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KEY BUDGET PROCESS REFORMS

HEARING

BEFORE THE

COMMITTEE ON THE BUDGET 

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

HEARING HELD IN WASHINGTON, DC, MARCH 16, 2006

Serial No. 109–17

Printed for the use of the Committee on the Budget

(

Available on the Internet: http://www.access.gpo.gov/congress/house/house04.html 

(II)

COMMITTEE ON THE BUDGET 

JIM NUSSLE, Iowa, Chairman 

JIM RYUN, Kansas 

ANDER CRENSHAW, Florida 

ADAM H. PUTNAM, Florida 

ROGER F. WICKER, Mississippi 

KENNY C. HULSHOF, Missouri 

JO BONNER, Alabama 

SCOTT GARRETT, New Jersey 

J. GRESHAM BARRETT, South Carolina 

THADDEUS G. MCCOTTER, Michigan 

MARIO DIAZ–BALART, Florida 

JEB HENSARLING, Texas 

DANIEL E. LUNGREN, California 

PETE SESSIONS, Texas 

PAUL RYAN, Wisconsin 

MICHAEL K. SIMPSON, Idaho 

JEB BRADLEY, New Hampshire 

PATRICK T. MCHENRY, North Carolina 

CONNIE MACK, Florida 

K. MICHAEL CONAWAY, Texas4

CHRIS CHOCOLA, Indiana 

JOHN CAMPBELL, California 

JOHN M. SPRATT, JR., South Carolina, 

Ranking Minority Member 

DENNIS MOORE, Kansas 

RICHARD E. NEAL, Massachusetts 

ROSA L. DELAURO, Connecticut 

CHET EDWARDS, Texas 

HAROLD E. FORD, JR., Tennessee 

LOIS CAPPS, California 

BRIAN BAIRD, Washington 

JIM COOPER, Tennessee 

ARTUR DAVIS, Alabama 

WILLIAM J. JEFFERSON, Louisiana 

THOMAS H. ALLEN, Maine 

ED CASE, Hawaii 

CYNTHIA MCKINNEY, Georgia 

HENRY CUELLAR, Texas 

ALLYSON Y. SCHWARTZ, Pennsylvania 

RON KIND, Wisconsin 

PROFESSIONAL STAFF

JAMES T. BATES, Chief of Staff 

THOMAS S. KAHN, Minority Staff Director and Chief Counsel 

(III)

C O N T E N T S

Page 

Hearing held in Washington, DC, March 16, 2006 ............................................... 1

Statement of: 

Hon. Don Nickles, former chairman, Committee on Budget, assistant 

Republican leader, U.S. Senate ................................................................... 4

Hon. Charles W. Stenholm, former ranking member, Committee on Budget, U.S. House of Representatives ............................................................... 10

Hon. William E. ‘‘Bill’’ Frenzel, guest scholar, Brookings Institution; 

former Member of Congress, and former ranking member of House 

Budget Committee ........................................................................................ 18

Prepared statement of: 

Mr. Nickles ........................................................................................................ 7

Mr. Stenholm .................................................................................................... 12

Mr. Frenzel ....................................................................................................... 19

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KEY BUDGET PROCESS REFORMS 

THURSDAY, MARCH 16, 2006

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON THE BUDGET, 

Washington, DC. 

The committee met, pursuant to call, at 10:00 a.m., in room 210, 

Cannon House Office Building, Hon. Jim Ryun presiding. 

Members present: Representatives Ryun, Wicker, Campbell, 

Ryan, Chocola, Simpson, Spratt, Edwards, Baird, Cuellar, and Cooper. 

Mr. RYUN. Good morning. And let me welcome everybody to the 

hearing this morning. 

It is my understanding that we are going to have a series of 

votes on the floor this morning. Once votes commence on the floor, 

the hearing will stand adjourned. 

I ask unanimous consent that members who are unable to question the witnesses prior to the hearing’s adjournment be allowed 7 

days to submit questions for witnesses. 

Without objection, so ordered. 

Welcome, everyone, to today’s hearing on budget process reform. 

I am pleased to have with us several experts to participate in our 

discussion today, including, first, former Senator and assistant Republican leader and former chairman of the Senate Budget Committee, Don Nickles, welcome this morning, one of the most knowledgeable people out there on this issue as well as a steadfast leader 

on spending control in Congress. 

Former Congressman and former Budget Committee ranking 

member back when Republicans were in the minority, Bill Frenzel, 

is joining us this morning as well, well known for his institutional 

knowledge of the budget process in terms of history and context as 

well as policy and politics. Bill, welcome back today. 

We also have with us former Congressman Charlie Stenholm, 

who in his time here was co-chair of the Blue Dogs, and actively 

pushed for bipartisan legislation on budget process reform. He is 

currently serving on the Board of Directors of both the Concord Coalition and the Committee for Responsible Federal Budget. Welcome all. 

Last June, this committee heard a hearing to examine congressional budget practices. That hearing served as a useful first step 

in reflecting on how budget process reform works. Today’s hearing 

will draw on what we have learned from the hearing as well as 

focus on several key areas for potential reform, emergencies, lineitem veto, sunset commission, and finally earmark reform. 

2

I will take a moment to provide a brief overview of the budget 

process. It may be redundant for those of you who have served for 

years in this Congress, but I believe it is useful to briefly reflect 

on the current process and why we have it and why it needs to be 

here in the first place. 

The Budget Act of 1974 for the first time gave Congress an actual process for budgeting rather than a series of piecemeal responses to the President’s spending requests. It empowered Congress to set its own priorities, whether or not they agreed with the 

President, and to set in motion the policy choices that need to follow. 

It gave Congress the means to determine spending by setting a 

limit on total spending, by directing spending to what they had to 

determine the Nation’s most important priorities, and by the power 

to enforce agreed-upon spending limits through points of order. 

In short, the Budget Act empowered Congress to control the 

purse by determining its own priorities and policies and establish 

a systematic means to organize its decisions, set policy goals, and 

combine all of this into one blueprint, the budget, to guide Congress through not only the coming fiscal year but into future. 

Take this year’s for example. We had an occasion to use the 

emergency designation for certain spending initiatives, specifically 

relief to victims in the 2005 Gulf Coast hurricanes and the War on 

Iraq. 

The Budget Act defines when it is appropriate to use such an 

emergency designation and gives the authority to do so. Clearly 

such natural disasters as last year’s devastating hurricanes meet 

the emergency’s definition as it was intended. 

I think most would agree, however, that not every item Congress 

has categorized as emergency necessarily meets a reasonable definition as such. And if this designation is to have the intended effect 

of serving as a budget control, we have got to work on doing it to 

determine how it can be better used. 

On the issue of earmarks, while it may be easy to support abolishing earmarks on a conceptual level, it has proven much harder 

to do so in practice. It is my hope that our witnesses can lend some 

insight on how to best address this particular issue. 

The other two areas of reform that will be addressed today are 

the line-item veto and sunset commissions. On both of these issues, 

there is ongoing discussion as to whether either would be a help 

or a hindrance to Congress’ efforts to conduct their business and 

control spending. 

I look forward to hearing the thoughts of our witness on both of 

these issues. 

Once again, the purpose of today’s hearing is to take a focused 

look on certain key areas of budget process reform, specifically 

emergencies, earmarks, line-item veto, and sunset commission. 

While I imagine the members may have other constructive ideas 

for budget process reform, I would ask that we do our best to stay 

focused on these particular issues today. 

With that in mind, I turn to Mr. Baird for opening comments he 

might have. Mr. Baird. 

Mr. BAIRD. I thank my good friend and I want to thank our witnesses, Senator Nickles, Representative Frenzel, and RepresentaVerDate 0ct 09 2002 16:53 May 11, 2006 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 F:\DOCS\HEARINGS\109TH\109-17\HBU075.000 HBUD1 PsN: DICK
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tive Stenholm. It is great to see you again. Thank you for your 

leadership on this issue for many, many years. I think if we had 

been listening to some of your ideas over the years, we might not 

be in the pickle we are in today. 

Today’s hearing comes in the midst of a congressional consideration of the President’s budget and the congressional budget resolution. Unfortunately, the budgets that we have seen thus far, the 

President’s budget and the resolution that the Senate is considering, make the deficit worse, not better. 

Given these budgets and the Republican budgets that we have 

seen over the last 5 years, which includes some of the largest deficits in the history of this Nation, it is disappointing but not surprising that yet another debt ceiling increase is on the Congressional agenda this week. 

Unfortunately, however, changes to the budget process, which 

are the topic of today’s hearing, are unlikely to provide a substitute 

for the willingness to make the hard choices necessary to craft a 

budget that returns to balance. 

In fact, most of the process changes advocated in recent years by 

the administration would have at best a minor impact on the deficit. 

There is, however, one budget process change that would likely 

have a substantially positive impact. Unfortunately, our friends on 

the other side of the aisle have consistently opposed renewing it. 

I am referring here to the effective two-sided PAYGO rule, the 

PAYGO budget rules in place during the 1990s. 

There is a widespread mainstream consensus including Alan 

Greenspan, the Committee for Responsible Federal Budget, and the 

Concord Coalition in favor of PAYGO which, along with discretionary spending caps, clearly contributed to the fiscal progress 

made during the 1990s. 

Unfortunately, the majority party allowed PAYGO to expire in 

2002 and the administration and congressional Republicans have 

since advocated applying PAYGO only to mandatory spending and 

not the tax cuts. That leaves a huge gap in the budget enforcement 

system, allowing administration proposals to drive the deficit much 

higher over the next 10 years. 

Democrats support the balance and effective PAYGO system 

used in the 1990s. Reestablishment of two-sided PAYGO rules 

would be a good step toward putting the budget back on the right 

track. At the same time, it is important to keep in mind that the 

most important step would be for the President to propose and 

Congress to adopt budgets that actually return to balance. 

House Democrats have done this in recent years. Unfortunately, 

the administration and congressional Republicans have not. Perhaps we need to return to the model of 1997 when we saw the benefits of having everyone at the table and putting everything on the 

table. 

Republicans and Democrats, the White House, and the Congress 

worked together, were able to produce a plan to bring the budget 

back to balance. Unfortunately, that kind of bipartisan approach is 

not one that the current administration has undertaken. 

We are left then with a series of budgets that persist in making 

the deficit worse and do nothing to bring the budget back to balVerDate 0ct 09 2002 16:53 May 11, 2006 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 F:\DOCS\HEARINGS\109TH\109-17\HBU075.000 HBUD1 PsN: DICK
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ance. It is always helpful to discuss how the budget process might 

be structured more beneficially, and I look forward to today’s testimony. 

I would like to conclude with a brief story. Last month, I was at 

a high school and one of the young people asked me a little bit 

about the deficit. And I explained how the deficit works and the 

debt works. And he asked me how much the debt was. And I said, 

well, the debt is about $8.2 trillion. And the young person’s jaw 

dropped and his eyes got wide and he said, well, who is going to 

pay for that. And I pointed to him and he did this. He just put his 

hands on his head and dropped his head to his desk. And the other 

kids sat that there shaking their heads. 

No responsible adult would pass on physical pain to their children rather than taking the physical pain themselves. But this 

Congress repeatedly passes fiscal pain on to our children rather 

than enduring it ourselves and it is time we stop. And I look forward to your suggestions for how we do that. Thank you. 

Mr. RYUN. We will begin with our first witness this morning, 

Former Senator Don Nickles. 

STATEMENT OF DON NICKLES, FORMER CHAIRMAN, COMMITTEE ON BUDGET, ASSISTANT REPUBLICAN LEADER, U.S. 

SENATE 

Mr. NICKLES. Thank you very much, Mr. Chairman. 

I have had the pleasure of knowing and working with Bill Frenzel and Charlie Stenholm for a long time and I respect them greatly. 

And let me just say, although Chairman Nussle is not here, I 

had the pleasure of working with him for years. He is an outstanding Chairman and outstanding Congressman and Representative of the House. He always represented the House very well, and 

it was my pleasure to work with him. I think we had some successes and maybe some failures too, and hopefully we can talk 

about some of those. 

I appreciate some of the comments that Representative Baird 

just mentioned. I happen to be one who thinks you should put everything on the table. 

Mr. Chairman, I have an extensive statement. We do not have 

time for that, so I will ask you to insert that in the record. 

Mr. RYUN. Without objection. 

Mr. NICKLES. And just make a few comments if I might. 

One, a lot of people like to say the budget process is broken. It 

is not broken. It works. The budget only does about three things 

and we make it a lot more complicated than we need to. 

The budget sets discretionary caps. And, Representative Baird, 

that is the most important thing it does on discretionary spending. 

It puts a cap. That is more important than PAYGO. It is more important than anything else you do. It is vastly more important than 

earmarking. If your goal or objective in earmarking reform is to cut 

spending, caps are a hundred times more important. So I just want 

to make that perfectly clear. 

Earmarks have gotten way out of hand. I am embarrassed. I 

used to be on the Appropriations Committee decades ago. And 

5

there were earmarks then, but the multitude of earmarks has exploded. It is way out of hand, and it needs discipline. 

But you are not talking about saving money with earmark reform. Saving money will be done by caps, enforceable caps, and the 

will to enforce the caps. And it is easy not to enforce them. It is 

easy to let things go by and maybe not raise a budget point of order 

or so on. But if you have enforceable caps on discretionary spending, you will save a whole lot more than you will in any type of 

earmark reform. 

And I do not mind you having earmark reform, the more power 

to you. I would think good earmark reform would just be telling 

Members of Congress ‘‘do not ask for so many.’’ Ask for a couple. 

Ask for a few. But do not get carried away. And it has certainly 

gotten carried away and it is embarrassing. 

But if you eliminate some earmarks and you still have the same 

cap, you are going to spend the same amount of money, so you really did not save any money. So you need the caps. The caps are the 

most important thing. 

Emergency spending has gotten out of hand. One of the things 

in the last budgets that I was responsible for in 2003 and 2004 as 

far as the Senate is concerned, was the War on Iraq and Afghanistan, which we always classified as an emergency. I can see maybe 

the first year or two being an emergency, but it really should be 

put in the budget in the future. And I did not do that in my budgets, my fault, I probably should have done it, but we did not. 

Emergency designations are also abused. I mean, this Congress 

this year already passed LIHEAP as an emergency. LIHEAP is not 

an emergency in my opinion. I did pass a rule that requires emergency spending to have 60 votes in the Senate. And most of my remarks frankly will relate to the Senate because our rules are a little bit different. 

That was a good thing to do, but you still have to enforce it. It 

was not enforced effectively this year, because somebody made the 

budget point of order and it was not sustained. I raised a lot of 

budget points of order in the Senate. 

Under the FY 2004 budget that Congressman Nussle and I were 

primarily responsible for, Senators raised 82 budget points of order 

and all but four were sustained. And we saved about $1.7 trillion 

in spending. 

I also want to address PAYGO because a lot of people make a 

big deal out of it, but they, in my opinion, do not totally understand 

it. At least in the Senate, there is a multitude of budget points of 

order. Of those 82 budget points of order, only three were PAYGO 

points of order. PAYGO has been misconstrued as a bigger issue 

than it really is. 

Some people say, well, from 1990 to 2002, PAYGO was really a 

godsend, but it was not. Not one sequester was ever enacted because of PAYGO, not one. We did wipe off the books $736 billion 

worth of PAYGO balances that increased deficits. That was just 

wiped off at the end of the year. A lot of people don’t know that. 

But each year one of the last Appropriation bills just wiped that 

out, cleaned the slate, more or less, to avoid the sequester. 

Now it may have had a positive impact by giving Members a reason not to offer an amendment that would violate PAYGO knowing 

6

it might trigger a sequester. But in reality, lots of amendments 

were offered and passed that became law that violated PAYGO 

that were just wiped off the slate at the end of the year. And as 

I said, not one enforcement action was ever done in that period of 

time. 

PAYGO in the present situation, in my opinion, is unbalanced to 

the disadvantage of those people who want to extend present law 

on taxes. Spending under the baseline rules is assumed to continue 

even if the program expires, however this is not so in taxes. Congressman Stenholm and I were talking about the Farm Bill. The 

Farm Bill expires the end of next year, but it is assumed to continue. So under PAYGO, you do not have to come up with new 

money to pay for a new Farm Bill. A little editorial comment, I 

think we spend too much money on the Farm Bill. 

But on taxes, we have a 15-percent tax on dividends and capital 

gains that we passed in 2003 that I was the principal sponsor of 

in the Senate. That tax cut happened because this body and the 

Senate passed a Budget Resolution that allowed it to happen. 

Those tax cuts expire at the end of 2008. 

Well, under the current baseline rules, to extend those tax cuts 

for 2009 and 2010, you would have to come up with new revenue 

to pay for them. 

Further, these tax cuts are considered under obscene scoring provisions that do not take into account the real economic impact of 

dynamic scoring, even though some people say we have it. The 

scorekeepers underestimated substantially what we did in 2003 

with cap gains because it raised about 50 percent more money than 

they estimated it would. 

And so my point is PAYGO really makes it difficult to extend cap 

gains and dividends, but it is not difficult to extend the Farm Bill 

or extend any other spending program. And I find that inequitable—that is not right. 

Now, you might be able to figure out a way to solve this problem, 

but it will have to be bipartisan. One of the important things and 

one of the things I love about Bill Frenzel and Charlie Stenholm 

is their bipartisanship, and you cannot make budget reform unless 

you do it bipartisan. 

Congress is considering several things in budget reform. Whether 

you are talking earmarks or line-item veto or changing other rules, 

I encourage you to do it and I encourage you to do it in a bipartisan 

way. I encourage you to do bipartisan budgets. 

I was unsuccessful in getting a bipartisan budget—well, I take 

it back because Zell Miller, who is a very courageous Democrat 

from Georgia, did support our budgets the last couple years. So we 

had bipartisan budgets, but we only had one Democrat. 

I wanted to have a bipartisan budget in the Budget Committee. 

But due to the makeup of the committee or whatever, I was not 

successful. Maybe again I failed in that effort, but I tried. And I 

would encourage you all to try. I know with the makeup of Congress and the climate and so on, it is difficult to do. But if you are 

going to have lasting, long-term, real budget reform, it needs to be 

bipartisan for it to really be successful. 

And then just a comment on a couple of these rules. You mentioned line-item veto. I supported it when it was previously enVerDate 0ct 09 2002 16:53 May 11, 2006 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 F:\DOCS\HEARINGS\109TH\109-17\HBU075.000 HBUD1 PsN: DICK
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acted. We gave it to the Clinton administration. The Supreme 

Court declared it unconstitutional. Now different people are coming 

back and saying let us do it a little differently with enhanced rescission where Congress has a second look at the vetoed items. 

Fine. You will not save a lot of money that way, but it is good policy. 

It is kind of like earmark reform in that respect. If you want to 

do earmark reform, great, but really just have discipline. I would 

hope the Appropriation Committee members would just limit the 

number of earmarks, people restrain themselves because it has 

been embarrassing. But, again, I do not think it will really save a 

whole lot of money. 

The most important thing is budget caps. Budget caps work. 

Even in 2004 when we did not pass a budget, a Congressional 

Budget Resolution, we passed a cap on discretionary spending. I 

put it in the FY05 DOD Appropriation Bill and we had enforceable 

caps. 

And guess what? That year we stayed on the budget number. We 

stayed on our discretionary number and we made budget points of 

order to save money. And we saved billions and billions of dollars 

because that was the most important. That was how we controlled 

discretionary spending. 

So I would just encourage you, when you are putting together a 

budget, you have discretionary caps, you have entitlement spending, and you have how much money you are going to tax. And all 

three of those are important. That is what this Committee is about. 

That is what governing is about. And that is what the Budget Committee does. 

So, Mr. Chairman, thank you very much for allowing me to join 

you today. 

Mr. RYUN. Thank you for your comments. 

[The prepared statement of Don Nickles follows:]

PREPARED STATEMENT OF HON. DON NICKLES, FORMER CHAIRMAN, COMMITTEE ON

BUDGET, ASSISTANT REPUBLICAN LEADER, U.S. SENATE

INTRODUCTION

Chairman Nussle, Ranking Member Spratt, and distinguished members of the 

House Budget Committee. Thank you for inviting me to join you today to discuss 

proposals to improve the Federal budget process. 

In 1980 I was elected to the seat held by Senator Henry Bellmon upon his retirement. Senator Bellmon was a leader in creating the modern Federal budget process 

and the budget committees, and I was proud to serve many years on the Senate 

Budget Committee. I am particularly proud of my final 2 years in the Senate when 

I had the privilege to chair the committee, where I enjoyed working with you, Chairman Nussle, and your staff on two budget resolutions. 

We dealt with some very difficult issues those 2 years; some successfully and some 

not. However our efforts in 2003 resulted in a budget and a tax bill which I believe 

contributed substantially to the growth and vitality our economy is enjoying today. 

That budget resolution, and the tax reconciliation bill which accelerated tax relief 

and reduced capital gains and dividend taxes, passed the Senate only by the affirmative vote of the Vice President breaking the tie. That was indeed a close one, but 

well worth the effort. 

Passing a budget is hard work, and it should be since it defines the priorities of 

the Congress. However it is also one of the most fundamental responsibilities of the 

Congress to pass a budget and to live by it. 

Tough budget enforcement is very important. When I chaired the Senate Budget 

Committee in the 108th Congress, there were 82 points of order raised to enforce 

the budget. I am pleased to say that only 4 of those points of order were waived, 

8

a 95 percent success rate. All together, those points of order saved $1.7 trillion in 

deficit spending. 

Even in 2004 when the House and Senate did not agree on a budget resolution, 

we did successfully impose a spending cap/allocation on the appropriations bills for 

that year in the defense bill passed just before the August recess. When the Senate 

considered the Homeland Security appropriations bill the week following the recess, 

10 different amendments which would have increased spending by billions of dollars 

were defeated thanks to that spending allocation. Budgets do make a difference. 

It is important to note that in the evolution of the budget process, almost every 

major rewrite has been bipartisan in nature. From Gramm-Rudman-Hollings which 

created the concepts of deficit targets and sequesters, to the Andrews Air Force 

budget agreement in 1990 which created discretionary spending caps and pay-asyou-go; these efforts were notable for their bipartisanship. Since 1990, Congress has 

extended some budget enforcement, allowed some to expire, and tinkered around the 

edges, but the main elements of the process have been essentially unchanged. Real, 

lasting reform of the budget process will require both parties to work together. 

I will comment briefly on some of the budget process proposals currently under 

consideration. However I want to begin by emphasizing that the budget process can 

never be a substitute for political will. This committee has been hearing testimony 

for years about the fiscal crisis presented by the retiring baby-boom generation. 

That crisis is no longer on the horizon * * * it is here now * * * and there is no 

budget process you can devise to replace the difficult political effort that will be required to address this problem. 

BUDGET RESOLUTION REFORMS

The annual budget resolution and the process to enact it could be improved in 

a number of both technical and significant ways. 

Many have suggested biennial budgeting, which my former colleague Senator Pete 

Domenici has long advocated. Members may not recognize it, but Congress has actually lived with biennial budgeting since 2001. Both the 107th and 108th Congresses 

enacted budget resolutions for the first year of the session (2001 and 2003), and 

then failed to agree on a budget resolution for the second year of the session (2002 

and 2004). I hope for the sake of Chairman Nussle and Chairman Gregg that the 

109th Congress will not suffer the same fate, but perhaps history is trying to tell 

us something. 

Others have suggested making the budget a joint resolution that would be signed 

by the President. While I have some concern that this would further slow the budget 

process, and increase the likelihood of stalemate, I do believe that having the legislative and executive branches on the same page earlier in the year could be valuable. 

Finally, I would recommend that members consider other more technical changes 

to make the budget resolution, and the budget committees, more effective and more 

relevant. 

• Involve Committees in the Budget Process: Currently, authorizing and appropriations committees are directed to submit their ‘‘views and estimates’’ to the budget committees prior to consideration of the budget resolution. Unfortunately, few 

committees take this process seriously. I believe putting the committees on record 

early in the process would improve budget enforcement, so I would recommend that 

committees be required to vote to report their ‘‘views and estimates’’, and those 

views should include specific recommendations for increases or decreases in their 

committee allocation. 

• Revise Contents of the Budget Resolution: Currently, committee allocations are 

the focus of budget enforcement, but almost no members (and few staff outside of 

the budget committees) ever see the committee allocations because they are only 

published in the conference report’s statement of managers. The budget resolution 

amendment process and debate would be much more relevant and serious if members had to take money away from one committee’s allocation to give it to another 

committee. The major functional budget categories currently detailed in the budget 

resolution text could be replaced with specific committee allocations for budget authority, outlays, contract authority, and revenues. 

LINE-ITEM VETO/EXPEDITED RESCISSION

I have long been a supporter of both the Constitutional line-item veto and the various iterations of enhanced or expedited rescission authority. I am pleased that 

President Bush has initiated a renewed push to enact expedited rescission authority, and I encourage this committee to give it favorable consideration. 

9

Although called the ‘‘Legislative Line-Item Veto Act’’, the President’s proposal is 

basically just an expedited variation of the current rescission process. Essentially, 

the President will be allowed to send certain items of discretionary spending, mandatory spending, or targeted tax benefits back to Congress for a second vote. These 

proposed rescissions will receive privileged consideration in both the House and the 

Senate, but ultimately Congress retains the final decision, which should allow this 

authority to pass Constitutional muster. 

I should note, however, that although these proposals hold some promise to reduce overall spending, members should not expect any President to balance the 

budget with this new authority. 

EARMARK REFORM

Earmark reform is an easy issue to advocate generally, but much more difficult 

to implement specifically. I served several years on the Senate Appropriations Committee, including as ranking member on the Interior Appropriations Subcommittee 

which receives a host of earmark requests. I encourage you to legislate carefully in 

this area, and consider the following issues. 

• Disclosure: I rarely ever saw a successful earmark that wasn’t accompanied by 

a press release from its advocate, so some would say disclosure already exists. However, a more formal disclosure process could be healthy, and may help eliminate 

projects which truly can’t stand the light of day. 

• Report Language: Some proposals have suggested that Federal agencies disregard earmarks in report language or require all projects be included in bill language. I am not sure this would change the dynamics of earmarks much, but it 

would certainly make appropriations bills much larger and more complex. 

• Power of the Purse: The legislative branch should always consider very carefully any significant limitations on their ability to manage and control executive activities. What may seem to make sense now could have implications to the balance 

of power that may not even have been contemplated. 

BUDGETING FOR EMERGENCIES

Congress is frequently required to respond to emergencies ranging from disaster 

recovery to military confrontation. Unfortunately, we have failed to develop an adequate way to budget for and control this spending. When the discretionary spending 

caps were created in 1990, the concept of the ‘‘emergency designation’’ was created 

to give Congress a safety-valve to exceed the spending caps. 

Unfortunately, the emergency designation became a simple way for Congress to 

avoid the caps for spending which was not really an emergency. I am proud to have 

worked with my former colleague Senator Phil Gramm to create a supermajority 

hurdle for the use of the emergency designation in the Senate which is still effective 

today. 

The President has proposed refining the definition of an emergency to limit it to 

a necessary expenditure that is sudden, urgent, unforeseen, and not permanent. 

While I agree a tighter definition would be helpful, I am disappointed that the 

President has continued to request all funding for the War on Terror as an emergency. Congress has spent some $323 billion in this manner since 2001, and while 

I certainly hope this spending is ‘‘not permanent’’, I cannot agree that it is sudden 

or unforeseen. 

Senate Budget Chairman Judd Gregg has attempted in his latest budget resolution to limit emergency spending for fiscal year 2007 to $90 billion. While I congratulate this attempt to limit the global scope of emergency spending, I am somewhat concerned that budgeting a specific amount for emergencies will almost guarantee that it will be spent regardless of need. 

SUNSET COMMISSION

The President and many Members of Congress have proposed various proposals 

to require periodic reviews and reauthorization of Federal programs. The President’s 

proposal would create a seven-member, bipartisan Sunset Commission that would 

assess the performance of agencies and programs on a 10-year schedule and recommend reforms or termination. 

I have long been frustrated by Congress continued fascination with creating more 

and more new programs, and believe a Sunset Commission could help Congress 

with its oversight responsibilities. 

10

PAY-AS-YOU-GO

Finally, I would like to mention a budget process issue which seems to dominate 

much of the debate * * * pay-as-you-go. 

The ongoing effort to re-impose a pay-as-you-go enforcement regime is hailed by 

many budget pundits as a return to the budget discipline of the past. The truth is 

that the old pay-as-you-go rules were never an effective deficit deterrent, and many 

of their current proponents simply have an anti-tax-cut agenda unrelated to deficit 

reduction. 

From 1990 to 2002, not a single sequester enforcement action was ever invoked 

under pay-as-you-go to ‘‘pay’’ for the spending and tax cuts Congress added to the 

deficit. In fact, over $736 billion was wiped-off the pay-go scorecard at the end of 

each year to prevent such enforcement from taking place. 

Few realize that pay-as-you-go is largely duplicative of the Budget Act’s variety 

of enforcement tools. Of the 82 points of order raised in the Senate in the 108th 

Congress, only 3 were pay-as-you-go. The large majority of the points were either 

related to committee allocations, the discretionary spending caps, or emergency 

spending designations. 

The real goal of many pay-as-you-go supporters is to stop the extension of currentlaw tax relief that expires in 2010. Since the siren-song of higher spending has always been more irresistible than the allure of tax cuts, they know that they can 

easily clear the procedural hurdle to expand government spending while retaining 

immense leverage over the content and duration of future tax relief. 

CONCLUSION

Again, thank you Mr. Chairman and the committee for the opportunity to discuss 

these issues.

Mr. RYUN. I would ask our witnesses perhaps if they are going 

to submit their comments for the record, you know, we will give 

unanimous consent on that, but make your remarks somewhat 

brief because we do have members that would like to try and ask 

a few questions. And we are expecting some votes on the floor. 

Now, we are going to change the order just slightly and ask that 

Congressman Stenholm would go next. Congressman, we welcome 

your comments. 

STATEMENT OF CHARLES W. STENHOLM, FORMER RANKING 

MEMBER, COMMITTEE ON BUDGET, U.S. HOUSE OF REPRESENTATIVES 

Mr. STENHOLM. Thank you, Mr. Chairman. Delighted to be here. 

I wish you would put me on the 5-minute clock, so you can stop 

me at that point. I am used to that. 

But let me say, I am here, as you mentioned in the introduction, 

representing myself this morning. And all the views you hear are 

mine and mine alone and would acknowledge that that contributed 

to me being here as a former Member. One of my proudest moments was passing the Balanced Budget Constitutional Amendment in 1995 in a bipartisan way. 

One of the saddest was standing in the back of the Senate watching it be defeated by one vote. Had it passed, we would not have 

been able to enact the budget game plan that we are now under 

that has given us the biggest deficits in the history of our country, 

but that is hindsight. 

I want to commend Democrats and Republicans on this Committee who have put forward plans, the Blue Dog 12-point Plan, 

the Republican Study Committee Plan. Chairman Nussle had a 

plan in 1999. You take the best components of each of those three, 

work together in a bipartisan way, and you will find a way to begin 

dealing with the deficits. 

11

When we talk about budget enforcements, let me just state the 

obvious: budget enforcement rules are not a substitute for making 

the tough decisions and tough choices that the Congress has to 

make. Mr. Simpson and I were talking about that a moment ago, 

the frustration that many of you have on this Committee. But it 

takes political will. 

And as you heard Senator Nickles talking about, the need of bipartisanship, which has been totally absent in the last 5 years in 

this body—3 of which I can say personally. 

And to my Republican friends, with all due respect, if you are 

sincere in what you say—and I believe that you are—you should 

not have a problem with reinstating PAYGO for taxes as well as 

spending because it would force Congress to actually make the 

spending reductions before you have the tax cut. It seems to be logical. But I do not know why we have had such a fuss about that. 

PAYGO is extremely important. 

This committee may want to consider changes to the baseline 

rules to treat future tax cuts the same as entitlement legislation. 

I agree with one exception to what Senator Nickles was saying. 

The reason that tax cuts are back on the table is because Congress 

chose to use them for budget reduction purposes, to stay within a 

budget. 

If you would do the same on all of it, put it in the baseline and 

have tax cuts considered in the baseline. But we took the savings 

from the tax cut in the 2001, 2002 area and now you have got to 

pay for them, which is what some folks have had a difficult time 

doing. 

Statutory limit on discretionary spending, you bet. It worked. 

But make them realistic. Make them what you will have, 218 votes, 

and that requires bipartisanship, so that you will in fact enforce 

those limits. 

I would quite frankly say you have done a pretty good job on discretionary spending, so folks have got to quit pointing to discretionary spending as being the one area that you balance the budget 

because everyone knows it is entitlements. And you have got to 

look at defense and homeland security in the same breath or otherwise you cannot possibly cut enough out of discretionary spending 

in order to get anywhere close to a balanced budget. 

Increasing the debt limit, oh, that is always a fun one. You are 

going to get to do that. Well, you all are probably going to get to 

avoid that, but the Senate is going to have to go on a vote in doing 

that. But that is wonderful. 

But, you know, it should bother folks, the $8.2 trillion debt. And, 

you know, all of this hullabaloo about our ports and who owns the 

ports, I remember voting with President Reagan going through the 

$1 trillion debt limit. 

At that time, in 1981, foreigners owned 26 percent of our debt 

held by the public. Today, of the $8.2 trillion, foreigners own 48 

percent. And thank goodness they do. And in 5 more years, we will 

owe $11,500,000,000 plus and foreign interests will own debt held 

by the public, almost 60 percent of that. This ought to bother us, 

but it does not seem to do it with the debate going on today. 

Eliminating low-priority programs, a great idea. Sunset legislation, another great idea. Let me propose a novel thought: after the 

12

election of the Congress in November of this year, take the first 6 

months next year doing oversight. Eliminate all fund-raising activities. Make it totally illegal to raise one dime for your next election. 

Spend the first 6 months doing the work you were elected to do. 

Have oversight. Deal with the problems of authorizing and trying 

to make the match of budgeting. 

I think we would be surprised. If you do it in a bipartisan way, 

we would actually do something about deficits instead of just talk 

about them. 

Just moving on, the long-term fiscal problems, let us start taking 

a look at the long-term aspect, not just the short term. 

Social Security, Medicare, Medicaid, we ignored them last year. 

I was sorely disappointed. I thought last year since we had a President who had had the courage of putting Social Security on the 

table and we had bipartisan support for doing something. And my 

party was just as guilty as the other party—let me just say that—

of politicizing it. But no more so. But, boy, we cannot keep postponing the inevitable without paying some dear prices. 

Mr. RYUN. Let me interrupt just a minute, if I may, just so we 

can move to let the next member have an opportunity. Thank you. 

[The prepared statement of Charles W. Stenholm follows:]

PREPARED STATEMENT OF HON. CHARLES W. STENHOLM, FORMER RANKING MEMBER, 

COMMITTEE ON BUDGET, U.S. HOUSE OF REPRESENTATIVES

Mr. Chairman, Congressman Spratt and Members of the Committee, I am Charlie 

Stenholm, former Member of Congress from the 17th District of Texas and currently 

a Government Affairs Advisor at Olsson, Frank and Weeda. I am also a member 

of the Board of Directors of the Committee for a Responsible Federal Budget and 

the Concord Coalition. This testimony is my own and does not represent any position or conclusion of any of these organizations. 

I am particularly pleased to be on a panel with Bill Frenzel talking about ways 

to improve budget discipline. I served with Bill for many years in Congress, where 

he was one of the most respected voices on budget policy. I am now proud to serve 

with him on the board of the Committee for a Responsible Federal Budget. 

In my 26 years in Congress, I worked with many members on both sides of the 

aisle, including several members of this committee, fighting to leave a better future 

for our children and grandchildren. I am very pleased that Members of Congress 

are taking an active interest in exploring ways to restore discipline and accountability in the budget process. 

One of my proudest moments in Congress was when the House passed the Balanced Budget Amendment to the Constitution, and one of my greatest disappointments was when the Senate fell one vote short of approving it. A Balanced Budget 

Constitutional Amendment and strong budget enforcement rules would protect the 

rights of future generations who are not represented in our political system but will 

bear the burden of our decisions today. If a Balanced Budget Amendment were already in the Constitution, we would not have been able to enact the budget policies 

advocated by the majority that have resulted in a rapid increase in our national 

debt over the last 4 years. 

THE OPPORTUNITY FOR BIPARTISANSHIP

I want to commend the Democratic and Republican members of this committee 

who have put forward serious proposals to enforce fiscal discipline. Jeb Hensarling 

and Paul Ryan have been leaders keeping this issue on the front burner. On the 

Democratic side, Jim Cooper and Dennis Moore have done yeoman’s work in putting 

forward proposals to establish greater fiscal discipline. While there are some differences in the approaches, I believe that the authors of these proposals share a 

common goal of bringing greater discipline to the budget process. I believe there is 

a real opportunity for bipartisan cooperation on meaningful budget enforcement legislation. 

The Blue Dogs’ ‘‘Twelve point plan for restoring fiscal sanity’’ includes many proposals I advocated while I was in Congress. The Blue Dog plan is a package of three 

13

legislative proposals: A Balanced Budget Amendment to the Constitution, legislation 

reinstating and strengthening statutory budget enforcement rules and changes in 

the rules of the House of Representatives to improve the transparency and accountability of the legislative process. 

The Blue Dog twelve point plan is a credible, balanced package that offers the 

potential for bipartisan agreement on meaningful reforms. Many of the provisions 

in the Blue Dog plan were included in the Family Budget Protection Act proposed 

by the conservative Republican Study Committee or the budget process reform legislation authored by Chairman Nussle in 1999. 

I would encourage the Committee to look at the common elements of these three 

plans as well as other budget process changes with bipartisan support as the starting point for budget process reform and continue bipartisan discussions to find common ground on other issues. Serious proposals for reform should not be rejected by 

one part or the other simply because they were proposed by a member of the other 

party. 

THE NEED FOR STRONG AND BALANCED BUDGET ENFORCEMENT MECHANISMS

Budget enforcement rules are not a substitute for making the tough choices that 

will be necessary to restore fiscal discipline. If there is not the political will in Congress to maintain fiscal discipline, any budget process rule or statutory enforcement 

mechanism can be evaded in order to enact politically popular legislation that would 

increase the deficit. 

The value of budget enforcement rules is to establish the presumption in favor 

of fiscal discipline and placing greater accountability for actions that undermine fiscal discipline. Budget enforcement rules can raise a red flag for legislation that 

would increase the deficit and hold all of us accountable for our decisions. If it is 

the will of the majority to pass legislation that would make the budget situation 

worse, Congress should be forced to accept responsibility for doing so. 

If we are truly serious about restoring fiscal discipline, budget rules must apply 

to all parts of the budget, both spending and revenues. All parts of the budget must 

be on the table. Everyone needs to be pulling—we can’t do it if some folks are 

riding. It is irresponsible and politically unrealistic to propose budget rules that 

apply to one part of the budget but not others. Applying budget discipline to all 

parts of the budget is necessary to earn the bipartisan support that will be necessary to enact and maintain effective budget enforcement rules. Exempting part of 

the budget from budget discipline will undermine the credibility of any enforcement 

mechanism. 

RETURNING TO WHAT HAS WORKED—PAYGO AND SPENDING CAPS

My philosophy on budget issues has always begun with some simple West Texas 

Tractor Seat Common Sense—When you find yourself in a hole, the first rule is to 

quit digging. Dealing with our budget deficit must begin with reinstatement of 

budget enforcement rules to take away the shovels from Congress and the administration. 

Any serious effort to restore fiscal discipline should begin with reinstating the pay 

as you go budget enforcement rules and discretionary spending limits restricting the 

ability of Congress and the President to enact legislation that would increase the 

deficit. These budget enforcement rules, which Congress and the President enacted 

in 1990 and extended in 1997 with bipartisan support, were an important part of 

getting a handle on the deficits in the early 1990s and getting the budget back into 

balance. 

Reinstating paygo rules and discretionary spending limits would not by balance 

the budget, but doing so would represent an important first step in bringing discipline to the budget process by prohibiting policy changes that would further enlarge the deficit. They have been tested, and they worked. They didn’t always work 

perfectly, but there is no question that they significantly improved the responsibility 

and accountability of the budget process. 

The principle of paygo—if we want to reduce our revenues or increase our spending, we need to say how we would pay for it within our budget—is something all 

families understand. If we want to reduce our revenues, we need to say what spending we will do without. If we want to increase spending, we need to say where we 

will come up with the revenues for the new spending or what other spending we 

will do without. 

The concept of applying PAYGO rules to all legislation—spending and revenues—

has received support from both sides of the aisle since it was originally enacted. 

‘‘Two-sided’’ PAYGO was originally enacted in the bipartisan budget agreement of 

1990 and extended in the bipartisan balanced budget agreement of 1997. FurtherVerDate 0ct 09 2002 16:53 May 11, 2006 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6621 F:\DOCS\HEARINGS\109TH\109-17\HBU075.000 HBUD1 PsN: DICK
14

more, it was included in the budget passed by the Republican Congress in 1995. Applying pay-as-you-go rules to tax cuts does not prevent Congress from passing more 

tax cuts. All it would require is that Congress must identify another source of revenue or spending reduction if it wants to enact or extend a tax cut. 

Those who want to extend expiring tax cuts or make the tax cuts permanent 

should be willing to put forward the spending cuts or other offsets necessary to pay 

for them. Similarly, those who want to spend more in certain areas need to be willing to say where they would cut or how they would raise revenues to pay for their 

proposals. 

I would say with all due respect to my Republican friends that if you are sincere 

in what say about controlling spending, you should not have a problem with reinstating pay as you go for taxes as well as spending because it would force Congress 

to actually cut spending to accompany tax cuts instead of just promising to cut 

spending in the future. The problem is that the actions of the majority in Congress 

haven’t matched the rhetoric. Congress and the administration have cut taxes without cutting spending, and have charged the difference to our children and grandchildren by increasing the deficit. 

There has been an argument that applying paygo is biased against tax cuts because the costs of extending entitlement programs are included in the baseline and 

would not need to be offset, while extending expiring tax cuts would be scored as 

a new cost that would need to be offset. That argument ignores the fact that Congress got credit for savings on paper by establishing the sunset. By contrast, applying a sunset to entitlement legislation does not achieve any savings. The baseline 

assumes the extension of entitlement programs because, unlike tax cuts, the costs 

of extending entitlement programs are scored and subject to budget discipline at the 

time they are enacted. 

The tax cuts enacted in 2001 and 2003 are expiring because Congress included 

a sunset provision when they were initially enacted to limit the official cost. This 

was done in part to circumvent budgetary limits in place at the time. The cost of 

the tax cuts would have been several hundred billion dollars higher over that period 

if the tax bills had not included sunsets. Those additional costs were not subject to 

budget limits when the tax cuts were originally enacted. Making tax cuts permanent 

without considering their budgetary impact over the long-term and exempting their 

costs from budget enforcement would mean that those costs would never be subject 

to budget discipline. 

The Committee may want to consider changes to baseline rules to treat future tax 

cuts the sam as entitlement legislation—score the costs of the tax cut as if it is permanent, and then include the costs in the baseline. That would eliminate the incentive to use sunsets to artificially limit costs. But since the costs of extending the 

tax cuts was not scored when they were enacted, those costs should not be in the 

baseline. Put another way, Congress should not have gotten credit for ‘‘savings’’ by 

establishing a the sunset, but since 

Congress took credit for those ‘‘savings’’ then it should be charged with a cost 

when the sunsets are repealed. 

I would encourage the Committee to examine ways to prevent budget gimmicks 

intended to circumvent PAYGO rules. Potential improvements of PAYGO include 

prohibiting spending or tax legislation that delays costs outside of the 5 year window, prohibiting the use of ‘‘directed scorekeeping’’ in which legislation directs CBO 

to use certain assumptions to provide a more favorable budget estimate and requiring a separate vote to exemp legislation from PAYGO. 

Congress should also establish a statutory limit on total discretionary spending, 

with flexibility to shift funds within the overall limit. I believe there would be bipartisan support for legislation establishing discretionary spending limits at reasonable 

levels if they were accompanied by PAYGO rules which applied discipline to the rest 

of the budget, including revenues. 

The cap should be set at a level which will impose an attainable amount of spending restraint. I would suggest that separate vote be required to increase spending 

above the discretionary spending limits, instead of including an increase in spending 

limits as part of an omnibus appropriations bill as has been the case in the past. 

Statutory limits on discretionary spending enforced by sequrestration can be an 

effective tool for fiscal discipline if they are set at reasonable levels. However, discretionary spending limits can actually work against fiscal discipline if they are set 

at unrealistic levels. The discretionary spending limits enacted in 1990 and extended in 1993 were quite successful in restraining discretionary spending. By contrast, the much more restrictive spending caps enacted as part of the 1997 budget 

agreement proved to be unrealistic and were effectively ignored, leaving no credible 

restraint on discretionary spending in place. 

15

INCREASING THE DEBT LIMIT

There has been a great deal of attention over the last few days about the need 

to raise the debt limit for the fourth time in 5 years. While raising the debt limit 

is something that Congress must do, increasing the debt limit should be accompanied by a full and open debate about the fiscal policies that have made the increase necessary and a discussion about what should be done to stem the tide of 

red ink. 

The House of Representatives has been able to avoide this type of debate through 

the so-called Hastert rule, which provides that an increase in the debt limit shall 

be deemed to have passed without a separate debate or vote when the budget resolution conference report is adopted. This rule should be repealled and replaced by 

a requirement that the debt limit be subject to a full debate in committee and on 

the House floor. 

In addition, I believe that any long-term increase in the debt limit should be accompanied by a plan to restore fiscal discipline. I would propose that Congress approve a short term increase in the debt limit to avert the imminent crisis and provide for a longer increase in the debt limit contingent upon Congress taking action 

to reinstate paygo rules and other budget enforcement mechanisms. 

EMERGENCY SPENDING

The emergency designation was established in 1990 to allow spending above 

spending limits in response to unforseen emergency needs. Between 1991 and 1997, 

the emergency spending designation was used primarily to cover the costs associated with natural disasters, averaging roughly $7 billion a year. However, in recent 

years the amount of emergency spending has increased dramatically. Between 1998 

and 2002, emergency spending averaged $32 billion a year as the emergency spending designation was used to circumvent spending limits. Emergency spending has 

turned into a giant loophole for non-emergency spending. 

Congress should establish criteria for emergency spending and require the President and appropriations committee to provide justifications for emergency spending 

based on the criteria. Previous proposals have sought to define emergency spending 

as spending for the prevention or mitigation of, or response to, loss of life or property, or a threat to national security that is sudden, urgent, unforseen and temporary. 

The budget should also include a rainy-day fund-something that 45 states currently do. A rainy day or reserve fund would require Congress to set aside funding 

levels reflecting the average costs of past years’ disasters to prepare for unforseen 

disaster related costs. While the costs of responding to Hurricane Katrina would 

have exceeded the amount in the rainy day fund, at least we would have been starting froma better fiscal position. 

IMPROVING THE ACCOUNTABILITY OF THE BUDGET PROCESS

Budget rules only work if they are enforced. Unfortunately, budget act waivers 

have become a routine part of the legislative process. Both the Blue Dog Twelve 

Point Plan and the Republican Study Committee Family Budget Protection Act include provisions increasing the accountability of the legislative process by making 

it harder to waive the Budget Act. 

The Blue Dog plan would strengthen the Budget Committee’s oversight role by 

requiring the budget compliance statements from the Budget Committee accompany 

every bill that is reported out of committee for consideration by the full Congress. 

The Rules Committee would be required to specifically list all budget act waivers 

and provide a justification for the waiver instead of providing a blanket waiver without explanation. The Blue Dog plan would also require a separate vote to waive 

major budget act poits of order. The Republican Study Committee plan would go 

even further, requiring a two-thirds vote to wave points of order. I encourage the 

Committee to give serious consideration to these and other proposals to increase the 

transparency and accountability of the budget process by shining sunlight on budget 

act waivers and requiring Members to take responsibility for waiving the budget 

act. 

ELIMINATING LOW-PRIORITY AND UNNECESSARY SPENDING

One small step that would help restore a small measure of fiscal discipline is enactment expedited rescission legislation strengthening the ability of Presidents to 

identify and eliminate wasteful or low-priority spending items in appropriations 

bills or targeted tax preferences in tax bills. 

16

The Line-Item Veto proposal proposed by President Bush is virtually identical to 

expedited rescission legislation I first offered in 1993 requiring Congress to vote up 

or down by majority vote on rescissions submitted by the President. Expedited rescission legislation embodies an idea which many Members, both Democrats and Republicans, have advocated for years. Senator Carper was an early leader on this 

issue, working with Dick Armey, Tim Johnson and others to find a bipartisan consensus on this issue. Last year, I joined with Congressman Paul Ryan to offer an 

amendment granting the President expedited rescission authority. This approach 

has now been embraced by President Bush. 

Many of us who opposed the original Line-Item Veto as an unconstitutional shift 

of power from the legislative branch offered expedited rescission or ‘‘modified lineitem veto’’ as a Constitutional alternative. In fact, when the House of Representatives initially passed the Line-Item Veto Act in 1995, I offered an amendment that 

would have added expedited rescission authority as a fallback that would be available if the Line-Item Veto was ruled unconsitutional. The majority rejected my 

amendment, and when the line-item veto was struck down the President was left 

without an effective tool to eliminate low-priority spending. I can’t help but wonder 

what would have happened if Republicans in Congress had joined me to enact expedited rescission into law over a decade ago. Perhaps expedited rescission could have 

prevented the explosion of earmarks that has occurred over the last 10 years. 

Expedited rescission legislation would bring greater accountability to the budget 

process so that individual appropriations and tax items may be considered on their 

individual merits. The current rescission process does not make the President or 

Congress accountable. Congress can ignore the President’s rescissions, and the 

President can blame Congress for ignoring his rescissions. I believe that it is appropriate to strengthen the President’s ability to force votes on individual budgetary 

items. This reform will not make a significant dent in our deficit. But it will have 

a very real cleansing effect on the legislative process and will take a step toward 

reducing the public cynicism about the political process. 

Expedited rescission authority can be an important tool for eliminating wasteful 

spending, if the President uses this tool. I have been disappointed that President 

Bush has not exercised his authority under current law to send Congress a rescission list of low-priority spending and pork barrel projects that he wants Congress 

to eliminate. I would encourage the President to make use of his rescission authority whether or not Congress enacts expedited rescission 

Another tool that Congress should consider to eliminate low-priority spending is 

sunset legislation to provide for a regular review of the efficiency and public need 

every Federal agency, department and program. This would require agencies to justify their existence to taxpayers and Congress and provide an opportunity for Congress to consider changes in operations of an agency and the programs it administers, create new efficiencies, and eliminate obsolete programs or offices. 

Not only would sunset legislation provide for abolishment of obsolete Federal 

agencies and streamline others, it would encourage Congress as well as agencies to 

look for ways to improve programs to better serve taxpayers. A similar law is used 

in nearly half of the states including Texas, which has eliminated 44 agencies, saving Texas taxpayers $720 million. 

ADDRESSING LONG-TERM FISCAL PROBLEMS

As serious as our near term budget problems are—and they are very serious—

the long term problems we face as the baby boom generation begins to retire in 2008 

are even greater. We need to bring more attention to the long-term liabilities facing 

our nation as part of the budget process. 

Budget process rules should focus more attention on long term fiscal challenges 

and make it harder for Congress and the President to enact policies which make 

the long-term fiscal gap worse. The President’s budget and congressional budget resolution should include more information about the unfunded liabilities of Social Security and Medicare and the long-term fiscal gap. I would also encourage the Committee to examine the possibility of incorporating accrual accounting into the budget 

process where appropriate as a supplement to current budget presentation. 

The Senate has taken some steps to bring attention to long term fiscal issues in 

the budget process by establishing a point of order against legislation with long 

term costs the exceed $5 billion over a 10-year period after 2015. The Medicare Modernization Act set in place a mechanism to monitor the costs of the Medicare program. The effort to focus greater attention on long term fiscal problems is encouraging. However, these rules would have more credibility if the same level of discipline and review was applied to the revenue side of the ledger. 

17

I had hoped that last year would be the year that Congress and the President 

would take action to address the financial challenges facing Social Security, but neither party seemed interested in a serious discussion about the tough choices that 

will be necessary. These challenges will continue to get worse and become harder 

to address the longer we wait. And the challenges facing Medicare and Medicaid are 

even greater. 

The experience of last year convinced me that we need to establish a bipartisan 

commission to objectively review all the options for reforms of our entitlement programs and make recommendations to Congress and the President. Senator Chuck 

Hagel, a Republican from Nebraska and Congressman John Tanner, a Democrat 

from Tennessess, introduced legislation that would establish such a commission. 

Creating a bipartisan commission to examine the challenges that the Baby Boom 

retirement will have on entitlement programs presents an opportunity to get a fresh 

start on the debate and move toward a solution. 

There is justifiably cynicism in Washington about proposals to establish a commission to study an issue. There are bookshelves filled with dust-covered reports 

from commissions that went nowhwere. This commission may be destined for the 

same result. But this commission has the potential to move the debate forward if 

the President follows through on his pledge to address the issue in a bipartisan 

manner and continues to make addressing the long-term challenges facing entitlement programs a priority. 

Finding a politically viable and equitable solution to these challenges will require 

bipartisan discussions in which all options are on the table for consideration. The 

Commission should have one basic ground rule—all option should be on the table 

and members of the Commission should not go into the process with preconditions 

about what must be included or excluded from a final solution. Everyone must resist 

the temptation to immediately shoot down ideas they don’t like. Let an idea fly in 

the public debate long enough to consider its merits. 

I agree with former Treasury Secretary Rubin that the commission should be allowed to examine rolling back tax cuts and other options to increase revenues. Increasing taxes to meet the growing costs of meeting our obligations to Social Security, Medicare and Medicaid as the baby boom generations retires is a legitimate 

option that the commission should be allowed to consider. Likewise, keeping taxes 

at current levels will require substantial changes to scale back the costs of these 

entitlement programs. In all likelihood the solution will require a combination of 

changes to restain spending and increases in revenues. The Commission should be 

allowed to consider and discuss the full range of options and debate the tradeoffs. 

The budget process can play a role in ensuring that the Commission’s work 

recieves the attention it deserves. The appointment of a commission should be accompanied by a procedure requiring congressional consideration and vote on the 

commission recommendations either as part of the budget process or in separate legislation. To put even more teeth into this requirement, budget rules should prohibit 

the consideration of any tax cuts or entitlement spending increases with long term 

costs until Congress has addressed the existing long-term fiscal challenges by approving the Commission’s recommendations or an alternative approach to closing 

the long-term fiscal gap. 

As this Committee examines ways to improve budget enforcement, I wanted to 

raise a concern about an effort to circumvent budgt rules. House and Senate conferees on the reconciliation tax bill are reportedly considering a proposal to ‘‘pay for’’ 

the costs of a short-term tax cut through 2015 by enacting a long-term tax cut that 

would raise revenues in the short term budget will reduce revenues—and increase 

the deficit. 

Using this transparent gimmick to evade the Senate rule prohibiting reconciliation bills from increasing long term deficits would undermine respect for, and the 

effectiveness of, budget procedures intended to promote long-term fiscal responsibility, including procedures aimed at limiting increases in entitlement costs in years 

outside the budget window. Enacting a provision that worsens the long-term fiscal 

outlook in the name of complying with budget enforcement rules is a vivid illustration of the myopic thinking that currently characterizes, and distorts, the budget 

process. 

CONCLUSION

As I said at the beginning of my testimony, budget process reforms can be a tool 

to help Congress restore fiscal discipline. To be effective, however, budget enforcement mechanisms should have bipartisan support and must apply to all parts of the 

budget. Perhaps most importantly, there must be a commitment to enforce whatever 

budget rules that are established. No amount of budget rules and enforcement 

18

mechanisms will suceed in restoring fiscal discipline if Congress is willing to rely 

on waivers, budget gimmicks or other ways to circumvent budget rules. 

I hope that this Committee follows up on this hearing by beginning bipartisan discussions to reach a consensus on changes to improve the budget process. I am willing to help in any way that I can.

Mr. RYUN. I would like at this point to turn to Former Congressman Bill Frenzel who was the Budget Committee Ranking Member. Welcome. We look forward to your comments. 

Mr. FRENZEL. Thank you. I ask that my statement be entered in 

the record. 

Mr. RYUN. So ordered. 

STATEMENT OF WILLIAM E. ‘‘BILL’’ FRENZEL, FORMER RANKING MEMBER, COMMITTEE ON BUDGET, U.S. HOUSE OF REPRESENTATIVES 

Mr. FRENZEL. Mr. Chairman, I am delighted to be here. I am a 

guest scholar at the Brooking’s Institution and a Co-Chairman of 

the Committee for Responsible Federal Budget, an oxymoronic 

group, of course. 

But the testimony is my own and does not represent any position 

or conclusion of the other groups. It will not shock you, I am sure, 

to find that my testimony is remarkably similar to that of my two 

colleagues here at the witness table. 

I would like to proceed directly into the items that the Chairman 

has mentioned. The first one is the emergency limitations. The 

emergencies are a way that the Congress have found to break its 

promise to itself each year in the budget. Obviously we need to repair this loophole. 

The President has furnished a string of adjectives to try to describe what an emergency is. Like pornography, I guess we are not 

always sure we can describe it, but we sure know when meet it. 

I would think that descriptive limitation would be helpful. I do 

not look for this change to save tons of money because if Congress 

decides it wants to declare an emergency, it will always do so. 

Nevertheless, the tougher you can make the language, the tighter you can draw the noose around this loophole, the better it will 

be and the easier it will be for you to achieve the budget goals that 

you seek. 

Expedited rescission, or line-item veto, is the famous power shift 

that the old-time Congressmen bemoan. I would simply like to 

right the balance that we wrecked in 1974 when we took away the 

President’s power of empowerment. I would prefer a Constitutional 

Amendment with a real line-item veto. 

What the President has suggested looks to me about as close as 

you can come to what the Congress might be willing to give and 

what the courts may be willing to sustain in the form of law. 

I call your attention to George Wells’ op-ed in the Post this morning wherein he describes some of the Constitutional questions 

about this particular bill. 

Sunset—here is another one that may not amount to anything. 

But at worst, it will do nothing; at best, it might in fact cause the 

Congress to take a look at and let some agencies and programs actually expire. I think it is a worthy endeavor and I urge you to go 

ahead with it as best you can knowing that it may not work for 

19

you. But our fiscal condition is bad enough so that I believe that 

we have to make experiments and we have to take some chances. 

Earmark control, that is a question that is likely going to be decided outside of this Committee, perhaps in a bill dealing with lobbying, gifts, and travel. Earmarks really irritate the public and 

erode its confidence. Again, the control system that the Congress 

is willing to put on them is likely not to save a lot of money. But 

anything you can do to make them less obvious, less obscene, will 

be a great help to the process. 

If we do nothing, earmarks are going to eventually kidnap the 

whole Appropriations process. Then all we will be appropriating 

are the earmarks. You can do anything from banning them to disclosing them, to points of order. Whatever you do, I think, will be 

a plus. And if nobody else takes on earmarks, I hope within your 

jurisdiction that you can find a way to do so. 

I am going to close, Mr. Chairman, with a discussion of the discretionary caps and PAYGO. I agree pretty much with my colleagues. I think with Senator Nickles, probably I give discretionary 

caps more importance. And nevertheless, I do support PAYGO and 

I support it the whole way. 

I concede Don Nickles’ argumentation that taxes do not get a fair 

shake under the current baseline system. Nevertheless, I think 

they have to be included in some way to make it a good system. 

Mr. Chairman, you have got a miserable job this year. God bless 

you and good luck. 

[The prepared statement of William E. Frenzel follows:]

PREPARED STATEMENT OF HON. WILLIAM E. FRENZEL, GUEST SCHOLAR, BROOKINGS

INSTITUTION; FORMER MEMBER OF CONGRESS, AND FORMER RANKING MEMBER OF

HOUSE BUDGET COMMITTEE

Mr. Chairman and members of the Committee, I am a Guest Scholar at the 

Brookings Institution, but this testimony is my own and does not represent any position or conclusion of the Brookings Institution. 

Your summons, Mr. Chairman, indicated that I was invited to testify on ‘‘the key 

budget process reforms that are currently being proposed in the House of Representatives’’. Even a simple listing of all suggested reforms is a tedious process, so I shall 

confine my oral testimony to the reforms which seem most likely to dominate the 

budget discussions this year: (1) Emergency Limitations; (2) Line-Item Veto (Expedited Rescission); (3) Sunset Commission, (4) Earmark Control, and (5) Discretionary Caps and Pay-Go. 

My written testimony will include all the reforms I consider useful and important. 

Should I stray from the reforms which are the Committee’s priorities, I am sure the 

Members will redirect my feet back on to the path of righteousness. 

Last year, I testified on the Budget Process. The discussion and questioning focused on setting priorities, controlling spending, and Budget Act enforcement. Despite some good work by this Committee, my own impression is that no real improvements were adopted. The Act and its processes still do not seem to be serving 

any of the purposes noted above. The Deficit and the Public Dept continued to grow 

rapidly. Most observers predict no change this year. 

EMERGENCY LIMITATIONS

Defining an appropriation as ‘‘an emergency’’ is one of the traditional congressional dodges to avoid limits already established. Critics say that it is a way for 

Congress to avoid keeping promises made to itself. 

The President’s Budget calls for a multi-adjective definition of Emergencies—necessary, sudden, urgent, unforeseen and not permanent. Those are all good words, 

and I would add as many more as anyone found helpful to confine the emergency 

designation to real emergencies. 

Most catastrophes, which Congress feels require amelioration by the immediate 

application of Federal expenditures, are predictable. We can’t predict the events, but 

20

we know about what the costs are going to be each year. Over the years, we know 

pretty well what the average costs of fires, floods, hurricanes, droughts, and other 

catastrophes are. We ought to set up a reserve in each year’s Budget to cover these 

expenses. The obvious emergencies, like Katrina, can be dealt with in the usual 

ways. 

My own recommendation is to start with the President’s definition, and then augment it with whatever additional constricting language you can find to narrow the 

remaining emergency loophole as much as possible. If this amended procedure reduces the annual emergency costs, the savings will be small, but you will have reduced a major irritant in the Budget Process. 

EXPEDITED RECISSION

From a Legislator’s point-of-view, the Line-Item Veto, or any form of it like Expedited Rescission, is usually seen as a ‘‘power-shift’’ which causes a erosion in the 

legislative branch’s Constitutional Power of the Purse. Because I favor a Constitutional Amendment to create a real Line-Item Veto, I have never been moved by the 

argument that the Legislature ought to be concerned by the loss of power, or the 

change in the balance of power. 

To me, the real power-shift occurred in 1974. Then, Congress stripped the President of his power of Impoundment when it passed the Budget Act. Therefore I 

strongly support the strengthening of the President’s currently feeble power of rescission. I would prefer the real Line-Item Veto, a Constitutional Amendment, but 

I think the President has asked for about as much as the Congress is likely to give 

him, and as much as can pass constitutional muster in the courts. 

SUNSET COMMISSION

The President’s Budget message repeats his request, made last summer, 

for legislation creating a Sunset Commission and a Results Commission. Both 

have great promise, but both will be difficult to pass. At best, a Sunset Commission 

could force restructure or termination of agencies and programs in which the President recommends changes on a predetermined schedule unless they were reauthorized by the Congress. 

In my day, it was said old programs never die because old Congressmen never 

die. Presumably it is not much different today. Both types of Commission, although 

they would operate differently, would pose problems similar to those posed by the 

Base Closing Commissions. These are all tough decisions for Members, especially for 

Appropriators, but both could be a great help to this Committee and its work of enhancing national fiscal sobriety. 

These Commissions may be frightening because they represent a leap into the unknown, but every attempt to improve our fiscal position ought to be carefully examined and at least given some kind of operating test. 

EARMARK CONTROL

Earmarks are likely to be decided outside of this Committee, probably in a bill 

dealing with lobbying, gifts and travel. But they are so much in the news these days 

that it is impossible not mention them. When I came to Congress, they were plenty 

of Earmarks, but their growth in recent years has been startling. 

Without a lot of discussion, let is suffice to say here that some sort of control must 

be imposed lest the Earmarks kidnap the whole Appropriations Process. The control 

could be any thing from a ban to mere disclosure. The control could apply to all Earmarks, or only to those which creep into Conference reports without benefit of hearings, votes or authorization. 

My only advice here is to suggest that if Earmarks are not controlled elsewhere, 

this Committee ought to examine the alleged problem, and take some action appropriate to its budget jurisdiction. 

DISCRETIONARY SPENDING CAPS AND PAY-GO

I was one of the purple-hearted veterans of the Andrews Air Force base Budget 

Summit which produced the two limitations on spending; (1) Caps on Discretionary 

Spending, and (2) the Pay-as-you-go restrictions on Mandatory Spending and Taxes. 

As I have often testified before this Committee, I liked them both then and I like 

them now. I have not recanted. 

However, the Senate has just narrowly defeated an attempt to reinstate Pay-Go 

in the Senate Budget Resolution, and it now is apparent that, whether there is a 

budget Resolution or not, there will be no Pay-Go in the FY ’07 budget process. 

Even so, I repeat my annual recommendation for this Committee to approve it. 

21

OTHER PROCESS REFORM SUGGESTIONS

Many other suggestions have been made and remade over the years. Budget process changes can’t make miracles, and they cannot save a Congress from causing fiscal harm to the nation and its economy. Each of them has been calculated by its 

backers to make our Budgets more responsible. Most of them would probably be of 

some modest amount of help. 

The ones we are sure of, Discretionary Caps and Pay-Go, have been tested and 

proved to be somewhat effective. Other plans to control mandatories would include 

caps or targets, which, if touched or exceeded, would force a special oversight process. I do think that would be terribly effective, but it might help a little. Points of 

Order against mandatory spending which causes a deterioration in unfunded obligations would also help. 

The Joint Budget Resolution, seen by some observers as another power-shift, 

would also help by involving the President in the budget process at an earlier stage. 

A 2-year Budget Resolution has never appealed to me as helpful to improved fiscal 

controls, but it has many supporters. 

An Automatic Continuing Resolution to be effective if appropriations were not enacted at the beginning of the new Fiscal Year is a plan I like, especially if the CR 

levels are set beneath last year’s spending. 

Not in the Budget, but supposedly a favorite of the President is an Entitlements 

Commission. That is, I think, not really within your jurisdiction, but might help the 

country’s fiscal condition. Earmarks, also probably beyond your reach, can be most 

quickly controlled through use of Points of Order. 

One of my long-time favorite suggestions is the Budget Concepts Commission. We 

have not had a significant dialog on this subject since before the Budget Act of 1974 

was passed. I think such weird concepts and ‘‘negative outlays’’ need the harsh glare 

of sunlight, and certainly the Functions themselves and their enumeration could 

stand some rationalizing adjustments. 

CONCLUSION

This is going to be tough year. The Senate may not be able to pass a Budget Resolution of any kind. You will have your own particular difficulties, which may be no 

less severe. I believe the House will do it, and while you are at it I recommend that 

you pass all of the Budget Reforms mentioned in the President’s Budget, especially 

the ones noted herein.

Mr. RYUN. Let me first of all thank all of our witnesses for their 

testimony. 

And at the moment, we are waiting to determine a little bit 

about whether we are going to come back. We are serving members. See, first of all, if the witnesses would be willing to stay 

around. 

So we will adjourn temporarily. 

[Recess.] 

Mr. RYUN. All right. I am going to go ahead and move with the 

first question while we sort of survey everyone to see if they are 

interested in coming back. 

I will begin with former Chairman and Senator Nickles. You had 

mentioned earlier—actually, I agree with you with regard to earmark reforms. I know we need to work that through carefully. I 

personally believe that when you put earmarks through the regular 

process, then it is an acceptable way of having member representation. But I know that there are some abuses there. 

What I really wanted to address is how you—your statement 

when you said really if you want to enforce spending, look at caps 

at discretionary spending. How would you enforce those caps? You 

have had the experience on the Senate side. Tell us what you 

might do to enforce those caps. 

Mr. NICKLES. Well, again, I know more about the Senate than 

the House. But we were successful in working with Chairman 

Nussle and Ranking Member Spratt and others. We did come up 

22

with an amount, similar to the $873 billion that you are working 

on this year. And we enforced that. We enforced it in 2004. We enforced it 2003. We lived by those limits. 

Now, granted, defense went up 7 percent and homeland security 

10 percent. Other spending went up about 1 percent or a little less. 

That was really pretty darn good, pretty remarkable, particularly 

if you go back to President Clinton’s terms when discretionary 

spending went up about 14 percent. 

So we made some significant headway in that limited part of the 

budget. I happen to agree with my colleagues, though, you have to 

do some things on entitlements. The Budget Committee can do 

some things on entitlement. 

Your question on discretionary spending, discretionary spending 

in the Senate, we had budget points of order that we could raise. 

If they were exceeding their allocation, their Committee allocation, 

I would raise the budget point of order. Usually I would do it or 

whoever is Chairman or Ranking Member of the Committee could 

raise it. And they would have to have 60 votes to waive that budget 

point of order. And that is how we did it in the Senate and that 

is how we would keep our discretionary cap, and it did work. That 

is the reason why I said that is so much more important if you are 

interested in fiscal discipline. 

Then the earmark issue. Earmarks are kind of looking at the 

trees, but not the forest. Caps are looking at the forest. And the 

total spending is what, I think, the Budget Committees are really 

looking at. That is not so much the individual items. The individual 

items, I think, are going to require some discipline by the Appropriators. 

Mr. RYUN. Thank you very much. 

And in the interest of time, I am going to turn to Mr. Spratt for 

any questions he might have. 

Mr. SPRATT. Let me just observe, Senator Nickles, a problem in 

the House is points of order get mowed over by the Rules Committee every day the rule is issued. 

Just one question in the interest of time. Charlie Stenholm, I 

think you would agree that even the enhanced rescission itself 

could be subject to some abuse, used in a partisan way, used in a 

vindictive way. 

What are your thoughts or reflections on how we could structure 

it so that it would not be usable by a President for vindictive purposes or for blatantly partisan purposes? 

Mr. STENHOLM. Mr. Spratt, I am not sure that is one of the 

points that we ought to put too much emphasis on because it can 

happen. But that is the power of the President. 

I opposed the line-item veto in 1995. I went with the modified 

rescission order at that time because of the concern of the constitutionality of it. And I always ask the question to people when they 

say they are for line-item veto, did it make any difference to you 

if it is President Reagan or President Kennedy. And if the person 

looked me in the eye and said, no, it does not make any difference, 

then I say you got an honest position and I am for you doing that. 

You know, it bothers me a little bit about who it is, for the reason you mentioned. But the current proposal that President Bush 

has submitted, I think, should be passed and I think it should be 

23

given an opportunity to work because I think if we had done it in 

1995, I suspect the earmark problems as proliferated would never 

have occurred. 

Mr. SPRATT. Thank you, sir. And thanks for taking time to come 

testify. 

Mr. RYUN. At this point, we will take one more question. At this 

time, we will turn to Mr. Simpson for any question he might have. 

Mr. SIMPSON. Thank you, Mr. Chairman. I would like to have a 

discussion. I do not know that I can ask one question because it 

is—you have raised some interesting points, some of which I disagree and some of which I obviously agree with. 

You are right. If you are going to get control of this budget, you 

have got to have discipline and you have got to have caps that you 

stay within. 

I kind of disagree on the earmark and the line-item veto. And it 

is not whether it is any particular President. It is a legislative 

versus administrative issue. And if the President were not—maybe 

I could go for an enhanced rescission if we said in every conference 

committee, the administration cannot be represented. 

But as you all know, a conference report is a compromise of what 

the administration wants, what the Senate wants, what the House 

wants. And to give then one individual in that compromise the authority to rip parts of it out and send it back and vote on that separately seems to me to break the deal that has been written. And 

I do not think any of these things, these gadgets that we are looking at will take the place of having some discipline and making 

some tough decisions. 

The problem I have in this whole process—and this is a process—is that there is a disconnect between this committee, the 

Budget Committee, the appropriations process, and the authorizing 

committees. 

And I was telling Charlie just before this that it frustrates me 

that—I sat on the Appropriations Committee, Labor, HHS, and 

Education. They come in and they say, okay, we have got this 

much in education. We are going to spend it here. We never go over 

and talk to the Authorizing Committee, who are the experts on 

education, saying if you have got this much money, where would 

you spend it. 

And there needs to be a better engagement on how that all 

works. And this committee, frankly, we are going to vote on a cap 

on discretionary spending, we will go down to the floor. It is really 

easy to vote on a cap. Hell, we could lower it a hundred billion dollars and still vote on it and probably pass it because nobody knows 

what it is going to do in the individual appropriations and then you 

are not going to be able to pass them when they come out. 

Somehow we have got to reform, I think, the process of this coordination between these three different areas. 

And as far as earmarks go, I look at the numbers and they have 

increased. Last year, we had $142 billion budget in Labor, HHS. 

They proposed earmarking $2 billion of that, not one and a half 

percent. To suggest the administration does not earmark, the administration proposes a recommended budget. That is all it is. 

We are responsible for setting the budget and for Congress to say 

we are going to have some priorities in here of how we want to 

24

spend money relative to the administration and how they want to 

spend money, there is one organization that says if—that puts out 

pork in government—and they say if the President did not recommend it, then it is pork, and that is just nonsense. 

It is Congress really saying we are going to have some priorities 

in here too. But I guess I got in trouble with the last few secretaries when I started asking them during hearings about Presidential earmarks within this budget. 

Are there wasteful ones? Sure. To suggest that we gave—I do not know—$90 billion to Hurricane Katrina and they spent it on 

$2,000 cards getting tattoos and other things, that there is not 

waste if you give that money to the administration is false. 

Ultimately this Congress has to do one thing that we do not do. 

We do not do enough oversight. And that to me is the bottom line. 

We can save money if we do oversight and we do not do it. 

So I appreciate your comments. I always like to learn from those 

that have been here substantially. And you might disagree with me 

on what I said. I would be happy to hear your response. 

Mr. FRENZEL. Well, I have a slightly different outlook on the lineitem veto. The President is a part of the process. He can reject the 

bill. 

Over the years, of course, Congresses have taken to building very 

large bills, sometimes continuing resolutions (CRs) that include almost the whole budget of the Government. Those CRs make it very 

hard for a President to close down the Government, although we 

saw one do it effectively in 1995. 

It does seem to me that the President has been pretty effectively 

robbed of his veto by this conglomeration of all these wonderful 

earmarks and other wonderful appropriations. And he needs a way 

to reclaim that power, which I think the Framers wanted to give 

him. 

So that is the way I look at it. I think he has lost something 

along the way because Congress has been clever enough. And when 

you say he should not be in the conference committee because he 

breaks the deal, he has got the right under the Constitution to 

break the deal. He can kill the whole thing. But you have made 

it very difficult for him to veto the whole bill. 

Mr. STENHOLM. Line-item veto gives the President one-third plus 

one minority and that is where I totally agree with you, Mike, on 

the concern. 

But modified rescission order gives the President 50 percent. And 

if the Congress does not choose to override the President on his decision, then Congress has made that decision. 

Now, it may not be your decision, but it would be 218 of your 

colleagues that have made that decision. It seems to be a reasonable compromise between the extreme line-item veto which I agree 

with you the concerns there about the power it puts in the President’s hand and it has already been held unconstitutional. 

Mr. RYUN. The Chair is going to need to interrupt at this point. 

We have a series of ten votes on the floor. I do want to thank our 

witnesses for coming. 

And at this point, I do now move that the committee stands in 

recess subject to the call of the Chair. Without objection, so ordered. 

25

[Whereupon, at 10:45 a.m., the committee was adjourned.]

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