U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office,

http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center,

U.S. Government Printing Office. Phone 202–512–1800, or 866–512–1800 (toll-free). E-mail, gpo@custhelp.com.

56–154 PDF 2010

S. Hrg. 111–683 

TOOLS TO COMBAT DEFICITS AND WASTE: 

EXPEDITED RESCISSION AUTHORITY 

HEARING 

BEFORE THE

FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT 

INFORMATION, FEDERAL SERVICES, AND 

INTERNATIONAL SECURITY SUBCOMMITTEE 

OF THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

OF THE

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

DECEMBER 16, 2009 

Available via http://www.gpoaccess.gov/congress/index.html 

Printed for the use of the 

Committee on Homeland Security and Governmental Affairs 

( 


ph44585 on D330-44585-7600 with DISTILLER
(II) 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

JOSEPH I. LIEBERMAN, Connecticut, Chairman 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK L. PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

CLAIRE MCCASKILL, Missouri 

JON TESTER, Montana 

ROLAND W. BURRIS, Illinois 

PAUL G. KIRK, JR., Massachusetts 

SUSAN M. COLLINS, Maine 

TOM COBURN, Oklahoma 

JOHN MCCAIN, Arizona 

GEORGE V. VOINOVICH, Ohio 

JOHN ENSIGN, Nevada 

LINDSEY GRAHAM, South Carolina 

ROBERT F. BENNETT, Utah 

MICHAEL L. ALEXANDER, Staff Director 

BRANDON L. MILHORN, Minority Staff Director and Chief Counsel 

TRINA DRIESSNACK TYRER, Chief Clerk 

SUBCOMMITTEE ON FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT 

INFORMATION, FEDERAL SERVICES, AND INTERNATIONAL SECURITY 

THOMAS R. CARPER, Delaware, Chairman 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

MARK L. PRYOR, Arkansas 

CLAIRE MCCASKILL, Missouri 

ROLAND W. BURRIS, Illinois 

JOHN MCCAIN, Arizona 

TOM COBURN, Oklahoma 

GEORGE V. VOINOVICH, Ohio 

JOHN ENSIGN, Nevada 

JOHN KILVINGTON, Staff Director 

HARLAN GEER, Professional Staff Member 

BRYAN PARKER, Staff Director and General Counsel to the Minority 

DEIRDRE G. ARMSTRONG, Chief Clerk 


ph44585 on D330-44585-7600 with DISTILLER
(III) 

C O N T E N T S 

Opening statements: Page 

Senator Carper ................................................................................................. 1 

Senator McCain ................................................................................................ 12 

Prepared statements: 

Senator Carper ................................................................................................. 37 

Senator McCain ................................................................................................ 40 

WITNESSES 

WEDNESDAY, DECEMBER 16, 2009 

Hon. Russell D. Feingold, a U.S. Senator from the State of Wisconsin .............. 2 

Todd B. Tatelman, Legislative Attorney, American Law Division, Congressional Research Service ....................................................................................... 7 

Susan A. Poling, Managing Associate General Counsel, U.S. Government 

Accountability Office ............................................................................................ 10 

Raymond C. Scheppach, Ph.D., Executive Director, National Governors Association .................................................................................................................... 20 

Robert L. Bixby, Executive Director, The Concord Coalition ............................... 22 

Thomas A. Schatz, President, Citizens Against Government Waste .................. 24 

ALPHABETICAL LIST OF WITNESSES

Bixby, Robert L.: 

Testimony .......................................................................................................... 22 

Prepared statement .......................................................................................... 76 

Feingold, Hon. Russell D.: 

Testimony .......................................................................................................... 2 

Poling, Susan A.: 

Testimony .......................................................................................................... 10 

Prepared statement .......................................................................................... 56 

Schatz, Thomas A.: 

Testimony .......................................................................................................... 24 

Prepared statement .......................................................................................... 87 

Scheppach, Raymond C., Ph.D.: 

Testimony .......................................................................................................... 20 

Prepared statement .......................................................................................... 71 

Tatelman, Todd B.: 

Testimony .......................................................................................................... 7 

Prepared statement .......................................................................................... 46 

APPENDIX 

Hon. Robert C. Byrd, a U.S. Senator from the State of West Virginia ............... 42 


ph44585 on D330-44585-7600 with DISTILLER

ph44585 on D330-44585-7600 with DISTILLER
(1) 

TOOLS TO COMBAT DEFICITS AND WASTE: 

EXPEDITED RESCISSION AUTHORITY 

WEDNESDAY, DECEMBER 16, 2009 

U.S. SENATE,

SUBCOMMITTEE ON FEDERAL FINANCIAL MANAGEMENT,

GOVERNMENT INFORMATION, FEDERAL SERVICES,

AND INTERNATIONAL SECURITY

OF THE COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS,

Washington, DC. 

The Subcommittee met, pursuant to notice, at 2:32 p.m., in room 

SD–342, Dirksen Senate Office Building, Hon. Thomas R. Carper, 

Chairman of the Subcommittee, presiding. 

Present: Senators Carper and McCain. 

OPENING STATEMENT OF CHAIRMAN CARPER 

Senator CARPER. Well, welcome, everyone. We are delighted to 

see our witnesses and an audience of thousands of people who have 

joined us here, and my colleague, Russ Feingold, from Wisconsin. 

I have an opening statement that I am going to get into, but I 

want to simply yield initially to Senator Feingold. 

As we know, we are spending way more money than we can afford to in the long term. There is a lot of ideas on how to slow the 

growth of spending and how to raise some revenues and close that 

gap between spending and revenues. One of the ideas that I have 

been interested in for some time is strengthening the President’s 

rescission powers, and, as it turns out, so is Senator Feingold and 

Senator McCain, who is a ranking Republican on this Subcommittee. 

Senator Feingold and I were talking about the hearing today. We 

were talking last evening in the cloak room, and I said, you may 

want to come to this hearing and open us this up and start off the 

hearing with some comments of your own. 

I am just going to yield to him to do that at this time, and then 

go back to my opening statement and allow others to do that, and 

we will go to our first panel of witnesses. 

But thank you for your leadership. If there is anybody here who 

is determined, committed to reining in budget deficits, I know no 

one who has a greater commitment to that, a highly principled 

commitment to that, than Russ Feingold. It is great to serve with 

you, and it is great for you to join us here today. Please proceed. 


ph44585 on D330-44585-7600 with DISTILLER
2 

TESTIMONY OF THE HON. RUSS FEINGOLD, A U.S. SENATOR 

FROM THE STATE OF WISCONSIN 

Senator FEINGOLD. Thank you, Mr. Chairman, for the very kind 

words and for your exceptional courtesy in letting me go before 

your opening statement. It is unnecessary but extremely courteous 

of you. 

I want to thank you and, of course, the Ranking Member who is 

my co-author of the proposal that I will discuss, for allowing me to 

make a brief statement today on my proposal, and I know you have 

one as well, to give the President effective line-item veto authority 

to go after unauthorized, wasteful earmark spending. 

As I said, it is a special pleasure to appear before you, Mr. Chairman. I have been proud to work with you on quite a number of critical budget issues, including the restoration of the pay-go budget 

rule which was so central to our ability to balance the government’s books during the 1990s. You have been a true champion of 

taxpayers, and today’s hearing is another example of your leadership on their behalf. 

And, as I said, I have been working with Senator McCain for the 

better part of two decades to go after wasteful spending. People 

think of us as the campaign finance duo. We were working on these 

issues before we even got into campaign finance in 1995. 

Senator McCain may be the foremost opponent of wasteful earmark spending, and he has been joined in that effort in recent 

years by other Members of this Subcommittee including Senator 

McCaskill and Senator Coburn. Those three Senators may have 

caused more heartburn among those who promote earmark spending than any other group in either house. 

And I also want to mention my colleague from Wisconsin, the 

Ranking Member of the House Budget Committee, Congressman 

Paul Ryan, whom I have been working with on this issue for the 

last several years. He and I belong to different political parties, 

and we differ on many issues, but Congressman Ryan and I do 

share at least two things in common: Our hometown of Janesville, 

Wisconsin, and, an abiding respect for Wisconsin’s tradition of fiscal responsibility. 

The bill I will highlight today is one Congressman Ryan and I 

have authored. It would grant the President specific authority to 

rescind or cancel congressional earmarks including earmark spending, tax breaks and tariff benefits. It builds on the landmark earmark disclosure legislation we passed in the last Congress, the 

Honest Leadership and Open Government Act, and in fact uses the 

definition of earmark that is laid out in that measure. 

Under our bill, when Congress passes a bill, the President has 

30 days to propose that some or all of the earmarks in the bill be 

rescinded or canceled. The President sends that proposal to Congress which then considers the proposed rescissions within a limited time. 

Both houses must vote up or down on the measure. If either 

house defeats the proposal, then the earmarks would take effect. 

But, if both houses pass the rescissions, the spending is canceled, 

and the resulting savings is applied to the deficit. 

I will be brief because you have a number of distinguished witnesses today, but let me just note that this could not be timelier, 


ph44585 on D330-44585-7600 with DISTILLER
3 

as you were indicating. Congress has just passed another mustpass year-end omnibus appropriations bill. That bill reportedly included nearly 5,000 separate earmark provisions costing billions of 

dollars. 

The President is now faced with a choice, having to sign or veto 

the entire measure into law. The only way he can get at those 

thousands of earmarks is to veto the whole bill, and, of course, that 

is exactly what the authors of the thousands of earmarks want. 

They have slipped their unreviewed, unauthorized special interest 

spending provisions in a bill that will be hard for the President to 

veto. 

So, given those two choices, I certainly hope the President does 

not veto the bill, but we should give the President more options 

than just these two. The measure that Senator McCain, McCaskill, 

Coburn, and I proposed would let the President get at those earmarks without having to veto the entire bill. 

I know the Subcommittee will consider a variety of different approaches today, but let me just close with this. Whenever someone 

proposes giving the President this kind of line-item veto authority, 

the examples they give are like money for a mule museum in 

Bishop, California, or funds to refurbish the statue of Vulcan in 

Birmingham, Alabama. That is how the line-item veto is sold. 

And I am willing to consider giving the President broader authority, but, at a minimum, any expedited rescission authority we 

grant the President as a kind of line-item veto would include within its scope cancelling congressional earmarks. 

So much has happened this year that we should recall that we 

began it by enacting an omnibus appropriations bill for fiscal year 

2009, and it too was filled with thousands of earmarks. We have, 

therefore, Mr. Chairman, bookended the year with measures that 

serve as vehicles for exactly the kind of spending that taxpayers 

want the President to reject. 

This practice has to end, and, if Members of Congress will not 

restrain themselves, they should at least let the President act to 

end this abusive and fiscally irresponsible practice. 

So, again, thank you so much for your courtesy and for the way 

in which we share our interest in trying to get something done in 

this area. Thanks so much, Mr. Chairman. 

Senator CARPER. I thank you. We thank you, and I just look forward to working with you on this, you and Senator McCain, as we 

have on other issues in the past. 

And thank you for taking the time to share your thoughts with 

us, and we will work together. Thanks. 

Senator FEINGOLD. Thanks, Mr. Chairman. 

Senator CARPER. You bet. 

As Senator Feingold leaves the hearing, I want to start off by 

thanking our witnesses for joining us today and for the testimony 

that you have provided us and for your willingness to respond to 

our questions. 

We are holding this hearing because, as Senator Feingold has 

said, our Nation is on a fiscal path that is not sustainable. Our 

Country has accumulated as much new debt in the first 8 years of 

this decade as we did in the first 208 years of our Nation’s history. 


ph44585 on D330-44585-7600 with DISTILLER
4 

Our national debt is approaching $12 trillion, and this year we 

are likely to add another $1 trillion to it as we begin to come out 

of this great recession. 

As a percentage of GDP, our national debt stands today at almost 85 percent, a level I think exceeded only during World War 

II, during the past 70 years. 

As our Nation emerges next year from this recession, we need to 

begin easing off of the accelerator with one foot and start tapping 

the brakes with the other foot, as we begin to slow the growth in 

spending and again begin to grow revenues. 

In this Subcommittee, we have examined many things. This is a 

wonderful Subcommittee. Federal financial management is part of 

it, but it enables us to look into all kinds of nooks and crannies in 

the Federal Government to see where we are not spending money 

very wisely, and we are trying to do that. 

We look at things like closing the tax gap. We have about $300 

billion of revenue that should be paid, ought to be paid. We have 

some idea who owes it. We are not collecting it. It has been that 

way for a long time. 

Other things are recovering improper payments, something like 

almost $100 billion worth of improper payments last year to other 

issues such as reining in the growth of the Department of Defense 

cost overruns. Last year, major weapon systems cost overruns exceeded $295 billion, up from about $45 billion in 2001. Finally, 

we’ve also looked at issues like disposing of much of the Federal 

Government’s surplus property. 

Those are all ideas. They are just some of the ideas that we are 

working on. I hope when the President gives the State of the Union 

Address in a month, some of those issues, some of those concerns 

will appear and draw his interest and concern. 

But today’s hearing will look at the spending side of our goal of 

deficit reduction. Every year, as Senator Feingold has said, Congress passes a number of spending bills, and, not surprisingly, 

these bills sometimes include spending on items which many of us 

would consider of marginal value, some even wasteful, and which 

contribute unnecessarily to our rising deficit. 

While many in Congress and the President may want to remove 

this waste, their desire to do so is often pitted against an array of 

interests intent on protecting that spending or by a compelling 

need to pass those bills in order to direct funds to urgent priorities. 

So we accept a little waste at the cost of getting bills passed. My 

guess, it has been that way in the Federal Government, and probably in State and local governments, for a long time. 

Having said that, we need to find a better way to reduce wasteful 

spending without jeopardizing the funding for our top priorities. 

One of those ways relates, at least in my view, to the President’s 

ability to get Congress to consider, maybe reconsider, spending 

cuts. Currently, when Congress sends a spending bill to the President, he can sign it and then propose that Congress consider rescinding or reducing spending in certain categories of that bill. 

The problem is that Congress is under no obligation to consider 

these rescissions, and when Congress receives rescissions they 

often arrive dead on arrival. Congress has tried to fix this in 1996 

by passing the Line-Item Veto Act, but that ended quickly with the 


ph44585 on D330-44585-7600 with DISTILLER
5 

1The chart submitted by Senator Carper appears in the Appendix on page 00. 

Supreme Court affirming that the bill was unconstitutional after it 

had been struck down by a district court judge. 

I agreed with that decision in 1996. The legislation was deemed 

unconstitutional. It extended extraordinary power to Presidents to 

veto specific spending and revenue measures within legislation unless super majorities of both the House and Senate voted to override a President’s action. The unconstitutional legislation not only 

dramatically shifted power from the Legislative Branch to the Executive Branch of government, but it did so permanently. 

So what was given in 1996 was a right to the President essentially to almost line-item veto discretionary spending, entitlement 

spending and revenue provisions. That is a pretty broad extension 

of power, and the only way that the Congress could override it was 

with a super majority, two-thirds votes in the House and in the 

Senate. The Court said that seemed like a lot of power shifted to 

the Executive Branch, and they threw the measure out, and that 

was 13 years ago. 

Today, we have these huge deficits, and we think maybe it is 

time to improve on that earlier product and still get at part of the 

concern that earlier efforts attempted to address. 

Well, in this hearing, we will explore the President’s existing rescission authority, try to determine how successful it has been at 

reducing spending that most of us, again, would consider to be of 

marginal value or really wasteful. We will also consider several 

ways to change that authority or to try to make it more effective. 

Before we turn to our first panel of witnesses, I want to take a 

moment to describe one legislative change that 21 of my colleagues 

and I have proposed, to strengthen safeguards against wasteful 

spending that we can no longer afford in the era of trillion dollar 

deficits. 

Over here to my left, to our audience’s right, is a chart,1 and it 

talks a little bit about S. 907. We are calling it the Expedited Rescission Authority Act, and it guarantees that the President’s rescission package gets a vote within 10 days, provided that the 

President’s package does not cut tax benefits or entitlement spending. We do not want to include in our legislation what was included 

in 1996 and ultimately deemed unconstitutional. 

The President’s package cannot cut authorized items by more 

than 25 percent. Unauthorized items could be reduced entirely up 

to 100 percent. 

In order for the rescissions to become law, a majority in both 

chambers must vote in favor of the package, and the authority 

would sunset after 4 years. 

I describe it as a 4-year test drive with something akin to certainly enhanced rescission authorities for the President. Sometimes 

people say it is almost like statutory line-item veto. I do not know 

that I would go quite that far, but it is a 4-year test drive. 

If Presidents abuse it, as they could, in order to coerce legislators, Representatives or Senators to vote with the Administration 

on a particular issue in order to have the legislators’ favorite program, protected, then we want to make sure if that kind of behavior is adopted by Presidents, that they will lose this authority in 


ph44585 on D330-44585-7600 with DISTILLER
6 

the future because we are only providing it for 4 years. Then we 

will stop and see how it is working. Is it effective? Is it being 

abused or not? 

We want to protect authorized programs. We want to provide less 

protection, almost no protection, for unauthorized programs, and 

we do not want to allow the President, at least through the authority of this legislation, to go after revenues or to go after entitlement 

spending. 

One other thing I would mention, and it is mentioned on the 

chart, but I will mention it again. The legislation that was deemed 

unconstitutional in 1996, when the President submitted his rescission proposals to the legislature, to Congress, they became law unless two-thirds of the House, two-thirds of the Senate voted to override the President’s proposal. 

We are taking a different approach here, and we have consulted 

with some constitutional scholars who say, well, this was unconstitutional 13 years ago, but what we think that we are doing here 

is not. And the reason why is that the President would submit his 

proposal for rescinding spending in certain areas, in conjunction 

with a particular bill, and we would have to vote on it. 

We could vote with a simple majority in the House or the Senate, 

but we would have to essentially pass the President’s proposal. We 

could not walk away from the vote. We could not ignore the vote. 

They are not going to go away. The rescission will be there, and 

we have an expedited timeline during which to vote. 

If 51 Senators say, no, we are not interested in doing that, it is 

dead. If 218 House members say, no, that is not what we want to 

do, then it is a dead item there too. But if the majority of the 

House and the majority of the Senate vote for it, then the President’s rescissions would become effective. 

I only say as a recovering governor whose State constitution gave 

me line-item veto powers, I just want to be clear: Neither line-item 

veto powers nor enhanced rescission powers alone will restore fiscal 

sanity to this government, or really to any government. 

Sometimes I think the line-item veto powers are oversold, but I 

think we all realize in addition to the kind of spending restraint 

that this legislation could bring, entitlement spending must be 

reined in, revenues that are owed must be collected, and some new 

revenues may need to be collected. I think they will need to be collected. Programs must be run more cost-effectively. 

I wish I could say there are silver bullets in this business. I do 

not know that there are a whole lot of them. But there are a number of arrows in our quiver that can help, and we need to figure 

out which ones are most likely to help, and we need to put them 

to use. 

I think this could be one of those arrows in our quiver. As it 

turns out, so do a number of my colleagues including Senator Feingold and Senator McCain. 

If he were here, I would recognize Senator McCain now to make 

some comments of his. When he comes, I will yield to him to make 

whatever comments he wants to add. But, as you know, he is the 

lead sponsor of the bill, lead co-sponsor of the bill that he and Senator Feingold have introduced. 


ph44585 on D330-44585-7600 with DISTILLER
7 

1The prepared statement of Mr. Tatelman appears in the Appendix on page 46. 

I think that pretty much wraps up what I wanted to say. I think 

now I get to introduce some witnesses, and one or two of you look 

pretty familiar. 

For our second panel, we are going to start by receiving testimony from Todd Tatelman from the Congressional Research Service, or affectionately known as CRS. The Congressional Research 

Service is the nonpartisan research arm of our Legislative Branch 

here in Congress. CRS strives to provide comprehensive legislative 

research and analysis to Members of Congress and their staff. I 

have personally benefited, my staff have benefited greatly from the 

service that the Congressional Research Services provides, and we 

are grateful. 

Mr. Tatelman is a legislative attorney in the American Law Division at the Congressional Research Service. He specializes in the 

areas of congressional laws and procedures, constitutional law, administrative law, transportation law, and international law. 

We thank you for being here. 

He is going to be joined at the witness table on this panel by our 

next witness whose name is Susan Poling, who is Managing Associate General Counsel at the U.S. Government Accountability Office, affectionately known as GAO. Ms. Poling has spent more than 

19 years at GAO, starting right out of high school, where she has 

focused on providing support for GAO audit teams on budget and 

appropriation issues. Additionally, Ms. Poling, I am told, is responsible for GAO’s duties under the Empowerment Control Act, and 

we will be hearing more about that here in just a minute. 

Before joining GAO, Ms. Poling was in private practice and 

worked as an attorney in the Office for Civil Rights at the U.S. Department of Education. 

With that having been said, you all are welcome to come to the 

table, and we will sit back and listen to your testimony. 

Normally, we ask our witnesses to keep their comments to about 

5 minutes. If you go way beyond that, I will rein you in. If you do 

not, then we will just let you fill it up, but try to stay close 5 minutes, please. 

OK, Mr. Tatelman, do you want to go first? 

Mr. TATELMAN. Certainly, Senator. Thank you. 

Senator CARPER. No, we thank you, I think. I am sure we do. 

TESTIMONY OF TODD B. TATELMAN,1 LEGISLATIVE ATTORNEY, AMERICAN LAW DIVISION, CONGRESSIONAL RESEARCH SERVICE 

Mr. TATELMAN. Mr. Chairman, thank you very much, and thank 

you for the very kind words about the Congressional Research 

Service. We certainly appreciate them and do our best to abide by 

that nonpartisan objective mandate that you laid out. 

This afternoon, I have the distinct privilege of offering you testimony related to both the Line-Item Veto Act of 1996, the Supreme 

Court decisions that flowed from Congress’ passage and President 

Clinton’s eventual use of that authority, and then I will talk a little 

bit about both S. 907, the bill that you have spoken of, and S. 524 

which was Senator Feingold’s bill, and discuss what might be some 


ph44585 on D330-44585-7600 with DISTILLER
8 

of the issues that would arise and how it would differ from the 

Line-Item Veto Act. 

So, to start, I would also like to ask that the full prepared statement be submitted as part of the record. I think there is a lot more 

detail there than I will be able to cover here. 

Senator CARPER. Without objection, the entire testimony of each 

of our witnesses will be made a part of the record. Thank you. 

Mr. TATELMAN. Thank you, Mr. Chairman. 

To start, I suppose it is worth going back through in a little bit 

of detail what the Line-Item Veto Act of 1996 actually provided. 

Senator, you did that very nicely a minute ago, but I will stress a 

few points just to make it clear, so that when we discuss the Supreme Court opinions we know exactly what we are talking about. 

The Line-Item Veto Act called for the President to have the authority to cancel any dollar amount of discretionary budget authority, any item of new spending or any limited tax benefit. So it was 

quite a broad base of authority covering a number of different legislative proposals. 

In order to effectuate the cancellation or rescission of the bills 

under the Line-Item Veto Act, the President needed to send a special message up to Congress within 5 days of the enactment’s passage. The cancellation legally took effect upon receipt of that special message by either the House or the Senate, whoever got it 

first. 

And, as you mentioned before, in order for the Congress to overturn a presidential cancellation, it needed to pass a disapproval 

resolution which would render the cancellation legally null and 

void. That was the language of the statute. And it needed to be 

done, as you mentioned, by a two-thirds majority in both houses. 

Almost immediately after the Line-Item Veto Act passed the 

Congress, it was facially challenged by a number of Senators who 

had voted against the bill when it was on the Senate floor. That 

initial facial challenge resulted in a Supreme Court opinion known 

as Raines v. Byrd. That opinion was handed down in 1997. 

Interestingly, Raines does not deal with the constitutional question about whether the Line-Item Veto Act was constitutional or 

not. Rather, Raines turns on whether or not the Members of Congress had standing to bring the case before an Article III court. So 

Raines does not answer any of our constitutional questions. Nevertheless, it is a very important decision in its own right having to 

do with the separation of powers between Congress and the courts. 

So I will not spend a tremendous amount of time on Raines, but 

I do note that the impetus for the case was a facial challenge to 

the line-item veto. The plaintiffs in that case felt that it was 

facially unconstitutional. 

The Court, in Raines, indicated that it was not going to decide 

the constitutional question regarding the Act because, in part, not 

only did the plaintiffs not have standing, but the Act had not been 

used by a President yet. The Court indicated very clearly in one of 

its opinions that a more applied challenge needed to wait until the 

President actually enacted and used the authority provided to him. 

Well, President Clinton did exactly that at the end of 1997 by 

cancelling two provisions in the Taxpayer Relief Act of 1997 and 

one provision in the Balanced Budget Act of 1997. The affected 


ph44585 on D330-44585-7600 with DISTILLER
9 

plaintiffs in those instances, the entities that were to receive those 

benefits under the bills, brought suit pursuant to the statute in 

1997, and that statute called for a decision first by a district court 

here in the District of Columbia who almost immediately held the 

Act to be unconstitutional. 

The Supreme Court, under the same statute, expedited its appeal, and the case went directly from the district court to the U.S. 

Supreme Court and resulted in the 6 to 3 decision known as Clinton v. the City of New York. 

The Court was very clear and very narrow in its holding with respect to the line-item veto. They held that it was unconstitutional 

because it violated Article I, Section VII of the Constitution. According to the Court, the Constitution provides for only a ‘‘single 

finely wrought and exhaustively considered procedure for adopting 

laws in the United States, namely, passage by both houses of Congress, presentment to the President for his signature or veto.’’ 

Nothing in the Constitution, according to the Court, allowed for 

the President to amend, alter, cancel or rescind provisions of the 

bill. Because the President, according to the Court, acted unilaterally under the auspices of the Line-Item Veto Act, they felt that 

that was an unconstitutional use of the President’s veto power. 

The Court was very careful to distinguish constitutionally permissible vetoes from the vetoes that were provided statutorily by 

the Act. According to the Court, constitutional vetoes take place before a bill becomes law, whereas the line-item veto provisions or 

cancellations by the President did not take effect until after he had 

signed the underlying provision into law. That distinction was incredibly important to a majority of the members of the Court. 

Turning now briefly to the two bills and the expedited rescission 

possibilities, as you described earlier, Mr. Chairman, under S. 907, 

the bill you have introduced, the President needs to submit his special message to the Congress within only 3 days of passage of the 

underlying message. Your bill applies only to discretionary budgetary authority and does not appear, at least on its face, to apply 

to the other areas of law that the Line-Item Veto Act dealt with. 

Most importantly, it requires Congress to enact a bill or joint resolution approving of the rescission before the rescission or cancellation is legally permitted to take place, and as you mentioned, the 

authority would expire after 4 years, in 2012. 

Similarly, S. 524, sponsored by Senators Feingold and McCain, 

would also give the President the ability to suggest rescissions to 

the Congress. However, their bill provides for that suggestion to be 

made up to 30 days after the bill was permitted, and their bill specifically applies to congressional earmarks, limited tariff and tax 

benefits. It does not mention discretionary budget authority, but it 

rather uses the other language that I just mentioned. 

Similarly, it requires Congress to enact a bill or joint resolution 

prior to the rescission or cancellation becoming law. Similarly, it 

also uses expedited procedure provisions to move the suggestions 

through the process. 

One major difference between S. 524 and S. 907 is that S. 524 

also provides the President with temporary authority to withhold 

legally obligating the funds for up to 45 days from the date that 

the special message is received from Congress, and something that 


ph44585 on D330-44585-7600 with DISTILLER
10 

1The prepared statement of Ms. Poling appears in the Appendix on page 56. 

S. 907 does not appear to provide for. And, similarly, S. 524 would 

expire in 2014, as it contains provisions there. 

Very briefly, applying the constitutional analysis that the Court 

used in Clinton vs. City of New York to the expedited rescission 

proposals, both S. 907 and S. 524, would appear to be distinguishable from Clinton v. City of New York. Unlike the bill in Clinton, 

the Line-Item Veto Act of 1996, the expedited rescission authorities 

do not provide the President with unilateral cancellation authority. 

Rather, it provides him with the authority to suggest rescissions 

or cancellations to the Congress and then requires the Congress to 

take an affirmative action of passing a separate bill or joint resolution before those cancellations would become legally effective. That 

distinction would appear to abide by the provisions of Article I, Section VII as Congress would, in a sense, have to pass a second bill 

or joint resolution before the President’s suggestion cancellation 

were to become legally effective. 

Because there appears to be a second resolution or bill that 

would go through the Article I, Section VII procedures, it would 

seem that if the expedited rescission provisions were to be challenged in a court that the court would easily be able to distinguish 

the situation from that which appeared before it in Clinton v. City 

of New York and would likely hold it to be at least constitutional 

under the Article I, Section VII analysis. 

Of course, remember the Court does not address any additional 

constitutional reasons and did not address any additional constitutional holdings in Clinton v. City of New York. So, if there are additional arguments that plaintiffs would make against the expedited 

rescission bills, those have not yet been addressed by any court, including the Supreme Court. They focused very narrowly on that bicameralism and presentment language in Article I, Section VII. 

And, with that, I will end and turn it over to my colleague from 

GAO. 

Senator CARPER. Good. Nice job. Thanks very much. Ms. Poling, 

welcome. 

TESTIMONY OF SUSAN A. POLING,1 MANAGING ASSOCIATE 

GENERAL COUNSEL, U.S. GOVERNMENT ACCOUNTABILITY 

OFFICE 

Ms. POLING. Thank you, Mr. Chairman, and Senator McCain. 

I am pleased to be here today to discuss GAO’s role in the congressional rescission process and to provide some perspective on 

the use and impact of rescissions. My written statement also includes statistical data on rescissions from 1974 to 2008. 

The Impoundment Control Act of 1974 was enacted to tighten 

congressional control over presidential impoundments and establish a procedure under which Congress could consider the merits 

of rescissions proposed by the President. Under the Act, the President may propose a rescission when he wishes to withhold funds 

from obligation. These funds may be withheld for a limited time period, and, if Congress does not approve the rescission during this 

period, the President must release the funds. The Act also provides 

for a special discharge procedure permitting 20 percent of the 


ph44585 on D330-44585-7600 with DISTILLER
11 

1Figure 1 referenced by Ms. Poling appears in the Appendix on page 61. 

2Figure 2 referenced by Ms. Poling appears in the Appendix on page 63. 

members of either house to force a floor vote on any presidential 

rescission proposal. 

Since the enactment of the Impoundment Control Act, Presidents 

have proposed about $76 billion for rescission, of which Congress 

has accepted about $25 billion. Presidents of both major parties 

have submitted rescission proposals, but, as you can see in Figure 

1,1 which is also in the written testimony, the dollar values proposed vary widely with each administration. The Reagan Administration proposed the largest amount for rescission, a total of $43.4 

billion. In contrast, President George W. Bush did not transmit any 

proposals for rescission under the Impoundment Control Act; he 

did propose something called cancellations. 

For example, in October, 2005, President Bush sent a letter to 

Congress proposing the cancellation of $2.3 billion from 53 different 

programs. As this was not a rescission proposal under the Act, 

agencies were not authorized to withhold funds from obligation. 

However, our study showed that seven agencies withheld budget 

authority from 12 programs, in violation of the Act. After our inquiry, the agencies released the funds. 

Since 1974, the Congress has approved about 33 percent of the 

President’s rescission proposals as measured by dollar value. The 

approval rate varies by Administration. As you can see in Figure 

1, in the Clinton Administration, Congress approved about 54 percent of the rescission proposals as measured by dollar value, but 

the total amount rescinded under President Clinton, $3.6 billion, 

was small in comparison with the amount rescinded under President Reagan, $15.6 billion. 

On its own initiative, Congress has made increasing use of rescissions as a tool to revise enacted budget authority, from $1.4 billion in 1974 to a high of $18.9 billion in 1995. Overall, congressionally initiated rescissions are about 2.5 times the amounts proposed 

by all the Presidents since 1974. 

Figure 22 compares by year the amounts proposed by Presidents 

for rescission which is the short dashed line, presidentially proposed amounts enacted by Congress which is the solid line, and 

congressionally initiated rescissions which is the large dashed line. 

As you look at it, you can see that in the first 10 years of the 

Act, from 1974 through 1983, Congress accepted $18.6 billion of the 

$37.4 billion of presidential rescission proposals, just under 50 percent in the first 10 years. At the same time, Congress enacted 

about $9 billion in rescissions on its own initiative. 

Fast-forward to the last 10 years, 1999 through 2008, and you 

will see that Congress enacted approximately $17 million, not billion, of the $163 million proposed for rescission by the President, 

about 10 percent, while enacting about $92 billion in congressionally initiated rescissions. 

Over time, the share of the total rescissions enacted each year 

which were proposed by the President has fallen, and the share 

originating in Congress has increased. While these statistics highlight Congress’ increasing use of rescissions, the relatively small 


ph44585 on D330-44585-7600 with DISTILLER
12 

amounts rescinded make clear that rescissions have not been a 

major tool in reducing spending. 

This is in part because discretionary budget authority, which is 

the only spending for which rescissions can be proposed, constitutes 

approximately 40 percent of Federal spending. Spending growth is 

driven by the remaining part of the budget which is spent on such 

programs as Social Security and Medicare. These mandatory programs and interest on the Federal debt represent about 60 percent 

of the budget. 

This is not to say that rescissions are unimportant. The President’s proposals can foster debate between the President and Congress over funding priorities and cuts in specific programs. To enhance accountability and further public debate over spending priorities, there have been a number of proposals presented in Congress 

over the years for an expedited rescission process. 

Although the details of the proposals vary, expedited rescission 

proposals are designed to ensure rapid and formal congressional 

consideration of rescissions proposed by the President. An essential 

element of an expedited rescission procedure is a prompt up or 

down vote in the Congress on the President’s proposals to reduce 

enacted spending authority. Since budget authority is not cancelled 

unless a law rescinding existing budget authority is enacted, in accordance with Article I, Section VII of the Constitution, an expedited rescission process does not present the constitutional issues 

that led the Supreme Court to strike down the Line-Item Veto Act. 

Mr. Chairman, this concludes my prepared remarks, but I am 

happy to answer any questions that you or Senator McCain may 

have. 

Senator CARPER. Good. Ms. Poling, thank you very much for that 

testimony. We really are grateful to GAO for the good work that 

you do not just for us, but really for the citizens of this Country. 

We have been joined by Senator McCain, and I am going to yield 

to Senator McCain for any comments that he wants to give, or any 

questions that he would like to ask of these first two witnesses. 

OPENING STATEMENT OF SENATOR MCCAIN 

Senator MCCAIN. Well, let me ask Ms. Poling first, were the Congressional rescissions that you pointed to, were they used for deficit 

reduction or just reallocation to other programs or projects? 

Ms. POLING. We cannot actually answer either/or on that question, Senator. They are rescissions, and that is all they are. We do 

not know how the money was used, or whether it was used at all. 

So, actually, I cannot answer the question. 

Senator CARPER. If I can interrupt, when I heard how much the 

Congress had rescinded and how relatively little Presidents had rescinded, I thought maybe we are making better use of our rescission powers than the President. I do not know if that is true. I say 

it partly tongue in cheek. 

Senator MCCAIN. Ms. Poling, I think if you checked into it, most 

of it was not for purposes of reducing spending. It was for moving 

money around for different priorities and different projects that the 

Congress had. Members of Congress, particularly members of the 

Appropriations Committee, it has been my experience. But perhaps 

you could illuminate on that for us for the record. 


ph44585 on D330-44585-7600 with DISTILLER
13 

Ms. POLING. Just to make sure you understand my comment. If 

there is a rescission that comes in an appropriation bill, which 

would be one way of making room for other priorities, that is not 

counted as a rescission. It is when a rescission is of already enacted 

budget authority. 

Senator MCCAIN. Well, again, I guess my response is that they 

have a certain budget level, and they meet it, and they move 

money around. But the budget does not decrease overall, and the 

spending does not decrease overall. 

Ms. POLING. I think that the record is going to show that spending and the budget did not decrease overall for most of the years 

in question. [Laughter.] 

Senator MCCAIN. I guess that goes in the category of a dumb 

statement. 

Ms. POLING. No, I agree with you wholeheartedly, Senator. 

Senator MCCAIN. On my part, I mean, Ms. Poling. 

You stated that there have been a number of proposals. Senator 

Carper has a very strong proposal. You have heard them all. What 

would be the ideal proposal that you think would pass constitutional muster and, at the same time, be most effective? Mr. 

Tatelman. 

Mr. TATELMAN. Well, Senator, I can only speak to the constitutional question. 

Senator MCCAIN. Yes. 

Mr. TATELMAN. Its effectiveness is something far beyond my own 

expertise. 

In an ideal setting, I am not sure that there is an ideal way to 

do it. There are a number of possibilities and proposals that would 

pass constitutional muster in the sense that as of now we only 

have a court decision that seems to require that whatever happen, 

it has to happen in accordance with Article I, Section VII, which 

requires Congress to affirmatively pass either a bill or a joint resolution, and the President must sign that into law before a rescission or cancellation of any budget authority can take place. As long 

as that centerpiece part of any expedited rescission bill or other rescission proposal is there, I think you are on solid constitutional 

ground, at least as far as we know from this point. 

My written statement indicates there may be some separation of 

powers questions that would get raised, depending on how the temporary impoundment authority is structured. So providing the 

President with the ability to temporarily withhold obligation of 

funds while that second bill or joint resolution is being considered 

by Congress might, in some people’s view, raise constitutional concerns. Then again, it may not as we do not have a direct Supreme 

Court or even court of appeals opinion on any proposal that includes that temporary withholding obligation. 

So there are some potential questions that exist out there, but 

for now I think we can confidently say that anything that meets 

that Article I, Section VII requirement would at least pass constitutional muster. 

Senator MCCAIN. And the last effort did not meet that constitutional requirement because? 

Mr. TATELMAN. Because the President’s action, according to the 

Court, was unilateral in the sense that his line-item veto, according 


ph44585 on D330-44585-7600 with DISTILLER
14 

to the majority of the members of the Court, took place after he 

signed the bill into law. 

So the process was different from Article I, Section VII in the 

sense that Congress presents the appropriations bill to the President. The President would sign it, therefore creating a law that he 

arguably has a duty to take care, as faithfully executed under Article II, Section II. Then he would enact the authority, or execute the 

authority given to him by the line-item veto power, which was an 

automatic cancellation with no consideration by Congress at the 

time that the cancellation became legally effective. 

So the line-item veto occurred after the bill had become law, 

which the Court zeroed in on and focused on and pointed out was 

the constitutional infirmity of that particular act. 

Senator MCCAIN. Ms. Poling. 

Ms. POLING. With regard to the expedited rescission proposals 

that I particularly looked at for this hearing, which are S. 524, 

Senator Feingold’s bill, and Senator Carper’s bill, S. 907, both of 

these are generally consistent with the very constitutional issues 

that Mr. Tatelman brought up. They are consistent with Article I, 

Section VII, with regard to presentment. Both of them are passed 

by both houses of Congress and then presented to the President. 

They are bills. They take the normal way a bill would go 

through, with the exception of the rules that get at this expedited 

consideration on the part of the Congress. 

And with regard to the usefulness of this, we leave it in fact to 

the Congress as a matter of policy about whether it would indeed 

like to pass this type of legislation. 

We do note that it cedes some control over the congressional calendar to have this expedited process. The provisions that limit the 

number of messages or the time period in which the President can 

send it, to make it eligible for this fast-track legislation, may help 

maintain control of the congressional calendar. 

But the short timeframes also could present other challenges for 

the Congress. In the past, under the Impoundment Control Act, the 

Congress has looked to GAO to provide it with information about 

the various rescissions. We would go and we would get a copy of 

the special message at the same time as it is sent to the President, 

and this is still true under Senator Carper’s bill. 

But we would get a copy of the bill, and then we would contact 

the Office of Management and Budget officials to find out the reasons why it is being requested and to double-check their figures. 

We would talk with program officials to find out how this bill 

would affect the program, the overall program, this particular type 

of rescission. Then we would report back to the Congress within 25 

working days. 

We can still do that under Senator Carper’s bill. But obviously, 

when the time is compressed, there is a limit to how much we can 

do for the Congress, and there is a limit on how much information 

the Congress itself can get. 

Certainly, Senator Carper’s bill also includes the same types that 

are in the Impoundment Control Act, and there is a list of five 

things that the President must provide when he sends forward this 

rescission proposal under the bill. Those will certainly help the 


ph44585 on D330-44585-7600 with DISTILLER
15 

Congress decide whether in fact these are, as a package, what the 

Congress wants to pass. 

So, from our point of view, we do think that it is perhaps important to permit the President to also bring forward to the Congress 

a rescission proposal outside the expedited process. Senator Carper’s bill, by amending the Impoundment Control Act, still permits 

that process. 

So, if in fact after the 3 days have passed, 6 months have passed, 

and the President looks at the program, and some things have 

changed, and he wants to bring forward to the Congress the idea 

that this is something that we can rescind—we either no longer 

need this program, or we do not need this much money for the program, and we would like to withhold that from budget authority— 

under the Impoundment Control Act, the President you can still do 

that. 

So you have a dual procedure for bringing things to the Congress’ 

attention—both the expedited procedure and the regular procedure 

under the Impoundment Control Act. 

Senator MCCAIN. Thank you. Thank you, Mr. Chairman. It has 

been very helpful. 

Senator CARPER. You bet. Thank you. 

I am going to ask you to answer the next question just for the 

record, and it is a little bit along the lines of Senator McCain’s 

question, one of his earlier questions. We are just soliciting input 

for how to improve on what we have drafted and introduced, and 

I would just ask you to answer for the record, any further thoughts 

that you have on how we might improve the legislation, whether 

it is respect to its constitutionality or its potential effectiveness. If 

you could do that for us, I would be most grateful. 

Mr. Tatelman, quite often we have heard that expedited rescission proposals like our bills are proposals, a type of line-item veto 

that puts too much power in the hands of the Executive Branch. 

When I looked at the 1996 legislation, as I said earlier, that was 

a concern to me to give the President these extraordinary powers 

over discretionary spending, over entitlement spending, over revenue provisions and require a super majority to undo all that. That 

just seemed like a bridge too far to me. 

Knowing what you do know about these proposals, do you think 

it is fair to characterize expedited rescissions as a type of line-item 

veto, and do they change the power dynamic between the Legislative and Executive Branches in what you might deem an unfair 

manner? This would be for you, Mr. Tatelman. 

Mr. TATELMAN. I think it is a very good question, and there is 

certainly a lot of divided opinion on the answer. I am not sure that 

I can, CRS does not generally tend to, speak in terms of a fair and 

unfair manner. 

I would say that I think there definitely would be a shift in the 

power dynamic, even under an expedited rescission authority. I 

would agree, as a matter of constitutionality, it does not go as far 

as the Line-Item Veto Act of 1996, and it is a very different animal. 

I would only add as a matter of sort of process here that I think 

Ms. Poling’s point is one that is incredibly important, which is that 

the expedited procedure process in and of itself may pose some difficulties in the future for future Congresses, and thus her point 


ph44585 on D330-44585-7600 with DISTILLER
16 

about preserving both the two-track process—both having an expedited manner by which the President can bring rescissions before 

the Congress and preserving the existing budget Impoundment 

Control Act process—I think becomes critically important, especially when you consider that in future Congresses those expedited 

procedure provisions would not be binding in any way, shape or 

form, not as a matter of law and not as a matter of congressional 

procedure and not as a matter of constitutionality. 

There is nothing unconstitutional at all about Congress limiting 

its own ability to consider and deliberate per processes, but the 

111th Congress cannot put that imposition on the 121st Congress 

or the 130th Congress, or even the 112th for that matter. So future 

Congresses are going to need to not only evaluate the rescissions 

on their merits, but they may also feel compelled to reevaluate the 

process by which they consider those rescission. 

Thus, again, I would stress that I think Ms. Poling’s point about 

a two-track process may in fact prove to be very prescient in the 

sense that Congress may decide that the expedited procedures do 

not work for it. Even though it is in the law and even though they 

have passed them before, they may decide that those are inadequate to deal with the rescissions that a particular President in 

the future may propose. Thus, preserving that longer-term, more 

deliberative process may be something worth considering. 

Senator CARPER. All right. Thank you. 

As has been noted earlier today, our bill, maybe our bills essentially superimpose fast-track authority on top of the President’s 

current rescission authority. I have two questions I just want to 

ask about this, Mr. Tatelman. 

First, has there ever been a constitutional challenge, to your 

knowledge, to fast-track authority as it is used in other laws? 

Second, has there been a constitutional challenge, that you are 

aware of, to the President’s rescission authority as it stands under 

current law? 

Mr. TATELMAN. I think the answer to both questions, to my 

knowledge, is no, there have not been. And I will be honest that 

I have not done the adequate research on that question, but to my 

recollection and knowledge, certainly not on the expedited procedures question. 

I am not entirely sure that anybody currently, under current 

jurisprudence, would have the ability to bring such a challenge. 

The Supreme Court has ruled in other instances not involving fasttrack procedures, that they will not look into and rule on the internal procedures and workings of the Congress in a constitutional 

manner. You can find cases going all the way back to United States 

v. Ballin in 1890 that will establish that precedent, and there are 

a host of others, none of which have been on fast-track specifically 

though. But I think the concept that the Supreme Court is not likely to consider, for political reasons and for jurisprudential reasons, 

a challenge to fast-track would probably hold. 

Again, I have not looked into seeing if there have been constitutional challenges to the rescission authorities that are currently in 

place. 

Senator CARPER. If you could just answer that for the record, I 

would appreciate that. 


ph44585 on D330-44585-7600 with DISTILLER
17 

I do not want to put words in your mouth with this next question, but let me ask it just the same. Do you think it is fair to say 

that if S. 907 was to pass, then for the bill to survive judicial review the courts would have to address the constitutionality of both 

fast-track authority and the President’s existing rescission authority? 

Mr. TATELMAN. No, I do not think they would have to address 

those questions in order to issue a ruling. It is impossible to predict 

what a court case would bring forward and what allegations an affected plaintiff, might raise in bringing such a case. But I do not 

think as a matter of constitutional law or as necessity they would 

have to answer either of those two questions, no. 

Senator CARPER. OK. Let me yield back to Senator McCain for 

any other questions that he might have. 

Ms. Poling, I do not want to let you escape without any questions. So let me ask one or two of you. 

I think a vote has begun. We will go about another 10 minutes 

and then break for the vote. 

Ms. Poling, after reading your testimony, we noticed a provision 

of the Impoundment Control Act that I believe to be very rarely 

used or maybe not well known in the Congress, and that provision 

states that 20 percent of either chamber of Congress can force a 

floor vote on one of the President’s proposed rescissions. Could you 

explain for us how this works a little bit more and any idea when 

this might have last been used, this authority? 

Ms. POLING. Well, we are unaware of any instance in which any 

member of any house has actually used this special discharge procedure of forcing the vote. We did a Congressional Record search 

under the Impoundment Control Act for votes under the Impoundment Control Act, and we found no instances of it. We polled some 

GAO employees who had been doing Impoundment Control Act 

work for the last 25 years, and none of them had ever heard of it 

being used either. 

That does not mean that no one has tried to use it. They may 

have. But if it did not come for a vote, then it is not going to come 

up in the Congressional Record. 

Senator CARPER. A follow-up question if I could, one frustration 

with the current rescission process is that Congress receives these 

rescissions from the President, but the cuts are never voted on, or 

rarely voted on in the Congress because of a few members’ desires 

to thwart the President. 

Your testimony says that since 1974 Presidents have requested 

over 1,000 rescissions. I think it is 1,178. Do you know how many 

times these rescission requests have resulted in a floor vote in the 

House or Senate, any idea? If you do not know, we will invite you 

to just respond on the record. 

Ms. POLING. In terms of a floor vote, all the ones that have been 

enacted rescissions have gotten a floor vote on the bill in which 

they appeared. But in terms of the President’s bill as of a piece, 

we never did track that in terms of whether one bill went forward. 

Certainly, our experience in the last 25 years is that is not the way 

the rescissions are enacted. 

The bill goes forward. It goes to the various committees. They get 

our reports. They decide whether they are going to put it in whatVerDate Nov 24 2008 11:36 Nov 02, 2010 Jkt 056154 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 P:\DOCS\56154.TXT SAFFAIRS PsN: PAT

ph44585 on D330-44585-7600 with DISTILLER
18 

ever bill is moving at the time. That is the way it generally has 

worked. 

Senator CARPER. All right. Thank you. 

Another question for you, Ms. Poling, I know that under the previous administration, President Bush threatened to veto several 

appropriations bills because they contained spending that he 

viewed as wasteful. At the same time, he also made a push for his 

very own type of expedited rescission authorities, as I think you 

mentioned, in 2006. What did he call it? Cancellations, I think they 

were called. 

Ms. POLING. Oh, cancellations, yes. 

Senator CARPER. From my perspective, he was clearly dissatisfied with his existing rescission authority. I believe you said that 

he never used it in 8 years. But, according to your efforts from fiscal year 2002 to 2008, the President, as I said earlier, did not make 

a single rescission request. 

In your testimony, you explained that he instead started to cancel certain funding. You have talked about this a little bit, but 

could you just go into a little bit more detail about what happened 

from 2002 to 2008 on this front? Why do you suppose it happened 

that way? 

Ms. POLING. Well, we do not really know why President Bush decided not to use the rescission authority under the Impoundment 

Control Act. 

Now a President can propose a rescission in a bill at any time. 

He does not need to use the Impoundment Control Act. By using 

the Impoundment Control Act, the President is permitted to withhold that budget authority, to actually impound those funds for the 

45 legislative days, to give Congress the time to act on it. 

When we talked to Office of Management and Budget officials 

with regard to the cancellations, they explained to us very clearly 

that the President was not proposing these under the Impoundment Control Act and that none of the agencies were being permitted to in fact withhold the funds from obligation. 

So I am not sure I can say what the reasons are behind President Bush’s decision, but we do know that he was not using the 

Impoundment Control Act method for asking for rescissions. 

Senator CARPER. OK. All right. 

Mr. Tatelman, one more question if I could, for you, and I do not 

think I asked this. In your testimony, you say that S. 907 would 

not be susceptible to the constitutional concerns that overturned 

the Line-Item Veto Act of 1996. Do you have any other additional 

concerns about S. 907 that were part of the 1996 line-item veto debate? 

Mr. TATELMAN. No, none that I can think of, Senator. I think 

they are sufficiently distinct, that many of the issues that came up 

in 1995 and 1996 when it was being debated and being heard by 

the courts would not be the same types of concerns that would be 

raised by S. 907. 

Senator CARPER. OK. Thanks. 

And last question before we break for a vote, and this is for Ms. 

Poling, you have been tracking for quite a while now these matters. 

Can you identify any use for presidential rescission authority if the 


ph44585 on D330-44585-7600 with DISTILLER
19 

President cannot get a vote in Congress on the rescissions that he 

or she proposes? 

Or, to put it another way, if Congress does not give the President 

a vote on his or her rescissions, is there any additional use for this 

authority? 

Ms. POLING. The Impoundment Control Act has two aspects to it. 

One is a proposal for rescissions, and the other is a proposal for 

deferring budget authority. Both of them permit the President to 

impound and not spend the funds until the statutory framework 

has taken its regular procedure, including the 45 legislative days, 

and this actually has come before the courts. The courts have said 

that the President may not impound the funds beyond the 45-day 

period. 

So, in terms of what the President can do if Congress is not giving him a vote on the particular programs, I think all the President 

can do is have someone introduce another bill that would specifically mention whichever programs he feels very strongly about. 

Senator CARPER. OK. Thanks. 

Again, we are very grateful for your testimony, for being here 

today, for your preparation and your willingness to respond to our 

questions and then some questions for the record. Some of our colleagues, I am sure, will want to submit other questions for the 

record, and I appreciate your responding to those. 

I will get in the business of gathering co-sponsors. I think we 

have maybe 21 on the bill that I have introduced, S. 907. If you 

all want to sign up as a co-sponsor later on, when you submit your 

responses, you can add that as a P.S. for us, OK. 

In the meantime, happy holidays and thank you again for the 

good work that you do for all of us. Thank you. 

Ms. POLING. Thank you very much. 

Senator CARPER. You bet. We are going to take a recess. Hopefully, I will be back in about 20 minutes. Thanks very much. 

For now, we stand in recess. 

[Recess.] 

Senator CARPER. I am going to call the Subcommittee back to 

order. 

As we start off our third panel, let me just first of all say thank 

you for your patience with us. We voted once. We will probably be 

voting again, but my goal is to conclude our hearing before we have 

to reconvene on the floor for votes. 

We are going to hear from some people whose names are well 

known around here and highly regarded. Let me start off our third 

panel by introducing Ray Scheppach, who I was privileged to serve 

with when I was governor for 8 years for the State of Delaware. 

His official title is Executive Director of the National Governors Association (NGA), a position he has held since 1983. That is an 

amazing feat, 26 years. I was really grateful to him for his continued service. 

As Executive Director, Dr. Scheppach oversees the day to day operations of the association and works closely with the NGA chair 

and vice chairs and heads of the NGA’s respective committees as 

they help develop priorities for our Nation’s governors and our 

States. 


ph44585 on D330-44585-7600 with DISTILLER
20 

1The prepared statement of Mr. Scheppach appears in the Appendix on page 71. 

Prior to his position at the NGA, Dr. Scheppach worked for 7 

years at the Congressional Budget Office—I had forgotten that— 

serving his last 2 years as Deputy Director. 

And Dr. Scheppach has testified before the Congress on many occasions, including to the full Senate Homeland Security and Governmental Affairs Committee earlier this year. 

So our thanks to you for joining us, and we look forward to hearing your testimony. 

Our next witness is Robert Bixby, Executive Director of the Concord Coalition. The Concord Coalition, for those who may not know, 

is a nonpartisan, nonprofit organization established by a couple of 

former Senators, Warren Rudman and Paul Tsongas, and by Commerce Secretary Peter Peterson, in order to educate our public 

about the causes and consequences of Federal budget deficits. 

For the past 17 years, Mr. Bixby has served in a variety of positions including field director, policy director and for the past decade 

as executive director. He frequently represents Concord’s views on 

budget reform policy at congressional hearings and in the national 

media, and I have been privileged to be on panels where he has 

appeared before, and I always enjoy that and appreciate it. 

We welcome you back today to testify and look forward to your 

input on today’s hearing topic. 

Our final witness will be Thomas Schatz. Mr. Schatz is the President of Citizens Against Government Waste, a nonpartisan organization dedicated to eliminating government waste. He has been at 

Citizens Against Government Waste for 22 years. 

He has testified before Congress on numerous occasions about 

government waste. I think once or twice before panels that I was 

privileged to serve on. 

Before joining Citizens Against Government Waste, Mr. Schatz 

spent 6 years as legislative director for one of my old colleagues, 

Ham Fish, in the House of Representatives. 

Thank you for your service to our Country, and we thank you for 

your testimony today. 

Normally, we do not swear in witnesses to try to verify veracity. 

I am tempted to swear in Ray Scheppach. But, no, I am kidding. 

I will not. We are not going to do that. 

We are delighted you are all here. 

In presenting your testimony, try to stick close to 5 minutes. 

Your full testimonies will be made part of the record. 

But again, welcome. We are happy to hear from you. Thank you. 

Please proceed, Dr. Scheppach. 

TESTIMONY OF RAYMOND C. SCHEPPACH, PH.D.,1 EXECUTIVE 

DIRECTOR, NATIONAL GOVERNORS ASSOCIATION 

Mr. SCHEPPACH. Senator Carper—I will not use the term governor—I am pleased to appear before you today on behalf of the 

Nation’s governors to talk about line-item veto. 

I would first say that the timing on this is unusual in that just 

last week I was a panelist at a major conference down at the Miller 

Center at the University of Virginia that focused essentially on this 

question of how do countries manage with increasing amounts of 


ph44585 on D330-44585-7600 with DISTILLER
21 

debt. They had budget experts from a number of countries, and 

international economists as well. 

I would say that one of the conclusions is that there is an increasing concern among everybody internationally about the potential unraveling of the international financial system because of 

these high levels of debt. It could start with the value of the dollar. 

It could start with such small things like Dubai or Greece—although they in themselves are fairly small, it could touch off a run 

where you found individual investors, dumping dollars on the market. 

So the first point I think is that the risk of this is growing every 

year now, not only because of the U.S. debt but because of the total 

amount of international debt. 

I would say the second reason why we need to get this debt down 

is that the interest now, as a percentage of total spending, is getting quite significant on the order of magnitude of $700 billion, 

which limits your ability to invest in other things. And also, I think 

it is an inter-generational problem of leaving a huge debt to our 

children. 

The final reason I think you need to be concerned is that the 

components that you are cutting are probably the investment components of budget. It is the R&D, it is the education, and so on. 

Let me move on to State budget procedures. Let me first make 

the point, following up what the Senator mentioned, that you do 

have to be careful in pulling out one particular component or one 

tool because State budgeting processes and the Federal processes 

differ quite dramatically. States have balanced budgets; the Federal Government does not. States have capital budgets; the Federal 

Government does not. One of the big differences is that most governors really have the ability to make cuts across the board on previous appropriations without essentially going to the legislature. 

In terms of the line-item veto, 41 States have line-item veto authority on appropriations. In addition, 15 States have veto authority over selected words. Even four have the ability to change words. 

About 15 governors actually have the ability to reduce their appropriations. So, if something came in at $100 million, you could 

essentially amend it down to $50 million, and these would have to 

be overridden by some super majority. So line-item veto authority 

is fairly strong. 

If you look at the evidence among States, in terms of what the 

academics have looked at, there has been some interviews of governors, very extensive interviewing of seven governors in Georgia. 

Most felt very strongly that the mere fact that you had veto authority was a discipline in of itself, but they also felt that it was 

used a lot, and there are indications where you have major savings. 

Concerning other statistical evaluations, many of them found 

that in the short run you had major reductions in spending, although more questions about the long-run impact. 

I thought I would just review a couple of States very quickly: 

Missouri and Wisconsin. Last year, Governor Nixon of Missouri 

used the veto 50 times and believes that they saved $105 million 

out of a total of about $8 billion. 

The feeling was that this line-item veto is used mostly in good 

times where there is disagreement over the underlying policy 


ph44585 on D330-44585-7600 with DISTILLER
22 

1The prepared statement of Mr. Bixby appears in the Appendix on page 76. 

issues, but also in bad times you find that governors use them 

quite extensively, mostly to get rid of low priority items. 

A similar experience in Wisconsin, as they went from 457 vetoes 

in 1991 down to 33 vetoes in 2007, but averaged a couple hundred 

per year over that period, used extensively to maintain discipline. 

So I would say the conclusion is that we are in times right now 

where the risk of debt is huge and increasing, and I think what 

that requires is a pretty fundamental change in budget processes, 

including giving the executive a lot more authority to help control 

deficits. 

I would argue that there is a lot of evidence at the State level 

that they are done for low priority items, actually, what the Federal Government might call earmarks, because they are essentially 

things that State legislative leaders put in appropriations bills for 

a highway in their district or some other type of thing, which is 

similar to what happens here. And I would argue that this is probably one of the most effective ways at getting at those particular 

issues. 

I guess in the recent omnibus there was close to $4 billion in setasides or earmarks. So it would be very valuable in doing that. 

So governors tend to support more power, veto authority for the 

executive, the President. 

Thank you, Mr. Chairman. 

Senator CARPER. Thank you very much. 

Who was the governor of Wisconsin in 1991? It was not a guy 

named Thompson, was it? 

Mr. SCHEPPACH. Thompson, I think. 

Senator CARPER. I thought it was. 

Mr. SCHEPPACH. Who did not very much like OMB as I remember. 

Senator CARPER. Maybe not, that is true. All right, thank you. 

Thank you, Dr. Scheppach. 

Mr. Bixby, please proceed. Thank you. Welcome. 

TESTIMONY OF ROBERT L. BIXBY,1 EXECUTIVE DIRECTOR, 

THE CONCORD COALITION 

Mr. BIXBY. Thank you, Senator Carper. Thanks for inviting me 

to discuss the role of enhanced rescission in combating Federal 

budget deficits and waste. Given our Nation’s unsustainable fiscal 

outlook and the rising public concern over mounting debt, this is 

a very timely and relevant discussion. 

I am here representing the Concord Coalition, as you mentioned, 

co-chaired by your former colleagues, Warren Rudman and Bob 

Kerrey. The Concord Coalition believes that the current budget 

process suffers from a lack of transparency and accountability, and 

this has contributed to the unsustainable fiscal path that we are 

engaged in, and it has engendered corrosive public cynicism about 

government finances. 

So the testimony that I will give today will emphasize four 

points: 

One is that the public is increasingly frustrated with how Federal tax dollars are spent. We find that on our Fiscal Wake-Up 


ph44585 on D330-44585-7600 with DISTILLER
23 

Tour and on other projects that we have done. Of course, you have 

been a guest speaker on the Fiscal Wake-Up Tour. 

The second point is that restoring public trust is essential to winning broad support for needed hard choices. 

Third is that enhanced rescission can help to restore public trust 

in the budget process. 

And, fourth, the enhanced rescission alone will not have a meaningful effect on the budget deficit. 

To reiterate what everybody else has said, we find ourselves at 

a time of uncontrollable, or uncontrolled, Federal budget deficits. 

The task right now is to try to find some way to bring them under 

control. 

I look at the numbers going forward, and I think the projected 

cost of interest and the cost of debt is just astronomical. Today’s 

20-year-olds are facing a situation, that by the time they are in 

their early 40s and in their prime working years, would just be economically ruinous. So it is really the challenge of our generation to 

do something about that, and in doing that you really have to use 

all of your policy tools. 

As you mentioned at the beginning, what is driving the long-term 

budget problem is not earmarks or out of control discretionary 

spending. It is really the underlying dynamic of entitlement programs and lagging revenues, and you put that together, and that 

is what is really driving us over a cliff. 

But that does not mean that we should not bring all of our weapons to bear on resetting priorities in the best possible way. Enhanced rescission is a pretty good tool for doing that. 

I think that the value of enhanced rescission should not be measured by the dollar figures alone. I would certainly agree that you 

are not going to save a huge amount of money with enhanced rescission. But the value I think is from showing the public that 

somebody cares and that somebody is taking a look at the priorities, and so it is not just anything goes. 

I think that is really important because I believe in entitlement 

reform. You believe in it. I believe that we are going to have to put 

revenues on the table as well. But I do not believe the public is 

going to go for it if they think that the money is just going to be 

wasted. 

So here is where something like enhanced rescission comes in. 

The President can send some bills back to Congress and say, ‘‘take 

another look at these. Are these really high priority in a time of 

budget deficits and rising debt?’’ 

That allows Congress to say, well, OK, maybe this was not high 

priority. 

I think that would help restore public trust that something good 

was happening with the budget process. 

Unfortunately, there is no line-item in the budget that is labeled 

waste, fraud and abuse. So there are always going to be differences. That is a matter of interpretation. 

Now there are a couple of issues with enhanced rescission that 

have come up earlier in the discussion. I certainly agree with you 

that it is not a massive transfer of authority to the Executive 

Branch. That was true with the line-item veto. I think what we are 


ph44585 on D330-44585-7600 with DISTILLER
24 

1The prepared statement of Mr. Schatz appears in the Appendix on page 87. 

doing here is just giving the executive a chance to ask Congress to 

take a second look. 

I would say with S. 907, your bill, there are a couple of suggestions I would have. One is I think there should be some sort of 

mechanism that would help ensure that the savings that you got 

did go to deficit reduction, whether it would be adjusting the budget caps and the budget resolution or having it go towards pay-go, 

I think would be important. 

I would test the waters a little bit and apply it to targeted tax 

provisions and mandatory spending as well. There is probably more 

money there, certainly on the targeted tax cuts. 

Tax entitlements are really a sleeping giant in the budget, and 

I think that we should put some attention on that side and not just 

think that if it is not a discretionary program, it is not waste. It 

can be waste if it is mandatory spending or taxes as well. 

So I would put everything on the table, and I would just summarize by saying that nobody should expect that the enhanced rescission authority would be a panacea. But you do not need a panacea. 

You need to bring all your tools to bear. I think that this is a very 

common-sense one, and I think it would have great public support. 

Senator CARPER. Thanks for your testimony. Thanks also for 

your constructive ideas, and we will take those under advisement. 

If you have some more, we would welcome those as well. 

Mr. Schatz, again, thanks. Welcome. Please proceed. 

TESTIMONY OF THOMAS A. SCHATZ,1 PRESIDENT, CITIZENS 

AGAINST GOVERNMENT WASTE 

Mr. SCHATZ. Thank you, Mr. Chairman. 

Citizens Against Government Waste was created 25 years ago, 

following the report of the Grace Commission under President 

Reagan. The commission made 2,478 recommendations to save 

$424 billion over 3 years. At the time, the commission projected 

that if those recommendations were not adopted the Federal Government would have a $2 trillion deficit and a $13 trillion debt in 

the year 2000. 

We are not saying we would have saved the world, but it is inter- esting to note that we will soon have a $13 trillion debt and we 

have a $1.4 trillion deficit in the last year and possibly the same 

in the current fiscal year. 

One of the commission’s recommendations was the line-item veto, 

which would give the President the authority to eliminate wasteful 

programs and earmarks. 

Senate Majority Leader Harry Reid once said that earmarking 

has been going on since we were a Country. But nothing could be 

further from the truth. For much of the Nation’s history, constitutional objections from Members of Congress, the President and 

State legislatures were effective in limiting this kind of spending. 

Thomas Jefferson wrote to James Madison about Madison’s proposition for improvements to roads, using a system of national mail 

delivery. Jefferson wrote, ‘‘I view it as a source of boundless patronage to the Executive, jobbing to Members of Congress and their 

friends, and a bottomless abyss of public money. You will begin by 


ph44585 on D330-44585-7600 with DISTILLER
25 

only appropriating the surplus of post office revenues; but soon 

other revenues will be called into their aid, and it will be a scene 

of eternal scramble among the members, who can get the most 

money wasted in their State; and they will always get the most 

who are meanest.’’ 

In 1822, President James Monroe argued that Federal money 

should be limited to great national works only since, if it were unlimited, it would be liable to abuse and might be productive of evil. 

Now we have certainly heard Members of Congress, including 

Senator McCain, talk about the consequences of earmarking and 

pork barrel spending: Members of Congress going to jail, corruption 

of the appropriations process. 

And, of course, we all understand it is not the biggest part of the 

budget, but it seems to have the greatest value to Members of Congress because they will argue forever about this 0.5 of 1 percent of 

the $3.6 trillion budget because they think that it is their right to 

go spend that money. 

Now since 1991, CAGW’s annual Congressional Pig Book has 

identified 100,849 pork barrel projects which have cost taxpayers 

$290 billion. 

A constitutional line-item veto, which everyone seems to agree 

would occur under your bill and Senators McCain’s and Feingold’s 

bill, would have an impact on the number and cost of earmarks as 

well as duplicative and nonessential programs. It would not upset 

the balance of power. In fact, it would restore some of the imbalance that has occurred following the 1974 Budget and Impoundment Control Act. 

We support what you have proposed. We support what Senators 

Feingold and McCain have proposed, and whatever comes out 

would be better than what we have now. We would prefer not to 

have a 25 percent restriction on authorized earmarks or programs, 

but whatever ends up being agreed to and passed by the Congress 

would be more important than arguing over which is the better approach. 

One of the things that we even see within the current process is 

despite requirements for transparency even those rules are not 

being followed: 

57 percent of the cost of earmarks in the fiscal year 2009 Defense 

Appropriations Act were anonymous. That included $465 million 

for the alternate engine for the Joint Strike Fighter. 

In the fiscal year 2010 DOD Appropriations Act, the Senate 

version has $9.3 billion in earmarks; 71 percent of the cost is anonymous. That included $2.5 billion for 10 additional C–17 aircraft. 

There is a good example. In both cases, the alternate engine and 

the C–17s, with enhanced rescission they could come back on both 

of those items and force the House and the Senate to vote. The alternate engine was defeated in the Senate, in the authorization 

bill. Yet it was stuck back in, in the conference between the House 

and Senate, and now we do not know where it is because nobody 

has seen the DOD Appropriations Act. 

Mr. Chairman, successive Presidents have asked Congress to 

provide them with the line-item veto. It is the very least we can 

do with this record deficit and debt. Adopting many of the other 

larger items on budget reform, whether it is alone or part of a 


ph44585 on D330-44585-7600 with DISTILLER
26 

package, it is something that will really help and give the taxpayers a little bit of perhaps an improved view of Congress right 

now since they do not seem to be very happy with how much 

money is being spent. 

Thank you for allowing me to testify today. 

Senator CARPER. You bet. Thanks. Thanks very much and thank 

you especially for your mentioning of some of our weapon systems. 

I mentioned earlier in my opening comments that we have seen 

cost overruns for major weapons systems grow from $45 billion in 

2001 to I think about $295 billion last year. 

We finally got to the F–22 which has never flown in Iraq, never 

flown a mission in Afghanistan. I think the cost per flight hour is 

about $40,000. The cost per aircraft, I am not sure what it was, but 

it was in the tens of millions of dollars. 

I think the President finally saying, if you include funding again 

for the F–22, I am going to veto the bill, and that was very helpful. 

We still had a fight over it, but we got the job done. 

Dr. Scheppach, in your testimony you mentioned it was 41 States 

have some kind of line-item veto authority, and 38 States give their 

governor the ability to make budget cuts without legislative approval. 

We have heard criticisms of our rescission proposals, which is actually quite modest when compared to some of the powers that you 

just shared with us. But some have criticized our proposals as 

being the equivalent of an Executive Branch power grab that will 

only result in the President abusing his authority and maybe intimidating legislators to get them to go along with his or her priorities. 

In the time that you served at the NGA for all these years, do 

you recall any instance where a State legislature decried the governor’s line-item veto authority as being too powerful and shifting 

too much power to the State’s executive? 

I ask that question knowing there are a lot of people who serve 

in the State legislatures who want to be governor. So I think they 

might want to be careful how they would criticize a governor’s lineitem veto power. Do you recall ever hearing of that? 

Mr. SCHEPPACH. No, I do not. I mean basically what happens is 

particularly what we have seen over the last 2 years is that States 

have cut over $200 billion worth of previously appropriated funds. 

I mean that is just a huge amount. 

So what happens, though, is the legislature really does not want 

to do it. So their attitude is let the governor do it. Then the governor is willing to do it. So we have not seen any sort of public and/ 

or legislatures rebelling at that. It really works. 

Senator CARPER. Good point. 

One of the findings that you presented in your testimony is that 

line-item veto authority is used much more frequently during periods of economic stress and hardship. I think it was Governor Nixon 

of Missouri that you mentioned, pointing out that he used his 

power 50 times last year to eliminate lower priority items, cutting 

out some $105 million on a revenue base of about $8 billion. 

Those funding cuts were only about 1 percent of his State’s revenue base. So the vetoes did not have a huge impact on the State’s 

budget. However, is it possible that the frequent use of a line-item 


ph44585 on D330-44585-7600 with DISTILLER
27 

veto by Governor Nixon could serve as a warning to the State legislators that in a time of economic hardship, wasteful spending will 

not be tolerated? 

Mr. SCHEPPACH. I think so. I mean most governors you interview 

really believe that the mere fact that you have the line-item veto 

creates a certain amount of fiscal discipline, particularly when you 

realize that it is almost never overridden. If the governor does it, 

it pretty much stays. It does, over time, sort of erode the desire of 

legislatures from putting in all those special projects. So, yes. 

Senator CARPER. All right. Thanks. 

Why are line-item veto authorities so prevalent in States? You 

seem to indicate it is because 49 States have balanced budget requirements. Maybe that is part of it. 

I really cannot understand why line-item veto is good enough for 

41 States, but when it comes to the Federal level a much tamer expedited rescission authority is viewed by some as an unacceptable 

shift in power from one branch to another. Maybe if the Federal 

Government had a true balanced budget requirement and we were 

forced to live in our means as many States do, then the prospect 

of expedited rescission authority would be better. 

But would you just comment briefly on the applicability of some 

of these States’ rescission authorities to the Federal level? 

Mr. SCHEPPACH. I personally think a lot of it does come from the 

balanced budget requirement, and, as you say, the line-item veto 

authority is kind of the mild side of it. The much bigger power really is for the governor to have the right at any time to just go back 

and cut previous appropriations, and that is a pretty powerful type 

of tool. 

But again, I think most of it is dictated by the balanced budget 

requirement, and so when revenues go down in a decline, a sort of 

economic dip, there is no alternative. You have to get back to the 

balanced budget requirement. So I think legislatures are very willing to give the power to governors. 

Senator CARPER. Did you say there were four States where the 

governor can just go back and take money out of appropriated 

spending, on his own? Was that it? 

Mr. SCHEPPACH. Well, there are 39 States that can go back and 

can cut previous appropriations. Now some of those States, like 

Connecticut, will limit it to 1 percent. Some States, I think Iowa, 

says it has to be across the board. Some States say you can do it 

everywhere but the legislative appropriation bill. So there are some 

restrictions on some of the States, but about 38 States have some 

sort of ability to cut across the board. 

Senator CARPER. All right. Thank you. 

Mr. Bixby, you made a similar point to Dr. Scheppach in that I 

think you both mentioned that the use of rescission authority, 

budget rescission authority will not yield, is not likely at least to 

yield dramatic budget savings that will save a State’s budget problems or help close the Federal deficit, and I agree with you in that 

assessment. 

However, while this is true, would not expedited rescission authority at least have some sort of positive effect on the overall 

budget process you spoke, at least to some extent? 


ph44585 on D330-44585-7600 with DISTILLER
28 

In my mind, the threat of voting on a rescission would at least 

help to deter legislators from trying to advance wasteful spending 

in the first place. We saw this with the earmark reforms in Congress in the last year or so. While those reforms did not prohibit 

earmarks, the transparency requirements certainly have deterred 

members from introducing earmarks, and as a result our appropriations bills are containing fewer earmarks. 

Do you think that expedited rescission authority can have a positive effect here on the budget process? I think I heard that from 

you already, but I am going to ask that question anyway just for 

the record. 

Mr. BIXBY. Yes, the explicit answer is yes. In fact, that is why 

the Concord Coalition supports it. 

I think sometimes budget process things are sold for the wrong 

reasons or misunderstood or judged by the wrong standards. I look 

at enhanced rescission as a mechanism to accomplish just what you 

mentioned. It increases the accountability of the budget process, 

the transparency of the budget process, the priority-setting. 

It is sometimes sold as a deficit reduction tool, and, if that is how 

you sell it, it is easy to dismiss it. 

So I think speaking from the Concord Coalition’s point of view, 

the value in enhanced rescission is the deterrent effect it would 

have, the exposing. The ability to have a President that took earmark reform as seriously as Senator McCain, making it a crusade, 

would have a substantial deterrent effect. 

Senator CARPER. Thank you. 

Again, Mr. Bixby, we have often heard that expedited rescission 

proposals are just attempts to restore some sort of line-item veto 

power in the Executive Branch or to the Executive Branch. They 

argue that this authority will shift the balance of power, as I mentioned earlier, from a state of equilibrium between the President 

and the Congress to a situation that gives too much power to the 

President. 

You have seen several presidential administrations propose the 

Federal budgets, and you have seen even more Congresses pass 

spending bills accompanying these budgets. Do you think that a 

proposal that guarantees that Congress will vote, must vote on 

President’s rescissions would alter the power balance in the negative way that I have just described? 

Mr. BIXBY. No, I really do not. Maybe it gives the President another card to play, but I think that is actually a good thing. I do 

not think it would be a major shift. 

The fear would be of something that would give the President 

maybe the sort of line-item powers that some of the governors 

have. I can imagine Congress may not want to do that, and it 

would probably be deemed as unconstitutional. 

But here you are giving the President a role in looking at the priorities of Federal spending. All he is doing is saying, take another 

look at this. Here are some items I want you to look at again. 

And Congress retains the power. The President cannot. This is 

not a veto. It is not that the line-item veto was declared unconstitutional. This is not a major shift of power because Congress would 

still have to vote to approve the rescissions that the President recommends. 


ph44585 on D330-44585-7600 with DISTILLER
29 

So, if Congress retains the absolute power here, I do not think 

it is a major shift. 

Senator CARPER. Good. Thank you. 

Mr. Bixby, your testimony mentions that an expedited rescission 

authority could restore the public’s trust in the Federal Government. You just reiterated that. 

Can you explain how this public trust has eroded with regards 

to our budget and what this improvement could mean for future 

budgets and how the rescission bill could play into this? I do not 

know if you want to add anything to what you have already said. 

I think you already addressed this pretty well. 

Mr. BIXBY. I do, and I do not want to belabor the point, but I 

do think it is a hidden strength of the enhanced rescission process. 

What we find in our field events consistently is that we have our 

charts with unsustainable entitlement programs, and you lay them 

out. But inevitably we get questions about waste because it is on 

people’s minds and it bothers them. 

They like Medicare. They like Social Security. They may understand that they are unsustainable, and we have to make hard 

choices. They do not like waste. So, even if it is a small amount 

of money, they want something to be done about it. 

I look ahead to the sort of hard choices that we are going to have 

to make in the future, and the public is going to be very resistant 

to do that if they keep coming back to a reset point in their mind 

that says, but it is going to go to a bridge to nowhere. Why should 

I cut Medicare or Social Security or pay more taxes if it is going 

to be wasted? 

So I think the credibility of the Congress, and even entitlement 

scolds like myself, is at stake here. We have to do something to restore public trust, and this is a way to do it. It is one way to do 

it. 

Senator CARPER. In your next to last sentence, you mention the 

term entitlement scolds. It seems like every day I learn something 

new. That is the first time I have heard that. 

Mr. BIXBY. I have been called that, but it is not the worst thing. 

Senator CARPER. Well, I am sure. 

Mr. BIXBY. What do you mean, you are sure? 

Senator CARPER. I know it is not as bad as some of the things 

my colleagues and I have been called. 

OK, well, entitlement scold or not, we are delighted you took the 

time to be with us. Thanks for responding to those questions. 

Mr. Schatz, a couple comments if I could for you, and then I 

want to go back to ask one question. 

We are hearing what the States have done, what powers have 

been provided to the executives, chief executives of our States in 

these regards. Before we close, I will ask all of our panelists if they 

have heard anything, any steps, any powers provided in other 

countries along these lines, to help contribute to fiscal responsibility. So you all be thinking about that. 

But, in the meantime, Mr. Schatz, your organization has been 

tracking issues regarding wasteful Federal spending for 25 years. 

I remember well as a deficit hawk when I was in the House of Representatives, working with people like Tim Penny, Buddy MacKay, 

Charlie Stenholm, and others. 


ph44585 on D330-44585-7600 with DISTILLER
30 

Clearly, you are well acquainted with the relationship with the 

Executive Branch and the Legislative Branch when it comes to this 

kind of waste, and you have seen Presidents make rescission requests time and again only to have Congress, in many cases, ignore 

them. 

In your opinion, what purpose does this rescission authority 

serve if Congress never or rarely considers any of the proposed 

cuts? 

Mr. SCHATZ. In this case, the legislation requires Congress to 

vote. So there is a different process that did not exist previously. 

And I want to briefly address, if you are not asking me, the question you asked Mr. Bixby about how this affects overall spending. 

Senator CARPER. Sure. 

Mr. SCHATZ. There was an interesting report by Professor James 

Savage at the University of Virginia about the administrative cost 

of earmarks. He did a study on the Office of Naval Research and 

just the time that is spent answering to members on earmarks. 

They do not get extra money to administer the earmarks, and yet 

they become the high priority. 

In addition, the appropriations staff spends an inordinate 

amount of time because in many cases there is no set process for 

how to review these. There is no statutory authority. They do not 

fit into the legislature’s or I should say the agencies’ process. 

And there has been another report. Senator Coburn asked for a 

report in September 2007. The Inspector General of the Department of Transportation talked about the impact on higher priorities 

at many of the agencies and FAA. Yes, at Department of Transportation, including FAA replacement towers where they were 3 years 

behind the high priority replacement towers because of earmarks. 

So the impact is not just on the budget because it is not a large 

amount. It is on other priorities. It is also on how Members of Congress view legislation. If they were not necessarily voting for this 

tiny, little $500,000 teapot museum in Sparta, North Carolina, for 

example, they might not necessarily support the entire piece of legislation. So there is a larger amount that is addressed by this enhanced rescission authority. 

Senator CARPER. OK. Thank you. Those are some points that I 

had not thought of before, and I appreciate those. 

Of all our witnesses here today, I think your organization seems 

to be the most vocal about the Federal Government’s and especially 

Congress’ lack of good management practices with respect to our 

taxpayers’ dollars. I think you said in your written testimony, ‘‘The 

Constitution does not give Congress a blank check to spend tax dollars on anything that it wants.’’ 

Some have criticized expedited rescission authority, saying that 

if it passes, then it will give the President license to abuse his or 

her power. Are you concerned that Presidents, future Presidents 

will abuse this authority in the same way that Congress has 

abused, allegedly abused, our authority when it comes to spending? 

Mr. SCHATZ. Well, there is a check on this. You have a 4-year 

sunset. I think the taxpayers will certainly be watching this, concerned about whether the President will trade something of value 

in return for his own priorities or maybe higher spending, saying, 

I am going to reduce this earmark unless you vote for $25 billion 


ph44585 on D330-44585-7600 with DISTILLER
31 

more in spending. Those kind of things will hopefully be transparent and the opposite impact of what we would really want to 

see. 

Based on what Dr. Scheppach has said, it seems to work at the 

State level. You, of course, had that experience as governor, where 

the balance does work out pretty well. So I am not really concerned 

because there is currently an imbalance, and some of that would 

be restored under this enhanced rescission. 

Senator CARPER. I mentioned one of the questions I wanted to 

ask of all of you is if you are aware of any powers that are used 

or bestowed upon, if you will, chief executives in other countries 

along these lines. Do you all have any thoughts along those lines? 

Dr. Scheppach. 

Mr. SCHEPPACH. Yes, let me just make a couple comments. One 

is that there seems to be a growing consensus that any country 

that has an outstanding debt of 60 percent or more of GNP is definitely getting in the risk category. 

Senator CARPER. Say that number again. 

Mr. SCHEPPACH. Any country that has a debt-to–GDP ratio of 

more than 60 percent is getting into the risky area. The Pew Foundation with an advisory group, I think funded by Peterson, came 

out with that the other day. The European Market Community has 

that. The IMF has made that recommendation. 

So, first off, I think at some point Congress needs to think about 

once you hit certain points that are risky, maybe you ought to 

change the budget process and provide emergency authority, so 

that you can help correct that. In other words, one approach is to 

say, all right, maybe you go this direction now, but if in fact you 

get over 60 percent, maybe you go to a stronger line-item veto authority or other things. That is point one. 

Number two is Germany was at this conference, and they are an 

example of a country that has completely changed their budget 

process, and at least for the first year or two they have been making progress in bringing that debt down. Now it is a different form 

of government, so I am not sure whether it works here or not. 

Another point I would make is that there was a person—John 

Hilley, who used to work up here. I think he may have worked for 

Majority Leader Mitchell at one time—but that perhaps you ought 

to think about changing the baseline. Coming from CBO, the baseline is very clear. You build in inflation on discretionary items and 

defense, and your entitlements are best estimates. 

What Mr. Hilley said was freeze everything. No inflation adjustment for discretionary spending. Freeze the COLA, no COLA. No 

increase in reimbursement rates for any of the entitlements. Then 

you set a pile of money aside, a box, and you have to decide how 

much is in that box. But everything competes for that money, 

which is then forcing entitlements to compete against discretionary. 

But I think you are at the point, in all seriousness, that you have 

to think about much more draconian types of things. 

The only other thing I will add is that we are not starting that 

at the State level. This downturn now has sent repercussions 

through States that are going to last eventually 8 to 10 years. We 

are not going to be back to the previous revenue levels of 2008 


ph44585 on D330-44585-7600 with DISTILLER
32 

until 2014, and that is in nominal terms. Then the overhang of 

needs is phenomenal. 

So it is like essentially States have to understand that their revenue path in the last 2 decades has been 6 percent. It is now going 

to be 3.5 to 4 percent. So we are now, at NGA, going through the 

process of how you cut to core services on a sustainable way, and 

that is going to start. 

As you know, we are probably going to have 28 new governors 

next November, and we are going to start working with them on 

that because we are in what we call the new normal now. Everything we have had up to now gets thrown out. We are in a very 

different revenue path. We got to get looking at it as sustainable. 

Otherwise, at some point, this thing comes apart, and I do not 

think we have the fiscal policy or monetary policy tools to deal with 

it if and when it does. 

Senator CARPER. Thank you very much. 

Mr. Bixby, any idea, anything out there we can learn from other 

countries in this regard? 

Mr. BIXBY. Well, resuming my role as the entitlement nag, scold, 

I am actually more familiar with what they do on that front than 

on the discretionary front, and I do think that other countries are 

ahead of us on that. Countries with even older societies and more 

ambitious health care plans are realizing that they have to do some 

of the things that Mr. Scheppach was talking about. 

We do need to have more automatic controls, triggers, that sort 

of thing that are sprinkled throughout the budget process. I was 

part of a group that signed a document called ‘‘Taking Back Our 

Fiscal Future’’ last year, including several former CBO directors. 

What we were essentially saying is let’s take programs like Medicare and Social Security and Medicaid and put them on a budget, 

which we do not have now. 

Now other countries do that sort of thing, and that is where they 

are ahead of us. That is where the game is in controlling spending. 

I do like the idea that Mr. Scheppach mentioned of combining 

these things with the debt limit in the way that if you go over a 

certain point of debt as a percentage of your economy. Say it is 60 

percent, which we are getting very close to. I think we may be 

there by the end of next year. Then it might trigger enhanced rescission, where Presidents have an even greater authority to cut 

spending simply because that would be a deterrent effect on Congress. 

So I think we are going to have to look at things like that. 

I am not aware of what other individual countries are doing with 

respect to the line-item veto. I will inquire and get back to you for 

the record if I can. 

Senator CARPER. OK. Yes, thank you so much. Mr. Schatz, 

please. 

Mr. SCHATZ. Yes, Mr. Chairman. We have met in recent years 

with a lot of organizations from other countries. They are just trying to figure out how to address their excessive spending, the debt 

that has been discussed here. 

I do not recall anyone specifically mentioning line-item veto. It 

is a recommendation, among many others, that we suggest to these 

organizations, mostly nongovernmental organizations, and someVerDate Nov 24 2008 11:36 Nov 02, 2010 Jkt 056154 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 P:\DOCS\56154.TXT SAFFAIRS PsN: PAT

ph44585 on D330-44585-7600 with DISTILLER
33 

times individuals who just want to get something started in certain 

countries. We might be able to get you some more specifics based 

on the information, or at least some links to the groups that do 

exist. 

I do not want to spend a lot of time again on this issue that they 

have discussed, but we are talking about a massive amount of new 

spending—the bill that was just approved by the House and Senate, has a 12 percent increase. It is really difficult to sit here and 

say, and even to hear Members of Congress say, we have to get 

spending under control, when they are talking about a massive 

new entitlement in health care and they just passed a 12 percent 

increase in the appropriations bills. 

Yet, the President says, we are going to have fiscal discipline. 

Members of Congress say, we are going to have fiscal discipline. 

Our question is when? 

Senator CARPER. OK. Last question I would ask of each of you, 

take off your entitlement scold hat or any other hat you might be 

wearing and put on a critic or the hat of someone who is skeptical 

of what we are trying to do with the legislation that Senator Feingold, Senator McCain and the legislation that I have introduced 

with a number of my colleagues. Maybe just share with me what 

you think the most valid criticism of what we are trying to do 

might be, the most legitimate and valid criticism, and then rebut 

that for me. 

Try that, Dr. Scheppach. 

Mr. SCHEPPACH. It is a very targeted, very mild approach. I realize due to the previous court decisions and so on, and having 

worked at CBO and we were set up by the Impoundment Act, I am 

pretty sensitive to the balance of power issues that you are dealing 

with. But it is a very mild approach, and I think it would end up 

focusing largely on these earmarks. That is a good thing, though. 

I would rather, if this is as aggressive as you can get through 

the House and Senate, then I would support it because any small 

adjustment there that even on the margin helps control it I think 

is a good thing. 

So I would say it is very mild, particularly relative to what 

States do. But having some appreciation of how difficult it is and 

the balance of power and the sensitivity in the Congress, I would 

not be a critic. I would be supportive. Move it, if you can. 

Senator CARPER. Thank you. Mr. Bixby. 

Mr. BIXBY. I think that the most legitimate question raised 

would be sort of the bang for the buck issue. Presidents have not 

made aggressive use of the authority they now have, and so one 

could question whether as a matter of politics a President would 

make aggressive use of the enhanced rescission authority. So it 

may be you would go through all this, and still the President would 

say, I do not want to roil the waters here. 

I think a little of that happened actually in the early President 

Bush years. You remember when Mitch Daniels was the OMB Director, and he came up with the nickname ‘‘the Blade’’ and testified 

a few times about earmarks. There was a quite pushback from the 

Hill, quite a vocal pushback. As we saw in the earlier panel, President Bush actually never proposed any rescissions at all. 


ph44585 on D330-44585-7600 with DISTILLER
34 

So you do have to have the President actually use the authority 

that would be given, and so one could make the argument that you 

really would go through all this and frankly not accomplish much. 

My rebuttal to that would be you need to put the mechanisms 

in place before they can be used. You have to be standing in the 

end zone before you can catch a touchdown. Now it may be that 

somebody is standing in the end zone, and they are going to drop 

the ball. There is nothing you can do about that. But you have to 

put in place the mechanisms. 

So I think that if you put in enhanced rescission, given the fiscal 

pressures that we are going to have coming, I think it is inevitable 

that a future President would make greater use of this. So you 

want to have a good process in place. That would be how I would 

handle that criticism. 

Senator CARPER. Good. Thank you. 

Mr. Schatz, you get the last word on this question. 

Mr. SCHATZ. Thank you, Mr. Chairman, and I agree with what 

the other two witnesses have said. 

But recalling what you quoted from my remarks about the constitutional prerogative and Article I, Section VII and Members of 

Congress who view this as their absolute right, I recall one of our 

porkers of the month, in fact, Congressman John Mica of Florida 

said, this is the most important thing we do. 

How can somebody realistically say adding a teapot museum or 

a bridge to nowhere is the most important thing that we do? 

That is where I think the criticism comes from is your colleagues 

who believe that they just can do this and not worry about it because they view it as a way to get reelected. They view it as something that they have to do, although more and more Senators and 

Representatives are saying no to earmarks, period, because they 

understand it is just not worth the time and effort and a lot of the 

criticism that they get. 

So I think it is a matter of convincing them that this is one thing 

that should be done, and they do get a second bite at the apple. 

If their project is so worthy, then there should be a separate vote 

in the House and in the Senate, rather than sticking this in, in the 

middle of the night, air dropping it in conference, having bills that 

get approved when nobody knows exactly what is in them. 

There is so much talk about accountability and transparency. 

The Administration has new transparency rules for agencies. This 

would be a nice way to open up what is going on, on Capitol Hill, 

and allow members to defend these wonderful projects on the floor. 

Senator CARPER. Thank you. That reminds me of something I 

have said from time to time: I am not a prolific earmarker. I am 

actually a piker compared to most. To some, I should say. 

I have always said that if I cannot convince 50 of my colleagues 

to support a request that I have made, then I am in the wrong 

business, or at least I am picking the wrong projects. So I would 

welcome that challenge. 

That reminds me of the old saying, be careful what you ask for. 

[Laughter.] 

This has been terrific, and you all are great to come and share 

your thoughts, your expertise, your literally invaluable expertise 

and experience. To add up the years that you all have thought 


ph44585 on D330-44585-7600 with DISTILLER
35 

about these issues, worked on these issues, focused on these issues, 

it is just a real treasure trove here of experience and wisdom. So 

we thank each of you. 

As I said earlier to the first panel, some of my colleagues will 

probably want to submit some questions in writing, and, if you 

would take the time to respond to them in a forthright manner, we 

would be grateful. 

But again, thanks for your service. Thanks for your presence 

here today. And Merry Christmas, Happy New Year. Thanks. 

With that, this hearing is adjourned. 

[Whereupon, at 4:58 p.m., the Subcommittee was adjourned.] 


ph44585 on D330-44585-7600 with DISTILLER

ph44585 on D330-44585-7600 with DISTILLER
(37) 

A P P E N D I X 


ph44585 on D330-44585-7600 with DISTILLER56154.001
38 


ph44585 on D330-44585-7600 with DISTILLER56154.002
39 


ph44585 on D330-44585-7600 with DISTILLER56154.003
40 


ph44585 on D330-44585-7600 with DISTILLER56154.004
41 


ph44585 on D330-44585-7600 with DISTILLER56154.005
42 


ph44585 on D330-44585-7600 with DISTILLER56154.006
43 


ph44585 on D330-44585-7600 with DISTILLER56154.007
44 


ph44585 on D330-44585-7600 with DISTILLER56154.008
45 


ph44585 on D330-44585-7600 with DISTILLER56154.009
46 


ph44585 on D330-44585-7600 with DISTILLER56154.010
47 


ph44585 on D330-44585-7600 with DISTILLER56154.011
48 


ph44585 on D330-44585-7600 with DISTILLER56154.012
49 


ph44585 on D330-44585-7600 with DISTILLER56154.013
50 


ph44585 on D330-44585-7600 with DISTILLER56154.014
51 


ph44585 on D330-44585-7600 with DISTILLER56154.015
52 


ph44585 on D330-44585-7600 with DISTILLER56154.016
53 


ph44585 on D330-44585-7600 with DISTILLER56154.017
54 


ph44585 on D330-44585-7600 with DISTILLER56154.018
55 


ph44585 on D330-44585-7600 with DISTILLER56154.019
56 


ph44585 on D330-44585-7600 with DISTILLER56154.020
57 


ph44585 on D330-44585-7600 with DISTILLER56154.021
58 


ph44585 on D330-44585-7600 with DISTILLER56154.022
59 


ph44585 on D330-44585-7600 with DISTILLER56154.023
60 


ph44585 on D330-44585-7600 with DISTILLER56154.024
61 


ph44585 on D330-44585-7600 with DISTILLER56154.025
62 


ph44585 on D330-44585-7600 with DISTILLER56154.026
63 


ph44585 on D330-44585-7600 with DISTILLER56154.027
64 


ph44585 on D330-44585-7600 with DISTILLER56154.028
65 


ph44585 on D330-44585-7600 with DISTILLER56154.029
66 


ph44585 on D330-44585-7600 with DISTILLER56154.030
67 


ph44585 on D330-44585-7600 with DISTILLER56154.031
68 


ph44585 on D330-44585-7600 with DISTILLER56154.032
69 


ph44585 on D330-44585-7600 with DISTILLER56154.033
70 


ph44585 on D330-44585-7600 with DISTILLER56154.034
71 


ph44585 on D330-44585-7600 with DISTILLER56154.035
72 


ph44585 on D330-44585-7600 with DISTILLER56154.036
73 


ph44585 on D330-44585-7600 with DISTILLER56154.037
74 


ph44585 on D330-44585-7600 with DISTILLER56154.038
75 


ph44585 on D330-44585-7600 with DISTILLER56154.039
76 


ph44585 on D330-44585-7600 with DISTILLER56154.040
77 


ph44585 on D330-44585-7600 with DISTILLER56154.041
78 


ph44585 on D330-44585-7600 with DISTILLER56154.042
79 


ph44585 on D330-44585-7600 with DISTILLER56154.043
80 


ph44585 on D330-44585-7600 with DISTILLER56154.044
81 


ph44585 on D330-44585-7600 with DISTILLER56154.045
82 


ph44585 on D330-44585-7600 with DISTILLER56154.046
83 


ph44585 on D330-44585-7600 with DISTILLER56154.047
84 


ph44585 on D330-44585-7600 with DISTILLER56154.048
85 


ph44585 on D330-44585-7600 with DISTILLER56154.049
86 


ph44585 on D330-44585-7600 with DISTILLER56154.050
87 


ph44585 on D330-44585-7600 with DISTILLER56154.051
88 


ph44585 on D330-44585-7600 with DISTILLER56154.052
89 


ph44585 on D330-44585-7600 with DISTILLER56154.053
90 


ph44585 on D330-44585-7600 with DISTILLER56154.054
91 


ph44585 on D330-44585-7600 with DISTILLER56154.055
92 


ph44585 on D330-44585-7600 with DISTILLER56154.056
93 

Æ 


ph44585 on D330-44585-7600 with DISTILLER56154.057