Legislative Line Item Veto Act of 2006: Background and Comparison of Versions
Released: 2006-07-05T00:00:00

Background

Under the framework established by the Impoundment Control Act (ICA) of 1974 ( P.L.93-344 , 88 Stat. 297), the President may propose to rescind funding provided in an appropriationsact by transmitting a special message to Congress and obtaining the support of both houses within45 days of continuous session. If denied congressional approval during this time period, either byCongress ignoring the presidential rescission request or because one or both houses rejected theproposed rescission, the President has to make the funding available to executive agencies forobligation and expenditure.

President George W. Bush had access to the item veto as Governor of Texas and has calledrepeatedly for similar authority for the President. For example, in his State of the Union address onJanuary 31, 2006, he said, "We can tackle this problem [of too many special interest 'earmark'projects] together, if you pass the line-item veto." (1) An Administration draft bill, titled the Legislative Line Item VetoAct of 2006 (LLIVA), was transmitted to Congress on March 6, 2006.

Instead of allowing Congress to ignore presidential recommendations for rescissions,"expedited rescission" requires at least one house to vote on the proposals. If either housedisapproves the request, the other house need take no action because approval by both houses isnecessary to make the rescission permanent. In contrast, "enhanced rescission," briefly availableunder the Line Item Veto Act of 1996 ( P.L. 104-130 , 110 Stat. 1200), altered the rescissionframework to create a presumption favoring the President. (2) Under enhanced rescission, spending reductions identified inspecial presidential messages remain permanently cancelled unless Congress enacts a disapprovalbill. Should the President veto that disapproval bill, a two-thirds majority in both chambers wouldbe needed to override the veto.

Expedited rescission bills focus on procedural changes in Congress and typically contain adetailed schedule to ensure immediate introduction of a measure to approve the Presidents'srescission request, prompt reporting by committee or automatic discharge, special limits on flooramendments and debate, and so on. Under expedited rescission, congressional approval is stillnecessary to rescind the funding, but the fast-track procedures help to encourage an up-or-down voteon the President's proposal.

Expedited Rescission Bills in the 1990s

The expedited rescission approach has attracted support over the years, because it is generallyregarded as transferring less power from Congress to the President than most other approaches thatwould modify the ICA framework. In 1992, 1993, and 1994, the House passed an expeditedrescission bill each year. (3) In the 102nd Congress, H.R. 2164 , passed by the House in 1992, would have allowedthe President to transmit special rescission messages within three days of signing an appropriationsact; each message could have proposed rescissions from one act. A proposed rescission could nothave reduced a program below the budget level of the previous year or by more than 25% for a newprogram. The bill included expedited procedures to encourage a floor vote within 10 days ofintroduction, with no amendments allowed.

In the 103rd Congress, H.R. 1578 , as passed by the House in 1993, had no limiton the amount that could be rescinded, allowing the President to request rescission of 100% of aprogram's funding, thereby effectively eliminating it. H.R. 1578 also contained provisionsfor expedited judicial review. In a significant departure from previous expedited rescissionmeasures, H.R. 1578, as approved by the House, detailed fast-track procedures forexpedited consideration of a rescission's substitute, as reported by the Appropriations Committee,to provide an alternative to the President's package.

In the second session of the 103rd Congress, H.R. 4600 came to the floor andpassed the House in 1994 with a substitute amendment, characterized by its supporters asstrengthened expedited rescission. H.R. 4600, as approved by the House, would haveallowed submission of a special rescission message at any time, but retained the requirement toprepare a separate special message and accompanying draft bill for each appropriationssubcommittee having jurisdiction over accounts in a given appropriations act from which rescissionswere requested. Further, H.R. 4600 would have authorized special messages from thePresident proposing the repeal of any targeted tax benefit within 20 days following enactment. During floor consideration under the expedited procedures, a motion to strike any proposedrescission or repeal of targeted tax benefit would have been in order if supported by 50 Members inthe House, or by 15 in the Senate.

Overview of Provisions in the Administration's Proposal

On March 7, 2006, a draft expedited rescission bill from the White House, titled theLegislative Line Item Veto Act of 2006, was introduced as H.R. 4890 and S. 2381 . In addition to the existing rescission authority accorded the President underthe 1974 ICA framework, the Administration bill proposed to amend the ICA by inserting a new"Part C -- Legislative Line Item Veto." The provisions would authorize the President, in a specialmessage to Congress, to propose (1) rescission of any dollar amount of discretionary budget authorityin an appropriations act; (2) rescission of any item, in whole or part, of direct spending; or (3) repealof targeted tax benefits. The contents of the special message were specified, including a draft billto approve the President's request. The LLIVA would grant the President considerable flexibilityin the submission and packaging of the special messages. There are no time constraints, and a singlemessage may include any number of rescissions. Further, the LLIVA does not stipulate that a specialmessage be confined to a single public law; therefore, one message may encompass budget authorityor items of direct spending from several laws. Any amounts rescinded must be used for deficitreduction. Within five days of enactment of a rescission approval bill, the chairmen of the BudgetCommittees would be required to adjust committee allocations accordingly, and the Office ofManagement and Budget would be required to adjust spending caps under the Balanced Budget andEmergency Deficit Control Act ( P.L. 99-177 , 99 Stat. 1037). (4)

Under the bill, rescission requests from the President would be considered under fast-trackprocedures. The President's proposed bill could be introduced by the House and Senate leadershipwithin two days following receipt of the special message, after which any Member could introducethe President's proposal. The committee to which the bill is referred would have five days to reportthe bill without substantive revision, and with or without recommendation; if the reporting deadlinewere not met, the committee would be automatically discharged from consideration of the bill andthe bill would be placed on the calendar. A vote on final passage would have to occur by the 10thday of session following introduction of the approval bill. Debate would be limited to four hoursin the House and 10 hours in the Senate. No amendments to the approval bill would be in order ineither chamber. Additional expedited procedural rules are detailed for consideration of the approvalbill.

The LLIVA as introduced would allow the President to withhold any budget authorityproposed for rescission for up to 180 days following transmittal of the special message. Likewise,the President could suspend the execution of any item of direct spending contained in a specialmessage for 180 days. The legislation would allow, but not require, the President to release thefunds before the expiration of the 180 days.

The provisions allowing the President to withhold funds proposed for rescission or tosuspend the execution of an item of direct spending for 180 days have not been previously seen inexpedited rescission bills. Supporters of these provisions contend that they would provide for atemporary withholding or suspension until Congress has a chance to consider a President's request,and that such a mechanism is necessary so that Congress would have the opportunity to act on aPresident's rescission proposal received just before an extended recess or period of adjournment.Others see these provisions as subject to abuse and unnecessary, with the expedited procedures inLLIVA usually ensuring a final vote on the President's request within a month. Therefore, in theirview, a period considerably shorter than 180 days would suffice to give Congress the opportunityto act on a special message. They also point out that there is nothing in the bill that would prohibitthe President from initiating multiple 180-day withholding periods.

Critics of the 180-day withholding mechanism view the provisions as arguably sanctioningthe return of policy deferrals, originally provided for in the ICA, subject to a one-house veto, butinvalidated by the INS . v. Chadha (462 U.S. 919 (1983)) and City of New Haven v. United States (809 F.2d 900, D.C. Cir. 1987) decisions, as well as the statutory provisions in P.L. 100-119 . (5) Supporters of the 180-dayprovision stress that this is the maximum period that the funding could be deferred, and the billlanguage would allow the President to release the funds earlier "if the President determines thatcontinuation of the deferral would not further the purposes of this Act." The language, however,would not require early release of funds, even if one chamber voted to reject the approval bill.

Language in the LLIVA states that its provisions are severable. For purposes of judicialreview, this means that if a court found a portion of the measure to be unconstitutional, the remainderof its provisions would remain in force. The act would become effective upon signing and wouldapply only to spending or tax provisions contained in bills enacted after its passage.

Other Expedited Rescission Bills in the 109th Congress

In addition to the administration's proposal (the LLIVA, H.R. 4890 / S. 2381 ), several other measures with expedited rescission provisions have beenintroduced in the 109th Congress. An omnibus budget reform measure, H.R. 2290 ,introduced by Representative Jeb Hensarling and others on May 11, 2005, contains provisions forexpedited rescission in Section 311, "Enhanced Consideration of Certain Proposed Rescissions." Theprovisions would authorize the President to propose a rescission of any budget authority in anappropriations act that he identifies as "wasteful." Along with the proposed rescission, the Presidentcould also propose to reduce the appropriate discretionary spending limits for new budget authorityand outlays under the Balanced Budget and Emergency Deficit Control Act of 1985 by an amountnot exceeding the proposed rescission. Provisions for the special message and accompanying draftapproval bill are similar to those in the LLIVA; however, H.R. 2290 would limit thePresident to just one message for each appropriations act, unless the act included accounts fallingwithin the jurisdiction of more than one appropriations subcommittee, in which case the Presidentwould send a separate special message and accompanying draft bill for accounts within thejurisdiction of each subcommittee. (6)

Representative Mark Udall has introduced three expedited rescission measures in the 109thCongress, (7) the most recentof which -- H.R. 4699 -- was introduced on February 1, 2006. The stated purpose of thebill, the "Stimulating Leadership in Cutting Expenditures Act (or SLICE Act) of 2006,"is "to enable the President to require Congress to debate and vote on certain presidential proposalsfor reducing spending." The provisions for special messages and expedited procedures in H.R.4699 would apply to any budget authority provided in an appropriations act or in P.L.109-59 (119 Stat. 1144, the Omnibus Transportation Authorization Act). As seen in previousmeasures, the President could submit more than one special message and approval bill if theappropriations act contained accounts under the jurisdiction of more than one appropriationssubcommittee. For messages proposing rescission of funds provided in the transportation act, thedraft bill would be broken down into sections corresponding to specific projects.

Senator John Kerry introduced S. 2372 , the Expedited Budget Item Veto ReviewAct of 2006, on March 6, 2006. This bill is similar in coverage to the Line Item Veto Act of 1996. S. 2372 would allow the President to suspend and propose for cancellation (1) any dollaramount of discretionary budget authority, (2) any item of new direct spending, and (3) any limitedtax benefit. Not later than three calendar days after the date of enactment of the applicable law, thePresident could submit a special message proposing such cancellations and a draft bill for each itemto be cancelled. Provisions for identifying limited tax benefits also reflect those in the 1996 law. Expedited procedures would seek to ensure a vote on final passage of an approval bill by the closeof the 10th legislative day following its introduction. Items proposed for cancellation in a specialmessage would be made available for obligation or take effect on the date upon which the draft billaccompanying the special message were to be defeated in either the House or the Senate.

Representative John Spratt, ranking minority member on the House Budget Committee,introduced H.R. 5667 on June 21, 2006. Title I of this omnibus reform bill providesfor a legislative line item veto, with features similar to the expedited rescission bills receiving floorconsideration in the House in the 1990s. H.R. 5667 would allow the President to proposecancellation of discretionary spending and limited tax benefit provisions, but direct (mandatory)spending would not be covered. There would be one special message allowed per bill and expeditedprocedures for congressional consideration of the President's proposals. Like earlier bills, H.R.5667 would allow 100 members in the House and 16 members in the Senate to seek aseparate vote on a spending item or tax provision in the cancellation package, but no otheramendments would be in order.

Comparison of Expedited Rescission Bills

On June 14, 2006, the House Budget Committee held a markup of H.R. 4890 (the Administration's expedited rescission proposal as introduced in the House) and voted 24-9 toreport the bill favorably, as amended. (8) The next day the Rules Committee held a markup and voted 8-4to report an amended version in effectively the same form as that approved by the BudgetCommittee. (9) On June 22,the House approved H.R. 4890, as amended, by vote of 247-172. (10)

Meanwhile, on June 14, 2006, Senator Judd Gregg, the chair of the Senate BudgetCommittee, and others held a press conference to unveil the Stop Over Spending Act, which containsa modified version of the Legislative Line Item Veto Act in Title I, as well as other budget processreforms. On June 15, 2006, Senator Gregg and others introduced the bill as S. 3521 . On June 20, the Senate Budget Committee marked up S. 3521 and voted 12-10 to reportthe bill, as amended, favorably.

Table 1 , at the end of this report, provides a comparative overview of some major featuresin three expedited rescission bills: (1) H.R. 4890 / S. 2381 as introduced,(2) H.R. 4890 as passed by the House (House approved), and (3) Title I of S. 3521 , as amended and ordered to be reported by the Senate Budget Committee (Senate reported). The table also includes relevant provisions in the Line Item Veto Act of 1996 ( P.L. 104-130 ), whichwas overturned by the Supreme Court in 1998.

As indicated in the table, there are some noteworthy differences among the versions. Somefeatures in H.R. 4890 / S. 2381 as introduced have been modified in theHouse-approved and Senate Budget Committee bills to lessen the President's flexibility. Forexample, the original bills had no deadline for submission of special rescission messages and nolimit on the number of special messages. The House-passed version of H.R 4890 would requiresubmission of special messages within 45 calendar days of enactment of the law that contained theamounts/provisions proposed for cancellation; S. 3521 , as ordered to be reported, wouldallow the submission of a special message up to one year following enactment. Further, the SenateBudget Committee version would limit the President to four special messages per calendar year,whereas the House-passed version would set a limit of five special messages per act, or 10 foromnibus measures. With respect to these features, the House-passed version would be morepermissive in terms of the total number of special messages, whereas the Senate bill would be morelenient in the timing of their submissions.

The period for withholding of funds after submission of a special message is another featureon which the bills differ. As introduced, the LLIVA would allow the President to withhold fundsfor up to 180 calendar days despite any congressional action. S. 3521 would limitwithholding to 45 calendar days, as would the House-passed version. However, the House-passedversion would allow the President a 45-day extension, for a total withholding period of up to 90days. In addition, the LLIVA, as introduced, included no sunset termination date, whereas theHouse-passed version provides that the expedited rescission authority would expire after six years(October 1, 2012), and S. 3521, as ordered to be reported, stipulates termination after fouryears (December 31, 2010).

Some changes in H.R. 4890 as passed by the House and in S. 3521 as ordered to be reported may generate new concerns. Both versions appear to narrow the range ofpossible targeted tax benefits that may be proposed for cancellation when compared to theAdministration's proposal. H.R. 4890/ S. 2381 , as introduced, along withprovisions in P.L. 104-130 , would have covered revenue-losing measures affecting 100 or fewerbeneficiaries. The House-passed version of H.R. 4890 would apply only to arevenue-losing provision affecting a single beneficiary, (11) whereas S. 3521, as ordered to be reported, definestargeted tax benefits as affecting a particular or limited group of taxpayers (thereby placing its scopesomewhere between the Administration's proposal and the House-passed version). Also, the SenateBudget Committee version and the 1996 act would require the Joint Committee on Taxation toidentify the targeted tax benefits; the House-passed version would require the chairmen of the Waysand Means and Finance Committees to identify such provisions. The President could only proposea rescission of such identified tax benefits. H.R. 4890/S. 2381 as introducedwould allow the President to propose any targeted tax benefit that he identified.

Another change in the House-passed version of interest is its relationship to the ImpoundmentControl Act of 1974 (known as ICA, Title X of P.L. 93-344 ). The version approved by the Housewould repeal the ICA, except for Section 1013 (deferral authority for the President) and Section 1016(suits by the Comptroller General). H.R 4890/ S. 2381 , as introduced, and S. 3521 , as ordered to be reported, would amend Title X of the ICA by striking Part C(Line Item Veto Act of 1996) and inserting the text of the bill. At issue is whether the frameworkfor expedited rescissions in the current bills would augment, or replace, rescission authority accordedthe President under the ICA to propose rescissions at any time, but with the release of funds after 45legislative days absent congressional approval.

There were no further substantive changes to H.R. 4890 , as amended, duringfloor consideration. A manager's amendment offered by Representative Paul Ryan was adopted aspart of the special rule for consideration, however. In response to apparent concerns raised by theHouse Transportation and Infrastructure Committee, the amendment added clarifying language thatany amount cancelled that came from a trust fund or special fund would be returned to the fund fromwhich it originally derived, rather than revert to the General Fund for deficit reduction. (12) With this exception, allof the changes in H.R. 4890, as approved by the House, occurred during committeemarkups.

With respect to S. 3521 as ordered to be reported, a manager's amendmentoffered by Senator Gregg at markup and approved by voice vote made changes in Title I regardingthe legislative line item veto, among other things. (13) In its current form, the bill would prohibit the President fromresubmitting items of direct spending or targeted tax benefits previously rejected by Congress, butwould allow resubmission of proposed cancellations if Congress fails to complete action on themdue to adjournment. The amendment also proposes to reduce the period during which the Presidentmay suspend new direct spending or targeted tax benefits if the cancellation proposal is submittedafter the effective date of the provisions. Otherwise, features included in Table 1 under S.3521 as ordered to be reported were unchanged from those in the bill as introduced.

Some Concluding Thoughts

The provisions for expedited consideration of special messages from the President proposingrescissions of funds have remained quite similar over the years. Various versions of expeditedrescission bills pending in the 109th Congress all seek to ensure a vote on final passage of theapproval bill within 10 days after its introduction in the chamber. In the early 1990s, there were billswith provisions to allow for consideration of a substitute package of rescissions reported by theAppropriations Committee as an alternative to the President's package, or to allow a motion to strikea particular rescission from the approval bill with sufficient support. None of the expeditedrescission bills in the 109th Congress, except H.R. 5667 , contains such provisions.

Expedited rescission bills have differed in scope of coverage over the years. Some earlierbills confined the special messages to proposed rescissions of discretionary budget authority(appropriations). Subsequently, items of direct spending (entitlements) and limited or targeted taxbenefits were added. In the 109th Congress, H.R. 4699 would add certain transportationprojects to the universe of possible cancellations available to the President. The LLIVA in all threeversions considered here would grant the President among the most expansive scopes of coverageseen in an expedited rescission bill, by encompassing rescission of any dollar amount ofdiscretionary budget authority or of any new item of direct spending.

The Line Item Veto Act of 1996, with its enhanced rescission framework, was consideredeven by some of its supporters to have possible constitutional flaws, and the measure containedprovisions for expedited judicial review. In contrast, observers tend to view the expedited rescissionapproach, at least as applied to items of discretionary spending, as passing muster on constitutionalgrounds. The severability provision in the LLIVA creates further statutory insulation; if oneprovision were to be found unconstitutional, the remainder of the act would not be affected. Forexample, if one type of cancellation, such as targeted tax benefits, were to be overturned, thePresident's authority to submit special rescission messages for expedited consideration, coveringitems of discretionary budget authority or direct spending, might continue to be available.

In considering prospects for further action on expedited rescission bills, one might wish tokeep in mind the continuing involvement of the Bush Administration in seeking enactment of someversion of the LLIVA in the 109th Congress. On June 27, 2006, after meeting with a group ofSenators at the White House to discuss line item veto legislation, the President called upon theSenate to join the House and quickly pass the line item veto, so he could sign it into law. Accordingto a White House press release, the President wants the item veto to "target pork in large spendingbills. It is an essential part of the President's strategy to reform the budget process and enhance fiscaldiscipline." (14)

Table 1. Comparison of Selected Provisions in Three Versions of the Legislative Line Item Veto Act of 2006and theLine Item Veto Act of 1996