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United States. Congress. Senate. Committee on the.

Legislative line-item veto proposals : hearing before the Committee on the Budget, United States Senate, One Hundred Third Congress, second session, October 5, 1994 online

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Excluding 1981, Congress has approved less than 20 percent of the
dollar volume of rescissions proposed by Presidents. Congress has
simply ignore about $48 billion in rescissions proposed under Title
X of the 1974 Budget Act, refusing to take a vote on their merits.

Alone, an expedited rescission process is not going to go far
enough to balance the Federal budget. After all, it would only apply
to appropriations, but it is routinely estimated by a variety of inter-
est groups who have studied this issue that an additional $10 mil-
lion a year would be saved by this process.

Now, how would it be saved? Does it mean that the President
would actually move to rescind $10 billion annually? No, it is a
combination of a variety of dynamics that is set in place by having
the line-item veto or a modified rescission. After room for inflation-
ary adjustment, if I can paraphrase Ev Dirksen, you know, $10 bil-
lion here and $10 billion there, and pretty soon that adds up to be
real money.

On the tax side, public cynicism regarding Congress has grown
with increased attention to provisions hidden away in large tax
bills which benefit narrow interests or special constituencies. For
example, in H.R. 11, passed late in 1992, but vetoed, there were
50 special tax provisions that cost more than the enterprize zones
that were proposed to be the centerpiece of the bill. In other words,
we have become very good at being very artful about what we do
around here.



33

We have all heard the horror stories about tax breaks that bene-
fit one sports stadium or one wealthy family or one large corpora-
tion, and our constituencies have heard about them as loudly as we
have, because they are the ones that have ultimately told us about
them.

It would improve legislative accountability and produce a more
thoughtful process, and that is probably the second greatest initia-
tive or reason to pass a line-item veto or a modified rescission ap-
proach. An expedited rescission would cast an additional dose of
sunlight into the legislative process.

All too often, large bills including individual items that would
never stand public scrutiny, that has always been the fundamental
argument benind this kind of an approach, and it is an important
argument. We are all very familiar with the rush to get the legisla-
tive train out on time. That means bills are reported spanning hun-
dreds of pages that virtually no one has been able to read except
ultimately tne staff that has put it together. But there is no doubt
that, given this tool, there is a stronger chance that all bills would
be read in great detail and the 13 regular bills that we would move
out in the normal course of business I think are going to receive
a greater amount of attention by all parties involved.

Knowing that an individual provision may have to be returned
to Congress one more time, to stand on its own merits, will pro-
mote more responsible legislation I think in the first instance, and
that is what we are all about, and I think that is what this commit-
tee represents and what all of us talk about budget reform rep-
resent.

The third item, it would improve executive accountability. Now,
while we are talking about legislative accountability and budget
process accountability, this responsibility is worn by two parties of
our government, both the legislative and, as importantly, the exec-
utive. There is always some concern that any form of line-item veto
or expedited rescission process would transfer too much power from
the Congress to the President. Of course, that is the age-old argu-
ment and that is probably why we have denied the executive this
tool and ourselves this tool historically.

Those of us on both sides of the aisle have suggested at different
times that Presidents are not always serious about the rescission
message they send to Congress or that the volume of rescissions
they propose do not live up to their own talk about what they
would do if they had the line-item veto.

Well, Mr. Chairman, I think it is time that we call any Presi-
dent's blufT, and I mean every President, because I see this as a
bipartisan issue. I think the package I have before you and the co-
sponsorship speaks very clearly to that bipartisanship.

Without question, in the House, the vote in the House was very
bipartisan, and the cosponsorship of all of those items, the House
leadership has made every effort to make it a very bipartisan ap-
proach. So it has no margin, in my opinion, for the argument of
partisanship, and it should not be.

In particular, in our bill, we give the President a chance to des-
ignate how much of his or her rescission savings would apply to the
deficit. In other words, we are clearly giving them that option. We
heard the argument from this President some time ago that he



I 34

would like to rescind or veto one item, only to have the money
spent somewhere else. Of course, that is the prerogative of any ex-
ecutive, but we would give them the option through the use of what
is called a lockbox or deficit reduction account to say we are rec-
ommending rescission and that dollars go in X places.

Senator EXON. In other words, if I understand you correctly. Sen-
ator Craig, what you are saying is that you ar giving the President
that leeway, so the President could, if he wanted, to exercise the
veto and put it in the lockbox either totally or partially, or, on the
other hand, he could say I do not want any of it to go in the
lockbox, I want to spend it on X, Y and Z, is that right?

Senator Craig. That is right. We accomplish several things by
that, but, most importantly, we spotlight it and we place different
parameters on the argument. If the President says no, I am re-
scinding and all of this ought to go against deficit reduction, he or
she can argue a reduction in total expenditure, or he or she could
argue the priority as to their legislative package, and they would
seek different priorities than the Congress did in the appropria-
tions. Of course, that is the intent of being able to do that.

The main provisions of our expedited rescission reforms clearly
are as follows: The President could propose to rescind any appro-
priation budget authority at any time and designate whether that
rescission is to be expedited. Some other proposals give the Presi-
dent a deadline of up to a few days after enactment of the appro-
priation.

Ours is within 10 days of enactment of the tax bill, the President
may propose repeal of any narrowly targeted tax benefit in that bill
and receive expedited consideration. The President may designate
that some or all of the savings from expedited rescission be set
aside elusively for deficit reduction. Within 3-legislative days of the
President's transmission of a rescission bill comprising his request
would be introduced in the House.

The House Appropriations and/or Ways and Means Committees
would have 7-legislative days to report the bill, with or without rec-
ommendation, or to be discharged. The House must vote on final
passage within 10-legislative days of the bill's introduction, with
debate limited to 4 hours.

If passed by the House, the bill would be transmitted to the Sen-
ate within 1-calendar day. The Senate Appropriations and/or Fi-
nance Committees would have 7-legislative days to report the bill,
with or without recommendation, or be discharged. Senate debate
would be limited to 10 hours. Two additional features in our bill
stand out: First, the process would be self-enforcing, because the
particular item would be considered rescinded or repealed, unless
Congress completed the process and defeated the President's pro-
posal by a majority vote.

Second, no amendment would be allowed, except for striking an
individual item proposed by the President. A motion to strike
would only be allowed, if supported by 50 members in the House
and 15 in the Senate. This feature preserves some degree of legisla-
tive flexibility that has been a criticism by some on this issue. And
the President's entire rescission package will not go down, just be-
cause one spending or tax item had strong congressional support.



35

In conclusion, Mr. Chairman, by July of this year, the CRS had
identified some 36 bills introduced in Congress dealing with some
version of line-item veto. While there are differences, all move in
basically the same direction. The House has passed an expedited
rescission bill three times in the last 3 years, each time with large
bipartisan majorities. Three times in this Congress, a majority
have voted for the basic concept, and large bipartisan majorities
have approved sense of the Senate amendments to that effect on
two occasions.

I believe that a package like the common sense bill can and
should become law no later than early next year. To end, I cer-
tainly look forward to working with this committee in the weeks
and the year ahead to see if we cannot iron out the differences and
the details, Mr. Chairman, because I think this is an issue whose
time has come. The American people are speaking loudly to it, and
finally I believe Congress, by this hearing and by the actions of the
House, is beginning to focus on this and other issues that would
bring about the kind of budget reform that all of us want and ulti-
mately we have got to provide for ourselves and the American peo-
ple.

Having said that, Mr. Chairman, I would be happy to respond to
any questions you might have.

Senator ExoN. I just have a question or two. First, I take it that
you would agree, and I believe that some of the suggestions in your
bill and the one sent over to us by the House, the three parts of
it at least that I am a cosponsor of would very likely in some cases
require a change of the rules in the Senate. Obviously, if something
like this comes up, the first bridge that we would have to cross is
to get 60 votes to stop a filibuster, which is very unlikely. Is it true,
in your opinion. Senator Craig, that this bill, since it in my opinion
changes Senate rules, would require 57 votes in some instances?

Senator Craig. I believe that to be right in some instances.
There is no question that it creates a different dynamic, and they
need a different dynamic, because of the specifics. Although we
have done that in the past, we set aside separate issues that are
extraordinarily important of expedited activity that are exempt
from filibuster or cloture.

Clearly, once we have walked through our process in the presen-
tation of the budget and it has had its normal course of action on
the fioor and it has given the membership full access to it — and I
think I would certainly guard that right, as most Senators would —
we are talking about an extraordinary step in a new process that
is time sensitive and deserves to be time sensitive. If you are going
to give this the real effect that it has and create the dynamics both
in the executive and the legislative branches that expedited rescis-
sion ought to have, both in limiting our actions and being more di-
rect in what we do and causing the President to take this as a
truly serious effort, then you have got to create those kinds of dy-
namics.

Senator ExoN. Thank you very much, Senator Craig. I have no
further questions. I just want to compliment you for your leader-
ship and initiative and the fact that you are here today testifying
on this legislation. Obviously, we are not going to be able to do



36

anything this year, but we are trying to lay the groundwork for
some expeditecl action hopefully early in the next session.

Senator Craig. Thank you.

Senator EXON. Thank you very much for being here.

Senator Domenici?

Senator DoMENlci. Senator, first I want to compliment you on
your leadership not only in this matter that is before us today, but
obviously the balanced budget and its concept and probably in the
way it has finally evolved under your leadership is close to the best
balanced budget constitutional amendment language that has ever
been prepared, and I compliment you on that, f thank you for
working with us on that. It was my privilege.

Let me ask first a couple of general questions, if I could. It would
appear to me that, as I said in my opening remarks, this is very
serious business that we are talking about when we talk about ex-
pedited rescission or line-item veto. Clearly, you can see a lot of op-
portunities for Presidents to play games with this. I was not in
favor for quite some time of the line-item veto, because I worried
about that. I still worry about that.

Would you not agree that, whatever we try, we ought to sunset
it, so that we do have just a trial period and we do not have a
President sitting there with a pen ready to veto any change that
we try to make, make it 4 years or 2 years or 6 years, so we take
a good look at how it works?

Senator Craig. Well, Senator, if that is how we get there, yes,
I would support that. And I think the dynamics we have put in
place, as I expressed in mv comments before this committee, serve
both bodies well, ultimately, that it is not a one-sided effort when
we talk about line-item veto.

Senator DOMENICI. Yes.

Senator Craig. And so I have no problem with sun-setting. I
have no problem with saying that what we do is good enough that
in 4 years, it will stand the test and we will want to reauthorize
it or make it permanent law.

Senator DOMENICI. Well, you were speaking of leverage.

Senator Craig. Yes.

Senator Domenici. And I would think sunset would be leverage
against the arbitrariness of the President.

Senator Craig. Sure.

Senator Domenici. Because he could clearly understand that if
he played games with it, sunset would put it out and we would
never get it again.

Senator Craig. That is right.

Senator Domenici. On tne other hand, if it worked right, we
would pass it again and he would sign it. Otherwise, he has the
hammer because you cannot ever repeal the thing without him
having to sign it. And so you go back to the two-thirds overriding
a veto. So I think maybe that has some merit.

Second, expedited rescission, I expressed in my opening remarks
as probably the most logical approach and the thing that would
probably become law soonest and probably have the greatest oppor-
tunity to get through here.

You have spoken of it a number of times in your remarks. Is ex-
pedited rescission, as you see it, a mechanism for getting a Presi-



37

dent's rescission package an up or down vote in an expedited man-
ner within a reasonable period of time; is that essentially it?

Senator Craig. Yes, it is. And in our bill, we lay out that format
for both the House and the Senate, and time certain for direct ac-
tion on it.

Senator DoMENici. I have a question about one other part of
your package. As you recall, very early on, on the floor of the Sen-
ate, as Senators took on an appropriation bill and said let's take
out part of NASA, I think you heard me take to the floor and, in
addition, tell Republicans in our conference, that when you vote for
that, you were voting to cut NASA but you were not voting to cut
the budget. And that is because the caps govern, not the cuts.

So that if you take out $22 billion for NASA over 5 years, that
$22 billion will be spent somewhere else under the existing domes-
tic expenditure caps, domestic and defense. Are you trying to ad-
dress that issue in a generic way in your legislation so that if you
do that, the cuts will go against the deficit?

Senator Craig. Yes, we are.

Senator DOMENICI. How do you do that? Just briefly explain that
to me.

Senator Craig. We create a lock box mechanism. A technicality
in the 1990 Budget Enforcement Act prevents us from doing so un-
less we get the 60 votes, as you know, to waive a point of order.

Senator Domenici. Correct.

Senator Craig. In dealing with that, it was unforeseen and unin-
tentional what we have accomplished here. And to ensure that
spending cut amendments have their intended effect, that a cut is
really a cut, our bill would, number one, allow a floor amendment
to designate that all or some of the savings from a specific spend-
ing cut be directed to deficit reduction by placing it in a deficit re-
duction account or lock box, as you will.

And we give the President the same right in his recommenda-
tions or his rescissions to say: I would like this to go elsewhere; I
would like this to go against deficit reduction.

And we also would ensure that savings from spending cuts actu-
ally go to deficit reduction by automatically adjusting the overall
discretionary spending caps accordingly.

Senator DOMENICI. But in each of those instances, what you have
really done is get rid of the 60-vote point of order so you can do
it by majority vote?

Senator Craig. That is correct.

Senator DOMENICI. But it would be an individual case, affirma-
tive act by the Congress?

Senator Craig. That is right.

Senator DOMENICI. So if in a case of a big NASA cut, nothing oc-
curred with reference to your lock box, then essentially that would
merely be a cut in NASA and not a cut in the budget?

Senator Craig. That is right.

Senator Domenici. All right. Thank you very much.

Senator ExoN. Let me clarify that just one step further. I asked
you earlier. Senator Craig, and you answered in the positive that
the President would be allowed to either — a $1 billion cut, for ex-
ample, the President could say: And I want half of that to go to



38

deficit reduction and $500 million of it to go to program X, Y or
Z.

Are vou saying that, in answer to Senator Domenici's question,
that while the President could so instruct and express his wishes,
that when this matter is sent to the Congress, that the Congress
would have final authority on saying whether any or all of that
money should go into the secure box, or none of it?

Senator Craig. Now we are getting technical beyond my tech-
nical expertise.

Senator ExoN. In other words, if I understand you right, while
the President would have that option, at the same time, from a
practical standpoint, the Congress would make the final decision by
majority vote as to whether any and all of us should go into the
secure box or not; is that right?

Senator Craig. That is right. Why we have allowed, both of us,
this option, obviously on a cut-is-a-cut approach, as Senator Do-
menici has laid out, we clearly designate or give the Congress the
right to do that so that a cut actually does become a cut.

In the instance of the President, I use the term "spotlighting." It
gives the President

Senator ExoN. So the President is recommending that we would
make the determination?

Senator Craig. Exactly. And the President, you give him a little
power there because you give him the power of the bully pulpit to
say I am doing this and this I want to go against deficit reduction,
and I want this to go over in this other area of spending that I
think is a priority under my legislative package.

And then the Congress, in essence, can debate him on this issue
as to where the priorities of spending go. But in deficit reduction,
that is a pretty powerful argument. If the President says: I have
just vetoed $10 billion, collectively, and I want $5 billion of it to
go to deficit reduction and the Congress refuses to give me that,
that is a debate that ought to go on. That is a very legitimate de-
bate, and it ought to go on between the President and the Con-
gress.

Senator ExoN. Thank you, Senator.

Senator Conrad?

Senator Conrad. Well, I have got some questions, Mr. Chairman,
but I think in the interest of time, because of what happened this
morning, I will forego those questions so we can get to the next
Senator.

Senator ExoN. All right. You have the right to ask questions for
the record, if you wish.

Senator CoNRAD. I think I will just ask Senator Craig when we
are on the floor together. I have got a question. I will ask him
there.

Senator Craig. Well, I need to lobby you anyway, because you
are not a cosponsor yet of our package. [Laughter.]

Senator Conrad. Well, I have got a question, and if you answer
it in the affirmative, I might become a cosponsor.

Senator ExoN. It is better that you not ask a question, I suspect,
from what I am thinking. [Laughter.]

Senator DOMENICI. Mr. Chairman?

Senator ExoN. Yes?



39

Senator DOMENICI. Might I just state, Senator Craig, I think we
will explore with your staff some concerns that we have about how
conference and differences between the two houses will work with
reference to this approach of the security box or lock box. There are
some unanswered questions in our minds on it, but we will not
bother you now with it. We will raise them later.

Senator Craig. Well, I would appreciate that very much. What
we have put before you is an idea that we think has some very real
merit. We will certainly bow to your technical expertise and the ex-
pertise of your staff, and that would be greatly appreciated in ac-
commodating some of these approaches.

Senator EXON. Thank you very much. Senator Craig, and we ap-
preciate you being here and for your excellent testimony, and you
are excused.

I am pleased to call Senator Cohen, the senior Senator from
Maine, at the present time. Before he starts his testimony, the
Chair has been advised that Senator McCain will not be able to
make it because of the change in schedules. He has asked unani-
mous consent that his written statement be submitted for the
record. Without objection, that is so ordered.

[The prepared statement of Senator McCain follows:]

Phkparki) STA'n-;MKNT OF Sknator McCain

Mr. Chairman, I would like to thank you and Ranking Member Domenici for hold-
ing this hearing today. Although this issue has been debated many times on the
floor of the Senate, this is the first time since I arrived in the Senate 8 years ago
that we have held a hearing on the matter.

At the beginning of the 103d Congress I introduced S. 9, the Legislative Line-Item
Veto Act. This legislation would give the President the power to identify, up to 20
days after an appropriations bill is sent to the White House, items of spending with-
in that bill that are wasteful. The President will then notify Congress of the elimi-
nation or reduction of the funds for these items. The President may veto, or freeze,
Eart or all of the funds for programs that are determined to be wasteful. As you
now Mr. Chairman, such items are called enhanced rescissions or, more commonly,
line-item vetoes.

If the Congress disagrees with the President's rescissions, a simple majority vote
in the House and Senate within 20 days will overturn these line item vetoes. If no
action is taken within the allotted 20 day period the rescissions automatically be-
come effective. The President then has the opportunity to veto the rescission dis-
aoproval bill. In that case, the veto may be overridden by a two-thirds vote of the
House and Senate.

Mr. Chairman, S. 9 would also allow the President a second chance to eliminate
wasteful pork barrel spending by allowing him to submit additional enhanced rescis-
sion requests with the budget submission at the beginning of each year. This second
shot at proposing rescissions ensures that the President has the opportunity to
strike pork oarreT spending that may not be obvious during the first rescission pe-
riod. Additionally, let me note, S. 9 WOULD NOT: allow the President to rescind
money for entitlement programs such as social security, medicaid, or food stamps.

As we all know, Mr. Chairman, pork barrel politics is nothing new. However, the
Congress' addiction to pork has grown to obscene proportions. Something must be
done and something must be done now. For too long the Congress has addressed
this issue by maintaining the status quo. In the meantime, our addiction was grow-
ing and growing.

Mr. Chairman, while we are "getting our pork fix" our children are being raised
in a nation that may soon have no choice but to go cold turkey. The public is aware
of our profligate spending habits and their disdain for our activity is reflected in
our 28 percent approval rating.

The Federal debt is approaching $4 trillion. The cost of interest on that debt is
now almost $200 billion a year. That is more money than the Federal Government
will spend on education, science, law enforcement, transportation, food stamps, and
welfare combined. The Federal budget deficit set a record of $290 billion in 1992.



40

By 2003, the deficit is expected to leap to a staggering $653 billion and will have
reached its largest fraction of gross domestic product in more than 50 years.

Mr. Chairman, we must act to restore budgetary restraint in the Congress. An



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