United States General Accounting Office

GAO Testimony

Before the Subcommittee on Legislative and Budget

Process, Committee on Rules, House of Representatives

For Release on Delivery

Expected at

9:30 a.m. EST

Friday

July 30, 1999

IMPOUNDMENT

CONTROL ACT

Use and Impact of

Rescission Procedures

Statement of Gary L. Kepplinger

Associate General Counsel

Office of General Counsel/Accounting and Information

Management Division

GAO/T-OGC-99-56

Mr. Chairman and Members of the Committee:

I am pleased to be here today to discuss the General Accounting Office’s

role in the congressional rescission process and to provide some

perspective on the use and impact of rescissions.

The Impoundment Control Act of 1974 (ICA) was enacted to tighten

congressional control over Presidential impoundments and establish a

procedure under which Congress could consider the merits of

impoundments proposed by the President. Under the ICA the President

may propose a rescission when he wishes to withhold funds from

obligation permanently or submit a deferral when the withholding of funds

is temporary. Funds proposed for rescission may be withheld from

obligation for 45 days of continuous congressional session. If Congress

does not approve the rescission during this period, the President must

release the funds on the 46th day. The ICA also provides a special discharge

procedure permitting 20 percent of the members of either house to force a

floor vote on any presidential rescission proposal.

Rescissions under the ICA have not historically served as a significant

spending reduction tool. Since enactment of the ICA in 1974, Presidents

have proposed 1,172 rescissions totaling $75.8 billion dollars. The

Congress has accepted 459 of those proposals (39%), totaling $24.9 billion

(33%). During this period, Congress has initiated $104.8 billion in

rescissions to revise spending decisions.

The Comptroller

General’s Role

As you know, the President is required to send a copy of the special

message proposing rescissions or deferrals to the Comptroller General on

the same day it is sent to the Congress. Under the ICA, the Comptroller

General is required to review each special message and report his findings

to the Congress as soon as practicable. We review each message to verify

the facts surrounding, as well as the justification for, and the estimated

program effect of, the proposed impoundment. We do this by talking with

program officials, reviewing the latest agency budget documents and

discussing the proposed rescission with Office of Management and Budget

(OMB) officials. We also review each message to ensure that it is not

misclassified, such as a rescission proposal reported as a deferral. We

report our findings on each special message to the Congress, typically

within 25 working days after receipt of the President’s message.

Page 1 GAO/T-OGC-99-56
The ICA also requires the Comptroller General to report to the Congress

any impoundment which the President has failed to report. Obviously, it

would be impractical to attempt to continuously review every account of

the government, but we have found that this is unnecessary. When an

unreported withholding takes place, concerned Members or Committees

of the Congress, intended recipients, or our auditors typically bring it to

our attention.

After the President submits an impoundment message to the Congress, we

are responsible for monitoring the status of affected funds. For example,

we monitor deferred budget authority to ensure that the funds are released

in time to allow for prudent obligation. Well before the expiration of

deferred appropriations, we initiate inquiries at OMB to verify that the

funds will not be permitted to lapse. If it appears that a lapse may occur,

we report the deferral to the Congress as a de facto rescission. We also

monitor the 45-day statutory time limit associated with proposed

rescissions to ensure that funds are released promptly following

congressional disapproval or the expiration of the 45-day time limit.

If the funds are not promptly released after the expiration of the 45-day

period, the Comptroller General is empowered to bring a civil action in the

United States District Court for the District of Columbia to require release

of the budget authority. Prior to bringing suit, the Comptroller General

must report to the Speaker of the House of Representatives and the

President of the Senate the circumstances giving rise to the need to bring

suit. We may not initiate a suit until the passage of 25 days of continuous

session of Congress.

During the initial years of the ICA, we filed suit on one occasion and filed

25-day reports on several other occasions. In each case, the funds were

released. In recent years, it has not been necessary to resort to these

procedures.

Finally, we provide statistical summaries and analyses on the

impoundment process, as an adjunct to the above roles. In the past, we

informally provided a variety of data to the Congress. As the level of

interest in this area has increased, we have prepared and periodically

submitted to the Congress formal summaries of the number and dollar

amounts of the President’s proposed and enacted rescissions, and of

congressionally initiated rescissions. Attachment I summarizes all

proposed and enacted rescissions since 1974.

Page 2 GAO/T-OGC-99-56
Mr. Chairman, I would now like to turn to our rescission data to provide

some perspective on the use of rescissions by both the President and the

Congress since the ICA was enacted.

Use of the Rescission

Process

Both Republican and Democratic presidents have submitted substantial

rescission proposals in each year, save one, since 1974. However, the

number and dollar values proposed have varied widely with each

administration. See attachment II. For example, the Reagan administration

proposed the highest number (245 in 1985) and highest dollar value

($15.4 billion in 1981) as well as the lowest (zero in 1988).

Since 1974, the Congress has approved about 39 percent of Presidential

rescission proposals, totaling about 33 percent of the budget authority

proposed for rescission. The approval rate varies by administration. In the

Clinton administration, Congress has approved about 68 percent of the

proposals, covering 55 percent of the budget authority proposed for

rescission. In the Bush administration, Congress approved about

20 percent of the proposals, covering 18 percent of the budget authority

proposed for rescission. The comparable numbers for the Reagan

administration were about 36 percent of both the rescissions proposed

and the associated budget authority. In the Carter administration, the

comparable numbers were 56 percent of the rescissions proposed and

46 percent of the budget authority.

The Congress, on its own initiative, has made increasing use of rescissions

as a tool to revise enacted budget authority1

. As shown in attachment I, the

Congress has not merely reacted to presidential proposals, but has also

initiated its own rescissions. Overall, since 1974, congressionally initiated

rescissions total nearly $105 billion. When this is added to the presidential

proposals accepted by the Congress, the total of nearly $130 billion of

enacted rescissions exceeds the nearly $76 billion proposed by all

presidents since 1974.2

This data suggest an evolution in the use of rescissions as a budgetary tool.

In 1974, at the time of enactment of the Impoundment Control Act, the

rescission procedure was envisioned as a mechanism to accommodate a

President’s desire to impound funds by providing for congressional review

1

These congressionally initiated “rescissions” are independent of the Impoundment Control Act of

1974.

2

These estimates do not include rescissions of an indefinite amount of budget authority; that is,

rescissions that do not cancel a specific dollar value at the time of enactment.

Page 3 GAO/T-OGC-99-56
and approval of presidential rescission proposals. Congress, of course, can

always rescind enacted budget authority on its own initiative, either to

reduce spending or to adjust spending priorities. Over time, the share of

total rescissions enacted each year which were originally proposed by the

president has fallen and the share originating in the Congress has

increased.

Prior to the enactment of the Balanced Budget and Emergency Deficit

Control Act of 1985, Congress enacted approximately $18.6 billion (or

about $1.7 billion/year) of the $38 billion proposed for rescission by the

president, while enacting approximately $11.2 billion (or $1 billion/year) in

congressionally initiated rescissions. From 1985 through 1990, the years

under the Balanced Budget Act, Congress enacted approximately

$355 million (or $59 million/year) of the $18.5 billion proposed for

rescission by the president, while enacting approximately $29.7 billion (or

about $5 billion/year) in congressionally initiated rescissions. From 1991

through 1998 under the Budget Enforcement Act of 1990, Congress

enacted approximately $5.9 billion (or about $737 million/year) of the

$19.3 billion proposed for rescission by the president, while enacting

approximately $63.9 billion (or about $8 billion/year) in congressionally

initiated rescissions.

The Fiscal and

Programmatic Effects

of Rescissions

While these statistics highlight Congress’ increasing use of rescissions, the

relatively small amounts rescinded make clear that rescissions have not

been a major tool to reduce spending. Under the ICA, the President can

propose rescissions only for funding provided by annual appropriations or

supplementals - referred to as discretionary spending. Today this spending

represents only about one-third of the budget and is constrained by

statutory caps. However, it is the remaining two thirds of the budget,

which is spent on such programs as Social Security and Medicare, and

interest on federal debt, which has driven the deficits. Under the ICA, the

President cannot propose rescissions in mandatory spending.

Also, enacted rescissions do not reduce total spending if the rescinded

amount is used to offset spending of an equivalent amount of budget

authority in another account. In such cases, the rescission in effect

transfers funds from one program to another, thereby shifting budget

priorities rather than reducing spending. It is our sense that rescissions are

often used to offset new appropriations under the discretionary spending

caps. Although not required, Congress has recently offset some or all of

Page 4 GAO/T-OGC-99-56
emergency appropriations with reductions in other discretionary

spending.

Expedited Rescission

Proposals

This is not to say that rescissions are unimportant. Certainly, the

President’s rescission proposals can foster debate between the President

and the Congress over funding priorities and cuts in specific programs. To

enhance accountability and further public debate over spending priorities,

there have been a number of proposals presented in Congress over the

years for an expedited rescission process. Although the details of the

proposals vary, expedited rescission proposals are designed to ensure

rapid and formal congressional consideration of rescissions proposed by

the President. An essential element of an expedited rescission procedure

is a prompt up-or-down vote in the Congress on the President’s proposals

to reduce enacted spending authority. Since budget authority is not

canceled unless a law rescinding existing budget authority is enacted in

accordance with Article I, Section 7 of the Constitution, an expedited

rescission process does not present the constitutional issues that led the

Supreme Court to strike down the Line Item Veto Act. (Clinton v. City of

New York, 118 S.Ct.2091 (1998).)

The necessity for, and the form of, an expedited rescission process are, of

course, a matter for Congress to decide. We have one logistical concern.

As noted earlier, an expedited rescission process requires a prompt vote,

for example, within 10 days of receipt of the President’s proposal. Such a

timeframe will limit our ability to support congressional review of the

President’s proposed rescissions.

Conclusion In summary, Mr. Chairman, we believe that 25 years of experience show

that the rescission process has been used, as designed, by presidents to

advance their own priorities for spending cuts. But rescissions have also

been increasingly used by the Congress as a vehicle to express its own

view of changing priorities, especially in an era of tight discretionary

spending caps. As the Congress has come to enact greater reductions in

budget authority than proposed by presidents, the debate has shifted from

deciding whether to cut to deciding where to cut.

Thank you, Mr. Chairman. This concludes my prepared remarks. I would

be happy to answer any questions you may have.

Page 5 GAO/T-OGC-99-56
Attachment I 

Summary of Proposed and Enacted

Rescissions, Fiscal Years 1974-1998 (All

Legislative Action Through October 1, 1998)

Fiscal

year

Rescissions

proposed

by

president

Dollar amount

proposed by

president for

rescission

Proposals

accepted

by

Congress

Dollar amount

of proposals

enacted by

Congress

Rescissions

initiated by

Congress

Dollar amount

of rescissions

initiated by

Congress

Total

rescissions

enacted

Total dollar

amount of

budget

authority

rescinded

1998 25 $25,260,000 21 $17,276,000 43 $4,180,814,234 64 $4,198,090,234

1997 10 407,111,000 6 285,111,000 96 7,381,253,000 102 7,666,364,000

1996 24 1,425,900,000 8 963,400,000 104 4,974,852,131 112 5,938,252,131

1995 29 1,199,824,000 25 845,388,805 248 18,868,380,121 273 19,713,768,926

1994 65 3,172,180,000 45 1,293,478,546 81 2,374,416,284 126 3,667,894,830

1993 7 356,000,000 4 206,250,000 74 2,205,336,643 78 2,411,586,643

1992 128 7,879,473,690 26 2,067,546,000 131 22,526,953,054 157 24,594,499,054

1991 30 4,859,251,000 8 286,419,000 26 1,420,467,000 341 1,706,886,000

1990 11 554,258,000 0 0 71 2,304,986,000 71 2,304,986,000

1989 6 143,100,000 1 2,053,000 11 325,913,000 12 327,966,000

1988 0 0 0 0 61 3,888,663,000 61 3,888,663,000

1987 73 5,835,800,000 2 36,000,000 52 12,359,390,675 54 12,395,390,675

1986 83 10,126,900,000 4 143,210,000 7 5,409,410,000 11 5,552,620,000

1985 245 1,856,087,000 98 173,699,000 12 5,458,621,000 110 5,632,320,000

Subtotal:

1985-

1998 736 $37,841,144,690 248 $6,319,831,351 1,017 $93,679,456,142 1,265 $99,999,287,493

Subtotal:

1974-

1984 436 $38,018,165,000 211 $18,670,073,366 111 $11,215,221,347 322 $29,885,294,713

Grand

Total:

1974-

1998 1,172 $75,859,309,690 459 $24,989,904,717 1,128 $104,894,677,489 1,587 $129,884,582,2062

1The Military Construction Appropriations Act of l991 approved certain rescissions approved by

the President in 1990 41 days after the funds were released for obligation under the

Impoundment Control Act. Presidential rescission proposals R90-4, R90-5, and R90-10 totalling

about $41 million were not approved.

2The total estimate of budget authority rescinded is understated. This table does not include

rescissions which eliminate an indefinite amount of budget authority.

Page 6 GAO/T-OGC-99-56
Attachment I 

Summary of Proposed and Enacted

Rescissions, Fiscal Years 1974-1998 (All

Legislative Action Through October 1, 1998)

Fiscal

year

Rescissions

proposed

by

president

Dollar amount

proposed by

president for

rescission

Proposals

accepted

by

Congress

Dollar amount

of proposals

enacted by

Congress

Rescissions

initiated by

Congress

Dollar amount

of rescissions

initiated by

Congress

Total

rescissions

enacted

Total dollar

amount of

budget

authority

rescinded

1984 9 $636,400,000 3 $55,375,000 7 $2,188,689,000 10 $2,244,064,000

1983 21 1,569,000,000 0 0 11 310,605,000 11 310,605,000

1982 32 7,907,400,000 5 4,365,486,000 5 48,432,000 10 4,413,918,000

1981 133 15,361,900,000 1013 10,880,935,550 43 3,736,490,600 144 14,617,426,150

1980 59 1,618,100,000 34 777,696,446 33 3,238,206,100 67 4,015,902,546

1979 11 908,700,000 9 723,609,000 1 47,500,000 10 771,109,000

1978 12 1,290,100,000 5 518,655,000 4 67,164,000 9 585,819,000

1977 20 1,926,930,000 9 813,690,000 3 172,722,943 12 986,412,943

1976 50 3,582,000,000 7 148,331,000 0 0 7 148,331,000

1975 87 2,722,000,000 38 386,295,370 1 4,999,704 39 391,295,074

1974 2 495,635,000 0 0 3 1,400,412,000 3 1,400,412,000

Subtotal:

1974-

1984 436 $38,018,165,000 211 $18,670,073,366 111 $11,215,221,347 322 $29,885,294,7134

3Thirty-three rescissions proposed by President Carter and totalling over $1.1 billion are not

included in this table. These rescission proposals were converted to deferrals by President

Reagan in his Fifth Special Message for Fiscal Year 1981 dated February 13, 1981.

4The total estimate of budget authority is understated. This table does not include rescissions

which eliminate an indefinite amount of budget authority.

Page 7 GAO/T-OGC-99-56
Attachment II 

Rescissions by Presidential Administration

Under the Impoundment Control Act

Rescissions proposed by

President Clinton

Presidential proposals accepted

by Congress

Rescissions initiated by

Congress during Clinton

administration

Fiscal year Number Dollar amount

Number

accepted Dollar amount

Percent

accepted Number Dollar amount

1998 25 $25,260,000 21 $17,276,000 84 43 $4,180,814,234

1997 10 407,111,000 6 285,111,000 60 96 7,381,253,000

1996 24 1,425,900,000 8 963,400,000 33 104 4,974,852,131

1995 29 1,199,824,000 25 845,388,805 86 248 18,868,380,121

1994 65 3,172,180,000 45 1,293,478,546 69 81 2,374,416,284

1993 7 356,000,000 4 206,250,000 57 66 1,962,511,000

Total 160 $6,586,275,000 109 $3,610,904,351 68 638 $39,742,226,770

Rescissions proposed by

President Bush

Presidential proposals accepted

by Congress

Rescissions initiated by

Congress during Bush

administration

Fiscal year Number Dollar amount

Number

accepted Dollar amount

Percent

accepted Number Dollar amount

1993 0 $0 0 $0 0 8 $242,825,643

1992 128 7,879,473,690 26 2,067,546,000 20 131 22,526,953,054

1991 30 4,859,251,000 8 286,419,000 27 26 1,420,467,000

1990 11 554,258,000 0 0 0 71 2,304,986,000

1989 0 0 0 0 0 11 325,913,000

Total 169 $13,292,982,690 34 $2,353,965,000 20 247 $ 26,821,144,697

Rescissions proposed by

President Carter

Presidential proposals accepted

by Congress

Rescissions initiated by

Congress during Carter

administration

Fiscal year Number Dollar amount

Number

accepted Dollar amount

Percent

accepted Number Dollar amount

1981 33 $1,142,364,000 0 $0 0 0 $0

1980 59 1,618,100,000 34 777,696,446 58 33 3,238,206,100

1979 11 908,700,000 9 723,609,000 82 1 47,500,000

1978 12 1,290,100,000 5 518,655,000 42 4 67,164,000

1977 7 791,552,000 2 96,090,000 29 3 172,722,943

Total 89 $4,608,452,000 50 $2,116,050,446 56 41 $3,525,593,043

Note: The 33 rescissions proposed by President Carter were converted to deferrals by President

Reagan in his Fifth Special Message of Fiscal Year 1981, dated February 13, 1981.

Page 8 GAO/T-OGC-99-56
Attachment II 

Rescissions by Presidential Administration

Under the Impoundment Control Act

Rescissions proposed by

President Ford

Presidential proposals accepted

by Congress

Rescissions initiated by

Congress during Ford

administration

Fiscal year Number Dollar amount

Number

accepted Dollar amount

Percent

accepted Number Dollar amount

1977 13 $1,135,378,000 7 $717,600,000 54 0 $0

1976 50 3,582,000,000 7 148,331,000 14 0 0

1975 87 2,722,000,000 38 386,295,370 44 1 4,999,704

1974 2 495,635,000 0 0 0 3 1,400,412,000

Total 152 $7,935,013,000 52 $1,252,226,370 34 4 $1,405,411,704

Rescissions proposed by

President Reagan

Presidential proposals accepted

by Congress

Rescissions initiated by

Congress during Reagan

administration

Fiscal year Number Dollar amount

Number

accepted Dollar amount

Percent

accepted Number Dollar amount

1989 6 $143,100,000 1 $2,053,000 17 0 $0

1988 0 0 0 0 0 61 3,888,663,000

1987 73 5,835,800,000 2 36,000,000 3 52 12,359,390,675

1986 83 10,126,900,000 4 143,210,000 5 7 5,409,410,000

1985 245 1,856,087,000 98 173,699,000 40 12 5,458,621,000

1984 9 636,400,000 3 55,375,000 33 7 2,188,689,000

1983 21 1,569,000,000 0 0 0 11 310,605,000

1982 32 7,907,400,000 5 4,365,486,000 16 5 48,432,000

1981 133 15,361,900,000 101 10,880,935,550 76 43 3,736,490,600

Total 602 $43,436,587,000 214 $15,656,758,550 36 198 $33,400,301,275

(990900) Page 9 GAO/T-OGC-99-56
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