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LINE–ITEM VETO: PERSPECTIVES ON

APPLICATIONS AND EFFECTS

HEARING

BEFORE THE

COMMITTEE ON THE BUDGET 

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

HEARING HELD IN WASHINGTON, DC, MAY 25, 2006

Serial No. 109–18

Printed for the use of the Committee on the Budget

(

Available on the Internet: 

http://www.gpoaccess.gov/congress/house/budget/index.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, Texas 

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, May 25, 2006 .................................................. 1

Statement of: 

Hon. Patrick J. Toomey, a former Representative in Congress from the 

State of Pennsylvania ................................................................................... 8

Thomas A. Schatz, President, Citizens Against Government Waste ........... 10

Ed Lorenzen, Policy Director, Concord Coalition ........................................... 14

James R. Horney, Senior Fellow, Center on Budget and Policy Priorities .. 22

Prepared statements, additional submissions by: 

Chairman Nussle .............................................................................................. 2

Hon. Paul Ryan, a Representative in Congress From the State of Wisconsin ............................................................................................................. 4

Mr. Schatz ......................................................................................................... 12

Mr. Lorenzen ..................................................................................................... 17

Mr. Horney’s submission of an article written by Mr. Richard Kogan ........ 23

Mr. Horney’s prepared statement ................................................................... 30

(1)

LINE–ITEM VETO: PERSPECTIVES ON 

APPLICATIONS AND EFFECTS 

THURSDAY, MAY 1, 2006

HOUSE OF REPRESENTATIVES, COMMITTEE ON THE BUDGET, Washington, DC. 

The committee met, pursuant to call, at 10:03 a.m., in room 210, 

Cannon House Office Building, Hon. Jim Nussle (chairman of the 

committee) presiding. 

Members present: Representatives Nussle, Ryun, Hensarling, 

Ryan, Conaway, Campbell, Spratt, Moore, Neal, Ford, Capps, 

Baird, Cooper, and Cuellar. 

Chairman NUSSLE. Good morning, and welcome everyone. 

Today’s hearing is the first of two hearings that this committee 

will hold on the issue regarding the line-item veto prior to marking 

up the legislative line-item veto, which is a bill which has been introduced by Paul Ryan of this committee. The gentleman from Wisconsin is here, and I appreciate his leadership on the issue. 

Today’s discussion—I will yield to the gentleman from Wisconsin 

in a moment, because it is his legislation, but let me just make a 

couple of observations. 

Today’s discussion will focus on perspectives, applications, the effect of the practice, both past use of the practice as well as the possible use of the practice in the future. 

I am pleased that we have several experts on the issue, including 

and first our former—I was about to say our former friend and colleague—our former colleague, current friend, Pat Toomey, who was 

a member of this committee for a number of years, and I am sure 

he—I hope he didn’t break out into hives when he walked back into 

the room. I know that can occur for some Members who used to 

serve on this committee; I hope it didn’t happen in this case. 

Pat Toomey is serving at the president of Club for Growth. We 

welcome the gentleman from Pennsylvania back to the committee. 

We have many others who have been here before: Tom Schatz, 

who is the president of Citizens against Government Waste. We appreciate his leadership and testimony on behalf of this committee 

and before this committee as well. 

Ed Lorenzen, the policy director from the Concord Coalition, we 

welcome you; as well as James Horney, who is from the Center of 

Budget and Policy Priorities. Welcome back to the committee. We 

look forward to hearing your testimony. 

Just as a kind of a brief history, let me suggest that back in 

1994, as many of you may recall, the House Republicans included 

in our contract with America a version of the line-item veto, which, 

2

after much discussion between the House and the Senate, and with 

the input of several State Governors, Congress enacted in the 

spring of 1996 the Line Item Veto Act authorizing the President to 

cancel discretionary appropriations, any new item of direct spending, entitlements or other mandatory programs, and certain limited 

tax benefits. If Congress disagreed with the President’s action, it 

could pass a resolution of disapproval within 30 days, but the 

President could then veto that resolution and force an override vote 

in each House. 

That is pretty much how it worked. But as most of you may also 

recall, in 1998 the Supreme Court ruled that the Line Item Veto 

Act was unconstitutional, noting that in the two applications of the 

veto reviewed by the Court, the cancellation authority provided by 

the President by the veto, it violated the Constitution, and thus the 

law was stricken from the books at that time. 

The legislative Line Item Veto Act that we will hopefully soon 

consider must not only provide the effective mechanism for reducing unnecessary Federal spending, but it must also be able to overcome the constitutional implementation concerns that all of us 

share, and that we hope can be overcome so that it can be used 

appropriately. 

As I mentioned a moment ago, the committee hopes to hold some 

hearings on this, as well as have an opportunity to possibly mark 

this up. This goes in conjunction with other works that we are having with regard to curbing earmark abuse, all in a hope—and we 

are seeing it borne out in the numbers—of actually reducing the 

deficit, which it is coming down. We want it to come down as fast 

as possible and as responsibly as possible, and we believe that 

these are some of the mechanisms that can be used in order to accomplish that. 

[The prepared statement of Chairman Nussle follows:] 

PREPARED STATEMENT OF HON. JIM NUSSLE, A REPRESENTATIVE IN CONGRESS FROM

THE STATE OF IOWA

Whenever Congress has faced rapid spending growth combined with budget deficits, we’ve seen proposals to adopt a presidential ‘‘line-item veto’’ emerge. In general, 

the intent of these proposals has been to reduce unnecessary spending included in 

Congressionally-passed legislation by allowing the president to strike out individual 

spending items effectively removing them from a bill. 

BRIEF HISTORY

Back in 1994, as many of you recall, House Republicans included in our ‘‘Contract 

with America’’ a version of the line-item veto which after much discussion between 

the House and Senate, and with the input of several State governors Congress enacted in the Spring of 1996. 

The Line Item Veto Act authorized the president to cancel discretionary appropriations, any new item of direct spending (entitlements and other mandatory programs), and certain limited tax benefits. 

If Congress disagreed with the president’s action, it could pass a resolution of disapproval within 30 days. But the president could then veto that resolution and force 

an override vote in each House. 

PROBLEM

But as most of you will also recall, in 1998, the Supreme Court ruled the Line 

Item Veto Act unconstitutional, noting that in the two applications of the veto reviewed by the Court, the cancellation authority provided to the president by the veto 

violated the Constitution and thus, the law was stricken from the books. 

3

THE LEGISLATIVE LINE ITEM VETO ACT

The legislation we will soon consider The Legislative Line Item Veto Act of 2006 

must not only provide an effective mechanism for reducing unnecessary Federal 

spending, it must also be able to overcome constitutional and implementation concerns. 

As I mentioned a moment ago, this Committee hopes to hold two hearings prior 

to marking up the legislation. Today we’ll hear from our panel of experts on how 

the line-item veto might assist us in addressing earmarks and curbing future laws 

that might increase the deficit. 

Then, following the Memorial Day Recess, we plan to look at constitutional issues 

surrounding the legislation which I imagine will be a both a very spirited and informative discussion. 

And I look forward to hearing the thoughts of our witnesses and our Members 

on all these issues.

Chairman NUSSLE. Let me yield briefly to the gentleman from 

Wisconsin for any comments he would like to make, since this is 

his bill. 

Mr. RYAN. I thank the chairman for yielding, and I ask unanimous consent that my full opening statement be included in the 

record. 

Chairman NUSSLE. And without objection, all Members’ opening 

statements will be put in the record as well. 

Mr. RYAN. I will be fairly brief. No. 1, I want to thank the witnesses for coming. Ed Lorenzen, it is nice to see you here as well, 

because we have worked on this together over the years when you 

worked with Charlie Stenholm. 

This bill is not a new idea. This is virtually identical to the Stenholm-Spratt bill that was introduced and, as Ed just told me, 

passed the House in 1993 in the 103d Congress, very similar to the 

Stenholm-Kasich-Penny bill, very much the same exact bill that I 

had with Charlie Stenholm in 2004. In every case these bills have 

been bipartisan. 

I think most people acknowledge that the rescission system we 

have today doesn’t work. This bill fixes the rescission system so the 

rescissions actually work. And I am extremely sensitive to the constitutional issues. I actually agree with the Supreme Court ruling 

of 1996. I do believe that that version of the line-item veto, now 

having read the case, did unnecessarily transfer too much power 

from the legislative to the executive branch. This goes in a different 

direction. 

We actually have been talking to a lot of different constitutional 

scholars, including Chuck Cooper, who is the man who argued 

against the Supreme Court case in 1996, who is a strong supporter 

of this version of the line-item veto. This makes sure that Congress 

has the final say-so, Congress is the final arbiter of these things, 

but it makes sure that the rescission requests by the President 

don’t go ignored like they all too often have ignored. 

And I will finish with this last point which is what we are trying 

to do is bring transparency and accountability to the way we spend 

taxpayer dollars. And we have the beginning of the system and the 

end of the system. What I mean when I say that is the earmark 

reform legislation we are trying to pass, we are trying to bring 

more transparency and accountability to the front end of the spending process here in Congress, but we don’t have enough transparency and accountability at the back end of the final stages of 

the spending process. The choices we are given in Congress is one 

4

vote up or down on a conference report, which is usually typically 

a massive spending bill or tax bill. Then the President has the 

same kind of choice, sign or veto this entirely large bill. There is 

no in-betweens, no chances to revisit something that would have 

gotten snuck in in a conference report or something like that. 

So I think what this does is it brings a very good complement 

to the process by bringing more transparency and accountability at 

the back end of the spending process, and this complements our 

earmark reforms that are working its way through Congress to 

bring transparency and accountability at the front of the process so 

the entire congressional spending and taxing process has much 

more needed transparency and accountability so our constituents 

can see how their tax dollars are being spent, and that we, as 

Members of Congress, have an opportunity to visit these issues on 

an individual basis, and I think that is very important. We are airtight on the Constitution, and I would be happy to answer questions that people have, those things. 

But I want to thank the witnesses for coming, and I want to 

thank the chairman for having this hearing. 

Chairman NUSSLE. I thank the gentleman from Wisconsin. 

[The prepared statement of Mr. Ryan follows:] 

PREPARED STATEMENT OF HON. PAUL RYAN, A REPRESENTATIVE IN CONGRESS FROM

THE STATE OF WISCONSIN

Chairman Nussle, thank you for holding a hearing today on H.R. 4890, the Legislative Line-Item Veto Act of 2006. This legislation would provide the President with 

the authority to single out wasteful spending items and narrow special-interest tax 

breaks included in legislation that he signs into law and send these specific items 

back to Congress for a timely vote. Unlike the line-item veto authority provided to 

President Clinton in 1996, H.R. 4890 passes constitutional muster because it requires an up-or-down vote in both chambers of Congress under an expedited process 

in order to effectuate the President’s proposed rescissions. 

I appreciate the Budget Committee’s interest in this issue and am looking forward 

to this and other upcoming hearings on H.R. 4890. This series of hearings will ensure that we produce effective and constitutional legislation that will help the President and Congress work together to reduce the federal budget deficit. Today, I am 

very interested in the views of our distinguished witnesses as to the impact that 

this bill would have on Congress’ spending habits. It is my strong belief that H.R. 

4890 will take an important step toward bringing greater transparency, accountability and a dose of common sense to the federal budget process. 

THE PROBLEM

The amount of pork-barrel spending included in the federal budget continues to 

increase every year. According to Citizens Against Government Waste (CAGW), the 

federal government spent $29 billion on 9,963 pork-barrel projects in Fiscal Year 

2006 (FY 2006), an increase of 6.3% from 2005, and an increase of over 900% since 

1991. Overall, the federal government has spent $241 billion on pork-barrel projects 

between 1991 and 2005, an amount greater than two-thirds of our entire deficit in 

FY 2005. This includes irresponsible spending on items such as the $50 million Rain 

Forest Museum in Iowa; $13.5 million to pay for a program that helped finance the 

World Toilet Summit; and $1 million for the Waterfree Urinal Conservation Initiative. 

Many of these pork-barrel spending projects are quietly inserted into the conference reports of appropriations bills where Congress is unable to eliminate them 

using the amendment process. In fact, the only time that Congress actually votes 

on these items is during an up-or-down vote on the entire conference report, which 

includes spending for many essential government programs in addition to the porkbarrel earmarks. In this situation, it is very difficult for any Member to vote against 

an appropriations bill that, as an overall package, may be quite meritorious, despite 

the inclusion of wasteful spending items. 

5

Unfortunately, the current tools at the President’s disposal do not enable him to 

easily combat these wasteful spending items either. Even if the President identifies 

numerous pork-barrel projects in an appropriations bill, he is unlikely to use his 

veto power because it must be applied to the bill as a whole and cannot be used 

to target individual items. This places the President in the same dilemma as Members of Congress. Does he veto an entire spending bill because of a few items of pork 

when this action may jeopardize funding for our troops, for our homeland security 

or for the education of our children? 

The President’s ability to propose the rescission of wasteful spending items under 

the Impoundment Control Act of 1974 has been equally ineffective at eliminating 

wasteful spending items. The problem with the current authority is that it does not 

include any mechanism to guarantee congressional consideration of a rescission request and many Presidential rescissions are ignored by the Congress. In fact, during 

the 1980’s, Congress routinely ignored President Reagan’s rescission requests, failing to act on over $25 billion in requests that were made by the Administration. 

The historic ineffectiveness of this tool has deterred Presidents from using it with 

any regularity. 

SUMMARY OF H.R. 4890, THE LEGISLATIVE LINE-ITEM VETO ACT OF 2006

I introduced H.R. 4890, the Legislative Line-Item Veto Act of 2006, on March 7, 

2006. This legislation, which currently has the support of 104 bipartisan cosponsors 

in the House, is based on the Administration’s proposal to provide line-item veto authority to the President and is the product of discussions that I and my congressional colleagues have had with the White House since the President announced his 

intent to seek line-item veto authority in the State of the Union Address on January 

31, 2006. 

The Legislative Line-Item Veto Act is very similar to an expedited rescissions 

amendment that I offered during the consideration of H.R. 4663 on June 24, 2004, 

with my former colleague Representative Charlie Stenholm, a Democrat from Texas. 

Like H.R. 4890, this amendment would also have allowed the President to propose 

the elimination of wasteful spending items subject to congressional approval under 

an expedited process. Although this amendment failed to pass the House, it attracted the support of 174 Members of Congress, including 45 Democrats. A similar 

provision is also included in Section 311 of the Family Budget Protection Act, legislation that I introduced along with Congressman Jeb Hensarling of Texas, Congressman Chris Chocola of Indiana, and former Congressman Christopher Cox of California during 2004 and again in 2005. 

If passed, H.R. 4890 would give the President the ability to put on hold wasteful 

discretionary spending, wasteful new mandatory spending, or new special-interest 

tax breaks (those that affect less than 100 beneficiaries) after signing a bill into law. 

The President could then ask Congress to rescind these specific items. The requirement that both the House and Senate approve all proposed rescissions means that 

Congress will continue to control the power of the purse and will have the final 

word when it comes to spending matters. However, unlike the current rescission authority vested in the President under the Impoundment Control Act of 1974, the bill 

also includes a mechanism that would virtually guarantee congressional action in 

an expedited time frame. 

Using the Legislative Line-Item Veto, the President and Congress will be able to 

work together to combat wasteful spending and add transparency and accountability 

to the budget process. This tool will shed light on the earmarking process and allow 

Congress to vote up or down on the merits of specific projects added to legislation 

or to conference reports. Not only will this allow the President and Congress to 

eliminate wasteful pork-barrel projects, but it will also act as a strong deterrent to 

the addition of questionable projects in the first place. On the other hand, Members 

who make legitimate appropriations requests should have no problem defending 

them in front of their colleagues if they are targeted by the President. With H.R. 

4890, we can help protect the American taxpayer from being forced to finance wasteful pork-barrel spending and ensure that taxpayer dollars are only directed toward 

projects of the highest merit. 

The process under H.R. 4890 would begin with the President identifying an item 

of wasteful spending or a special-interest tax break in legislation that is being 

signed into law. The President would then submit a special message to Congress, 

asking for Congress to rescind this wasteful item or items. House and Senate leadership would have the opportunity to introduce the President’s rescission requests 

within two days following receipt of the President’s message. After that time period, 

any Member of Congress would be able to introduce the President’s rescission proposal, virtually guaranteeing congressional action. Once the bill is introduced, it 

6

would be referred to the appropriate committee, which would then have five days 

to report the bill without substantive revision. If the committee fails to act within 

that time period, the bill would be automatically discharged to the floor. The bill 

would have to be voted on by the full House and Senate within 10 legislative days 

of its introduction, with a simple majority required for passage. 

Since introducing H.R. 4890, I have received substantial feedback from interested 

Members of Congress on ways to improve the legislation to ensure that it best meets 

its intent of controlling federal spending while keeping the power of the purse 

squarely in the legislative branch. Among the changes that I think may improve the 

legislation are the following: limiting the time period available to the President to 

make a rescission request after signing a bill into law; limiting the number of rescission requests that can be made for each piece of legislation signed into law; allowing 

for the bundling of rescission requests; explicitly prohibiting duplicative requests; 

ensuring that the authority cannot be used to target policy provisions; and tightening the language that allows the Administration to defer spending while a rescission request is being considered by Congress. These changes will strengthen the bill 

and better ensure that the legislative branch retains all of the powers delegated to 

it by our founding fathers. I am committed to continuing to work with my colleagues 

in Congress throughout the legislative process to make sure that H.R. 4890 is narrowly drafted in order to best achieve its goals. 

CONCLUSION

In 2006, the federal government will once again rack up an annual budget deficit of over $300 billion, and our debt is expected to surpass $9 trillion. Meanwhile, the 

retirement of the baby boom generation looms on the horizon, threatening to severely exacerbate this problem. Given these dire circumstances, it is essential that 

we act now to give the President all of the necessary tools to help us get our fiscal 

house in order. By providing the President with the scalpel he needs to pinpoint and 

propose the elimination of wasteful spending, H.R. 4890 takes an important first 

step toward achieving this goal.

Chairman NUSSLE. Mr. Spratt. I yield to my friend from South 

Carolina for any comments he would like to make. 

Mr. SPRATT. Thank you, Mr. Chairman. Thank you for calling 

this hearing. 

Mr. Chairman, anything that can help bring the budget back to 

balance is worthy of discussion. 

In March of this year, the administration sent up a bill which 

has been introduced now in the House and the Senate granting the 

President expedited and, one would say, enhanced rescission authority. This bill would vest the President with the power to propose to Congress the rescission of new discretionary spending and 

new mandatory spending, and the rescission of targeted tax benefits as well. For its part, Congress would guarantee the administration a vote on a fast track. 

This bill is a cession of power from Congress to the President, 

and as such it behooves us to take care. Jim Wright used to say 

that you needed to have served under LBJ to fully appreciate what 

a President with an item veto can do. For example, a President 

with this power, pushing a big spending bill, could call Members 

of Congress when a vote was coming up, solicit their support, and 

if it was not forthcoming, back up his request with a veiled threat 

of rescission of something that Member dearly wanted. 

Charlie Stenholm and I were conscious of this potential for abuse 

and perverse results 15 years ago when we wrote and brought to 

the floor what we call expedited and enhanced rescission. We made 

the President act swiftly, soon after a bill’s passage, if he wanted 

to wield his item veto. In one version we gave Members the right 

to present a petition of 50 votes so that items could be broken out, 

considered individually. We gave the President one bite at the 

apple. If he didn’t win the first time, there were no second chances. 

7

We limited the veto to discretionary spending so that we didn’t 

open up Social Security, Medicare to some other Member on the 

House floor. We widened the scope by including targeted tax benefits, tax benefits that go to a limited number of beneficiaries. And 

just in case these limitations were not enough to abort abuse, we 

inserted a 2-year sunset in the bill. 

If you respect this whole institution of the public and status as 

a coequal branch, indeed the first among equals because it is Article I of the Constitution—that is how the Framers viewed us when 

it was originally written, and 200 years of history have borne them 

out. If you regard this whole institution as a coequal branch, these 

limits seem to me to be the least we should be doing to make certain that we do not cede too much power. 

This bill before us goes far beyond the balanced bill that Charlie 

Stenholm and I brought to the floor in 1990. First of all, it effectively resurrects empowerment. It allows the President to suspend 

spending for 180 days on any item he proposed for rescission, even 

if Congress promptly rejects the rescission. In effect, this provision 

allows the President to cancel legislative spending without congressional approval. 

This bill omits any time frame for the President to exercise his 

item veto. As written, it would allow the President to propose rescission months after the passage of a bill and repeatedly thereafter, even in the face of continual rejection by Congress. 

Despite this broad grant of authority, the bill contains no sunset. 

It is permanent law until you can muster two-thirds of the votes 

in each House to override the likely veto of any bill appealing or 

reining in the powers this bill would grant. 

Supporters will admit that this might be a broad cession of 

power, but argue that it is necessary with intractable deficits running over $300 billion for as far as the eye can see. 

In truth, most of the earmarks, which are the prime targets of 

this kind of veto, don’t enlarge the total spending pie, they simply 

divide the pie into smaller pieces. In the end, total spending indeed 

may not be reduced at all if the President has these powers for reasons that I just mentioned. 

The Congressional Budget Office reports that under the more 

powerful line-item veto which the President enjoyed in 1997 and 

1998, only $600 million was actually cancelled out. As noted earlier, the two being proposed now would very easily give the President the leverage to win passage of legislation that increases rather than decreases the deficit. 

If we want budget process changed—and I think we need budget 

process changed—and improvements for us to get our grip on the 

deficit, a hand around this enormous problem, then why don’t we 

start with the PAYGO rule, the one rule that really proved its 

worth during the 1990s, the one rule that Alan Greenspan, sitting 

where these four witnesses sit, three times testified should be reviewed and reenacted? If we want to increase the scrutiny, if we 

want to increase the review that earmarks are given or special provisions are given or targeted tax benefits are given, let us realistically have and rigorously enforce the requirements that bills lay 

over so we have an opportunity, after they come out of conference 

8

or out of committee, to truly scrub them down and find what is in 

them and address those issues on the floor or elsewhere. 

There are lots of budget changes we can make in this institution 

that would make us more responsible, it would go directly to the 

problem at hand, without ceding enormous authority to the President, which could be manipulative, which could be used to our detriment. 

I would hope that those who support this bill will recognize that 

some of its features are extremely problematic. For example, as I 

said, the bill would allow the President to withhold funding that 

he proposes for rescission for 180 days even if we promptly reject 

that proposal, and then to withhold funds for an additional 180-day 

period simply by submitting the same proposal all over again. This 

could allow the President to thwart previously approved funding 

unilaterally, and in clear conflict with congressional intent. 

To bring the budget back to balance, in all sincerity, we need to 

return to the kind of process that worked in the 1990s, the PAYGO 

rule, realistic discretionary spending caps, and budget negotiations, 

bipartisan negotiations, in which everyone comes to the table, and 

everything is on the table. Defense spending and nondefense spending, tax cuts, entitlements; everything is on the table, and everybody is at the table. 

If passage of this bill causes people to think that we are making 

headway on the deficit, I fear we will only defer realistic confrontation with the issues we have got to grapple with. 

Thank you, and I look forward to your testimony. 

Chairman NUSSLE. Thank you, Mr. Spratt. 

Let me turn now to our witnesses. All of your statements will be 

made part of the record, as presented, and we would enjoy having 

you summarize your testimony as you see fit in the time allotted. 

Welcome back to the committee, Pat. Mr. Toomey, it is good to 

see you, and we are pleased to receive your testimony. 

STATEMENT OF THE HON. PATRICK J. TOOMEY, A FORMER 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF 

PENNSYLVANIA 

Mr. TOOMEY. Well, it is great to be back. 

And, Chairman Nussle, Ranking Member Spratt, members of the 

committee, thank you very much for giving me the opportunity to 

testify today on the topic of H.R. 4890, the Legislative Line Item 

Veto Act of 2006. And I would like to ask permission to have included with my testimony an op-ed that I recently wrote for the 

Philadelphia Inquirer addressing this very legislation. 

Chairman NUSSLE. Without objection. 

Mr. TOOMEY. Thank you. 

At the Club for Growth, we believe that Federal Government 

spending has long been excessive both in the total level of expending and in the kinds of spending that have occurred. The Heritage 

Foundation observes that between 2001 and 2006, Federal spending has grown by 45 percent, and the spending increase is across 

the board. Spending on education is up 137 percent, spending on 

Medicare is up 58 percent; defense spending, 76 percent. 

In addition to the total level of spending, the kind of pork barrel 

earmark spending has exploded. Since 1991, Federal earmarks 

9

have grown by 900 percent. And in 2006 alone, earmarks on appropriation bills totaled nearly 10,000 in number, adding up to $29 billion in costs for taxpayers. 

Now, we oppose that spending, and for many reasons, but the 

main reason, Mr. Chairman, is that we believe excessive government spending over time diminishes the rate of growth of our economy. The Government allocates money through a political process, 

which is necessarily heavily influenced by the perception of political gain of the officeholders. That is the nature of the process. Alternatively, nongovernment actors, be they individuals or businesses engaged in private enterprise, they tend to allocate capital 

based on the supply and demand signals they perceive in the marketplace. It is this latter free-market method of capital allocation 

that tends to allow for maximum economic growth and prosperity; 

therefore, growth in jobs and wages and opportunity. The former 

political allocation of capital simply doesn’t match up. So because 

excessive government spending such as we have costs our society 

jobs, wages and opportunity, we support legislative measures likely 

to reduce the excesses. 

We believe that H.R. 4890 is likely to reduce some of the excesses. We acknowledge this is no panacea; in fact, it is no guarantee that we will have less Federal spending, but we think most 

likely if this were enacted, there would be fewer earmarks, there 

would be less total spending, and we think it would be good for taxpayers and good for our economy. 

Now, I understand that some opponents have suggested that this 

legislation may not have constitutional authority granted to Congress to control Federal spending, or that it inappropriately grants 

to the President lawmaking power. We think that is demonstrably 

false for several reasons. One, first of all, the Constitution, of 

course, grants to the President the authority to sign or veto spending bills like other bills, and as such, he has a shared responsibility 

for establishing both the total level of spending and the specific 

items of spending. 

But furthermore, the 1998 Supreme Court decision regarding the 

1996 line-item veto legislation stated the Court’s opposition to that 

legislation very clearly, and I will quote. They say that the act gave 

the President the unilateral power to change the text of duly enacted statutes, end quote. 

This bill under consideration today, or being discussed today, 

clearly gives the President no such unilateral power. Furthermore, 

as Justice Scalia observed in his dissent of that 1996 decision, he 

made the point that insofar as the degree of political lawmaking 

power conferred upon the executive is concerned, there is not a 

dime’s worth of difference between Congress authorizing the President to cancel a spending item and Congress’ authorizing money to 

be spent on a particular item at the President’s discretion. And the 

latter has been done since the founding of the Nation. 

Finally, and, I think, positively, this bill is simply not a true lineitem veto; it is much more akin to an enhanced rescission bill. 

Under H.R. 4890, it is Congress and not the President that would 

have final say on these spending matters. So in our view this bill 

clearly would not violate the Constitution. What it would do is it 

would grant the President the power to force Congress to scrutinize 

10

a little more closely, and in some cases to specifically reaffirm Congress’ own spending decisions. 

So the question raised by H.R. 4890 seems to be is Congress willing to subject itself to a little more openness and a little more scrutiny of its own spending, and we believe it should. 

We observed that the Republican-controlled Congress granted to 

a Democratic President a considerably greater line-item veto power 

not long ago. Furthermore, if individual items as specified by the 

President under this bill have merit, they ought to be able to withstand the scrutinyand simply pass the test of the vote when returned to Congress. 

I would like to observe that at least 11 Presidents from both parties have called for this authority. Of the 50 States, 43 grant similar authority to their Governors, and if adopted at the Federal 

level, it just might help to reduce some of the spending excesses 

that have accelerated in recent years. 

So I thank you for giving me the opportunity to testify on behalf 

of the 35,000 members of the Club for Growth, and I would like to 

urge this committee and your colleagues throughout the House to 

pass H.R. 4890. Thank you. 

Mr. RYAN [presiding]. Thank you, Pat. 

Next we will hear from Tom Schatz, president of Citizens against 

Government Waste. Mr. Schatz. 

STATEMENT OF THOMAS A. SCHATZ, PRESIDENT, CITIZENS 

AGAINST GOVERNMENT WASTE 

Mr. SCHATZ. Thank you very much, Mr. Chairman, and also Mr. 

Spratt and the committee, for inviting us here this morning. 

This is an issue that has been around for quite some time, as I 

am sure all of you are aware, and brought up in the Senate many 

years ago, brought up in the House, of course. We did have passage 

of one piece of legislation that was found to be unconstitutional. So 

the question today really is how do we get legislation through that 

is constitutional, that can be bipartisan, because it will affect future Congresses, future Presidents of both parties? And I think it 

is important that there be a consensus on how to move this legislation forward because it is not only popular around the country, it 

needs to be something that sustains future objections from future 

Congresses. 

We have looked at the bill, and, of course, read the testimony of 

Charles Cooper, who testified before the Senate Budget Committee 

earlier in May, and he was assistant attorney general under President Reagan, and also argued against the previous version of the 

line-item veto. His view is this particular version is constitutional, 

and I think that other than his expertise, there are many others 

who agree that this is the appropriate way to move forward in this 

legislative line-item veto or enhanced rescission process. 

Looking at the actual numbers, the dollars that could be saved, 

it depends on how one looks at $29 billion in pork, as a small number or big number. We released our Congressional Pig Book earlier 

this year. This is where the $29 billion that Pat Toomey just spoke 

of comes from, almost 10,000 items. And while that is about 1 percent of the budget, it is still a list of items that people outside the 

Beltway recognize as wasteful spending. 

11

This is only part of what needs to be done in terms of budget reform, but certainly it would be nice if the President had the power 

to eliminate $500,000 for the Sparta Teapot Museum in North 

Carolina, a power which he currently doesn’t have; or several years 

ago the $50 million for the indoor rain forest in Iowa, where the 

money is still sitting out there, and that project hasn’t been built. 

There are a lot of ways to look at this and a lot of ways to move 

it forward, but it addresses what I think the American people say 

are the excesses here in Washington. Addressing entitlements, addressing larger areas of spending; even defense, of course, does 

need to move forward as well. But there is a lot of time that is 

spent on fighting for and protecting earmarks. While it is not a lot 

of money, it takes up an awful lot of time. A request to the Appropriations Committee, it affects their oversight, it affects the other 

activities that they may undertake, and therefore, in our view, it 

is critical to getting at least some of the spending under control in 

Washington. 

And I agree with what Mr. Ryan said about the fact that we are 

trying to get earmark reform up front. This is looking at the end 

of the process, allowing the President to be involved. It works in 

the 43 States. There doesn’t seem to be any kind of constitutional 

crisis in those States with a permanent line-item veto authority. 

So, in our view, the point is to get it right the first time. We 

think it should be permanent; it does work at that level. It did 

work a little bit when President Clinton had that authority. 

Whether it is $600 million or $30 million, or whatever it might be, 

it is still something that the American people want to be done. 

They are looking for reform, they know there has been too much 

spending. Pat gave you all the statistics, and they are all there. 

And at this point, with earmark reform moving forward, with other 

budget reforms being considered, with votes in the Senate to almost eliminate the $700 million Railroad to Nowhere, the line-item 

veto is a proposal—or the enhanced rescission in this case—a proposal whose time really has come. 

So in our view, we will be mobilizing, through our grass-roots activities or our lobbying group, our members to support this legislation. We hope that it does get to the floor, and we hope that there 

are additional actions taken by Congress to get spending under 

control. 

I would be happy to answer any questions, and I ask that my full 

statement be entered into the record. 

I also—I don’t want to take up the taxpayers’ money and print 

this, but we do have a report called All About Pork, which gives 

an interesting history about pork. And I just want to mention one 

quote from President Monroe in 1822, who argued that Federal 

money ought to be limited to ‘‘great national works only, since if 

it were unlimited, it would be liable to abuse and might be productive of evil.’’ So maybe we can get rid of some of that evil, as President Monroe identified it, and pass this legislation. Thank you. 

Mr. RYAN. Thank you, Mr. Schatz. 

[The prepared statement of Mr. Schatz follows:] 

12

PREPARED STATEMENT OF THOMAS A. SCHATZ, PRESIDENT, CITIZENS AGAINST

GOVERNMENT WASTE

Mr. Chairman, members of the subcommittee, thank you for the opportunity to 

testify today. My name is Thomas A. Schatz. I am president of Citizens Against 

Government Waste (CAGW), a nonprofit organization made up of 1.2 million members and supporters, dedicated to eliminating waste, fraud and abuse in government. Citizens Against Government Waste has not received at any time any federal 

grant and we do not wish to receive any in the future. 

CAGW was created 22 years ago after Peter Grace presented to President Ronald 

Reagan 2,478 findings and recommendations of the Grace Commission (formally 

known as the President’s Private Sector Survey on Cost Control). These recommendations provided a blueprint for a more efficient, effective and smaller government. The line-item veto was one of those proposals. 

Since 1984, the implementation of Grace Commission and other waste-cutting recommendations supported by CAGW has helped save taxpayers more than $825 billion. CAGW has been working tirelessly to carry out the Grace Commission’s mission to eliminate government waste. 

H.R. 4890, the Legislative Line Item Veto Act of 2006, was introduced by Rep. 

Paul Ryan (R-Wisc.), and would grant the power of a line-item veto to the president. 

This legislation would help restore fiscal discipline in Washington. 

The bill provides the authority for the President to identify a specific spending 

provision or tax break in legislation that is to be signed into law, and to presents 

a communication to Congress asking for the removal of the item. House and Senate 

leadership have two days to introduce the rescission request. After three days, any 

member of Congress is free to introduce the President’s proposal. 

Next, the rescission bill is submitted to the appropriate committee, which has five 

days to report the bill without substantive modification. The request is automatically discharged to the floor if the committee fails to act within five days. The full 

House and Senate must vote on the bill within ten days of its introduction, with 

a simple majority required to pass. Lastly, if the House and Senate approve of the 

rescission, it goes to the President and becomes law; if either fails, the proposal is 

not ratified. 

There is a public perception that earmarks, or pork-barrel spending, have been 

around ‘‘since we were a country,’’ as Senate Minority Leader Harry Reid (D-Nev.) 

said. Nothing could be further from the truth. While Congress is granted the power 

under Article I, Section 9, Clause 7, which says ‘‘No money shall be drawn from the 

Treasury but by consequence of Appropriations made by Law,’’ the Founding Fathers expressed strong views on the limits of that authority. 

Responding to a proposition by James Madison to improve a system of roads used 

in national mail delivery, Thomas Jefferson wrote the following on March 6, 1796: 

Have you considered all the consequences of your proposition respecting post 

roads? I view it as a source of boundless patronage to the executive, jobbing to members of Congress & their friends, and a bottomless abyss of public money. You will 

begin by only appropriating the surplus of the post office revenues; but the other 

revenues will soon be called into their aid, and it will be a scene of eternal scramble 

among the members, who can get the most money wasted in their State; and they 

will always get most who are meanest. 

President James Monroe argued in 1822 that federal money ought to be limited 

to ‘‘great national works only, since if it were unlimited it would be liable to abuse 

and might be productive of evil.’’

President Grover Cleveland was labeled ‘‘king of the veto’’ in the late 1800s for 

refusing to sign numerous congressional spending bills. He explained this practice 

by stating, ‘‘I can find no warrant for such an appropriation in the Constitution.’’

While the term pork-barrel spending was first used in the late 1800s comparing 

the rush toward tax dollars to the way slaves would crowd around barrels of salted 

pork at meal time, the practice was not widespread until the late 1980s. In particular, pork-barrel spending has exploded since the mid-1990s. Since 1991, CAGW’s 

annual Pig Book has identified 76,420 examples of egregious pork-barrel spending, 

which has cost taxpayers $241 billion. Examples from the 2006 Congressional Pig 

Book include: 

• $13.5 million for the International Fund for Ireland, which helped finance the 

World Toilet Summit; 

• $8.3 million for the Department of Defense for breath alcohol testing equipment; 

• $6.4 million for wood utilization research; 

• $5 million for the Capitol Visitor Center; 

• $4.2 million for shrimp aquaculture research; 

13

• $2.3 million for the International Fertilizer Development Center in Alabama; • $2.2 million for the MountainMade Foundation; • $1 million for the Waterfree Urinal Conservation Initiative; • $550,000 for the Museum of Glass in Tacoma, Washington; • $500,000 for the Sparta Teapot Museum in Sparta, North Carolina.; • $450,000 for plantings on the eastern front of the Capitol; • $250,000 for the National Cattle Congress in Waterloo, Iowa; • $234,000 for the National Wild Turkey Federation in Edgefield, South Carolina; • $150,000 for the Bulgarian-Macedonian National Education and Cultural Center in Pittsburgh, Pennsylvania; • $150,000 for the Actors Theater in Louisville, Kentucky; and • $100,000 for the Richard Steele Boxing Club in Henderson, Nevada. 

For a brief period, the American people had hope that reform would reduce the 

assault on their wallets. In 1995, Congress passed the line-item veto by a voice vote 

in the House and a 69–31 vote in the Senate. This law was enacted after several 

previous failed efforts to pass such legislation. 

Unfortunately, this new veto privilege was used sparingly by President Bill Clin- ton to cancel a mere $355 million in fiscal year 1998 pork-barrel spending, less than 

.002 percent of that year’s budget. Although the amount of waste that was removed 

was miniscule, members of Congress who had previously lauded the passage of the 

line-item veto began to question its legitimacy. This was clear evidence that even 

though the overall amount of money saved was relatively small, eliminating more 

waste would have had a substantial effect on the spending culture. 

However, the Supreme Court took the line-item veto power away from the president in mid-1998, ruling the law unconstitutional. 

The need still exists for a constitutional presidential line-item veto because Congress has confronted the president repeatedly with hastily-crafted, 11th-hour omnibus 

bills that cover all or substantial portions of federal spending for the year. This 

practice inhibits the exercise of the veto, which under such circumstances would 

have the effect of closing down the federal government. A line-item veto would enhance the president’s role in the budget process. It would not tilt the power over 

the nation’s purse strings in favor of the president, but restore the balance that has 

been eroded by Congress’ budget rules that favor spending and pork. As it does in 

43 states, it would make both the legislative and executive branches more accountable for our tax dollars. While some have questioned whether a line-item veto at 

the federal level would threaten the separation of powers, experience with such authority at the state level indicates that would not be the outcome. 

A line-item veto is necessary because under current law, the president’s rescission 

proposals can easily be ignored. This luxury afforded Congress by the Budget and 

Impoundment Control Act of 1974 shifted the balance of power over spending, and 

that balance needs to be restored. It is an affront to common sense that while the 

president now can propose to rescind any portion of an appropriations bill, Congress 

is not required to vote on his rescission package. If Congress chooses to ignore the 

president’s request, it expires after 45 days. The spending proposals stand as law. 

Under H.R. 4890, the President would be authorized to defer or suspend signing 

an appropriations bill for up to 180 days, enough time to allow Congress to consider 

the President’s rescission suggestions and to vote them up or down. By giving the 

president a bigger presence in spending decisions, fiscally sound legislation and not 

special interests would be the order of the day. 

Concern that the line-item veto would give the president unlimited power is unfounded. The fear that the president could use the veto authority to expand his 

power exponentially and upset the checks and balances between the branches is addressed by restricting the president’s veto power to disapproving specific line-items 

in appropriations bills. In this way, the line-item veto would not give authority to 

the president to alter the budget priorities set by Congress in its spending decisions, 

since the veto can only be used to withhold funds for an item. 

As for the constitutionality of H.R. 4890, it is the opinion of former Assistant Attorney General Charles J. Cooper, that the proposal by the president passes that 

test. Mr. Cooper testified before the Senate Budget Committee on May 2, 2006, that 

the Legislative Line Item Veto Act of 2006 has been designed in a way that avoids 

what was previously deemed unconstitutional by the Supreme Court—specifically 

that a president cannot reject outright portions of a bill. If he disagrees with it, he 

must ‘‘reject it in toto.’’ Consequently, it was stated in the court’s opinion that President Clinton’s cancellation ‘‘prevent[ed] one section of the Balanced Budget Act of 

1997 * * * ‘from having legal force or effect,’ ’’ while allowing the remaining portions of the Act ‘‘to have the same force and effect as they had when signed into 

law.’’

14

Mr. Cooper’s testimony is especially significant because in 1997, he was on the 

opposite side of the line-item veto issue, when he represented the City of New York 

and healthcare associations and providers who were affected by President Clinton’s 

use of the line-item veto on the Balanced Budget Act of 1997. That veto resulted 

in a reduction of almost $1 billion in Medicaid subsidies for the State of New York. 

In Clinton v. City of New York, 524 U.S. 417, 448 (1998) the Supreme Court struck 

down the Line Item Veto Act, stating ‘‘the Act’s cancellation provisions violate Article I, & 7, of the Constitution.’’

As Mr. Cooper stated in his Senate testimony: 

The Legislative Line Item Veto Act of 2006, in contrast, is framed in careful obedience to Article I, Section 7 and to the Supreme Court’s teaching in Clinton. The 

President is not authorized by the bill to ’cancel’ any spending or tax provision, or 

otherwise to prevent such a provision ’from having legal force or effect.’ To the contrary, the purpose of S. 2381, as President Bush put it in proposing the legislation, 

is simply to ’provide a fast-track procedure to require the Congress to vote up-ordown on rescissions proposed by the President.’ Thus, any spending or tax provision 

duly enacted into law remains in full force and effect under the bill unless and until 

it is repealed in accordance with the Article I, Section 7 process—bicameral passage 

and presentment to the President. 

For decades, the opportunities for purging wasteful government programs and reducing the size of government have been scarce. A line-item veto can provide opportunities for Congress and the president to work closely for a smaller, more efficient 

and less costly government. 

The Government Accountability Office, Congress’ own investigative agency, estimated in 1992 that a presidential line-item veto could have cut $70.7 billion in porkbarrel spending from fiscal years 1984 through 1989. That’s $70.7 billion in unnecessary spending taken out of the hands of the private sector. 

The line-item veto would help restore control over the budget process. This, in 

turn, would promote fiscal soundness, efficient government, and policies favorable 

to continued economic growth. A line-item veto, over time, would reduce the inclusion of unauthorized, non-competitive projects in appropriations bills and require increased cooperation between Congress and the executive branch in determining 

which programs truly need to be funded with the taxpayers’ money. 

CAGW realizes that while pork-barrel spending is a serious problem, it affects a 

relatively small portion of the budget, and more needs to be done to limit the growth 

of entitlements and other government expenditures in order to bring the budget 

back into balance. However, that does not mean that a line-item veto, which receives a great deal of attention because it is tied to some of the most egregious examples of wasteful spending, should be delayed until other budget problems are addressed or solved. 

Mr. Chairman, the line-item veto would allow the president to weigh parochial expenditures which benefit the few against the common good and the priorities of the 

many. The American people know the way business is done in Washington, and they 

are seeking changes. A recent Wall Street Journal/NBC News poll reported that 

‘‘among all Americans, a 39 percent plurality say the single most important thing 

for Congress to accomplish this year is curtailing budgetary ’earmarks’ benefiting 

only certain constituents.’’

Successive presidents have asked Congress to provide them with the line-item 

veto. Congress must show that it is serious about controlling spending by passing 

legislation giving the president the line-item veto. The time is now to pass a constitutional version of that legislation. 

This concludes my testimony. I will be glad to answer any questions.

Mr. RYAN. Next we are going to hear from Ed Lorenzen, the policy director of the Concord Coalition. Mr. Lorenzen. 

STATEMENT OF EDWARD LORENZEN, POLICY DIRECTOR, 

CONCORD COALITION 

Mr. LORENZEN. Good morning, Mr. Chairman, Mr. Spratt and 

members of the committee; it is good to be before you. 

I am Ed Lorenzen, the national policy director of the Concord Coalition. Before going to work at the Concord Coalition, I spent nearly 15 years working on Capitol Hill, primarily as an aide to former 

Congressman Charlie Stenholm. In that capacity I had the priviVerDate 0ct 09 2002 10:47 Jul 10, 2006 Jkt 000000 PO 00000 Frm 00018 Fmt 6633 Sfmt 6602 F:\DOCS\HEARINGS\109TH\109-18\28214.TXT HBUD1 PsN: DICK
15

lege of working with several members of the committee as well as 

the Democratic and Republican staff of the committee. 

The Concord Coalition has worked for 14 years to help build a 

political climate that encourages elected officials to make the tough 

choices required to balance the Federal budget, keep it balanced on 

a sustainable basis, and prepare for the fiscal and economic challenges that will occur as the Nation’s population become sharply 

older in the coming decades. 

Most recently, the Concord Coalition has organized the Fiscal 

Wake-Up Tour, a series of public forums around the country designed to focus attention on our Nation’s fiscal challenges. We are 

taking this message across the country because better public 

awareness of the problem is the first step in finding solutions that 

are both acceptable and meaningful. 

The Concord Coalition believes that the proposed modified lineitem veto could have a positive impact on the budget process. 

Strengthening the rescission process, as this proposal would do, 

brings greater accountability to the budget process. 

Now, let me say the enactment of the modified line-item veto authority will take a step toward reducing public cynicism about the 

public political process and send a signal to the public that politicians are serious about addressing the deficit, and we are willing 

to set aside narrow parochial interests to make hard choices for the 

common good. 

Restoring public confidence in the budget process is an important 

first step in dealing with the deficit. One of the things that we 

found throughout the Fiscal Wake-Up Tour is that even after explaining to the public the tough challenges we are facing with entitlements and tax policy, that they are willing to make those tough 

choices, but they first want to be reassured that those sacrifices 

will go toward the greater goal of deficit reduction and will not be 

diverted toward special-interest spending or taxes. Under realistic estimates, deficits will remain near or above $300 

billion the rest of the decade. Fiscal policy is not sustainable over 

the long term. 

Now, proposals to grant the President modified line-item veto authority are not likely to have a significant impact on budgetary outcomes. The spending and tax items that will be affected by this 

provision represent a relatively small portion of the budget. Simply 

cracking down on everyone’s favorite target of waste, fraud and 

abuse is simply not enough to get the job done. 

Modified line-item veto authority would do nothing to address 

the underlying structural deficit problems resulting from existing 

tax and entitlement laws, and the legislative actions which have 

the greatest impact on a deficit are expansions of entitlement programs or tax cuts that go well beyond the scope of this legislation. 

That is one of the reasons that the Concord Coalition strongly supports reinstatement of PAYGO budget enforcement rules for all tax 

and spending legislation that would increase the deficit, as well as 

mechanisms which would force Congress to address existing structural fiscal problems. 

The modified line-item veto proposal put forward by President 

Bush embodies the approach of legislation passed by the House of 

Representatives in the early 1990s, as Congressman Ryan menVerDate 0ct 09 2002 10:47 Jul 10, 2006 Jkt 000000 PO 00000 Frm 00019 Fmt 6633 Sfmt 6602 F:\DOCS\HEARINGS\109TH\109-18\28214.TXT HBUD1 PsN: DICK
16

tioned. This approach, an expedited rescission, has received support from Members of both sides of the aisle over the years. 

Having been involved in several previous legislative efforts to 

enact expedited rescission authority, I thought it might be useful 

to briefly discuss some of the differences between this proposal and 

previous proposals, as well as other issues that the committee may 

wish to consider. I will focus on six key areas: the ability to withhold funds, when and how often the President may propose rescissions, allowing separate votes on individual items, sunsetting the 

authority, applying the authority to targeted tax revisions, and ensuring that savings goes to deficit reduction. 

On withholding funds, that is perhaps the most significant difference between H.R. 4890 and previous expedited rescission proposals. As Congressman Spratt and others have noticed, that language will allow the President to withhold funds even if Congress 

has already voted to reject a proposed rescission, which could be 

viewed as an unconstitutional grant of Presidential authority to 

cancel provisions of law. 

Previous expedited rescission proposals included language making it clear that the President could not withhold funds or delay 

implementation of a tax provision after Congress has rejected the 

proposal. I would strongly encourage the committee to replace this 

provision allowing the President to withhold funds for 180 days 

with language requiring that the funds be made available for obligation on the day after rescission package is adopted. 

There was some question in the past whether the President 

would be allowed to withhold funds if Congress ignored or waived 

the requirements of this legislation and failed to act on a proposed 

rescission package. Based on conversations I have had with legal 

scholars in the past, I believe the President would have the authority to defer spending until Congress acts in rescission; however, the 

committee may wish to clarify this point in legislative language. 

On the issue of the timing and composition of the rescission message, most of the previous expedited rescission proposals allow the 

President to submit one rescission package per bill for expedited 

consideration. This limitation was included to prevent the President from tying up the legislative schedule with dozens of rescission proposals. By contrast, H.R. 4890 gives the President the authority to submit rescissions throughout the year with no limit on 

the number of rescissions he can submit. 

On the issue of separate votes on individual items, as Congressman Spratt mentioned, several previous versions contain a mechanism for obtaining a vote to strike an individual action or item in 

a package. If the President proposed to rescind an item with strong 

congressional support in the package with dozens of other lowerpriority items, Congress would have the option of striking the politically popular provision from the package and approving the rest 

of the package. 

On the sunset authority, as Congressman Spratt mentioned, concerns have been raised that the President could abuse this authority granted in the legislation. Some previous versions address this 

concern by including provisions sunsetting authority after 2 years. 

If a President were to abuse the authority, Congress almost certainly would not approve an extension. 

17

H.R. 4890 would allow the President topropose rescissions of targeted tax benefits as well. The Concord Coalition believes budget 

enforcement rules should apply equally to taxes and spending. Special-interest provisions in tax bills have as much, if not more, of an 

impact on the Federal budget of earmarks and appropriation bills. 

And I would note that the concept of allowing the President to single out targeted tax rates and tax bills as well as spending earmarks was originally introduced into the debate by then-House Republican Leader Bob Michel. 

The Concord Coalition strongly supports the requirement that all 

savings through modified line-item veto would go to deficit reduction. This requirement ensures that the authority would be used to 

improve the overall fiscal condition instead of simply reducing the 

priorities of Congress in order to fund the President’s priorities. I 

would encourage the committee to strengthen this language to clarify that any savings from rescinding tax or entitlement provisions 

would not be credited to the PAYGO scorecard for purposes of congressional rules or statutory budget enforcement rules. 

In conclusion, the proposed modified line-item veto and similar 

proposals would not remotely begin to address the magnitude of 

our fiscal problems. However, granting the President modified lineitem veto authority could be a useful tool to improving the accountability of the budget process and achieving greater public confidence in the budget process that will be necessary to make the 

tough choices on much larger fiscal issues. 

Mr. RYAN. Thank you, Ed; and it is nice to see you again. 

[The prepared statement of Mr. Lorenzen follows:] 

PREPARED STATEMENT OF EDWARD LORENZEN, POLICY DIRECTOR, THE CONCORD

COALITION

BACKGROUND

Chairman Nussle, Congressman Spratt, and members of the Committee, thank 

you for inviting me to discuss the President’s modified line-item veto proposal. I am 

the National Policy Director for The Concord Coalition, a nonpartisan organization 

with approximately 200,000 members who hail from every state who have consistently urged Washington policymakers to strengthen the nation’s long-term economic 

prospects through sound and sustainable fiscal policy. The Concord Coalition receives no grants, contracts, or other funding from the government. Before going to 

work at Concord, I spent nearly fifteen years working on Capitol Hill, primarily as 

an aide to former Congressman Charlie Stenholm. In that capacity I had the 

privilige of working with several members of the Committee as well as both the 

Democratic and Republican staff of the committee. 

Concord’s co-chairs are former senators, Warren B. Rudman (R–NH) and Bob 

Kerrey (D–NE). The Concord Coalition has worked for fourteen years since the organization’s founding by Paul Tsongas, Warren Rudman, and Peter G. Peterson in 

1992 to help build a political climate that encourages elected officials to make the 

tough choices required to: • Balance the federal budget • Keep it balanced on a sustainable basis, and • Prepare for the fiscal and economic challenges that will occur as the nation’s 

population becomes sharply older in coming decades. 

Given these objectives, The Concord Coalition is encouraged by encouraged by the 

growth in the awareness of our fiscal challenges on the part of the public and policymakers. The Concord Coalition has organized The Fiscal Wake Up Tour, a series 

of public forums around the country designed to focus attention on our nation’s 

daunting long-term fiscal challenges. The purpose of this new issue-oriented grassroots project is to draw attention to the simple fact that, according to analysts of 

diverse political views, current fiscal policy is unsustainable and hard choices must 

be made to set things right. To that end, we have joined forces with speakers from 

the Brookings Institution, the Heritage Foundation, the Committee for Economic 

18

Development the Committee for a Responsible Federal Budget and other organizations who may differ on proposed solutions but who all agree on the magnitude of 

the problem and the need for serious action. Our purpose is not to cast blame but 

to give the public a better idea of how serious the long-term fiscal problem is; why 

there is no free lunch, and what the realistic trade-offs are. 

We are taking this message across the country because better public awareness 

of the problem is the first step in finding solutions that are both acceptable and 

meaningful. Without greater understanding of the problem among the public, community leaders, business leaders and home state media, elected leaders are unlikely 

to break out of their comfortable partisan talking points. In our Wake Up Tour 

events we explain the greater context for today’s fiscal policy debates, including: 

changing demographics; inadequate national savings; intractable health care costs; 

the crowding out of discretionary spending on everything from defense to education; 

and ultimately growing deficits and debt that is simply unsustainable. 

Under realistic estimates, deficits will remain near or above $300 billion for the 

rest of the decade. Analysts of diverse ideological perspectives and nonpartisan officials at the Congressional Budget Office (CBO) and the Government Accountability 

Office (GAO) have all warned that current fiscal policy is unsustainable over the 

long-term. 

Dealing with these fiscal challenges will require a comprehensive look at all parts 

of the budget. As the Concord Coalition board said in a recent New York Times Ad: 

‘‘If everyone insists on only cutting someone else’s priorities, talk about deficit reduction will remain just that. The best way to end this standoff is to agree on the 

common goal of deficit reduction, put everything on the table-including entitlement 

cuts and tax increases-and negotiate the necessary trade-offs * * * Unfortunately, 

actions have been wanting. Leaders must put the national interests ahead of partisan or parochial interests and develop a specific and realistic plan to put the country on a sustainable long-term fiscal path.’’

THE ROLE OF THE LINE ITEM VETO IN ADDRESSING FISCAL PROBLEMS

One of the cornerstones of the administration’s effort to restore fiscal discipline 

is the proposal for a line-item veto ‘‘that would withstand constitutional challenge.’’ 

The proposal would give the President the authority to defer new spending whenever he ‘‘determines the spending is not an essential Government priority.’’

The Concord Coalition believes that the proposed modified line-item veto could 

have a positive impact on the budget process. Strengthening the rescission process 

as this proposal does 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. 

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. Granting the President modified lineitem veto authority would send a signal to the public that politicians in Washington 

are willing to set aside narrow parochial interests and make hard choices for the 

common good. 

Restoring public confidence in the budget process is an important step in gaining 

the support that will be necessary to make the difficult choices required to address 

our fiscal challenges. On the Fiscal Wake Up Tour we have found that even after 

we present information regarding the magnitude of our fiscal challenges and point 

out that pork barrell spending pales in comparison to the rapid growth in entitlement spending, audience members still feel strongly about the need to cut out 

wasteful spending. It is not that they believe that the budget can be balanced by 

eliminating waste, fraud and abuse. The audiences at Wake Up Tour events understand that addressing our fiscal problems will require tough choices restraining entitlement spending or increase revenues and are willing to accept the necessary sacrifices. But before they accept sacrifices in terms of lower entitlement benefits, reduced services or higher taxes they want to be assured that those savings will go 

toward the greater good of balancing the budget and not diverted to special interest 

spending or tax items. 

Although Concord supports granting the President additional authority to root out 

low-priority spending, we do not believe this proposal by itself will have a significant 

impact on budgetary outcomes. The spending and tax items that would be affected 

by these provisions represents a relatively small piece of the budget. Moreover, 

President Bush has never used his authority under current law to submit rescissions of earmarks or other spending he considers low priority, so it is unclear 

19

whether granting him this additional authority would have much of an impact at 

all. 

According to the House Appropriations Committee, appropriations earmarks totaled $17 billion last year. Other studies have produced somewhat higher numbers, 

perhaps as high as $30 billion. The cost of earmarks in authorizing measures such 

as the highway bill and special interest tax provisions in tax legislation undoubtably 

add to this cost. But even under the most optimistic of estimates the potential savings from reducing or even eliminating so-called ‘‘pork barrell spending’’ would not 

remotely begin to address the magnitude of our fiscal problems. 

In 2005, the government spent $2.47 trillion and ran a deficit of $318 billion. If 

Congress had been required to balance the budget without raising taxes, it would 

have had to enact a 14 percent cut in all federal programs ? not an easy task. But 

if Social Security, Medicare and Medicaid were exempted, the cut would have to be 

25 percent. Nobody would suggest such a thing, but these numbers demonstrate 

that exempting popular programs from fiscal scrutiny is not a viable strategy for 

balancing the budget and that simply cracking down on everyone’s favorite target 

of ‘‘waste, fraud and abuse,’’ is not enough to get the job done. 

Modified line-item veto authority would do nothing to address the underlying 

structural deficit problems resulting from existing tax and entitlement laws. Moreover, the legislative actions which have the greatest impact on the deficit are expansions of entitlement programs or tax cuts that go well beyond the special interest 

provisions that this legislation would address. The Concord Coalition strongly supports reinstatement of budget enforcement rules for all tax and spending legislation 

that would increase the deficit as well as mechanisms which would force Congress 

to address existing structural fiscal problems. 

BRIEF HISTORY OF MODIFIED LINE ITEM VETO PROPOSALS

Under Title X of the Budget Control and Impoundment Act , the President may 

propose to rescind all or part of any item at any time during the fiscal year. If Congress does not take action on the proposed rescission within 45 days of continuous 

session, the funds must be released for obligation. Congress routinely ignores Presidential rescissions. The discharge procedure for forcing a floor vote on Presidential 

rescissions is cumbersome and has never been used. Most Presidential rescission 

messages have died without a floor vote. 

The modified line-item veto proposal proposed by President Bush embodies the 

approach of legislation passed by the House of Representatives in 1993 and 1994 

requiring Congress to vote up or down by majority vote on rescissions submitted by 

the President. This approach, known as ‘‘expedited rescission authority’’ or ‘‘modified 

line-item veto,’’ has received support from members on both sides of the aisle over 

the years. In the early 1990’s, then Congressman Tom Carper worked with former 

Congressmen Dick Armey, Tim Johnson and others to find a bipartisan agreement 

on consensus legislation establishing expedited rescission authority. The House of 

Representatives overwhelmingly approved this consensus language in October of 

1992. 

The legislation was introduced in the 103rd Congress by former Congressman 

Charlie Stenholm, for whom I had the honor of working from 1990 through 2004. 

The House of Representatives passed a version of this legislation in April of 2003 

with several modifications and improvements made in cooperation with Congressman Spratt based on consultations with leaders of the Appropriations Committee, 

the Clinton administration and other Members. The House again passed an expedited rescission proposal authored by Congressman Stenholm and former Congressmen Tim Penny and John Kasich in July of 1994. 

Enactment of the Line Item Veto in 1996 made expedited rescission a moot issue 

in Congress. Congress rejected proposals to provide expedited rescission authority 

as a fallback option if full line-item veto authority was struck down. There was little 

interest in the issue immediately following the Supreme Court decision striking 

down the Line Item Veto law, perhaps because the budget was in surplus. However, 

the proposal resurfaced last year when Congressman Paul Ryan offered an amendment granting the President expedited rescission authority. This approach has now 

been embraced by President Bush. 

Having been involved with most of these previous legislative efforts to enact expedited rescission authority similar to the President’s proposal, I thought it might be 

useful to discuss some of the differences between these previous proposals and the 

legislation currently before the committee as well as other issues the Committee 

may want to consider in marking-up the legislation. 

Previous expedited rescission bills were carefully crafted to comply with the Constitutional requirements established by the courts in I.N.S. v. Chada, 462, U.S. 919 

20

(1983), the case that declared legislative veto provisions unconstitutional. Legislative vetoes allow one or both Houses of Congress (or a Congressional committee) to 

stop executive actions by passing a resolution that is not presented to the President. 

The Chada case held that legislative vetoes are unconstitutional because they allow 

Congress to exercise legislative power without complying with Constitutional requirements for bicameral passage of legislation and presentment of legislation to the 

President for signature or veto. Unlike the line-item veto law struck down by the 

Supreme Court, the expedited rescission approach meets the Chada tests of bicameralism and presentment by requiring that both chambers of Congress pass a 

motion enacting the rescission and send it to the President for signature or veto, 

before the funds are rescinded. Expedited rescission does not provide for legislative 

review of a preceding executive action, but expedited consideration of an executive 

proposal. Thus, it represents a so-called ‘report and wait’ provision that the Court 

approved in Sibbach v. Wilson and Co., 312 U.S. 1 (1941) and reaffirmed in Chada. 

THE ABILITY TO WITHOLD FUNDS FOR PROPOSED RESCISSIONS

The most significant difference between H.R. 4890 and previous expedited rescission proposals is the provision in H.R. 4890 allowing the President to withold funds 

for items in a rescission package for 180 days. The language appears to allow the 

President to withold funds even if Congress has already voted to reject the proposed 

rescission. This could be viewed as an effective grant of presidential authority to 

cancel provisions of law that was proscribed by the Supreme Court in Clinton v. 

City of New York, 524 U.S. 417 (1998), the decision striking down the Line Item 

Veto Act. 

Previous expedited rescission proposals included language making it clear that 

the President could not withold funds or delay implementation of a tax provision 

after Congress has rejected the proposal. I would strongly encourage the Committee 

to replace the provision in H.R. 4890 allowing the President to withold funds for 

180 days with the following language that was included in all previous expedited 

rescission proposals: 

REQUIREMENT TO MAKE AVAILABLE FOR OBLIGATION

1. Any amount of budget authority proposed to be rescinded in a special message 

transmitted to Congress under subsection (b) shall be made available for obligation 

on the day after the date on which either House rejects the bill transmitted with 

that special message. 

2. Any targeted tax benefit proposed to be repealed under this section as set forth 

in a special message transmitted by the President shall not be deemed repealed unless the bill transmitted with that special message is enacted into law. 

There was some question in the past about whether the President would be allowed to withold funds if Congress ignored or waived the requirements of the legislation and failed to act on a proposed rescission package. Based on conversations 

I had at the time with legal experts I believe that the language above gives the 

President implicit authority to defer spending until Congress acts on the rescission 

and that OMB would be allowed to utilize the practice it has followed under Title 

X of the Impoundment Control Act of withholding funds from apportionment until 

Congress acts on the rescission message. However, if the Committee decides to 

adopt the language mentioned above, you may want to clarify that point in the legislative language or committee report. 

LIMITATIONS ON WHEN AND HOW OFTEN THE PRESIDENT MAY PROPOSE RESCISSIONS

Most of the previous expedited rescission proposals granted the President the authority to submit one rescission package per bill for expeditied consideration within 

ten days after enactment. All of the proposed rescissions for each bill would be bundled into one package for Congressional consideration. This limitation was included 

to prevent the President from tying up the legislative schedule with dozens of rescission proposals that would receive priority consideration. The President would be free 

to submit additional rescissions throughout the year as under current law, but they 

would not be eligible for expedited consideration. By contrast, H.R. 4890 gives the 

President the ability to submit rescissions throughout the year with no limits on the 

number of rescission proposals he can submit. This gives the President greater flexibility to rescind items that are discovered or found to be of low priority well after 

a bill has been signed into law, but also presents opportunity for abuse. 

21

SEPARATE VOTES ON INDIVIDUAL RESCISSION ITEMS

The requirement that all rescissions in each bill be bundled together led to concerns that individual items would not get an up or down vote on its merits but could 

be eliminated because it was packaged with other less meritorious items. This led 

to the inclusion of a process to divide up a package of rescissions. The StenholmSpratt legislation passed by the House in 1993 allowed 10 Senators or 45 Members 

of the House of Representatives to demand a separate vote to strike an item from 

the package. That way if the President proposed to rescind an item with strong Congressional support in a package with a dozen other lower priority items, Congress 

would have the option of striking the popular provision from the package and approving the rest of the package instead of being forced to choose between rejecting 

the entire package or approving the rescission of an item with strong support. 

H.R. 4890 does not include language providing the ability to get a separate vote 

on individual items in the package. This is obviously much less of an issue without 

the requirement that all rescissions for each bill be bundled together. However, even 

under H.R. 4890 the President potentially could try to thwart the will of Congress 

by packaging a rescission that does not have Congressional support with other rescissions that are difficult to reject. 

SUNSET

Concerns have been raised that the President could abuse the authority granted 

under this legislation. Specifically, it has been suggested that a President could use 

this authority not to reduce the deficit but to punish his opponents and increase his 

leverage with Members of Congress. In fact, some have argued that granting the 

President this authority could just as easily increase spending if the President 

threatens to veto items unless programs he favors are increased. I believe that these 

dangers are mitigated by the fact that the President must get a majority of the 

House and Senate to support his rescissions for them to take effect. Moreover, a 

President who blatantly abused the authority for political purposes would risk political reprecussions with the public as well as Congress. 

Nonetheless, these are very serious and legitimate concerns and it is impossible 

to determine whether or not these fears are founded until the President has the authority. Some previous expedited rescission proposals have addressed the concern by 

including a provision sunsetting the authority after two years. Advocates of this approach referred to it as a ‘‘two year test drive’’ to see how it operates. If a President 

abused the authority, Congress almost certainly would not approve an extension. 

This is similar to the approach that Congress took when it granted the executive 

branch additional authority in the Patriot Act. 

APPLYING RESCISSION AUTHORITY TO TARGETED TAX PROVISIONS

H.R. 4890 would allow the President to propose rescission of targeted tax benefits 

for expedited consideration in Congress. As a general principle, The Concord Coalition believes that budget enforcement rules should apply equally to taxes and 

spending. Since spending and tax decisions both have consequences for the budget, 

there is no good reason to exempt either from budget discipline. It it therefore very 

appropriate to extend expedited rescission authority to special interest tax breaks. 

Special interest provisions in tax bills have as much if not more of an impact on 

the federal budget than earmarks in appropriations bills. The vast number of special interest fiscal giveaways in the corporate tax bill passed in 2004 and the tax 

incentives in the energy bill approved last year are just the latest examples of tax 

bills becoming the vehicle for Congressional pork-barreling at its worst. 

Applying this authority to tax legislation has encountered resistance among some 

Republicans in the past. However, it is worth noting that the concept of allowing 

the President to single out targeted tax breaks in the same way as spending earmarks was originally introduced into the debate by then House Republican leader 

Bob Michel. Exempting tax cuts from modified line-item veto authority would also 

encourage an expansion of so-called ’tax entitlements’ where benefits are funneled 

through the tax code rather than by direct spending, a far less efficient approach. 

ENSURING THE SAVINGS GO TO DEFICIT REDUCTION

The President proposed that the modified line-item veto be linked to deficit reduction and that any savings achieved would not be available to offset increases in 

other programs. The Concord Coalition strongly supports the requirement that all 

savings from modified line item would go to deficit reduction. This requirement ensures that the authority will be used to improve the overall fiscal condition instead 

22

of simply reducing the priorities of Congress in order to fund the President’s priorities. 

H.R. 4890 seeks to impliment this mandate by providing for an adjustment of 

spending allocations to reflect enacted rescissions and requiring the Director of the 

Office of Management and Budget Committees to adjust any statutory spending limits. Without these provisions the enactment of a rescission package would simply 

free up additional room within budget allocations and spending limits for other 

spending. 

This language is very useful as far as it goes. However, I would encourage the 

Committee to take it a step further and clarify that any savings from rescinding 

a tax or entitlement provision would not be credited to the paygo scorecard for purposes of Congressional rules or statutory budget enforcement rules. The principal 

that the purpose of the modified line-item veto should be to improve the budget’s 

bottom line and not rearrange budgetary priorities should apply to tax and entitlement legislation as well. 

Although statutory pay-as-you-go rules expired in 2002, the Senate still has a 

‘‘post-policy’’ paygo rule for tax and entitlement legislation which increases the deficit beyond the amount provided in the budget resolution. Approval of a Presidential 

proposal to rescind a tax benefit should result in a corresponding reduction in the 

amount available on the Senate paygo scorecard for tax cuts. More importantly, as 

I stated earlier The Concord Coalition continues to urge Congress to reinstate paygo 

rules for all tax and entitlement legislation which would reduce the deficit. We 

would therefore encourage the Committee to adopt language ensuring that any savings from rescinding a tax or entitlement spending provision would truly go to deficit reduction and could not be used to offset other tax cuts or entitlement spending 

increases. 

CONCLUSION

The proposed modified line-item veto and similar proposals would not remotely 

begin to address the magnitude of our fiscal challenges. Budget enforcement tools 

such as pay-as-you-go rules for all tax and spending legislation which would increase the deficit would have a much greater impact on fiscal policy. Balancing the 

budget nd establishing a fiscally sustainable course for the future will require Congress and the President to confront tough choices regarding tax and entitlement policy. However, granting the President modified line-item veto authority could be a 

useful tool in improving the accountability of the budget process and achieving 

greater public confidence in the budget process that will be necessary to make the 

tough choices on much larger fiscal issues.

Mr. RYAN. Next we will hear from James Horney, from the Center on Budget and Policy Priorities. Mr. Horney. 

STATEMENT OF JAMES R. HORNEY, SENIOR FELLOW, CENTER 

ON BUDGET AND POLICY PRIORITIES 

Mr. HORNEY. Thank you, Mr. Chairman. Congressman Spratt, 

members of the committee. I appreciate the opportunity to appear 

here today to talk about the line-item veto proposal. I am Jim 

Horney. I am a senior fellow at the Center on Budget and Policy 

Priorities, a nonpartisan, nonprofit research and policy institute 

which receives no government funds. 

Before going to the center, though, I did work for 20 years for 

the legislative branch; I worked for the House Budget Committee, 

the House Rules Committee, the Senate Budget Committee, the 

Government Accountability Office and the Congressional Budget 

Office. While Ed was staying put working for Mr. Stenholm, I was 

moving around. 

I would also, with the approval of the committee, like to submit 

for the record a paper authored by my colleague at the Center on 

Budget , Richard Kogan——

Mr. RYAN. Without objection. 

Mr. HORNEY [continuing]. Which goes into more detail about the 

things I want to talk about today. 

23

[The information referred to follows:]

PROPOSED LINE-ITEM VETO LEGISLATION

WOULD INVITE ABUSE BY EXECUTIVE BRANCH

PRESIDENT COULD CONTINUE WITHHOLDING FUNDS

AFTER CONGRESS VOTED TO RELEASE THEM

By Richard Kogan 

The Administration has proposed the Legislative Line Item Veto Act of 2006, 

which was recently introduced in Congress by Senate Majority Leader Bill Frist (RTenn.) as S. 2381 and by Representative Paul Ryan (R-Wis.) as H.R. 4890.1 Both 

the House and the Senate are expected to consider the proposal in coming months. 

The proposal would allow the President to sign appropriations acts and tax and 

entitlement legislation, and then strike specific provisions from them. He would be 

allowed to strike far more than ‘‘earmarks.’’ For example, the President could, if he 

chose, leave all earmarks in place while eliminating all funding for the 91 programs 

he proposed to eliminate in his February 2006 budget. 

Under the proposal, when the President chose to strike amounts from appropriations acts, he could withhold the funds in question for 180 days. During that time, 

Congress would be required to vote on whether to pass legislation eliminating the 

funding as the President had requested, without any amendments being allowed. If 

Congress turned down the President’s request to eliminate the funds the President 

could continue to withhold them for months after Congress had voted to reject his 

request to eliminate the funding. Some of the funds could expire in the meantime 

if the 180-day period extended beyond the end of the fiscal year for which the funds 

had been appropriated. 

As acting Congressional Budget Office director Donald Marron explained in recent 

testimony on the proposal, the withholding of funds ‘‘would not end upon the 

Congress’s rejection of the rescission proposals * * *,’’ giving the President the 

‘‘power to unilaterally defer spending for 6 months, thereby effectively canceling 

some budget authority and some programs altogether (for which the funding would 

lapse at the end of the fiscal year * * *’’ 2

The President also could use the new ‘‘line-item veto’’ procedure to strike provisions of new entitlement legislation and certain new ‘‘targeted tax benefits’’ contained in recently enacted tax bills. This authority would be far broader with respect 

to entitlement expansions than with respect to tax cuts. In fact, it appears Congressional tax-writers could draft new tax breaks in a way that made them exempt from 

the new procedure. 

HOW WOULD THE NEW PROPOSAL DIFFER FROM THE PRESIDENT’S EXISTING AUTHORITY

TO PROPOSE RESCISSIONS?

The new proposal would significantly expand the President’s authority. Currently, 

the President can request that Congress rescind (or cancel) enacted appropriations, 

and he can temporarily withhold the money in question while Congress considers 

the rescission request. The new procedure the Administration is proposing would be 

in addition to these existing procedures. (If the President wished Congress to rescind funding, he would be free to submit his rescission proposals to Congress under 

either set of procedures.) 

The new procedure would differ from the existing rescission procedure in a number of important ways: • The new procedure would give the President a ‘‘fast track’’ to force an up-ordown congressional vote on his package of terminations in its entirety. The package 

of cancellations could not be divided into separate parts, amended, or filibustered. 

The vote would occur within 10 days of the package’s introduction in Congress as 

a piece of legislation, and within 13 days of the President’s submitting the package. 

(The package would have to be introduced in Congress within 3 days after the President submitted it.) • The President could package his proposed cancellations in any way he wanted. 

He could split his proposed cancellations of items from a single piece of legislation 

into a number of packages, sending Congress a separate ‘‘package’’ for each proposed 

cancellation and compelling Congress to take dozens of individual votes. Or, he 

could combine cancellations from different bills—both appropriations bills and bills 

affecting mandatory programs—into a single package. Congress would have to cast 

an up-or-down vote on each package exactly as the President had constructed it. In 

sharp contrast, the existing rescission procedure allows Congress to package the 

President’s rescission requests in ways that are most convenient for congressional 

consideration, amend the President’s rescission requests, or decline to vote on them. 

24

• The new procedures would allow the President to withhold funding for 180 days 

after he proposed a package of terminations, even if Congress voted quickly to reject 

the terminations. If the President submitted a package of cancellations in the spring 

of a year, he could effectively kill various items simply by withholding funding until 

the end of the fiscal year on September 30, even if Congress had acted swiftly to 

reject his proposed cancellations.3

This lengthy period of withholding obviously is not necessary, since the fast-track 

mechanism in the proposal would require a vote in Congress within 13 days of Congress’ receiving the President’s package of proposed cancellations. The existing rescission procedure allows the President to withhold funds requested for rescission 

for 45 days, not 180 days. (In recent Congressional testimony, Rep. Paul Ryan stated that the bill’s 180-day withholding provision ‘‘is required to make sure that Congress has the opportunity to act if the President’s rescission proposal is made directly before an extended recess.’’ 4 This argument does not withstand scrutiny. The 

bill could have followed the current rescission procedures, under which the clock on 

the withholding period does not run during Congressional recesses of more than 3 

days. The Administration evidently made a decision not to follow that approach and 

instead to allow the President to continue withholding funds regardless of Congressional action.) 

• Exacerbating this problem, it appears that if the President proposed the rescission of funds under either the existing rescission procedure or the new procedure 

and Congress did not accede to his request, the President could then re-propose the 

same rescissions under the other procedure, withholding the funds for an additional 

period of time and thereby increasing the chances that the funding would effectively 

be cancelled despite congressional opposition to the cancellation. (The funding would 

effectively be cancelled if the fiscal year ended before the withholding period did.) 

• Another difference between the proposed procedure and the President’s current 

rescission authority is that under the new procedure, the President could propose 

the elimination of appropriations for discretionary programs but not a reduction in 

funding for such programs. If the President wanted to reduce but not eliminate a 

program or line item, however, he could continue to use the existing rescission procedures. 

• Another significant point is that under the new procedure, if Congress enacted 

a package of cancellations that the President had submitted, the Budget Committee 

Chairmen would reduce accordingly the amount allocated to the Appropriations 

Committees for the fiscal year in question. The effect would be to dedicate all savings from the cancellations to deficit reduction. 

This rigid approach is problematic, however, and could well prove self-defeating. 

A legitimate purpose of eliminating certain unworthy projects may be to direct 

scarce funds to higher priority programs, but that would not be permitted under the 

new procedure. And without the opportunity to redirect at least some of the savings 

to better uses, Congress is likely to be less willing to approve the President’s package of cancellations in the first place. 

• The new procedure could be applied not only to appropriations for discretionary 

programs but also to new entitlement legislation and to new ‘‘targeted tax benefits’’ 

contained in recently enacted tax bills. The President could propose to cancel or 

scale back an increase in benefits or eligibility in a provision of an entitlement bill 

if he submitted his request after enactment of the bill but before his next annual 

budget was issued. 

Since many entitlement increases work by making additional categories of people 

eligible for benefits or increasing benefits by changing the formulas for calculating 

them, the authority to scale back a new entitlement increase appears to give the 

President the authority to change entitlement laws in unexpected ways. For instance, if Congress created a Medicare ‘‘buy in’’ option for uninsured people between 

the ages of 62 and 65, the President might be able to use the new procedure to scale 

back this entitlement increase by raising the buy-in age to 63 for some types of people and to 64 for others, even if Congress had not created any such distinction between eligible individuals. 

• The story is quite different with regard to ‘‘targeted tax benefits,’’ which the 

President could propose to cancel but not to scale back. Of particular note, under 

the Administration’s proposal, the term ‘‘targeted tax benefit’’ would be defined so 

narrowly that it appears Congress could design special-interest tax breaks so they 

would be exempt from any possible presidential rescission. 

Targeted tax benefits would be defined as measures that provide a tax break to 

100 or fewer beneficiaries. The definition of targeted tax break used in the proposal 

is identical to the definition used in the Line Item Veto Act of 1996. At the time 

the earlier legislation was enacted, the Joint Committee on Taxation indicated that 

25

tax benefits generally could be drafted in ways that would make them exempt from 

this presidential authority, even if they were targeted to 100 or fewer people. 

Note that the proposal would establish unequal treatment of entitlement increases and tax breaks. The President could use the proposed fast-track procedure 

to force a vote on the cancellation of an entitlement improvement that would benefit 

millions of people, but he would not be able to force a vote on a tax break if it benefited as few as 101 people. This is despite the finding by Congress’s Joint Committee 

on Taxation, the Government Accountability Office, and former Federal Reserve 

Chairman Alan Greenspan that many tax breaks are analogous to entitlement programs and are properly thought of as ‘‘tax expenditures’’ or ‘‘tax entitlements.’’ 5

In addition, the President could modify and rewrite entitlement improvements 

and create new entitlement categories and program distinctions that Congress never 

intended, but he could make no such modifications even in targeted tax cuts affecting fewer than 100 tax payers; he could only accept these targeted tax breaks or 

propose to cancel them. 

Finally, the new procedure would place the savings achieved by vetoing an entitlement increase into a ‘‘lockbox,’’ as with vetoed items from appropriations bills. But 

the savings from vetoing a targeted tax benefit would appear not to be placed in 

a lockbox and thus would remain available for another tax cut (although the drafting of the bill is murky on this point). 

WOULD THE PROPOSAL REDUCE THE DEFICIT?

The Congressional Budget Office has suggested that the consequences of this proposal might be to increase total spending rather than reduce it, because ‘‘Congress 

might accommodate some of the President’s priorities in exchange for a pledge not 

to propose rescission of certain provisions, thereby increasing total spending.’’ CBO 

says that studies of states with line-item vetoes have ‘‘documented similar devices 

employed by state legislatures.’’ 6

The columnist George Will makes the same point: 7

Arming presidents with a line-item veto might increase Federal spending, for two 

reasons. First, Josh Bolten, director of the Office of Management and Budget, may 

be exactly wrong when he says the veto would be a ‘‘deterrent’’ because legislators 

would be reluctant to sponsor spending that was then singled out for a veto. It is 

at least as likely that, knowing the president can veto line items, legislators might 

feel even freer to pack them into legislation, thereby earning constituents’ gratitude 

for at least trying to deliver. Second, presidents would buy legislators’ support on 

other large matters in exchange for not vetoing the legislators’ favorite small items. 

Congressional Research Service senior specialist Louis Fisher also came to the 

conclusion that presidents would more likely use line-item veto authority to pressure lawmakers to support White House spending policies by threatening to cut 

Members’ pet projects, than to reduce total spending or the deficit. In a 2005 report, 

Fisher warned that ‘‘experience with the item veto, both conceptually and in actual 

practice, suggests that the amounts that might be saved by a presidential item veto 

could be relatively small, in the range of perhaps one to two billion dollars a year. 

Under some circumstances, the availability of an item veto could increase spending. 

The Administration might agree to withhold the use of an item veto for a particular 

program if Members of Congress agreed to support a spending program initiated by 

the President. Aside from modest savings, the impact of an item veto may well be 

felt in preferring the President’s spending priorities over those enacted by Congress.’’ 8

Finally, Douglas Holtz-Eakin, director of the Congressional Budget Office from 

February 2003 to December 2005 and now a fellow at the Council on Foreign Relations, recently observed that, ‘‘I don’t think there’s any evidence that this, in itself, 

is a powerful enough weapon to alter the path of spending.’’ Holtz-Eakin noted that 

in studying the effect of line-item vetoes at the state level, he found they produced 

mixed results. He found no major differences in spending between states where governors had this power and states where they did not.9 Similarly, in his recent testimony on this proposal, the current acting CBO director noted that in the absence 

of a political consensus to establish fiscal discipline, ‘‘the proposed changes to the 

rescission process included in H.R. 4890 are unlikely to greatly affect the budget’s 

bottom line.’’ 10

WOULD THE PROPOSAL IMPROVE THE QUALITY OF LEGISLATION AND THE POLITICAL

PROCESS?

Mr. Will’s second point, cited above, is not just about the size of the Federal budget but also about the political power of the President. The current division of powers 

gives the President the power to veto legislation, but balances this presidential 

26

power by giving Congress the power to package legislation. The new proposal would 

further weaken Congress in relation to the President by enabling the President to 

propose cancellations that could divide the congressional coalition that had negotiated the legislation in the first place. Mr. Will concludes that ‘‘The line-item veto’s 

primary effect might be political, and inimical to a core conservative value. It would 

aggravate an imbalance in our constitutional system that has been growing for 

seven decades: the expansion of executive power at the expense of the legislature.’’

As Will makes clear, the proposal would enhance the President’s ability to engage 

in political ‘‘horse-trading’’ with Members of Congress. The President also would 

gain enhanced ability to engage in political horse-trading with outside groups. 

Whether dealing with legislators or outside groups, the President could threaten to 

propose the cancellation of their favored items—or pledge not to cancel their favored 

items—in return for their support on other, unrelated matters. The President’s 

threat to cancel, or promise not to cancel, items of importance to legislators or to 

outside groups could be used to increase his leverage to advance policies unrelated 

to the budget, such as support for his nominees, for regulatory legislation, or even 

for foreign treaties. 

These effects were recently discussed by a former staff director of the House Appropriations Committee, who testified—

There is no question that a nexus has developed between campaign fund-raising 

and the community that advocates on behalf of earmarks. The more earmarks a 

Senator or Congressman is able to win for a local university, hospital, city government or art museum, the more lobbyists he may expect to find in attendance at his 

fund-raisers. * * * Earmarks are increasingly used to persuade members to support 

legislation that they might otherwise oppose or oppose legislation that they might 

support. In the House this practice is now being extended to the granting of earmarks in one piece of legislation in return for a member’s vote on unrelated legislation. Chairman Thomas joked openly about the delay in consideration of the highway bill last summer so that the leadership could gain more support for the Central 

America Free Trade Agreement.11

Some would maintain that H.R. 4890 is intended to be a partial cure for these 

diseases. But it could just as easily aggravate the diseases by giving the President 

an easier and more direct way to play the game. The premise of the proposal seems 

to be that the President will be less political, less interested in rounding up votes 

for policy issues, nomination, and other proposals, and less interested than Members 

of Congress in securing the financial and political support of outside groups for such 

purposes. Would that really be the case? Norman Ornstein, of the American Enterprise Institute, thinks not. 

[T]he Republicans have rejected the one device that has been proved in the past 

to bring fiscal discipline, the pay-as-you-go provisions that governed fiscal policy 

through the golden years in the 1990’s. Instead, they are pushing a sham version 

of the line-item veto, basically just a sharply enhanced rescission authority for the 

president. Congress would pass its spending bills, the president would pluck out 

items he did not like and send them back to Congress to vote on them again. 

Leave aside the simple abdication of responsibility by Congress here—the refusal 

to set up a provision to have separate votes on earmarks or related items before 

any bill gets to the president, and the basic message of ‘‘stop us before we spend 

again.’’ The larger reality is that this gives the president a great additional mischief-making capability, to pluck out items to punish lawmakers he doesn’t like, or 

to threaten individual lawmakers to get votes on other things, without having any 

noticeable impact on budget growth or restraint.12

KEY FINDINGS

• The line-item veto legislation would expand Presidential power to a greater degree than has been understood. 

• If the President proposed to cancel funds appropriated for a program, Congress 

would have to vote on his proposal within 10 days from the bill’s introduction in 

Congress. But even if Congress turned down his request, he could continue withholding the funds until 180 days had passed. 

• If the fiscal year ended before the 180-day period did, the funds could expire. 

This could enable the President to kill some types of programs even if Congress had 

rejected his proposals to cancel funding for the programs. 

• The Congressional Budget Office, the Congressional Research Service, columnist 

George Will, and other analysts have concluded the legislation is as likely to increase expenditures as to reduce them, because a President could use this new authority to pressure Members of Congress to support some of his spending and taxVerDate 0ct 09 2002 10:47 Jul 10, 2006 Jkt 000000 PO 00000 Frm 00030 Fmt 6633 Sfmt 6621 F:\DOCS\HEARINGS\109TH\109-18\28214.TXT HBUD1 PsN: DICK
27

cut priorities in return for a promise not to propose canceling appropriation items 

they favored. 

• The legislation supposedly applies to both increases in entitlements and new 

‘‘targeted tax benefits.’’ In fact, its application to special-interest tax breaks may be 

more apparent then real, as Congress would be able to draft new tax breaks in ways 

that exempted them from the line-item veto procedure. 

HOW DOES THIS PROPOSAL DIFFER FROM THE LINE ITEM VETO ACT OF 1996?

Unlike H.R. 4890, the Line Item Veto Act of 1996 granted the President the unilateral authority to cancel enacted appropriations. The Supreme Court ruled in 1998 

that such authority was unconstitutional, since it allowed the President to change 

a law by himself, thus violating the constitutional rules for creating or amending 

laws. The new proposal is presumed to be constitutional because it does not grant 

the President the authority to change an appropriations act unilaterally; rather, he 

would request that Congress enact a change in the appropriations law. 

There are three ways in which the new proposal could grant the President more 

power than under the 1996 act. First, that act gave the President 5 days from the 

enactment of appropriations, entitlement, or tax legislation to decide whether to 

cancel some of its provisions, while H.R. 4890 gives the President up to a year. In 

addition, under the 1996 act, if Congress overturned a presidential rescission by 

statute, the withheld funds would have to be released; under H.R. 4890, if Congress 

overturns a presidential veto by defeating the President’s proposal to cancel the 

funds, the President can continue to withhold the funds for the 180-day period—

long enough, in some cases, to effectively cancel them. 

Second, the 1996 act allowed the President to cancel entitlement increases but not 

to scale them back. As noted in this analysis, the authority to scale back entitlement 

increases may permit the President to rewrite entitlement benefits in unexpected 

ways. (The drafting of the new proposal also suggests that the President could propose to cancel or modify provisions of new legislation that would reduce entitlement 

benefits. In short, it appears that he could veto or modify both entitlement increases 

and entitlement decreases.) 

Finally, the 1996 act included a sunset provision; the act would expire after 8 

years if not reauthorized. This provision apparently was included due to the uncertainty about the effects that the line-item veto legislation would have. The new proposal, by contrast, has no expiration date. It would become permanent law. 

ENDNOTES

1The text of the proposal is available at http://www.whitehouse.gov/omb/pubpress/2006/line—

item—veto.pdf. 2Statement of Donald B. Marron, Acting Director, Congressional Budget Office, before the 

Subcommittee on the Legislative and Budget Process, House Rules Committee, March 15, 2006, 

available at http://www.cbo.gov/ftpdocs/70xx/doc7079/03-15-LineItemVeto.pdf. 3The appropriations provided for most programs expire at the end of the fiscal year in question. In such cases, any funds that have not been obligated by September 30 revert to the Treasury. (If the line-item veto legislation were enacted, it is possible that Congress would respond 

by lengthening the period of time for which appropriations for various programs would remain 

available, but it is unclear whether Congress would do so.) 4Statement of Rep. Paul Ryan before the Subcommittee on the Legislative and Budget Process, House Rules Committee, March 15, 2006. 5 According to the Joint Committee on Taxation, ‘‘special income tax provisions are referred 

to as tax expenditures because they may be considered analogous to direct outlay programs, and 

the two can be considered as alternative means of accomplishing similar budget policies. Tax 

expenditures are similar to those direct spending programs that are available as entitlements 

to those who meet the statutory criteria established for the programs.’’ See Joint Committee on 

Taxation, ‘‘Estimates of Federal Tax Expenditures for Fiscal Years 2005-2009,’’ January 12, 

2005, p. 2. This equivalence is why former Federal Reserve Chairman Alan Greenspan has referred to these tax breaks as ‘‘tax entitlements.’’ 6Testimony of Donald B. Marron, op.cit. 

7George Will, ‘‘The Vexing Qualities of a Veto,’’ in the Washington Post, March 16, 2006, page 

A23. 8Louis Fisher, ‘‘Item Veto: Budgetary Savings,’’ Congressional Research Service, May 26, 

2005. 9 Jonathan Nicholson, ‘‘Precursor to Line-Item ’Veto’ Failed to Restrain Prior Spending, GAO 

Says,’’ Bureau of National Affairs, Daily Tax Report, March 13, 2006, p. G-6. 10Testimony of Donald B. Marron, op.cit. 11The highway bill was a cornucopia of earmarked projects. The testimony was by Scott Lilly 

before the Subcommittee on Federal Financial Management, Government Information, and 

International Security, Committee on Homeland Security and Governmental Affairs, United 

States Senate, March 16, 2006. 

28

12 Norm Ornstein, Three Embarrassments in an All-Around Shameful Congress, American Enterprise Institute, April 5, 2006, at http://www.aei.org/publications/filter.social,pubID.24163/

pub—detail.asp.

Mr. HORNEY. I want to divide the testimony into two parts. The 

first part would talk about what I view as some of the fundamental 

problems with granting line-item veto authority to the President, 

and that is any President, not just to this President. And then second, I do want to talk about some of the problems or issues raised 

by the particular legislation proposed by the President and introduced in the House by Congressman Ryan. Some of those were already addressed by Ed Lorenzen, but I would like to talk a little 

bit more about them. 

The most fundamental aspect of any line-item veto proposal is a 

shift of power from the legislative branch to the executive branch. 

Whether it is because I spent most of my career working in the legislative branch or because I have a high regard for the wisdom of 

the Founding Fathers in balancing the powers between the 

branches of government, I have a great reluctance to see a further 

grant of power from the legislative branch to the executive branch. 

In this I agree with the columnist George Will, who has written: 

‘‘The line-item veto’s primary effect might be political, and inimical 

to a core conservative value. It would aggravate an imbalance in 

our constitutional system that has been growing for seven decades: 

the expansion of executive power at the expense of the legislature.’’

I can understand how people who might even share the concern 

about that transfer of power would still say this might be worthwhile if giving this grant of power to the President had a real likelihood of doing anything to help bring our serious long-term budget 

problem under control. But I think, as other witnesses have testified, that is pretty unlikely, given the limited nature of the lineitem veto. 

In particular, the long-term problem we face is posed primarily 

by the anticipated growth of three entitlement programs—Social 

Security and, more importantly, Medicare and Medicaid—that are 

anticipated to grow in coming decades much faster than the economy will grow and than revenues will grow. 

The line-item veto, of course, is not well designed to get at the 

problems either with those entitlement programs or with taxes because it deals only with new legislation, and the entitlement programs and revenues are generally controlled, governed by permanent law. So you can’t use line-item veto to get the underlying policies governing those programs. What that means is you are left 

with the primary effect of the line-item veto potentially on about 

one-third to two-fifths of the budget represented by programs that 

are controlled by annual appropriations. That obviously is still a lot 

of money. 

And again, if the line-item veto offered a high likelihood of getting rid of wasteful spending in the discretionary area, again, I can 

see how people might say they are willing to chance this transfer 

of power. But, again, I think the likelihood of that happening, that 

the actual result of giving the President line-item veto authority 

will be to get rid of wasteful spending, is probably not very high. 

The assumption that we will get rid of wasteful spending, that 

that will be the primary effect of the line-item veto, is on the basis 

that the President will use the power primarily for that purpose 

29

and not to try to forward and advance other priorities that he has. 

But I know of no reason why we would expect we could give an additional grant of authority to the President and then the President 

would not use that to try to advance whatever policy he is focusing 

on at the moment. So I think again it is likely that you would end 

up with a President talking and at least hinting to a legislator that 

if the legislator would support him on a trade pact, on an immigration bill, on a judicial nominee, then he is likely not to propose a 

veto of some particular program that the legislator supports. 

Again, I am not the only person who thinks this. Norman 

Ornstein, the noted congressional scholar at the American Enterprise Institute, has written that the line-item veto ‘‘gives the President mischief-making capability, to pluck out items to punish lawmakers he doesn’t like, or to threaten individual lawmakers to get 

votes on other things without having any noticeable impact on 

budget growth or restraint.’’

And again, even if you look only at the budget aspects of what 

the President might do with line-item veto, it is far from clear that 

the effect would be to reduce spending. Again, the President could 

use the promise not to veto a particular item that legislators are 

interested in in order to get support for tax cuts or entitlement increases that the President supports that cost far more than all of 

the items the President might consider vetoing. 

Again, not the only ones who think that. Acting Congressional 

Budget Director Donald Marron, in testimony to the Senate Budget 

Committee earlier this month, said that ‘‘the Congress might accommodate some of the President’s priorities in exchange for a 

pledge not to oppose the rescission of certain provisions, thereby increasing total spending.’’

Mr. RYAN. Sir, I am wondering if you could wrap it up. 

Mr. HORNEY. Okay. So the idea, it is entirely possible the effect 

of this would be to actually increase spending. As Congressman 

Spratt suggested that while many people could have a reasonable 

disagreement about how President George W. Bush might use the 

authority, it is hard to imagine anybody seriously arguing that a 

President like Lyndon Johnson would use it to reduce spending. 

Ed Lorenzen pointed out the various problems about the President’s flexibility in packaging and sending up legislation. I think 

that is a real concern Congress needs to address and try to limit 

that. I think there is a particular concern—and I think many people share this—about the 180-day period the President can withhold the money, because, in fact, if he simply waits until the early 

part of April to submit a proposal, then the money, if it is 1-year 

money, expires at the end of the year. I think there are ways to 

get around that, for instance, the suggestion by Ed Lorenzen that 

once either House has voted down the resolution, then you release 

the funds. I think there may be a constitutional question with that. 

I think scholars differ on that. 

There is another way to do it, which is to reduce the period of 

withholding to—probably wouldn’t need any more than 15 days—

but do the calculation of the withholding period on the same basis 

that you do the period when Congress has to act. In other words, 

under the requirement, Congress acts within 13 days. If they go 

out on recess, the clock stops. Calculate the withholding period on 

30

the same basis; if Congress goes out on recess, the clock stops. So 

you can set it that some few days after Congress is required to act, 

then at that point the President has to release the funds unless 

they have enacted a rescission bill. 

One final thing, and then I will wrap up, is concern about the 

direct spending under the proposal. This proposal allows the President not only to strike——

Mr. RYAN. We can get into these in questions. It is just that we 

are well beyond the 5 minutes, and I want to give Members a 

chance because we are going to have a vote relatively soon. 

Thank you very much, and I appreciate your comments, Mr. 

Horney. 

[The prepared statement of Mr. Horney follows:] 

PREPARED STATEMENT OF JAMES R. HORNEY, SENIOR FELLOW, CENTER ON BUDGET

AND POLICY PRIORITIES

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

the opportunity to appear before the Committee on the Budget today to discuss the 

line-item veto legislation proposed by the president and various members of Congress. I am currently a Senior Fellow at the Center on Budget and Policy Priorities, 

a nonpartisan policy and research institute, which receives no grants, contracts, or 

other funding from the government. Before going to work at the Center, I spent 

more than twenty years working in the Legislative Branch, as a staffer at the House 

Budget and House Rules Committees, the Senate Budget Committee, the Government Accountability Office, and the Congressional Budget Office. 

I want to divide my testimony today into two parts. First, I want to discuss what 

I consider the fundamental problems with granting the president—any president—

line-item veto or expedited rescission powers. Then I would like to discuss some of 

the issues raised by the particular legislation proposed by the president and introduced in the House as H.R. 4890 by Congressman Ryan. With the permission of the 

Committee, I would also like to submit for the record a paper written by my colleague at the Center on Budget, Richard Kogan, entitled ‘‘Proposed Line-Item Veto 

Legislation Would Invite Abuse by Executive Branch.’’ That paper goes into more 

detail about the matters I will discuss in my testimony. 

The most fundamental aspect of any line-item veto proposal is to shift power from 

the legislative branch to the executive branch. Whether because of a career spent 

primarily working for the legislative branch (although that ensures I know the 

shortcomings of Congress all too well) or my basic regard for the wisdom of the 

founding fathers in balancing powers in our government, I am troubled by the idea 

of further enhancing the power of the executive branch. I agree with columnist 

George Will, who has written that ‘‘The line-item veto’s primary effect might be political, and inimical to a core conservative value. It would aggravate an imbalance 

in our constitutional system that has been growing for seven decades: the expansion 

of executive power at the expense of the legislature.’’

I could understand, however, how even some who share my concern about shifting 

power to the executive branch in general might believe that giving the president 

line-item veto authority would still be worthwhile if it were likely to significantly 

help in bringing our long-term deficit problem under control. But I do not believe 

that giving the president line-item veto authority is likely to produce that result. 

First of all, a line-item veto is not well-suited to getting at the biggest cause of 

our real, long-term budget problem. That long-term problem is posed primarily by 

the fact that under current policies the cost of three big entitlement programs—Social Security, Medicare, and Medicaid—are projected to grow at a rate that will exceed the growth of the economy and revenues, leading to ever higher deficits, borrowing, and debt unless the policies guiding those programs and taxes are changed. 

Because those entitlement programs and revenues are generally governed by permanent law, the line-item veto—which provides only the opportunity to modify new 

legislation—is not a tool that can be used to make changes in the underlying laws 

governing entitlements and taxes (and, as I will discuss shortly, the ability to use 

the proposed line-item veto even to make changes in new tax legislation is very limited). 

As a result, the potential effect of the line-item veto is to a large extent limited 

to the one-third to two-fifths of the budget determined through annual appropriation 

legislation. That is, of course, still a large enough portion of the budget to be conVerDate 0ct 09 2002 10:47 Jul 10, 2006 Jkt 000000 PO 00000 Frm 00034 Fmt 6633 Sfmt 6621 F:\DOCS\HEARINGS\109TH\109-18\28214.TXT HBUD1 PsN: DICK
31

cerned about, and if the line-item veto offered a realistic chance of limiting unwise 

spending in that area, it might still be worth trying. But I think that the line-item 

veto is unlikely to have that effect. 

The success of the line-item veto in limiting unwise discretionary appropriations 

depends on the president using the authority solely or primarily to eliminate such 

unwise spending, as opposed to using the authority as leverage to gain support in 

Congress for any number of policies he is pursuing. But why should we expect that 

a president would not use this power to help him achieve a variety of goals; for instance, to promise a legislator that he will not veto an item favored by that legislator in return for a vote on a judicial nominee or a trade pact supported by the 

president. Norman Ornstein, the noted Congressional scholar at the American Enterprise Institute, concludes that the line-item veto ‘‘gives the president a great additional mischief-making capability, to pluck out items to punish lawmakers he 

doesn’t like, or to threaten individual lawmakers to get votes on other things, without having any noticeable impact on budget growth or restraint.’’

And, it is far from certain that any effect that the line-item authority might have 

on the budget would be to restrain spending. For instance, a president could promise not to veto a particular item in return for the sponsor of that item agreeing to 

support new spending or tax cuts proposed by the president that far exceed the cost 

of items the president might consider vetoing. It is not unlikely that giving the 

president line-item veto authority would actually increase spending and deficits 

compared to what would occur without the line-item veto. 

We at the Center on Budget are not the only ones who think this is a possibility. 

Acting Congressional Budget Office Director Donald Marron, for instance, told the 

Senate Budget Committee earlier this month that ‘‘the Congress might accommodate some of the president’s priorities in exchange for a pledge not to propose rescission of certain provisions, thereby increasing total spending. As CBO has previously 

testified, studies of the line-item veto at the state level have documented similar devices employed by state legislatures over the years * * *.’’

Columnist George Will also concluded that the line-item veto might not have the 

desired effect of reducing spending, explaining: ‘‘Arming presidents with a line-item 

veto might increase federal spending, for two reasons. First, Josh Bolten, director 

of the Office of Management and Budget, may be exactly wrong when he says the 

veto would be a ’deterrent’ because legislators would be reluctant to sponsor spending that was then singled out for a veto. It is at least as likely that, knowing the 

president can veto line items, legislators might feel even freer to pack them into legislation, thereby earning constituents’ gratitude for trying to deliver. Second, presidents would buy legislators’ support on other large matters in exchange for not 

vetoing the legislators’ favorite small items.’’

I would imagine that reasonable people could have different views about how 

president George W. Bush might use the line-item veto, but I wonder how many 

people would be willing to argue that giving line-item veto authority to a president 

like Lyndon Johnson would reduce spending. 

Let me turn now to a few of the problems that are presented by the particular 

version of the line-item veto proposed by the president. 

First are issues related to the submission of the president’s proposed rescissions. 

Under the administration’s proposal, the president would have enormous flexibility 

as to when he can submit proposed rescissions and how he could package his rescissions. For instance, the president would be able to propose to rescind a discretionary 

appropriation at any time as long as the funds appropriated remain available for 

obligation. For multi- or no-year appropriations that remain available for obligation 

for more than one fiscal year, the president could even wait several years after an 

appropriation is enacted before proposing the rescission. For entitlement program 

increases or targeted tax provisions, the president could submit a veto proposal any 

time after legislation is enacted and before his next budget is submitted. Furthermore, the president would be able to submit multiple rescission bills for any single 

appropriation, entitlement, or tax bill, or to submit a proposed rescission bill that 

includes rescissions of items from any number of different bills (combining, for instance, rescissions of discretionary appropriations, entitlement increases, and tax 

provisions in the same rescission bill). The Congress would then have to consider, 

but would not be able to amend or modify in any way, each of the bills the president 

submits. This gives the president the ability to affect the Congressional legislative 

agenda to a far greater degree than he currently can. 

Second, and perhaps more importantly, the administration’s proposal would effectively allow the president to permanently rescind discretionary funding even if the 

Congress votes down his proposed rescission legislation. Under the administration’s 

proposal, discretionary funds the president proposes to rescind can be withheld for 

up to 180 days after the president submits his rescission to the Congress, even if 

32

the bill proposing to rescind the funds is defeated by the Congress within days of 

being submitted. In the case of appropriations that are only available for one fiscal 

year, the president could wait until April 1 to submit rescission legislation and then 

withhold funds proposed for rescission in that bill until the end of the fiscal year, 

at which time the funds expire. Thus, whatever action the Congress takes on the 

proposed rescission legislation, the funds would be cancelled. 

It is not necessary to have this180-day withholding period in order to ensure that 

Congress could not put off voting on the rescission package and still secure release 

of funds proposed for rescission by taking an extended recess until the withholding 

period has passed. The simplest way to achieve this without allowing the president 

to withhold funds long after the Congress has voted against his proposed legislation 

would be to require the president to release the funds as soon as either House votes 

against the rescission package, but that approach might run afoul of the Supreme 

Court’s decision that a one-House veto is unconstitutional. But it is also possible to 

achieve the desired result by calculating the period for which the president can 

withhold funds on the same basis as the period during which Congress has to consider the proposed rescission package, with the withholding period extending a few 

days beyond the Congressional deadline. The administration’s proposal requires the 

House and the Senate to vote on the rescission package within 13 days of session 

after receiving the president’s proposed rescission package. If the president were allowed to withhold funds proposed to be rescinded for 15 days of session of the House 

or 15 days of session of the Senate, whichever is longer, then Congressional action 

would have to be completed before the president would be required to release the 

funds (assuming Congress did not pass the rescission bill). If Congress delayed acting on the rescission bill by taking an extended recess, the withholding period would 

be extended by the length of that recess. 

Finally, I want to briefly address concerns about the way the administration’s proposed line-item veto procedures would apply to new entitlement legislation and to 

‘‘targeted tax benefits’’ included in new tax legislation. The president would be allowed to propose to cancel or scale back proposed increases in entitlement spending 

contained in new legislation. Since many entitlement increases occur as a result of 

making additional categories of people eligible for benefits or increasing benefits by 

changing formulas that determine them, the authority to scale back a new entitlement increase appears to give the president the ability to change entitlement laws 

in ways the Congress never anticipated in drafting the legislation. For instance, if 

Congress created a Medicare ‘‘buy in’’ option for uninsured people between the ages 

of 62 and 65, the president might be able to use the authority granted by the lineitem veto proposal to scale back the entitlement increase by raising the buy-in age 

to 63 for some types of people and to 64 for others, even if Congress had not created 

any such distinction between eligible individuals. 

In contrast, the administration’s proposal would only allow the president to cancel, but not scale back, targeted tax benefits. More troubling is the fact that targeted 

tax benefits are defined—as they were in the 1996 line-item veto legislation—so narrowly that it appears Congress could design special-interest tax breaks so that they 

would be exempt from any possible presidential rescission. Only measures providing 

tax breaks to 100 or fewer beneficiaries can be considered as targeted tax breaks, 

and further restrictions on the definition led the Joint Committee on Taxation to 

conclude in 1996 that tax benefits could generally be drafted in ways that would 

make them exempt from the presidential line-item veto, even if they were targeted 

to 100 or fewer people. 

Note that the proposed line-item veto procedure would establish unequal treatment of entitlement increases and tax breaks. The president could use the proposed 

line-item procedure to force a vote on the cancellation of an entitlement improvement that would benefit millions of people, but would not be able to force a vote 

on a tax break if it benefited as few as 101 people. This is despite the finding by 

the Joint Committee on Taxation, the Government Accountability Office, and former 

Federal Reserve Chairman Alan Greenspan that many tax breaks are analogous to 

entitlement programs and are properly thought of as ‘‘tax expenditures’’ or ‘‘tax entitlements.’’

In conclusion, there are a number of troubling aspects of the particular line-item 

veto plan proposed by the administration, but even if such flaws as the 180-day 

withholding period were corrected, I believe the fundamental problem with any lineitem veto proposal—the shift in power from the Congress to the president without 

any real likelihood that the shift will improve budget outcomes—should deter Congress from enacting a such a plan.

Mr. RYAN. I will start off. No. 1, Mr. Spratt, you raised a number 

of concerns—all very important and valid concerns, I might add—

33

as to the issue of whether or not this line-item veto is the panacea 

that is going to balance the budget. No one is pretending that it 

is. Mr. Hensarling, Chocola, and I have introduced comprehensive 

budget process reform, as have many other Members. This is 1 of 

16 ideas we are proposing on getting our hands around our fiscal 

house and reforming the budget process. So this was never meant 

to be the end of the system to change the way we spend money; 

this is one of the important components of doing it. That is point 

No. 1. 

Mr. Spratt, I would like to address some of the points you made, 

which I think are extremely important. When we introduced this 

bill a number of months ago, we introduced it with the sole intention of putting it out there to get feedback and responses from people as to how it can be improved. Let us go through a couple of 

these issues. 

Duplicative submissions. It was never the intention when I drafted this bill that the President could just keep redoing the same request over and over to run out the clock. I think that is something 

we can clearly address in the amendment process hopefully here in 

a markup. 

A sunset date, I think that is something we should also discuss. 

Bundling proposals. Can the President submit 115 proposals and 

tie Congress up in knots? That is not the intention either. And that 

is something we can also address, hopefully, in the amendment 

process. 

Limiting the number of requests. That as well I think is something we can address. 

Deferral. This is the big issue that I think Mr. Horney brought 

up and Mr. Spratt brought up, very important issue, a 180-day deferral is long. Here is the reason why it is in this bill in its current 

form, which I am looking at ways of changing it. My original idea 

was to have a legislative day, say 10 to 20 legislative days, because 

then you can incorporate a recess. A legislative day calendar incorporates those recesses. My fear is that if we do an omnibus appropriation at the end of the legislative process—I am not a big fan 

of omnibuses, but we have done them—let’s say we do one at the 

end of October, go into recess, we don’t come back until January 

20 for the State of the Union, Congress could set this up so that 

the President couldn’t defer beyond that window and then run up 

the clock and not be prone to this tool. 

So that is why I thought legislative days would have been the 

answer. Constitutionally it doesn’t work. You can’t really find many 

lawyers that tell you that works, so we have a constitutional problem with that approach. 

The other approach, having it conditioned upon the recess date, 

we have constitutional issues there, I believe. So I am convinced 

that we would have a court problem if we did it that way. So it 

is difficult to find an airtight constitutional way of limiting this 

time, and that is something that we are still looking for. 

And, Mr. Spratt, I would really enjoy some suggestions from you 

on how best to improve that. One of the things that I think we can 

do to improve this so that this can’t be a tool of abuse by any President with deferral authority is to limit the upfront time, limit the 

time in which he can submit this request after a bill is signed into 

34

law. That helps tighten the schedule at the front end, and then on 

the back end we have to work on making sure that the deferral 

isn’t excessively long. Hinging it on whether Congress acts or not 

is something that I would like to do; again, I think we have some 

legal problems with that as well. 

So these all get into sticky constitutional issues. If we are not 

worried about that, we could make this easy, 10 legislative days or 

something like that, done, case closed. I don’t think you would have 

an abuse of power on deferral, and Congress would have an airtight system. There are some constitutional issues, and that is 

something we are going to have in a hearing here, I think, in 2 

weeks with some constitutional scholars. 

Mr. Toomey, let me just ask you a quick question. You served 

here for 6 years, and you witnessed the process, you witnessed the 

process at the end of the stage of the process at the conference reports where a lot of things get stuck in a conference report. As a 

member of the Ways and Means Committee, I see it happen on tax 

policy all the time; as a member of the Budget Committee, watching the appropriation bills go through, you see a lot of stuff get put 

in at the end of the stage, provisions that never had hearings, provisions that never received scrutiny. 

Do you think this is a good tool that can help bring some kind 

of accountability at the end of the process? And the rest of the 

three of you witnesses, if you would like to comment on that point 

as well. 

Mr. TOOMEY. Well, I think it would. I think the tendency would 

be—first of all, I support a number of the other budget process reform measures that you and others have promoted. And I think the 

main common element in these things is more transparency, more 

openness, more scrutiny, allowing Members and the public to be 

more aware and give more consideration to some of these proposed 

spending measures, especially those that haven’t gone through a 

normal hearing process. And it strikes me that if these provisions 

are subject to the review of the President and the possibility of a 

separate up-or-down vote, then it influences the beginning of the 

process as well. 

Just the awareness of that, I think, would suggest that Members 

might take a more cautious approach to what they will suggest. 

And while we all necessarily—we will have to speculate about what 

the net effect of this bill would be if it were signed into law, I have 

to disagree with some of the other panelists. I think the tendency 

would be to reduce the number of these earmarks and this kind of 

spending rather than to increase it. Ultimately we won’t know unless and until it actually becomes law. 

Mr. RYAN. Thank you. And I apologize to the other witnesses. I 

spent too much time talking, but I want to stick to the 5-minute 

rule so Members get a chance to ask the questions. So if later on 

if you want to make those comments, I would encourage it. 

At this time I would like to recognize Mr. Spratt. 

Mr. SPRATT. Thank you all for your testimony because we have 

pretty well the spectrum here. 

Ed, you will remember over the years this bill went through an 

evolutionary process, and I think Charlie Stenholm was one of the 

first to promote it, along with Tom Carper, and it went through a 

35

number of different committees, Government Operations, this committee and Rules Committee, and as it did, it got fine-tuned more 

and more. 

When we had the constitutional line-item bill on the House floor, 

I got up and offered as an addendum to it expedited and enhanced 

rescission. And I said this bill is unconstitutional—excuse me, it 

was not unconstitutional, it was a statutory line-item veto based on 

the presumption that the President had this authority under the 

Constitution. As Bob Bork once said, if the President had that 

power, how come nobody has noticed for the last 210 years? 

In any event, what I said on the House floor to my Republican 

colleagues across the aisle was, add this to it as an addendum to 

it, and when the first section gets held unconstitutional, as it almost certainly will, you have some standing law as a fallback. They 

wouldn’t vote for it. I am not even sure, Paul, that they allowed 

it to be made in order. I got up and made some kind of protestations about it, but it never became law. 

But the ostensible concern there was that the Senate would buy 

off on expedited rescission and not give passage to the tougher part 

of the bill. That was an opportunity to put this in law on a trial 

basis. 

One of the things that came out of our study of the bill and our 

consideration of the bill was this idea to have a petition of, say, 50 

Members who would be able to break out an individual item, an 

individual cluster of items, and have a separate vote on it. You recall the pros and cons of that, Ed? 

Mr. LORENZEN. Yes. The pros of that approach is that it allows 

Members to get an individual vote on their item; that if a military 

construction appropriations bill was passed, and the President submitted 25 rescissions of that package, that there may be an individual Member may feel like his or her individual project is defensible, but would not want to be dragged down by the other proposals that are in there. So allowing the individual Member to get 

a vote on his or her individual projects, if they could convince 

enough of the Members, would allow them to separate that out. 

And also, absent this type of process, the President could intentionally—potentially thwart the will of Congress by packaging one 

or two rescissions that Congress wouldn’t support in a package of 

many other provisions that Congress would never—would be reluctant to reject. 

So again, the ability to strike out these more controversial ones 

would prevent the President from abusing it. And furthermore, it 

may make it more likely that you not have one or two controversial 

items sink down the savings in the rest of the package. 

Mr. RYAN. Can I ask a clarifying question; was it 15 or 50? 

Mr. LORENZEN. It was 15 in the House and 15 in the Senate. 

Now, the two arguments against it are, No. 1, the President submitting an entire package, and the view that the President should 

get a vote on his package as a whole. The other concern, as it 

comes to the procedural matter, is under the expedited rescission, 

without a separate vote, the House and Senate would either pass 

or reject the identical versions, there would be no conference. There 

is the issue that if the House were to strike out two package provisions, and the Senate were to strike out two separate provisions, 

36

you have to go to a conference. And there would be serious constitutional problems with trying to maintain an expedited process 

at that point. 

Mr. SPRATT. Let me switch over to a couple other things. That 

is one idea for modifying it so that the President has to choose selectively, or at least we get the opportunity—now, some people say 

that means the committee chairmen would get all their stuff approved, and the back benchers would never be able to carry a vote. 

There are all kinds of political considerations at stake here. 

Mr. Schatz, did I understand your testimony to be that you 

thought the President could defer signing an appropriation bill for 

up to 6 months? 

Mr. SCHATZ. I did not speak to that provision, Mr. Spratt. It is 

something that I think should be examined by the committee. It is 

certainly different than the prior enhanced rescission procedures 

that we have supported. So I would like to certainly encourage the 

committee to think about that. I understand what Mr. Ryan said 

and is trying to do. There has to be some time limit; 6 months is 

probably too long. 

Mr. SPRATT. Mr. Toomey, you have served here before. Wouldn’t 

you agree there has to be some sort of pretty narrow window within which the President has to act or forego the option? 

Mr. TOOMEY. There probably ought to be some constraint on the 

time. And I think, as Congressman Ryan mentioned, there are 

probably a number of areas where this proposal could be tweaked 

and improved. 

Mr. SPRATT. Thank you. My 5 minutes is up. 

Mr. RYAN. Mr. Ryun is gone. 

Mr. Hensarling. 

Mr. HENSARLING. Thank you, Mr. Chairman. 

Personally I find it difficult to believe that any work of yours 

would need improving or tweaking, but I can at least admit to the 

possibility. 

Mr. Schatz, in your testimony you mention that—and I think we 

all agree—that relative to the size of the Federal budget and relative to the size of the Federal deficit, that line-item veto geared 

toward earmarks is a relatively small portion of the budget—huge 

compared to the salaries of the American people. But you mention 

that even though the money saved is relatively small and limiting 

waste, it could have a substantial effect on the spending culture. 

Can you elaborate on that statement in your testimony? 

Mr. SCHATZ. Yes, Mr. Hensarling. The appropriations process, as 

you are all certainly aware, consumes an enormous amount of time. 

And given the number of requests that go to the subcommittees, 

those in turn also take a tremendous amount of time. And I think 

the consequences of those activities have been seen, the Jack 

Abramoff scandal, the Duke Cunningham sentencing, that it can 

literally get out of control. Some say it borders on legalized bribery, 

and in some cases obviously it has been illegal. 

We are not trying to stop that or address it. If somebody is going 

to be bribed, they are going to be bribed, but the point is that it 

would—in terms of the time that these appropriations subcommittee should be spending, it would take up less of their time. 

37

One of the reforms that we have suggested is that nothing should 

be appropriated if it has not been the subject of a hearing. Now, 

there were thousands of requests last year; we understand they are 

down this year because of the earmark reforms being proposed, and 

the fact that the committee might be recognizing it takes a lot of 

their time, but we have hearings on everything else, and it would 

take up even more time if hearings were held on these various proposals. So that is our point that it is not a lot of money, but it 

takes up a lot of time and energy. 

There is a whole business out there of people going out recruiting 

municipalities—the Montgomery, Alabama, YMCA has its own—to 

go get earmarks lobbyists. It is just extraordinary where we have 

come over the years in terms of what people are looking for from 

Congress. If there is a lack of oversight generally, it makes it even 

harder to do that job. 

Mr. HENSARLING. Thank you. 

Mr. Toomey, I think that Mr. Horney had made the point that 

he could envision a scenario where if we passed some version of 

Mr. Ryan’s legislation, it could actually lead to more spending. I believe in your testimony you mentioned that I think 43 or 50 Governors have something similar to the Ryan idea. So what do we observe in the real world in these other States? Have you looked at 

the actual case histories in our so-called laboratories of democracy? 

Are they spending more money or less money than they otherwise 

would because of this tool? 

Mr. TOOMEY. I don’t have with me a systemic analysis of those 

States that have versus those States that have not, but I think that 

is certainly a very worthwhile exercise to undertake. But I would 

like to make an observation, something that we understand about 

our political system, both at the State level and the Federal level, 

and that is by its very design, every elected member of the legislative bodies necessarily have a somewhat narrow and parochial obligation to represent this fraction of the overall geographical area 

they represent, be that a State or the entire country. And it is only 

the executive that is elected to represent the entire—in the case of 

the Federal level, the entire country. So it is only the President 

that has no narrow geographical, limited parochial interest in 

mind, and has necessarily the entire country’s interest, and so 

there is a fundamental dynamic here. And we have seen that that 

dynamic has led to an explosion in these earmark requests here at 

the Federal level, and we think that it is time for a counterweight 

to that, some measure that would shift a little bit of—and power 

is almost too strong a word. It is an opportunity to focus a spotlight. It is really little more than that. To give that opportunity to 

the person who is elected to represent the entire Nation just seems 

to make a lot of sense to us. 

Mr. HENSARLING. If I could interrupt my friend—I know the 

chairman is running a pretty mean gavel. I would like to slip in 

another question in 24 seconds. 

Mr. Lorenzen, in your testimony you talk about your Fiscal 

Wake-Up Tour, and I think you made a fascinating point there, 

that the individuals who were involved in this know that tough 

choices have to be made in entitlement spending, but they are not 

38

willing to make them if they think that earmark pork barrel spending will continue. 

So what is the nexus that you see between some version of enhanced rescission and changing the attitude of the American public 

and their willingness to open their minds to entitlement spending 

reform? 

Mr. LORENZEN. Well, as I said in my testimony, I believe that 

having a greater confidence that the tax dollars are being spent 

wisely—and Congress has already gone after the waste and 

abuse—will make a greater willingness to make greater sacrifices. 

I think that it will send a signal that elected leaders are willing 

to give up what is perceived as sort of their special-interest spending, and therefore—and they are willing to make sacrifices, and the 

public is willing to do that. 

As I said, at every one of these Fiscal Wake-Up Tour events, we 

go through in great detail talking about the long-term problems 

and dealing with entitlements, and people recognize that and agree 

with that, yet the questions still come back to let us get rid of 

waste. 

So I think it was a very clear message that we have seen that 

they want to first see the sacrifice being shared by everyone, and 

bringing out waste is a way to ensure that Members of Congress 

are contributing to some of the sacrifices. 

Mr. HENSARLING. Thank you. My time is expired. 

Mr. RYAN. At this time I would like to ask unanimous consent 

to allow Mr. Spratt to ask a quick follow-up question. 

Mr. SPRATT. I just want to make an observation in response to 

your question about what did we learn about the actual results. 

A number of Members who had served in State legislatures when 

we were processing these bills in the past recalled and observed 

that where there Governors had very strong veto authorities, the 

tendency of the legislature was to lob on a lot of these special 

projects, knowing that the Governor would have to exercise his veto 

and prune and purge the bill, and it tended to give them an incentive, actually, to add this stuff in, knowing it would eventually be 

filtered out. Whether you can document that or political scientists 

could make the case for that, I am not sure, but it certainly came 

up anecdotally in a lot of testimony we received in years past. 

Mr. RYAN. Well, if I knew you were going to make that point, I 

am not sure I would have yielded to you. 

At this time, I want to yield to Mr. Neal. 

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

For the members of the committee panel, just ask you a question—I think this can be done with a yes or no—in our constitutional system, do Members of the Congress serve under the President? 

Mr. TOOMEY. No. 

Mr. SCHATZ. No. 

Mr. LORENZEN. No. 

Mr. NEAL. So we serve with the President. 

Is it the position of the members of the committee, Mr. Toomey, 

you were a pretty capable guy when you were here. Does Congress 

currently have the tools that are necessary to balance the budget? 

39

Mr. TOOMEY. Together with the President. The President has to 

sign anything that Congress——

Mr. NEAL. But are the tools available to us? 

Mr. TOOMEY. Theoretically, sure. 

Mr. NEAL. It is more than theory, because we did it. 

Mr. TOOMEY. More often than not, we have not done it. 

Mr. NEAL. That is not the point. The point is why embrace an 

artificial solution when Congress already has the ability to do this. 

I liked your suggestion about transparency. That would go a long 

way toward curtailing some of these suggestions about spending. 

Now let me ask you another question here. Why would Members 

of the Congress, given what we have witnessed for the last few 

years—and I have been consistent on this because I opposed the 

line-item veto when Clinton was President, and I want to remind 

Members of the body here how chilling that effect was when it was 

in place for a brief period of time—to call down to the White House 

to ask them if they would look favorably upon your proposal. 

I think we are going down this term limits argument—and, by 

the way, they are all still here, the ones that were for it, a lot of 

them are. Then we embraced the issue of, remember, the balanced 

budget amendment to the Constitution. We are here because of 

what the majority has done. Everybody is familiar with the K 

Street Project and what happened. That is why we are here today 

with another artificial solution. I thought these issues in some part 

were settled at Runnymeade in 1215. 

The argument that we don’t want to arm Lyndon Johnson during 

Vietnam with more tools than were necessary—and, you know, 

Lyndon Johnson said to Richard Russell in 1965 that Vietnam is 

a mistake and that things look very glum. McNamara on those 

tapes is saying the same thing in 1965 and 1966. 

So I would remind our colleagues they acknowledge in 1965 that 

it is a mistake and that it is not going anywhere, and the war went 

on until 1974. How many kids were killed? You can come up with 

a pretty good number. We went from 20,000 to 58,000 when, in the 

privacy of the White House, there was an acknowledgment that it 

wasn’t going to be won on the terms that were being offered. 

What I am arguing with you today about is why would Members 

of Congress cede their authority to the White House, to any President? Transparency, as Mr. Toomey suggested, is the answer. Put 

it out there. Let people see what is being requested. 

You and I know, Mr. Toomey, based upon your experience here, 

that some of the Members of the House that did the most screaming and hollering about spending sent the most letters to the appropriators. Just kick the letters out there, and there will be far 

fewer of those people in the well. And this is not an attempt to gain 

any upper hand. 

Did you ever request an earmark when you were here? 

Mr. TOOMEY. Probably two or three. 

Mr. NEAL. Okay. 

Mr. Ryan, have you requested any earmarks? 

Mr. RYAN. Probably two or three. 

Mr. NEAL. Two or three. 

Mr. RYAN. None this year. 

40

Mr. NEAL. We all know the reason why they are not being requested this year. But I have requested them this year because I 

am pleased to defend the ones I have requested. 

Back to another point here that I think is essential. One of the 

reasons we find ourselves in the position that we are in today is 

because Congress for the last few years, probably 5 or 6, has forfeited oversight responsibility. All you do with the line-item veto 

proposal is shift spending priorities to the White House. Then the 

President will determine what the priorities are for the country, 

rather than the ability to share that responsibility, as Mr. Toomey 

has accurately suggested. 

Mr. TOOMEY. May I respond briefly? 

First of all, I share your preference for greater transparency, as 

I pointed out before. I share your view there should be greater 

oversight and that has been a shortcoming of Congress for a number of years. 

But I would simply suggest that there is an infinite possible 

array of rules by which Congress could conceivably go about the 

spending process. There is a long number of proposed reforms, including PAYGO in various forms, sunsetting provisions, requiring 

hearings, requiring authorization legislation, any number of these 

things. They are all reasonable for a topic of discussion, and I think 

that this is one. 

Mr. NEAL. How about a 3-day layover on conference reports? 

Mr. TOOMEY. There is a very long list of very reasonable ideas. 

We happen to think this is one very such reasonable idea that 

could help us do a better job getting spending under control, not 

the only one. Frankly, we support all of the proposals that Congressman Ryan and some of his colleagues have proposed by way 

of budget process reform. This is not a panacea, but we think it is 

a very constructive step in the right direction. 

Mr. NEAL. But there is general agreement that the Congress currently possesses the tools to balance the budget. 

Mr. TOOMEY. Sure. 

Mr. NEAL. Thank you. 

Mr. RYAN. The gentleman’s time has expired. 

At this time, we will recognize Mr. Conaway. 

Mr. CONAWAY. Thank you, Mr. Chairman. Thank the panel for 

being here. 

Certainly we have got the tools, but I don’t know whether we 

have got the will to do it. Anybody that can read or actually stay 

within lines—this is a chart David Walker gave us this morning. 

We have all seen it. Growth in this Federal Government over the 

next 40, 50 years, which is the single biggest threat to our life, our 

grandchildren’s way of life. I have got an 8-year-old that will be in 

this position in 2050. When left unchecked, this Federal Government will soak up about 50 percent of GDP, and he will have to 

figure out how to live and prosper on the other half. 

It is also kind of like the fellow that fell off the 10-story building. 

As he passed the fifth floor, he said, wow, so far, so good. So far, 

so good. 

Last year, or, actually, earlier this year, we passed the Deficit 

Reduction Act, which trimmed mandatory spending by some $37 

billion, I guess. We proposed a much bigger number in the House. 

41

The Senate whittled it down. The rhetoric on both sides was 

overdone. Our side bragged way too much; the other side cried disaster way too much. 

The truth of the matter is that modest attempt to changing mandatory spending would have less than a half a percent affect on 

these numbers. Maybe $29 billion this year doesn’t have an effect, 

but given how hard it is to make even modest changes to spending 

in this Federal Government, where is the biggest bang for our buck 

in terms of—there is going to be screaming and hollering from both 

sides about trying to get it done and trying to create this political 

will to use those tools to rein all this stuff in. Where is our biggest 

bang for our buck? 

We can’t go through the rhetoric we went through last year for only $36 billion and keep the thing working and have a meaningful 

impact on these numbers. Anybody, where would be the biggest 

bang for our buck in terms of relooking at how the Federal Government spends money? 

Mr. SCHATZ. If I may, one of the proposals that has been used 

at the State level—and I don’t want to get into a long discussion 

of tax and expenditure limitations, but that is one concept, to 

strictly limit overall the amount of increase in the growth of the 

Federal Government. 

Any organization that needs to look at its bottom line picks a 

number somewhere that makes sense and says we will spend 3 percent more than the current year, we will spend at the rate of inflation, we will increase salaries by 2 percent or 3 percent or whatever it is. And it is interesting, because Congress increases the salaries of Federal workers at a certain rate, but then everything else 

goes up far more than that. Well, tie wage increases to spending 

increases. 

So if you set—this would go across the board—a limit of some 

kind, that would help address this growth that we see in all of 

these programs; and it would force Congress to make more of the 

choices that we think they should be making now. 

Mr. TOOMEY. If I could briefly respond, I think you have observed 

yourself in the long run if we don’t address the big entitlement programs, then the rest is fiddling around the edges. However, from 

my 6 years in the House, I learned one thing early on which is 

sometimes we have to settle for very, very modest victories and you 

make very incremental progress. 

So if we can make this incremental improvement, what I see is 

an improvement in the budget process, spending process, and 

maybe change the culture of spending a little bit by putting greater 

scrutiny behind some of these projects, maybe we are taking a 

small step in a long journey to get this budget under control. 

Mr. HORNEY. If I may, I think the key thing is what I have 

learned about budget process over the years, and I think it is very 

important, the process is not good at forcing the Congress and the 

President to do things they haven’t decided are worth doing. So 

what you really want to do is work on getting the will; and then, 

once you do that, budget procedures can be very useful in enforcing 

the decisions. 

I think that is the lesson from 1990 where the President, the 

Congress, Republicans, and Democrats got together. The first thing 

42

they did was make changes in policy. They increased revenues, cut 

spending. They did it together; and then they put in place the 

PAYGO rules and the statutory caps on discretionary spending 

that helped enforce that agreement. It wasn’t the other way 

around. They didn’t change the rules and then go and come to the 

policy decisions. 

I think trying to achieve the results through process rules like 

overall spending limitations can be difficult; and I think the experience of the one State that has really tried that, Colorado, after several years of doing it, as a result of things that happened, what 

happened in the State, they have suspended it. 

So I think there are some real questions about whether things 

like that work; and what you really need to do is what David Walker is trying to do, the Concord Coalition and others, is get the public and lawmakers to realize what needs to be done. 

Mr. LORENZEN. I would concur for the most part with what Jim 

said about budget enforcement, trying to enforce policy decisions. 

The one additional place for the budget process is to bring greater transparency and at least force accountability. So if spending 

were to go above certain levels or revenues above certain levels, I 

don’t think the process could dictate the outcome, but it could potentially at least require an acknowledgment and a discussion of 

that. And the policy outcome may be the one that the Concord Coalition might like, may not, but at least that debate and recognition 

of an issue and consideration of it. 

Mr. RYAN. At this time, I would like to recognize Mr. Baird. 

Mr. BAIRD. Thank you, Mr. Chairman; and thanks to the witnesses. This is a very important and fascinating topic, and I appreciate you raising the issue. 

A word about transparency. I think Mr. Neal mentioned the 3-

day layover. That is already in the House rules, but we waive it 

with alacrity. I have introduced a bill, 72-hour rule, which would 

require 72-hour barring two-thirds majority vote and with exceptions for emergencies, et cetera. 

By the way, it also provides not only that we have 72 hours to 

look at bills, but so would you. Bills would have to be made available on the Internet. I think that would actually go a fairly long 

way toward shining the light of day on frivolous or egregious 

abuses of the earmark system. 

I also want to commend you. Because one of the problems we 

face, one of the reasons people don’t seem to read bills is what we 

do, as we all know, is go down on an appropriation bill that we 

have had 6 hours to read and we don’t say what is the broad sweep 

of this bill. Instead, we say, is my project in it? It is a little bit like 

asking Santa, did I get what I asked for? And if Santa says yes, 

then you love Santa, regardless of who else gets what in the bag. 

It is not a very good way to run a government. 

Having said that, I am not sure the alternative is good, and I 

want to play around with this. So if we don’t put the earmarks, we 

who represent the districts—and I would warrant that I know my 

district a good bit better than the President of the United States 

who has never been there. If we don’t put them in, how is the 

money spent? Is it not going to be spent by a bureaucrat and are 

they not then subject to their own political agendas? 

43

I sincerely would be interested in answers to that. 

Mr. SCHATZ. If I may, and this is part of our All About Pork Report, and among other pieces I have read about this. I find it interesting that Members of Congress talk about these nameless, faceless bureaucrats that make these decisions, where, in fact, they 

give that authority through legislation. 

So it seems to me that you, in some cases, have it both ways in 

some particular project and programs. For example, the Save 

America’s Treasures Program under the National Park Service got 

$15 million, totally competitive, Department of Interior, went into 

the appropriations bill. The Appropriations Committee added 

$16,750,000, all earmarked. 

So, clearly, someone thought that this project should have more 

money, this program should have more money but somehow didn’t 

trust the same people they had already entrusted to make the initial decisions with all of the decisions. So I don’t see how it can be 

done both ways. 

In terms of what the decisions are and how the decisions are 

made, if Congress doesn’t like how they are being made, they can 

change the law, they can change how these grants are made, and 

they can change the process. But I don’t think it is fair to say you 

want to have it both ways. 

Mr. BAIRD. Let me ask this question, and I appreciate the point 

you just made. That would seem to argue for me legitimately to 

make a case against earmarks per se. But I am not sure that then 

is an argument in favor of the rescission authority for the President. 

Mr. SCHATZ. If you have earmarks and they are being added on 

in ways that are noncompetitive and without hearings, then someone has to at least point that out and force Congress to vote separately on those items. Because in the appropriations bills you don’t 

have that opportunity, at least not right now. 

Now if the earmark reforms were done in a way that there would 

be a greater opportunity for amendments to be offered on the floor, 

and certainly a lot of Members, including some who are here, are 

trying to do that, that might make it a little bit less important for 

a line-item veto. But I still think at the back end there is always 

going to be something we would like to see being brought back to 

the floor for consideration. 

Mr. TOOMEY. I would like to add one thought. 

Mr. BAIRD. I want to get an alternative view. 

Mr. TOOMEY. Sure. I would suggest that the alternative to having fewer earmarks on the part of Members of Congress is not necessarily that bureaucrats would do them instead. It is possible that 

they could be discontinued. 

Mr. BAIRD. No. 

Mr. TOOMEY. I think in some cases it is pretty clear that earmarks are used to get funding for something that really wouldn’t 

be able to withstand the scrutiny of a normal process of hearings, 

consideration, authorization, a vote on the floor on a free-standing 

measure. It wouldn’t pass the giggle test sometimes. 

Mr. BAIRD. If I may, I appreciate the point. 

Mr. HORNEY. I think, in earmarks, it is hard. I think there is 

nothing evil about earmarks. A lot of the ones—for instance, look 

44

at the foreign operations bill. It is filled with earmarks. But that 

is because Congress thinks it is appropriate for Congress to decide 

how much money goes to Israel, how much to Egypt, and so on. 

There is a balance. What I think is really key is to realize the 

line-item veto is not even close to being limited to earmarks. We 

are talking about much broader power than that. The President 

could ignore every earmark in an appropriation bill and instead to 

propose to eliminate the 91 programs that the President proposed 

to eliminate in his budget this last year. 

So if you want to get at earmarks, and I think you need to be 

careful about how you do that, the line-item veto is much broader 

and sort of a blunt tool to do that. 

Mr. BAIRD. I appreciate the response on both sides of this. Thank 

you, Mr. Chairman. 

Mr. RYAN. Mr. Cuellar. 

Mr. CUELLAR. Thank you very much, Mr. Ryan. Thank you for 

taking the leadership on this particular issue. I know this is an 

issue that Mr. Spratt and some of the folks who have been here 

before have been working on; and I do appreciate—to the witnesses, I appreciate your comments. 

I think we all understand the great magnitude of facing the fiscal challenges that we have. Of course, all of us are looking at the 

different tools that are available to improve accountability in the 

budgetary process; and, of course, I think the end result is to get 

greater public confidence in the work that we do here in the budgetary process. 

I think if you look at the different budgetary tools, there is a lot 

of them out there on the table, some of them already in law, some 

of them have been debated already and been ruled unconstitutional, and some of them are still going to be considered, like we 

are today. But I think we all have an obligation to consider and 

debate the different tools, budgetary tools that are out there. 

No. 1, PAYGO, the 1974 Empowerment Control Act, Sunset Commission, Performance-based Budget Team, that is legislative oversight, a modified line-item veto, these are different tools out there. 

In my State, for example, in Texas, we have the following budget 

tools, and I support tools like this: PAYGO, I support that; Sunset 

Commission, I support that; Performance-based Budget Team; Legislative Oversight, I definitely support that; line-item veto, I support that, and in fact I am a cosponsor with Mr. Ryan here. 

What I ask is the witnesses to work with us so we can fine-tune 

this particular tool; and today, of course, we are talking about the 

line-item veto. I do understand—I think Mr. Spratt is correct on 

this—any time you propose something, you will have little challenges. New challenges will arise where—I call it sparring between 

the executive branch and the legislative branch. 

For example, if you are talking about line-item veto what is 

going to happen is Congress will find a way to try to design a bill 

so it doesn’t become line-item veto; and you will have conversations 

between individual Members and the President. Look, we will work 

with you on this one if you don’t line-item veto our thing. But I 

think that is part of the process. 

The only thing I do ask is that you work with us to fine-tune the 

legislation. Because, again, we didn’t invent this. There has been—

45

43 other States have gone through this, other Members of Congress 

went through this, and what we ask you is to just help us fine-tune 

this legislation to make it as best a product as possible. Nothing 

is perfect. 

I am a big believer of putting the tools out there, consider them, 

debate them, and then see what we can do to work, and understanding that there will be sparring between the legislative and 

oversight. 

I am a cosponsor of this legislation. I do want to fine-tune it, but 

I still believe that the will is so important, the legislative will is 

so important and legislative oversight. I think that is the most 

basic things that I think we always talk about, but we need to do 

more to provide oversight. 

Pat, any of you, if you have any thought on this, I would be 

happy to work with you, along with the other members. 

Mr. TOOMEY. I would just very briefly say that we agree there 

is a very wide range of tools that are available for the budget process. We support many, many of the reforms. We think this is a 

great start, a great idea; and we look forward to working with you 

and other members of the committee in the hopes of refining it so 

that it can pass and be effective. 

Mr. SCHATZ. We are happy to contribute as well. 

Again, I think there are plenty of individuals—and my understanding is with the next hearing you will be listening to some of 

them—with the constitutional background to also address some of 

the issues related to this legislation. 

Mr. LORENZEN. In my testimony, I raise several issues for consideration. A couple I would bring to your attention is ensuring that 

all the savings go to deficit reduction, including savings from rescinding a tax cut or entitlements, and, obviously, the issue that 

has been discussed about the release of funds and how long the 

President can defer funds and striking the balance between ensuring the funds are spent with the will of Congress while ensuring 

that the money isn’t spent until Congress has acted. 

Mr. HORNEY. While our preference would be that no bill is enacted, we have made suggestions about the way it can be improved, 

and we have talked with House and Senate staffs about those 

things, and we will continue to do that. 

Mr. CUELLAR. Mr. Ryan, again, as one of your cosponsors, I hope 

you work with us on fine-tuning this legislation. There is no Republican way, there is no Democratic way, but if you can work with 

Mr. Spratt and some of the other Members, I think this is a good 

piece of legislation, and if we can tinker this—fine-tune, not tinker—fine-tune it, I would appreciate your consideration. 

Mr. RYAN. I couldn’t agree more. 

We were sitting here talking about ways of fine-tuning it back 

here. The deferral issue is an important one, and my intention is 

not to give the President any more undue power. At the same time, 

we have got Chada issues, constitutional issues that we have to 

make sure we accommodate; and we also have to make sure that 

Congress can’t run out the clock with the recess beyond the deferral. 

So it is not as easy as it seems at first, but, absolutely, my full 

intention is to fine-tune this legislation to address these very valid 

46

concerns, some of which Mr. Horney brought up, I think each witness brought up, and Mr. Spratt brought up. So I look forward to 

doing that. 

At this time, I recognize Mr. Cooper. 

Mr. COOPER. Thank you, Mr. Chairman. 

I, too, am a cosponsor of your legislation but a reluctant cosponsor. I think the record should show that I believe you are the only 

Republican on the committee who is in the room right now, and 

that has been true for some time, so I wish you could muster more 

interest in this hearing on your side of the aisle. 

I think what we have here—as was said in the movie Cool Hand 

Luke, what we have here is a failure to communicate, not necessarily among so-called experts but with the American people. So, 

with your indulgence, let me put the cookies on a real low shelf. 

The President already has tremendous power to cut spending 

and yet, as the Cato Institute and the Heritage Foundation have 

demonstrated, government has grown more dramatically than at 

any time since Lyndon Johnson and probably exceeding LBJ himself and the Great Society. 

So what has the President done with his cutting tools? 

He has got the chain saw of a real constitutional veto. He has 

never used it, the longest-serving President since Thomas Jefferson 

never to use it. 

He has also got a smaller tool, something like scissors, that every 

President since Richard Nixon has had. He has really never used 

that either, even though every President back to Nixon has used 

it hundreds of times. 

Now this whole hearing is about hedge clippers, some sort of intermediate tool that he probably should have, and we are debating 

the fine point of hedge clippers. Meanwhile, he has never used the 

chain saw or the scissors. 

And you and I both know, while an intermediate tool might be 

helpful, if you have never tried the bigger tools or smaller tool, he 

hasn’t even approached the intermediate problem that we are addressing here today. 

So I would suggest what we have here today is not a tool problem, it is a timidity problem. So probably we shouldn’t be having 

a hearing about line-item veto, it should be more on the subject of 

Levitra. Probably shouldn’t talk about constitutionality, maybe 

more Cialis. We probably need Viagra to stop the Niagara of spending and promises that are being made. Because it is a willpower 

problem. It is something more than a chain saw or scissors or 

hedge clipper problem. 

Mr. SPRATT. Mrs. Capps is blushing. 

Mr. COOPER. I told you it would be a real low shelf. 

As the Comptroller General has testified to us, the cost of delay 

in addressing these problems is extraordinary. It is far more than 

even Members of Congress can imagine. It approaches $3 trillion 

a year. Now we will work less this year than any Congress since 

1948, and the problem will be $3 trillion worse when people regain 

their resolve next January. 

I am worried that, as convenient as it is for some of these groups 

to raise money off of this new issue, this recycled issue, this bang 

the drum slowly issue of line-item veto, we should be focusing on 

47

more immediate action because it is a dangerous debate that diverts attention from our real problems and why we aren’t using the 

chain saw or the scissors. 

Now let me remind you I am for the hedge clippers, but it is a 

lot like asking us in Congress, stop us before we spend again. Look 

at the appropriations bills we have just gone through. Look at how 

few votes the Flake amendments have received. All they would do 

is ask us to live up to the transparency and disclosure requirements that most all of us voted for in the earlier lobbying reform 

bill. 

We are not taking action, nor is the White House taking action. 

That is why I am a reluctant cosponsor. Because we are debating 

the fine points and the niceties. Meanwhile, the problem is getting 

worse every day, every week, every month to the tune of $3 trillion 

a year; and we are jawboning about intermediate tools. It is a willpower problem; and, hopefully, with clearer communication, folks 

back home can understand how to give us more backbone. Because 

that is what it boils down to. 

Forgive me, Mr. Chairman, for the statement and for my reluctance in cosponsoring your fine measure, but that is where I think 

the communication needs to go on. 

If any witness would like to make a comment, I would be happy 

to hear you. 

Mr. SCHATZ. Certainly the idea of the President not using his 

veto has been prominently used by our organization and I know by 

Mr. Toomey’s as well. We are not reluctant critics of the lack of fiscal discipline on both sides of the aisle. So I would like to just 

make that point. In fact, we have been disappointed by the fact 

that spending has grown so much; and it wouldn’t have mattered 

under whom that occurred. 

One quick comment totally off what you had said but what Mr. 

Horney said about foreign aid. I don’t think that the line-item veto 

will be looking at the Israeli or Egyptian appropriations. I think 

they are looking at the $13-1/2 million for the International Fund 

for Ireland which this year included plans to fund the World Toilet 

Summit. 

Mr. NEAL. Might I respond? 

Mr. RYAN. It is Mrs. Capps’ turn next. Maybe she can yield to 

you. I want to keep it clean on time. Let me recognize Mrs. Capps. 

It is her turn. 

Mrs. CAPPS. I would like my time, but I would also want to yield 

to Mr. Neal. 

Mr. NEAL. Thank you. 

Mr. Schatz, you do a disservice to the Ireland Fund when you 

don’t point out the success that it has had by singling out one part 

of the Ireland Fund that you disagree with. The border counties of 

Ireland, beginning in Dundalk and moving all through the north, 

have had an experience that is unparalleled with the help of American foreign policy. In fact, if every achievement in American foreign policy came close to what has happened in Ireland over the 

last decade, we would all be standing here with a round of applause. 

The Ireland Fund has worked quite well, despite the single issue 

that you raise. It has been an extraordinary success in those border 

48

counties. Members of the Protestant community, members of the 

Catholic community herald it, as well as the European Union and 

Australia. They all participate. 

Mr. RYAN. This is when you get someone who is Irish up—as an 

Irishman. 

Mrs. CAPPS. Is it time for me to reclaim my time? 

I also just have to say to Mr. Spratt, the mention of chain saws 

always makes me blush. I know all the quotable quotes have been 

said, and I am kind of doing cleanup. 

Mr. Conaway left, but he sort of yielded the fact that there is tremendous lack of will both in the leadership in the administration 

and also in the House now to—which is quite a statement—to do 

anything about balancing the budget. 

Another quote comes from ‘‘USA Today’’ editorializing that the 

line-item veto is a convenient distraction, that the deficit is caused 

primarily by an unwillingness to make hard choices on benefit programs or to levy the taxes to pay for the true cost of government. 

I would like—that admission of failure on the other side—I could 

say, in a partisan way, the Democrats would like a chance to balance the budget. And I didn’t serve here then, so I can’t take credit 

for what happened in the ’90s. I came in at the end of it. But I 

want to use my time or let you use my time to illustrate for me 

what happened in the ’90s that made it work. 

But, before I do, I think there are two elephants in this room 

that I haven’t heard mentioned today. I just want to put them out 

there. Elephants is a good symbol. One is the war cost and the 

other is the huge tax cuts. These have got to have something to do 

with our deficit. 

I also want to make one other point—I am hoping I am going to 

hear in your comments that there should be an effort in a bipartisan way to deal with this. 

But, we have a Speaker now who says he is looking for a majority of the majority to make decisions. A classic example is what 

happens in my years of serving honorably under the good leadership on this committee. I can count only three or four bipartisan 

amendments that were voted on in a bipartisan way in this process 

of drafting a budget. 

Mr. Horney, you sort of put your finger up first. 

Mr. HORNEY. If I could, I think that we have a serious long-term 

problem, no question about that, very serious. What needs to be 

done, the only way it is going to be dealt with is when Republicans, 

Democrats, the President, Congress come together and look at everything, put everything on the table and consider everything. 

That is exactly what happened in 1990 when the current President’s father worked together with congressional Democrats and 

Republicans. I was on the House Budget Committee staff at that 

point. I was out at Andrews Air Force Base for part of that time. 

A lot of people say that was a terrible experience, but, in fact, it 

was an incredible experience of people saying we think we have got 

an important problem, and that means giving up some things I 

care about. 

Democrats were not eager to cut Medicare, but they said, in 

order to get deficit reduction, I will do it. Republicans were not 

eager to raise taxes but said we are willing to do it in order to reVerDate 0ct 09 2002 10:47 Jul 10, 2006 Jkt 000000 PO 00000 Frm 00052 Fmt 6633 Sfmt 6602 F:\DOCS\HEARINGS\109TH\109-18\28214.TXT HBUD1 PsN: DICK
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duce the deficit. They put together a package with bipartisan support, President and Congress, that reduced the deficit by $500 billion over 5 years and set the stage—it didn’t by itself achieve the 

balanced budget, but it certainly had an important effect. 

Mrs. CAPPS. Do you think a bipartisan coming together is essential to this process? 

Mr. HORNEY. I don’t see how it can be done otherwise. Because 

when you are dealing with Medicare, Medicaid, Social Security and 

taxes, it has got to be a combination of reductions in those programs and increases in revenues. I don’t see how either party can 

do those things by themselves. 

Mrs. CAPPS. Would any of the others like to comment? 

Mr. LORENZEN. I agree with everything Jim said about the need 

for everything to be on the table and making tradeoffs, that we are 

never going to be able to balance the budget by cutting everyone 

else’s priorities; and I think bipartisanship is necessary to assure 

that any agreements are sustained so you don’t have the tough 

choice made for deficit reduction reversed as soon as the other 

party is in power. 

I think in the 1990s the other key was that there was a bipartisan consensus that deficits mattered, were a problem, and a bipartisan consensus we should achieve a balanced budget. There 

were differences about how to achieve that, but when you started 

with that goal, that it was the goal we wished to achieve, that was 

able to focus the discussion in a way that we have lost in recent 

years. Once you have that political will and put everything on the 

table, then you can have the type of discussions; and that is where 

budget enforcement tools such as PAYGO and discretionary caps 

and others can help enforce and further that will. 

Mr. TOOMEY. I would like to address, if I could, very briefly. We 

strongly disagree that the main reason we need to get spending 

under control is because of the size of the current deficit. 

First of all, it is less than 3 percent of GDP, that is a modest 

level. 

More importantly, if the deficit as it is today were a serious problem for the economy, everybody acknowledges it would manifest 

itself in high interest rates, which we don’t have. We have extremely low interest rates. 

The last point I would make is, you mention the tax cuts, and 

I think it is indisputable that, at least if you dispute the cause and 

effect, you can’t dispute the fact that since the tax cuts there has 

been a tremendous, robust and broad and sustained economic recovery; and revenue to the Treasury has grown and is at an alltime record high. 

I wouldn’t suggest that raising taxes is in any way a good solution to the deficit program. 

Mrs. CAPPS. Would you agree that there was a burst in the economy in the ’90s as well? 

Mr. TOOMEY. Absolutely. 

Mrs. CAPPS. So there might be some correlation. 

Mr. TOOMEY. There was a whole different set of factors that were 

going on then. 

50

Mrs. CAPPS. I have one further question. You said that deficits 

don’t matter to the economy. Would you agree—did I quote you 

right? 

Mr. TOOMEY. What I am saying, the deficit at the current size 

is not a constraint on economic growth. 

Mrs. CAPPS. Would you share my concern that the trend might 

be significant economically? And, also, would you think there might 

be other considerations besides the economy that would be important to consider with our deficit? 

Mr. TOOMEY. First, the entitlement programs are 

unsustainable; and they would lead to deficits that are unmanageable. I will acknowledge that. 

But I think the main reason to focus on the deficit is if you believe it causes economic problem. If there is no economic problem 

because it is so small, and it could well be that it is that small at 

the moment, then I would say certainly don’t raise taxes to deal 

with something that is not an economic problem. 

Mrs. CAPPS. I am going way over my time. I have a naive question to ask. Why do we never consider the war cost when we talk 

about budget? 

Mr. TOOMEY. Well, we do. Our organization doesn’t get into foreign policy matters, but we acknowledge it is very expensive. War 

is always very expensive. We think, frankly, that, given the costs 

of the war, it creates an even greater need to have fiscal discipline 

on the discretionary and the domestic side of spending. 

Mr. SCHATZ. Mrs. Capps, we would actually like to see offsets to 

pay for the cost of the war. This was done in the Korean War 

and——

Mrs. CAPPS. Do you think we should do that now? 

Mr. SCHATZ. We object to these supplemental appropriations with 

offsets. I know Mr. Ryan and others have tried to offset the nondefense part, but it seems an interesting way to fund something 

you know you are going to spend money on because it frees up 

money to do things we may not necessarily need in other areas. 

Mrs. CAPPS. It also precludes some oversight. 

Mr. RYAN. If the gentlelady will yield, because you are the last 

speaker. We did put $50 billion in the budget. Now as a down payment on the next supplemental, I will be the first to tell you I don’t 

think that is enough, but there was an attempt to try and acknowledge, at least in our baseline and our deficit projections, the cost 

of the war. I agree with Mr. Schatz. We should be seeking offsets 

for these things. 

Mrs. CAPPS. For the cost of the war? 

Mr. RYAN. I would love to cut the spending to pay for the war. 

I am not going to win on that point. We have attempted to offset 

the nonwar spending, and we have made some success on that. 

But I just wanted to make a point to you, which is the budget 

resolution that just passed has $50 billion in it as a down payment 

on the next war supplemental, so there is a recognition in the 

budget that the war will cost money. The administration never acknowledged that until, I think, this year. I think OMB put it in 

their submission. So we in the House have been recognizing that 

a lot longer than OMB has. 

51

Mrs. CAPPS. Let me ask, why is it that we want to offset the cost 

of the war with cuts to Medicare and Medicaid? 

Mr. RYAN. Who said we are cutting those to pay for the war? 

Mrs. CAPPS. Are there no other choices to pay for a war? Where 

is the sacrifice? 

Mr. RYAN. Well, I don’t think anybody said cut Medicare and 

Medicaid. We have not cut them. We have only restrained the increase in spending on Medicare and Medicaid. So we have not been 

cutting Medicare an Medicaid. 

Let’s stick with the topic at hand. I want to keep order here. 

Let me stop with this. I want to thank the witnesses for coming 

and presenting very articulate testimony. I think each of you raise 

a lot of insight into this issue. I think each of you raised some of 

the issues we are dealing with, which is a deferral authority, bundling duplicative submissions, all very important issues that we 

have to grapple with; and, yes, I think that there is some improvement in the fine-tuning area that needs to happen. 

I see Mr. Cooper. 

Let me just say two reasons why we are doing this and why we 

are talking about this. 

No. 1, this bill introduces a new element of transparency and 

scrutiny at the very stage in the process where it is lacking. Provisions which typically have not faced scrutiny hearings or good legislative oversight make it into the bills at the conference stage. 

Members of Congress have one choice, vote for or against the entire 

conference report. Oftentimes, you will find you want to vote for a 

bill because of other meritorious things like veterans, health care 

or something like that; and so, therefore, you are forced to vote for 

other things that are wasteful, unnecessary spending that haven’t 

gone through committee process. 

The President has the same decision. Yes, it is a chainsaw. 

So let’s take a veterans bill. The President can either sign it into 

law and get important things done like veterans health care or 

take a chainsaw and veto the entire bill because there are parts of 

it that never went through congressional scrutiny, never went 

through hearings, and are wasteful spending. 

I think we need to change the culture of the way we spend 

money here. This will not balance the budget, but this tool will 

bring more transparency, more scrutiny, more accountability at the 

very stage in the spending process where it is so lacking. That I 

think will help change the culture of spending here in Congress so 

we can get on to the bigger picture, get on to the bigger things, 

change our culture and talk to each other about how to actually 

balance a budget and, yes, prepare for the retirement of the Baby 

Boom generation which we are so ill-prepared for. 

I will control the time right now and then yield. Mr. Cooper 

raised his hand first. 

Mr. COOPER. Thank you, Mr. Chairman. 

I just wanted to ask Mr. Toomey because I think he said in response to Mrs. Capps a couple of times that deficits at the current 

level don’t pose an overwhelming threat. I would just like to ask 

Mr. Toomey to speculate, what about deficits that were twice as 

large as those you acknowledge today? 

52

Mr. TOOMEY. It is hard to say on precisely what level the markets would start to say this is not sustainable and we need higher 

interest rates. I think the right way to look at this is not in absolute dollar terms but in terms of percentage of GDP. 

Mr. COOPER. I agree. Right now, it is 2.6 percent. What if it were 

6.2 percent? 

Mr. TOOMEY. I think it is fair to say, based on other historical 

facts, if it looked like it would be sustained at that level, that 

would start to probably become problematic. 

Mr. COOPER. If it starts becoming a problem at the doubling 

level, what would it be like if it were 10 times larger? 

Mr. TOOMEY. I think it would be a very serious problem. 

Mr. COOPER. Let me point out to you that the U.S. Department 

of Treasury issued a report in December of last year that said the 

real U.S. deficit wasn’t $319 billion for the year 2005, it was $760 

billion, or 6.2 percent of GDP; and it seems to be climbing, according to that analysis. So you would indicate that would start being 

a problem. 

Mr. TOOMEY. The analysis includes really the way the counting 

occurs for the big entitlement programs. 

Mr. COOPER. Social Security and Medicare. It does include Civil 

Service retirement and some veterans benefits, but it completely 

excludes Social Security and Medicare. If you add those in, according to Harvard Law School Professor Howell Jackson, the 1-year 

deficit for America for 2005 was $3.3 trillion, or 10 times larger 

than the acknowledged figure of $319 billion. 

Mr. TOOMEY. I would simply suggest that what we choose to acknowledge and how we describe it and whether we include the unfunded mandates and the accrual of those liabilities, when the entitlement programs—that matters much less than the real-world observation of the marketplace and the judgment the market makes 

on the sustainability. Right now, the market is saying what we are 

currently doing is sustainable to the extent that 30-year bonds 

have 5 percent yields. 

Mr. RYAN. We are going way beyond line-item veto. You guys can 

have this conversation another time over in the corner if you want 

to. I want to just keep order here. 

Mr. Spratt has asked to be recognized, and at this time let me 

recognize Mr. Spratt. 

Mr. SPRATT. Mr. Chairman, let me make an observation in light 

of what you said a minute ago. 

As I sat here listening, I was trying to discern what is our purpose. Is it to reduce, if not wipe out, the deficit? Is it to deal with 

this thing called earmarking? Or is it some other purpose? What 

is our objective here? 

What you suggest is, no, we probably won’t do much more than 

dent the deficit at best. We might be able to control a bit of spending, but mainly it is to change the culture of this place. If that is 

our objective, then I think it probably ought to start here. 

The reforms we are focusing on should be more internal reforms, 

as opposed to going to the White House and have the White House 

superimposed upon our processes. Let’s look around here. 

Let’s be honest with ourselves. One of the problems we have with 

devising any truly strong budget controls is that we have someVerDate 0ct 09 2002 10:47 Jul 10, 2006 Jkt 000000 PO 00000 Frm 00056 Fmt 6633 Sfmt 6602 F:\DOCS\HEARINGS\109TH\109-18\28214.TXT HBUD1 PsN: DICK
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thing called the Rules Committee, which has almost unbridled authority when it comes to mowing down most of the barriers that 

we would put in place simply by overriding points of order and 

things of that nature. 

So if that is the objective—and I think you probably put it right, 

that should be the objective—then let’s go at it from that point of 

view and deal internally with this institution, clean out our own 

closet before we go downtown and ask the President——

Mr. RYAN. Let me reclaim time and summarize, just give you one 

example of how the Rules Committee did not waive points of order. 

Last week, we had a military quality of life bill which left unpro- tected $500 million in spending that occurred above the 302(b). Mr. 

Hensarling went to the floor with six points of order which were 

unprotected which were allowed in the rule and knocked that 

spending out. 

So the Rules Committee did not wipe this away. The Rules Committee allowed a Member of Congress, any Member of Congress, to 

go to the floor and literally wipe out $500 million in spending just 

last week. 

So I have would say that there are some positive developments 

in the culture around here. This would be yet another positive development in bringing more scrutiny, transparency and accountability to the budget process precisely at the stage where it lacks. 

Let me just conclude by thanking our witnesses for coming. I am 

just going to adjourn the hearing, and we can talk in a minute. Because we are way past the time we had planned on it. So I want 

to thank the witnesses for coming. 

This hearing is adjourned. 

[Whereupon, at 11:46 a.m., the committee was adjourned.]

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