. Expedited consideration of certain proposed rescissions of
budget authority.
Sec. 1013. Proposed deferrals of budget authority.
* * * * * * *
TITLE IX--MISCELLANEOUS PROVISIONS EFFECTIVE DATES
exercise of rulemaking powers
Sec. 904. (a) The provisions of this title (except section
905) and of titles I, III, IV, V, and VI (except section
601(a)) and the provisions of sections 701, 703, [and 1017]
1012A, and 1017 are endated by the Congress--
(1) as an exercise of the rulemaking power of the
House of Representatives and the Senate, respectively,
and as such they shall be considered as part of the
rules of each House, respectively, or of that House to
which they specifically apply, and such rules shall
supersede other rules only to the extent that they are
inconsistent therewith; and
* * * * * * *
(d) Appeals in the Senate from the decisions of the Chair
relating to any provision of title III or IV or [section 1017]
sections 1012A and 1017 shall, except as otherwise provided
therein, be limited to 1 hour, to be equally divided between
and controlled by, the mover and the manager of the resolution,
concurrent resolution, reconciliation bill, or rescission bill,
as the case may be. * * *
* * * * * * *
TITLE X--IMPOUNDMENT CONTROL
* * * * * * *
Part B--Congressional Consideration of Proposed Rescissions,
Reservations, and Deferrals of Budget Authority
* * * * * * *
rescission of budget authority
Sec. 1012. (a) Transmittal of Special Message.--* * *
(b) Requirement to Make Available for Obligation.--
* * * * * * *
expedited consideration of certain proposed rescissions of budget
authority
Sec. 1012A. (a) Proposed Rescissions.--The President may
propose, at the time and in the manner provided in subsection
(b), the rescission of any budget authority provided in an
appropriations Act. Except as otherwise provided in this
section, budget authority proposed for rescission under this
section may not be proposed for rescission again under this
title.
(b) Transmittal of Special Message.--
(1) Special message.--
(A) In general.--Subject to the time
limitations provided in subparagraph (B), the
President may transmit to Congress a special
message proposing to rescind budget authority
contained in an appropriations Act. Except as
provided in subparagraph (B)(ii)(II), only one
special message shall be transmitted under this
section for any single Act and that message
shall propose to rescind budget authority
contained in that single Act.
(B) Time limitations.--A special message may
be transmitted under this section--
(i) during the 20-calendar-day period
(excluding Saturdays, Sundays, and
legal holidays) commencing on the day
after the date of enactment of the
provisions proposed to be rescinded; or
(ii) on the first day of a session of
Congress--
(I) for rescissions contained
in an Act enacted after the
adjournment of the Congress to
end the preceding session; or
(II) for rescissions in an
Act enacted prior to an
adjournment of Congress to end
the preceding session, if a
special message had been
transmitted under clause (i)
but Congress adjourned prior to
the expiration of the 10 days
of session under subsection
(c)(1)(C).
(2) Draft bill.--The President shall include with
each special message transmitted under paragraph (1) a
draft bill that, if enacted, would rescind budget
authority proposed to be rescinded in that special
message. The draft bill shall clearly identify the
budget authority that is proposed to be rescinded
including, where applicable, each program, project, or
activity to which the rescission relates.
(3) Contents of special message.--Each special
message shall specify, with respect to the budget
authority proposed to be rescinded--
(A) the amount of budget authority that the
President proposes be rescinded;
(B) 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;
(C) the reasons by the budget authority
should be rescinded;
(D) to the maximum extent practicable, the
estimated fiscal, economic, and budgetary
effect (including the effect on outlays and
receipts in each fiscal year) of the proposed
rescission; and
(E) all facts, circumstances, and
considerations relating to or bearing upon the
proposed rescission and the decision to effect
the proposed rescission, and to the maximum
extent practicable, the estimated effect of the
proposed rescission upon the objects, purposes,
and programs for which the budget authority is
provided.
(4) Deficit reduction.--
(A) Discretionary spending limits.--Not later
than 5 days after the date of enactment of a
bill containing rescissions of budget authority
as provided under this section, the President
shall reduce the discretionary spending limits
under section 601 of the Congressional Budget
Act of 1974 for the budget year and any outyear
affected by the rescission bill to reflect the
rescission.
(B) Adjustment of committee allocations.--Not
later than 5 days after the date of enactment
of a rescission bill as provided under this
section, the Chairs of the Committees on the
Budget of the Senate and the House of
Representatives shall revise levels under
section 311(a) and adjust the committee
allocations under section 302(a) or 602(a) to
reflect the rescission, and the appropriate
committees shall report revised allocations
pursuant to section 302(b) or 602(b).
(c) Procedures for Expedited Consideration.--
(1) In general.--
(A) Introduction.--Before the close of the
second day of session of the Senate and the
House of Representatives, respectively, after
the date of receipt of a special message
transmitted to Congress under subsection (b),
the majority leader or minority leader of each
House shall introduce (by request) the draft
bill accompanying the special message. If the
bill is not introduced as provided in the
preceding sentence in either House, then, on
the third day of session of that House after
the date of receipt of that special message,
any Member of that House may introduce the
bill.
(B) Referral and reporting.--The bill shall
be referred to the appropriate committee. The
committee shall report the bill without
substantive revision and with or without
recommendation. The committee shall report the
bill not later than the fifth day of session of
that House after the date of introduction of
the bill in that House. If the committee fails
to report the bill within that period, the
committee shall be automatically discharged
from consideration of the bill, and the bill
shall be placed on the appropriate calendar.
(C) Final passage.--A vote on final passage
of the bill shall be taken in the Senate and
the House of Representatives on or before the
close of the 10th day of session of that House
after the date of the introduction of the bill
in that House. If the bill is passed, the
Secretary of the Senate or the Clerk of the
House of Representatives, as the case may be,
shall cause the bill to be transmitted to the
other House on the next day of session of that
House.
(2) Consideration in the house of representatives.--
(A) Motion to proceed to consideration.--A
motion in the House of Representatives to
proceed to the consideration of a bill under
this subsection shall be highly privileged and
not debatable. An amendment to the motion shall
not be in order, nor shall it be in order to
move to reconsider the vote by which the motion
is agreed to or disagreed to.
(B) Motion to strike.--During consideration
under this subsection in the House of
Representatives, any Member of the House of
Representatives may move to strike any proposed
rescission if supported by 49 other Members.
(C) Limits on debate.--Debate in the House of
Representatives on a bill under this subsection
shall not exceed 4 hours, which shall be
divided equally between those favoring and
those opposing the bill. A motion further to
limit debate shall not be debatable. It shall
not be in order to move to recommit a bill
under this subsection or to move to reconsider
the vote by which the bill is agreed to or
disagreed to.
(D) Appeals.--Appeals from decisions of the
Chair relating to the application of the Rules
of the House of Representatives to the
procedure relating to a bill under this section
shall be decided without debate.
(E) Application of house rules.--Except to
the extent specifically provided in this
section, consideration of a bill under this
section shall be governed by the Rules of the
House of Representatives. It shall not be in
order in the House of Representatives to
consider any bill introduced pursuant to the
provisions of this section under a suspension
of the rules or under a special rule.
(3) Consideration in the senate.--
(A) Motion to proceed to consideration.--A
motion to proceed to the consideration of a
bill under this subsection in the Senate shall
not be debatable. It shall not be in order to
move to reconsider the vote by which the motion
to proceed is agreed to or disagreed to.
(B) Motion to strike.--During consideration
of a bill under this subsection, any Senator
may move to strike any proposed rescission if
supported by 11 other Members.
(C) Limits on debate.--Debate in the Senate
on a bill under this subsection, and all
debatable motions and appeals in connection
therewith (including debate pursuant to
subparagraph (D)), shall not exceed 10 hours,
equally divided and controlled in the usual
form.
(D) Appeals.--Debate in the Senate on any
debatable motion or appeal in connection with a
bill under this subsection shall be limited to
not more than 1 hour, to be equally divided and
controlled in the usual form.
(E) Motion to limit debate.--A motion in the
Senate to further limit debate on a bill under
this subsection is not debatable.
(F) Motion to recommit.--A motion to recommit
a bill under this subsection is not in order.
(G) Consideration of the house bill.--
(i) In general.--If the Senate has
received the House companion bill to
the bill introduced in the Senate prior
to the vote required under paragraph
(1)(C), then the Senate may consider,
and the vote under paragraph (1)(C) may
occur on, the House companion bill.
(ii) Procedure after vote on senate
bill.--If the Senate votes, pursuant to
paragraph (1)(C), on the bill
introduced in the Senate, then
immediately following that vote, or
upon receipt of the House companion
bill, as the case may be--
(I) if the House companion
bill is identical to the
version of the Senate bill on
which the vote under paragraph
(1)(C) was taken, the House
bill shall be deemed to be
considered, read the third
time, and the vote on passage
of the Senate bill shall be
considered to be the vote on
the bill received from the
House; or
(II) if the House companion
bill is not identical to the
Senate bill on which the vote
under paragraph (1)(C) was
taken, the Senate shall proceed
to the immediate consideration
of the House companion bill,
the procedures under this
paragraph shall apply except
that a motion to strike all
after the enacting clause and
insert the text of the Senate
bill shall be in order.
(H) Amendment between houses.--Overall debate
on all motions necessary to resolve amendments
between the Houses on a bill under this section
shall be limited to 2 hours at any stage of the
proceedings. Debate on any motion, appeal, or
point of order under this section which is
submitted shall be limited to 30 minutes, and
such time shall be equally divided and
controlled in the usual form.
(4) Conference.--
(A) Authority of conferees.--
(i) In general.--Except as provided
in clause (ii), the conferees may only
recommend that a House recede from a
disagreement to an amendment of the
other House, or recede from its own
amendment, and that the other House
concur in such action.
(ii) Exception.--If the second House
has stricken all after the enacting
clause of the first House, the
amendment reported by the conferees
shall include each provision that is
included in the versions of both
Houses, and may include a provision
included by either House upon which the
conferees have agreed, and may not
include any other matter.
(B) Consideration of conference reports.--
Debate in the House of Representatives or the
Senate on the conference report and any
amendments in disagreement on any bill
considered under this section shall be limited
to not more than 2 hours, equally divided and
controlled in the usual form. A motion further
to limit debate is not debatable. A motion to
recommit the conference report is not in order,
and it is not in order to move to reconsider
the vote by which the conference report is
agreed to or disagreed to.
(C) Failure of conference to act.--If the
committee on conference on a bill considered
under this section fails to submit a conference
report within 5 calendar days after the
conferees have been appointed by each House,
any Member of either House may introduce a bill
containing only the text of the draft bill of
the President on the next day of session
thereafter and the bill shall be considered as
provided in this section except that the bill
shall not be subject to any motion to strike.
(d) Amendments and Divisions Prohibited.--Except as
otherwise provided by this section, no amendment to a bill
considered under this section shall be in order in either the
Senate or the House of Representatives. It shall not be in
order to demand a division of the question in the House of
Representatives (or in a Committee of the Whole). No motion to
suspend the application of this subsection shall be in order in
the House of Representatives, nor shall it be in order in the
House of Representatives to suspend the application of this
subsection by unanimous consent.
(e) Temporary Presidential Authority To Rescind.--
(1) In general.--At the same time as the President
transmits to Congress a special message proposing to
rescind budget authority, the President may direct that
any budget authority proposed to be rescinded in that
special message shall not be made available for
obligation for a period not to exceed 45 calendar days
from the date the President transmits the special
message to Congress.
(2) Early availability.--The President may make any
budget authority not made available for obligation
pursuant to paragraph (1) available at a time earlier
than the time specified by the President if the
President determines that continuation of the
rescission would not further the purposes of this Act.
(f) Definitions.--For purposes of this section--
(1) the term ``appropriation Act'' means any general
or special appropriation Act, and any Act or joint
resolution making supplemental, deficiency, or
continuing appropriations;
(2) the term ``budget authority'' means an amount, in
whole or in part, of budget authority provided in an
appropriation Act, except to fund direct spending
programs;
(3) the term ``rescission of budget authority'' means
the rescission in whole or in part of any budget
authority provided in an appropriation Act; and
(4) 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.
(g) Application to Targeted Tax Benefits.--The President
may propose the repeal of any targeted tax benefit in any bill
that includes such a benefit, under the same conditions, and
subject to the same congressional consideration, as a proposal
under this section to rescind budget authority provided in an
appropriations Act.
proposed deferrals of budget authority
Sec. 1013. Transmittal of Special Message.-- * * *
* * * * * * *