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# Legislative Bulletin..................................................June 22, 2006

**Contents:**

> **H.R. 4890---The Legislative Line Item Veto**

H.R. 4890---The Legislative Line Item Veto (Ryan)

**[Order of Business]{.underline}**: The bill is scheduled to be
considered on Thursday, June 22^nd^, subject to a closed rule (H.Res.
886). H.Res. 886 is a self-executing rule, providing for the adoption of
the manager's amendment. The changes made by that amendment are
incorporated below.

**[Background]{.underline}**: In 1996, the Line Item Veto Act (P.L.
104-130) was signed into law to give the President the authority to
rescind targeted spending and tax items from larger pieces of
legislation. Such rescissions took effect automatically and did not need
approval by Congress. President Clinton used the authority 82 times
before the Supreme Court in 1998 struck the law down in *Clinton v. New
York*. The central defect of the Line Item Veto Act was that it ran
afoul of the presentment clause of Article I, Section 7. That clause
states that all legislation passed by Congress be presented to the
President and "if he approve he shall sign it, but if not he shall
return it, with his objections." The Court reasoned that allowing the
President to essentially amend a statute unilaterally was not consistent
with the Constitution's specific procedures for enacting a law. The
Legislative Line Item Veto (H.R. 4890) is an attempt to remedy the
Constitutional defect identified by the Court by establishing a process
whereby Congress can expeditiously approve of a President's rescissions
package.

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**[Summary of H.R. 4890:]{.underline}**

-   Authorizes the President to propose "the cancellation of any dollar
    amount of such discretionary budget authority, item of direct
    spending, or targeted tax benefit" within 45 days of enactment of
    any spending or tax legislation. The President would transmit a
    "special message" to Congress identifying the proposed rescissions
    and a description of why each item ought to be cancelled.

-   Restricts the number of special messages (or rescission packages) to
    five per bill---unless the bill is an omnibus reconciliation or
    appropriation bill which could be accompanied by ten special
    messages.

-   Prohibits the President from proposing the same rescissions or
    "substantially similar" rescissions more than one time. In other
    words, the President could not include the same earmark in all five
    of the packages he sent to Congress (assuming he offered the maximum
    number).

-   Provides that if Congress approves the President's rescission
    package, by enacting the "approval" bill that receives expedited
    consideration in Congress (see below), the savings will be directed
    toward deficit reduction. However, the rule (H.Res. 886)
    self-executes a change with regard to highway spending. If a highway
    earmark is rescinded by Congress, the money would flow back into the
    Highway Trust Fund to be spent through the normal formula-driven
    process. The change was made due to concerns that otherwise the
    Highway Trust Fund would be subsidizing deficit reduction even
    though it is largely funded by gas taxes for highway construction.

-   Allows the Chairmen of the Budget Committees to adjust the budget
    resolution to reflect any rescissions that Congress approves. In
    addition, the Office of Management and Budget is directed to adjust
    the statutory spending caps as well (although currently none are in
    effect, having expired in 2002).

-   Requires the majority leader of each chamber to introduce an
    approval bill, within five days of receiving a President's
    rescissions package, consisting of the rescissions proposed in the
    President's "special message." The bill could only include those
    items that CBO scores as meeting the definition of discretionary
    budget authority, items of direct spending, or targeted tax
    benefits.

> For instance, the approval bill could not repeal a pro-life
> legislative rider that was contained in an appropriations bill because
> it is not discretionary budget authority that CBO could or would
> score. In fact, the bill also explicitly states that "any restriction,
> condition, or limitation in an appropriation law, or the accompanying
> statement of managers...on the expenditure of budget authority for an
> account, program, project, or activity, or on activities involving
> such expenditures" cannot be included in the President's rescissions
> package nor be given expedited consideration through Congress.

-   Provides (in the House) that the approval bill would be referred to
    the committees of jurisdiction who would be required to report the
    bill favorably or unfavorably within seven days. If a committee
    failed to report the bill, a motion to discharge the bill from
    committee would be in order. The approval bill would then receive up
    to five hours of consideration; no amendments would be in order.

-   Provides (in the Senate) that the approval bill *not* be referred to
    the committees of jurisdiction and ensures that the motion to
    proceed to the bill is not debatable (so that it cannot be
    filibustered). The approval bill itself would be debated for up to
    10 hours; no amendments would be in order to the bill.

-   Allows the President to defer from spending an amount of
    discretionary budget authority or implementing an item of direct
    spending or targeted tax benefit for 45 days from the date the
    special message was sent to Congress. The President could then
    extend the deferral period by an additional 45-day period---but not
    more than once---by sending a separate special message to Congress.
    In effect, this additional 45-day period ensures that the President
    can defer up to 90 calendar days to adequately navigate the
    legislative calendar and any long Congressional recesses.

-   Requires the Chairmen of the Ways and Means and Finance Committees
    to review any conference report to amend the Internal Revenue Code
    and identify any targeted tax benefits. A targeted tax benefit is
    defined as "any revenue-losing provision that provides a Federal tax
    deduction, credit, exclusion, or preference to only one
    beneficiary." This definition does not cover industry wide tax
    preferences.

-   Clarifies that all of the proposed rescissions will take effect only
    upon enactment of the approval bill. Congress must approve and the
    President must sign the rescissions packages.

-   Instructs GAO to report on whether any proposed rescissions are
    still not being spent or implemented after the expiration of any
    deferral period.

-   Requires that the new law sunset on October 1, 2012.

-   Includes a Sense of Congress that "no President or executive branch
    official should condition the inclusion or exclusion of any proposed
    cancellation in any special message under this section upon any vote
    cast or to be cast by any Member of either House of Congress."

**[Committee Action]{.underline}**: On March 7, 2006, H.R. 4890 was
referred to the House Budget and Rules Committees, which reported the
bill on June 14^th^ and June 15^th^ respectively for consideration by
the full House of Representatives.

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**[Cost to Taxpayers]{.underline}**: None.

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**[Does the Bill Expand the Size and Scope of the Federal
Government?]{.underline}**: No, the bill is designed as a tool for
Congress and the President to reduce the size and scope of the federal
government.

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**[Does the Bill Contain Any New State-Government, Local-Government, or
Private-]{.underline}**

**[Sector Mandates]{.underline}?**: No.

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**[Constitutional Authority]{.underline}**: The Budget Committee cites
constitutional authority in Article I, Section 8, Clause 18 (granting
Congress the power to make all laws which shall be necessary and proper
for carrying out the powers vested by Congress or in any department).
The Rules Committee cites Article I, Section 5, Clause 2 (relating to
each House of Congress determining the rules of its proceedings).

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**[RSC Staff Contact]{.underline}**: Russ Vought,
russell.vought@mail.house.gov, (202) 226-8581

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