[Senate Report 104-14]
[From the U.S. Government Publishing Office]



   104th Congress 1st            SENATE                 Report
         Session
                                                        104-14
_______________________________________________________________________

                                     

                                                        Calendar No. 27
 
                     LEGISLATIVE LINE ITEM VETO ACT

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                             together with

                     ADDITIONAL AND MINORITY VIEWS

                              TO ACCOMPANY

                                 S. 14

 TO AMEND THE CONGRESSIONAL BUDGET AND IMPOUNDMENT CONTROL ACT OF 1974 
    TO PROVIDE FOR THE EXPEDITED CONSIDERATION OF CERTAIN PROPOSED 
                     CANCELLATIONS OF BUDGET ITEMS




    March 7 (legislative day, March 6), 1995.--Ordered to be printed
                   COMMITTEE ON GOVERNMENTAL AFFAIRS

 WILLIAM V. ROTH, Jr., Delaware, 
             Chairman
                                     TED STEVENS, Alaska
                                     WILLIAM S. COHEN, Maine
                                     FRED THOMPSON, Tennessee
                                     THAD COCHRAN, Mississippi
                                     CHARLES E. GRASSLEY, Iowa
                                     JOHN McCAIN, Arizona
JOHN GLENN, Ohio                     BOB SMITH, New Hampshire
SAM NUNN, Georgia
CARL LEVIN, Michigan
DAVID PRYOR, Arkansas
JOSEPH I. LIEBERMAN, Connecticut
DANIEL K. AKAKA, Hawaii
BYRON L. DORGAN, North Dakota
 Franklin G. Polk, Staff Director 
         and Chief Counsel
Joan Woodward, Professional Staff 
              Member
  Leonard Weiss, Minority Staff 
             Director
  Michal Sue Prosser, Chief Clerk


                            C O N T E N T S

                              ----------                              
                                                                   Page
  I. Purpose of the measure...........................................1
 II. Background and need..............................................1
III. Expedited procedures.............................................2
 IV. Legislative history..............................................5
  V. Committee action and tabulation of votes.........................5
 VI. Committee amendments.............................................6
VII. Section-by-section analysis......................................6
VIII.
     Cost and budgetary considerations...............................11
 IX. Regulatory impact evaluation....................................12
  X. Additional and minority views...................................13
 XI. Changes in existing law.........................................16
                                                        Calendar No. 27
104th Congress                                                   Report
                                 SENATE

 1st Session                                                     104-14
_______________________________________________________________________


                     LEGISLATIVE LINE ITEM VETO ACT

                                _______


    March 7 (legislative day, March 6), 1995.--Ordered to be printed

_______________________________________________________________________


  Mr. Roth, from the Committee on Governmental Affairs, submitted the 
                               following

                              R E P O R T

                             together with

                     ADDITIONAL AND MINORITY VIEWS

                          [To accompany S. 14]
    The Committee on Governmental Affairs, to which was 
referred the bill (S. 14) reports thereon with an amendment and 
without recommendations.

                       I. Purpose of the Measure

    The purpose of S. 14, as ordered reported, is to provide 
for the expedited consideration of presidential recommendations 
to cancel ``budget items.'' The bill defines budget items as 
budget authority provided in an appropriation Act--except to 
fund direct spending (entitlements)--and targeted tax benefits. 
Under the reported bill, at least one House of Congress would 
have to consider and act upon presidential proposals to rescind 
funds or repeal targeted tax benefits.

                        II. Background and Need

    S. 14 is designed to remedy a serious defect in the 
Impoundment Control Act of 1974, which established a procedure 
for rescinding (terminating) budget authority. Under the 1974 
statute, the President may recommend rescissions but those 
recommendations take effect only if both Houses of Congress 
pass an approval bill within 45 days of continuous session. 
Otherwise, the budget authority must be released to the 
agencies for obligation and expenditure. Congress is not 
required to act on or consider the President's proposals. It 
frequently happens that special messages submitted by the 
President to rescind funds receive no action at all by 
Congress.
    The record since 1974 underscores the deficiencies of the 
Impoundment Control Act. Over the course of the life of this 
statute, Presidents have recommended $72.8 billion in 
rescissions and Congress has granted its approval to only $22.9 
billion. On its own initiative, Congress has resorted to the 
regular legislative process to rescind a total of $70 billion.
    By relying on a procedure called ``expedited rescission,'' 
S. 14 requires at least one House of Congress to consider and 
act on a presidential proposal to rescind budget authority or 
cancel targeted tax benefits. Under the procedures set forth in 
the bill, presidential proposals are transmitted to Congress in 
a special message identifying the particular items to be 
rescinded or canceled. The proposals would become law only if 
both Houses of Congress approved them during a designated 
review period. The burden would be on the President to obtain 
congressional approval during this period of time. Supporters 
of expedited rescission believe that the procedures in S. 14 
prevent the transfer of the spending power from Congress in 
this regard, S. 14 forces a vote in Congress on a President's 
proposal and guarantees that congressional action and 
consideration be expedited. The procedures in S. 14 are 
designed to maintain a constitutional balance between the 
executive and legislative branches.
                       III. Expedited Procedures

    The bill sets forth congressional procedures for expedited 
consideration of the President's special message. The President 
may propose the rescission of any budget authority provided in 
an appropriations Act or the repeal of any targeted tax benefit 
(as defined in S. 14). With regard to rescissions of budget 
authority, the President may transmit only one special message 
for a single Act except in one situation: when the President 
transmits a special message but Congress adjourns prior to the 
expiration of the ten days allowed for action by a chamber. A 
special message may be transmitted during the 20-calendar-day 
period (excluding Saturdays, Sundays, and legal holidays) 
beginning on the day after the date of enactment of the 
provision proposed to be rescinded/canceled or on the first day 
of a session of Congress for rescissions (1) contained in an 
Act enacted after Congress adjourns to end the preceding 
session or (2) in an Act enacted prior to a congressional 
adjournment to end the preceding session if the President 
transmitted a special message but Congress adjourned prior to 
the expiration of the 10 days of session allowed for action by 
a chamber. The President shall include with each special 
message a draft bill to rescind budget authority or cancel 
targeted tax benefits. As explained in the section-by-section 
analysis, the special message shall specify a number of facts.
    Introduction of Bill.--Before the close of the second day 
of session of the Senate and the House of Representatives, 
after receiving the special message, the majority or minority 
leader of each House shall introduce (by request) the draft 
bill accompanying the special message. If the bill is not so 
introduced, on the third day of session of that House after the 
date of receiving the special message, any Member of that House 
may introduce the bill to approve the President's proposal.
    The approval bill shall be referred to the appropriate 
committee, which 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 bill shall be automatically discharged and 
placed on the appropriate calendar.
    A vote on final passage of the bill shall be taken in each 
chamber 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 approving the rescissions or targeted 
tax benefits passes, the bill shall be transmitted to the other 
House on the next day of session of that House. If the bill of 
approval fails in one House, there would be no need for action 
in the other House because congressional acceptance requires 
approval by both Houses in a bill that is presented to the 
President. The proposed rescission of budget authority or 
repeal of a targeted tax benefit would be defeated if one House 
fails to approve the President's proposal.
    Consideration in the House.--During consideration in the 
House of Representatives, a motion to proceed to the 
consideration of an approval bill 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. Any Member 
may move to strike any proposed rescission if supported by 49 
other Members.
    Debate in the House of Representatives on the approval bill 
shall not exceed four 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 the approval bill or to move to 
reconsider the vote by which the bill is agreed to or disagreed 
to. Appeals from decisions of the Chair relating to the 
application of the Rules of the House of Representatives to the 
procedure relating to an approval bill shall be decided without 
debate.
    Consideration in the Senate.--During consideration of the 
approval bill in the Senate, a motion to proceed to the 
consideration of the bill 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. Any Senator may move 
to strike any proposed rescission if supported by eleven other 
Senators. Debate in the Senate on an approval bill, and all 
debatable motions and related appeals shall not exceed ten 
hours. Debate on any debatable motion or related appeal shall 
be limited to not more than one hour. A motion to further limit 
debate on an approval bill is not debatable, nor is a motion to 
recommit an approval bill in order.
    Amendments Between Houses.--Overall debate in either 
chamber necessary to resolve amendments between the Houses 
shall be limited to two hours at any stage of the proceedings. 
Debate on any motion, appeal, or point or order under this 
section shall be limited to 30 minutes. 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. 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.
    Debate in either chamber on the conference report and any 
amendments in disagreement on any bill considered under this 
section shall be limited to not more than two hours. A motion 
further to limit debate is not debatable, nor is it in order to 
offer a motion to recommit the conference report or to move to 
reconsider the vote by which the conference report is agreed to 
or disagreed to.
    If the conference committee fails to submit a conference 
report within five calendar days after the conferees have been 
appointed by each House, any Member of either chamber may 
introduce a bill containing only the text of the President's 
draft bill 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.
    Except as otherwise provided in S. 14, no amendment to an 
approval bill shall be in order in either chamber. 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.
    Temporary Presidential Authority.--At the same time that 
the President transmits a special message, 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. The same procedure 
applies to suspending the effectiveness of targeted tax 
benefits proposed to be canceled. Prior to the expiration of 
the 45-calendar-day period, the President may make any budget 
authority available for obligation or any targeted tax benefit 
available for execution if the President determines that 
suspension of the budget authority or targeted tax benefit 
would not further the purposes of this Act.
    Definitions.--As explained in greater detail in the 
section-by-section analysis, the bill defines the terms 
``appropriation Act,'' ``budget authority,'' ``rescission of 
budget authority,'' and ``targeted tax benefits.''
    Lock-box.--If Congress supports the President's proposal to 
rescind budget authority, a ``lock box'' will guarantee that 
any savings go to deficit reduction. Not later than five days 
after enacting a rescission bill, the President shall reduce 
the discretionary spending limits under Section 601 of the 
Congressional Budget Act for the budget year and each outyear 
affected by the rescission bill to reflect that amount. Not 
later than five days after enacting the rescission bill, the 
chairs of the Senate and House Committees on the Budget 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).
    The procedures established in S. 14 would take effect on 
the date of enactment, apply only to budget authority provided 
in Acts enacted on or after the date of enactment of S. 14, and 
cease to be effective on September 30, 2002.

                        IV. Legislative History

    S. 14 was introduced by Senator Domenici on January 4, 
1995, with Senators Exon, Craig, Bradley, Cohen, and Dole as 
initial cosponsors. The bill was referred jointly to the 
Committees on the Budget and Governmental Affairs, with 
instructions that if one committee reports, the other committee 
would have thirty days to report or be discharged.
    The Senate Committee on the Budget held markup on February 
14, 1995, and reported S. 14 without recommendation after 
adopting an amendment in the nature of a substitute as well as 
two amendments. Senator Domenici offered a substitute to his 
original bill by providing for an expedited rescission process 
for appropriations only. An amendment by Senator Exon to 
restore to the substitute the procedure for repealing targeted 
tax benefits was adopted by a vote of 12 to 10. An amendment by 
Senator Nickles, redefining targeted tax benefits to allow the 
President to veto any targeted tax provision for 100 or fewer 
beneficiaries (a definition included in the House-passed H.R. 
2) was approved by a vote of 12 to 10. The committee acted to 
report the bill by a rollcall vote of 13 to 8.
    A joint hearing was held on January 12, 1995 by the House 
Committee on Governmental Reform and Oversight and the Senate 
Committee on Governmental Affairs to explore changes to the 
rescission process in the Impoundment Control Act. The first 
panel heard testimony from Senators John McCain and Dan Coats 
and from Representatives Gerald Solomon, Jack Quinn, Mark 
Neumann, and Michael Castle. Also testifying at those hearings 
were Governor William Weld of Massachusetts; Dr. Alice Rivlin, 
Director of the Office of Management and Budget; Dr. Robert D. 
Reischauer, Director of the Congressional Budget Office; Judge 
Gilbert S. Merritt, Chief Judge of the Sixth Circuit and 
Chairman of the Executive Committee of the Judicial Conference; 
Joseph Winkelmann of Citizens Against Governmental Waste; David 
Keating of the National Taxpayers Union; and Dr. Norman 
Ornstein of the American Enterprise Institute.

              V. Committee Action and Tabulation of Votes

    The Committee on Governmental Affairs held an additional 
hearing on February 23, 1995, at the request of Democratic 
Senators on the committee. Testimony was heard from Senator 
Bill Bradley, Representative Peter Blute, Louis Fisher of the 
Congressional Research Service, and Allen Schick of the George 
Mason University. Issues explored during the hearings included 
the extension of rescission authority to tax expenditures and 
the definition of targeted tax benefits; comparisons between S. 
4, S. 14, and the House-passed enhanced rescission bill, H.R. 
2; exempting the judiciary from the President's exercise of 
rescission authority; the question of whether S. 4 and S. 14 
could reach entitlements such as social security; and the 
balance between the executive and legislative branches, 
including the issue of how much legislative power may be 
delegated to the President.
    On March 2, 1995, the Senate Governmental Affairs Committee 
held a markup on S. 14. Senator Cochran moved that the 
Committee report S. 14, without recommendation. Senator Levin 
modified the Cochran motion to report with recommendation. The 
vote on the Levin motion failed 6-8. The following Senators 
voted AYE on the Levin amendment: Glenn, Nunn, Levin, Pryor, 
Lieberman (by proxy), Akaka and Senator Dorgan. The following 
Senators voted NO: Roth, Stevens, Cohen (by proxy), Thompson, 
Cochran, Grassley, McCain (by proxy) and Smith. Senator Cochran 
then withdrew his motion.
    Senator Glenn then moved that the Committee report out S. 
14 with recommendation. Senator Roth then amended the Glenn 
motion to report out S. 14 without recommendation. A vote then 
occurred on the Roth amendment, the result was 9-6. The 
following Senators voted AYE on the Roth motion: Roth, Stevens, 
Thompson, Cochran, Grassley, McCain, Smith and Lieberman. 
Senators voting NO on the Roth motion: Glenn, Nunn, Levin, 
Pryor, Akaka, and Dorgan.
    A final vote then occurred on the Glenn motion as amended 
by the Roth motion to report S. 14 without recommendation. By a 
rollcall vote of 13-2, the bill was reported from the 
Governmental Affairs Committee without recommendation. The 
following Senators were recorded as voting AYE: Roth, Stevens, 
Cohen, Thompson, Cochran, Grassley, McCain, Smith, Glenn, Nunn, 
Levin, Pryor and Lieberman. The following Senators were 
recorded as voting NO: Akaka and Dorgan.
                        VI. Committee Amendments

    During the March 2, 1995, markup of S. 14, Senator Pryor 
offered an amendment to exclude Social Security from the line 
item veto. The amendment was adopted by a voice vote in the 
Governmental Affairs Committee markup. The amendment excludes 
from the definition of ``budget authority'' any budget 
authority provided the Social Security. The amendment ensures 
that the expedited rescission authority can not be used to 
reduce or eliminate the funds appropriated for the operating 
expenses of the Social Security Administration. While the funds 
appropriated in the Limitation on Administrative Expenses 
Account for the Social Security Administration's administrative 
expenses come from the Trust fund, the funds must be 
appropriated annually. Currently, the administrative budget of 
SSA is $3.1 billion, which represents only 0.9% of total 
program costs. Without the Pryor amendment, those 
administrative funds could be subject to rescission by the 
President.

                    VII. Section-by-Section Analysis

    Section 1 provides the short title of the ``Legislative 
Line Item Veto Act'' for S. 14.
    Section 2 establishes the procedures for expedited 
consideration of certain proposed rescissions of budget 
authority and certain proposed repeals of targeted tax 
benefits. Title X of the Congressional budget and Impoundment 
Control Act of 1974 is amended by adding after section 1012 a 
new section (section 1012A) entitled ``Expedited Consideration 
of Certain Proposed Rescissions of Budget Authority.''
    Presidential Proposals.--The President may propose, at the 
time and in the manner provided below, the rescission of any 
budget authority provided in an appropriations Act. Except as 
otherwise provided in the section, budget authority proposed 
for rescission under this section may not be proposed for 
rescission again under this title. The President may also 
propose the repeal of any targeted tax benefit (as defined in 
S. 14) in any bill that includes such a benefit, under the same 
conditions and subject to the same congressional consideration 
as the rescission of budget authority.
    Subject to the time limitations provided in this bill, the 
President may transmit to Congress a special message proposing 
to rescind budget authority contained in an appropriations Act. 
Except as provided below, the President may transmit only one 
special message under this section for any single Act and that 
message shall propose to rescind budget authority contained in 
that single Act. A special message may be transmitted under 
this section (1) during the 20-calendar-day period (excluding 
Saturdays, Sundays, and legal holidays) commencing on the day 
after the date of enactment of the provision proposed to be 
rescinded, or (2) on the first day of a session of Congress for 
rescissions contained in an Act enacted after the adjournment 
of the Congress to end the preceding session, or for 
rescissions in an Act enacted prior to an adjournment of 
Congress to end the preceding session, if a special message has 
been transmitted under the 20-calendar-day period but Congress 
adjourned prior to the expiration of the 10 days of session 
provided for congressional consideration in each House.
    The President shall include with each special message 
transmitted under the procedures of S. 14 a draft bill, if 
enacted, would rescind budget authority proposed to be 
rescinded in that special message or would repeal targeted tax 
benefits. The draft bill shall clearly identify the targeted 
tax benefit to be repealed or the budget authority to be 
rescinded including, where applicable, each program, project, 
or activity to which the rescission relates.
    Each special message shall specify, with respect to the 
budget authority proposed to be rescinded: (1) the amount of 
budget authority that the President proposes to be rescinded, 
(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 why the budget authority should be rescinded, (4) 
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 (5) 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. Similar special messages shall be 
prepared for the repeal of targeted tax benefits.
    Lock-box.--S. 14 establishes procedures to guarantee that 
budget savings effected by this bill will be set aside for 
deficit reduction (``lock-box''). Not later than five days 
after the date of enactment of a bill containing rescissions of 
budget authority as provided in this bill, the President shall 
reduce the discretionary spending limits under section 601 of 
the Congressional Budget Act of 1974 for the fiscal year and 
any outyear affected by the rescission bill to reflect the 
rescission. Not later than five days after the date of 
enactment of a rescission bill as provided in S. 14, the chairs 
of the Senate and House Committees on the Budget 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).
    Introduction of Bill.--S. 14 establishes procedures for the 
expedited consideration of presidential special messages. 
Before the close of the second day of session of the Senate and 
the House of Representatives, after the date of receiving a 
presidential special message transmitted under this bill, the 
majority leader or minority leader of each House shall 
introduce (by request) the draft bill accompanying that 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 or receiving that special 
message, any Member of that House may introduce the bill.
    The bill shall be referred to the appropriate committee, 
which 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 
bill shall be automatically discharged from committee and 
placed on the appropriate calendar.
    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.
    Consideration in the House of Representatives.--In the 
House of Representatives, a motion 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. 
During consideration under this subsection in the House of 
Representatives, any Member may move to strike any proposed 
rescission if supported by 49 other Members.
    Debate in the House of Representatives on a bill under this 
subsection shall not exceed four 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. 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. 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.
    Consideration in the Senate.--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. During consideration of a bill under this 
subsection, any Senate may move to strike any proposed 
rescission if supported by 11 other Members. Debate in the 
Senate on a bill under this subsection, and all debatable 
motions and appeals in connection therewith (including debate 
on individual motions or appeals) shall not exceed 10 hours, 
equally divided and controlled in the usual form. 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 
one hour, to be equally divided and controlled in the usual 
form. A motion in the Senate to further limit debate on a bill 
under this subsection is not debatable. A motion to recommit a 
bill under this subsection is not in order.
    Consideration of the House Bill.--If the Senate has 
received the House companion bill to the bill introduced in the 
Senate prior to the vote required on or before the close of the 
10th day of session of the Senate after introduction of the 
bill, then the Senate may consider, and the vote under the 10-
day limit may occur, on the House companion bill. If the Senate 
votes pursuant to the 10-day limit 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, (1) if 
the House companion bill is identical to the version of the 
Senate bill on which the vote under the 10-day limit 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 of the bill received from the House, 
or (2) if the House companion bill is not identical to the 
Senate bill on which the vote under the 10-day limit 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.
    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 two 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.
    Conference.--Except as provided in the next sentence, 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. The exception is as follows: 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.
    Debate in the two chambers on the conference report and any 
amendments in disagreement on any bill considered under this 
section shall be limited to not more than two 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 the reconsider the vote by which the conference report is 
agreed to or disagreed to.
    If the conference committee considering a bill under this 
section fails to submit a conference report within five 
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.
    Amendments and Divisions Prohibited.--Except as otherwise 
provided in this section, no amendment to a bill considered 
under this section shall be in order in either chamber. 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.
    Temporary Presidential Authority to Rescind.--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. The 
President may make any budget authority not made available for 
obligation pursuant to the above paragraph 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.
    Definitions.--For purposes of this section the term 
``appropriation Act'' means any general or special 
appropriation Act, and any Act or joint resolution making 
supplemental, deficiency, or continuing appropriations. 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 (entitlements) programs. The term 
``rescission of budget authority'' means the rescission in 
whole or in part of any budget authority provided in an 
appropriation Act. 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.
    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 
appropriation Act.
    Amendments to Existing Law.--Section 904 of the 
Congressional Budget Act of 1974 (2 U.S.C. 621 note) is amended 
(1) in subsection (a) by striking ``and 1017'' and inserting 
``1012A, and 1017'' and (2) in subsection (d) by striking 
``section 1017'' and inserting ``sections 1012A and 1017.'' The 
table of sections for subpart B of title X of the Congressional 
Budget and Impoundment Control Act of 1974 is amended by 
inserting after the item relating to section 1012 the 
following: ``Sec 1012A. Expedited consideration of certain 
proposed rescission of budget authority.''
    Effective Period.--The amendments made by this Act shall 
(1) take effect on the date of enactment of this Act, (2) apply 
only to budget authority provided in Acts enacted on or after 
the date of enactment of this Act, and (3) cease to be 
effective on September 30, 2002.

                VIII. Cost and Budgetary Considerations

    The following estimate of costs of this measure has been 
provided by the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, March 2, 1995.
Hon. William V. Roth, Jr.,
Chairman, Committee on Governmental Affairs,
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 
Governmental Affairs on March 2, 1995.
    S. 14 would grant the President the authority to propose 
legislation that would rescind all or part of any discretionary 
budget authority (except funds provided for Social Security) 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 rescission 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 already 
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. Therefore, 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.
            Sincerely,
                                              James L. Blum
                                   (For June E. O'Neill, Director).
                    IX. Regulatory Impact Evaluation

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact that would be incurred in 
carrying out S. 14. The bill is not a regulatory measure in the 
sense of imposing Government-established standards of 
significant economic responsibilities.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of S. 14, as ordered reported. Paperwork is now 
generated by presidential requests under the Impoundment 
Control Act to rescind budget authority. Additional paperwork 
beyond the current level would be modest.
                    X. ADDITIONAL AND MINORITY VIEWS

                              ----------                              


               MINORITY VIEWS OF SENATOR DANIEL K. AKAKA

    I have long opposed granting the President line item veto 
authority because it represents a serious shift in power from 
the Legislative branch to the Executive branch of government.
    I was, however, intrigued by the ``enhanced rescission'' 
measure, S. 14, as introduced by Senator Domenici and Senator 
Exon. Embodied in the original proposal was the right of a 
President to cancel a budget item while allowing Congress to 
override a rescission by a simple majority of both Houses, 
Moreover, the original measure would have applied to 
appropriations, new entitlements and new targeted tax benefits.
    Regrettably, the bill, as amended and reported out of the 
Budget Committee and forwarded to the Governmental Affairs 
Committee, removed new tax expenditures and new entitlement 
spending. The only tax-related provision is one that would 
limit line item veto authority to targeted tax provisions that 
benefit 100 or fewer taxpayers.
    In additional to my concerns that S. 14 would dilute the 
power of the Legislative branch to serve as a check on the 
Executive branch and limit rescission authority to 
appropriations, I am also deeply troubled that the bill was 
reported out of the Government Affairs Committee without 
recommendation. I felt that S. 14 could serve as a basis for 
debate on enhanced rescissions, but without having an 
opportunity to consider amendments that would have been offered 
if debate had not been checked, I could not vote in favor of 
the measure.
    I was prepared to support amendments that would have 
addressed the targeted tax expenditure issue and other 
provisions that would have better defined enhanced rescissions. 
I am hopeful that when we consider S. 14 on the floor we will 
have a better opportunity to debate the matter fully.
          ADDITIONAL VIEWS OF SENATORS GLENN, LEVIN, AND AKAKA

    While S. 14 makes an earnest attempt to deal with wasteful 
spending on one side of the ledger sheet, we are greatly 
disappointed in its failure to effectively address the other 
component--special tax exemptions. Whether it occurs through 
discretionary spending or tax giveaways, we have to do away 
with all unnecessary spending.
    Tax expenditures currently account for more than $450 
billion in yearly losses to the Federal Treasury. As with 
discretionary spending, many of these expenditures are worthy, 
but others are not. These expenditures are growing at a rate 
six times faster than discretionary spending. The latest 
projections show them costing us $565 billion in Fiscal Year 
1999.
    Once these special provisions become part of the Tax Code 
they usually remain, with little or no review, in perpetuity. 
If we are to subject regular program accounts to periodic 
review, reauthorization, and appropriations we should do the 
same with tax expenditures. We simply cannot afford to have any 
new special tax breaks slipped into the Code never to see the 
light of day again.
    S. 14 purports to provide the President with the authority 
to address these special provisions, but under the present 
language in the bill, the President can only ``veto'' tax 
expenditures if they affect 100 or fewer taxpayers. We believe 
that such a limitation is arbitrary, unworkable, totally 
unfair, and negates any serious consideration of ``tax 
loopholes''.
    Throughout the hearings, no one was able to provide any 
persuasive rationale for the magic number of one hundred. This 
averages out to just two taxpayers per State. As Senator 
Bradley stated in his testimony before this Committee, by the 
time a tax break for just a few people is inserted devised the 
break will have sold it to more than 100 clients. Arbitrary 
numerical limits defeat our purpose, which is to cut wasteful 
and frivolous spending.
    Hearings on this bill also provided few answers as to how 
the President should determine the number of taxpayers that 
could be affected by a loophole. In truth, under S. 14, it does 
not matter how many taxpayers are actually affected. All that 
matters is the President's estimate as to how many may be 
affected. So we could have a situation where the President 
estimates that 99 taxpayers may be affected and, in the end, 
300--or many times 300--actually are. Or vice versa. Then what 
happens?
    The bottom line is that federal bureaucrats--making 
estimates good or bad, and with little or no review--will 
ultimately determine the President's line-item veto power. We 
doubt that this is the result that was intended.
    Senator Glenn had a series of amendments he was prepared to 
offer which would have addressed this glaring deficiency. 
Unfortunately, when it was clear that there would be no 
meaningful consideration of these amendments by the Majority, 
and any votes would not be based on the underlying merits, they 
were not put forth in Committee. We look forward to having the 
opportunity to fully an substantively consider such amendments 
on the Senate Floor.
    Tax breaks in the Code drain the Federal Treasury, increase 
the deficit and, in effect, lead to higher tax rates for the 
rest of Americans. They do not deserve any special status, but 
should be placed on the table just like ordinary spending.

                                   John Glenn.
                                   Carl Levin.
                                   Daniel K. Akaka.
                      XI. Changes in Existing Law

    The bill represents a new section (section 1012A) to be 
added after section 1012 of Title X of the Congressional Budget 
and Impoundment Control Act of 1974. Section 904 of the 
Congressional Budget Act of 1974 (2 U.S.C. 621 note) is amended 
(1) in subsection (a) by striking ``and 1017'' and inserting 
``1012A, and 1017'' and (2) in subsection (d) by striking 
``section 1017'' and inserting ``sections 1012A and 1017.'' The 
table of sections for subpart B of title X of the Congressional 
Budget and Impoundment Control Act of 1974 is amended by 
inserting after the item relating to section 1012 the 
following: ``Sec. 1012A. Expedited consideration of certain 
proposed rescissions of budget authority.''