Order Code IB89148
CRS Issue Brief for Congress
Received through the CRS Web
Item Veto and Expanded Impoundment Proposals
Updated July 19, 2006
Virginia A. McMurtry
Government and Finance Division
Congressional Research Service ˜ The Library of Congress

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CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Brief History of Impoundment
Controversies Increase
Impoundment Control Act of 1974
Alternative of an Item Veto
Expanded Rescission Proposals and Enactment of the Line Item Veto Act of 1996
Developments During the 105th Congress
Initial Court Decisions
The Line Item Veto in Action
More Court Challenges
Consideration of Alternatives to the Line Item Veto Act
Developments in the 106th, 107th, and 108th Congresses
Developments in the 109th Congress
LEGISLATION
FOR ADDITIONAL READING

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Item Veto and Expanded Impoundment Proposals
SUMMARY
In recent years, conflicting budget priori-
nally favored an item veto constitutional
ties have accentuated the institutional tensions
amendment came to embrace expanded rescis-
between the executive and legislative branches
sion authority for the President as a function-
inherent in the federal budget process. Presi-
ally similar mechanism achievable more easily
dent Bush, like his recent predecessors, has
by statutory change.
called for an item veto, or possibly expanded
impoundment authority, to provide him with
The Line Item Veto Act was signed into
greater control over federal spending.
law on April 9, 1996 (P.L. 104-130), and it
became effective January 1, 1997. Key provi-
Congress exercises its “power of the
sions allowed the President to cancel any
purse” by enacting appropriations measures,
dollar amount of discretionary budget author-
but the President has broad authority as chief
ity provided in an appropriation, any item of
executive in the implementation stage of the
new direct spending, or certain limited tax
budget process. It is at this stage that the
benefits contained in any law. After Congress
monies provided by Congress are actually
had been notified of the cancellations in a
spent by the federal government. Impound-
special message, a period for expedited con-
ment, whereby the President withholds or
gressional review of the proposal followed.
delays the spending of appropriated funds,
provides one important mechanism for bud-
On August 11, 1997, President Clinton
getary control during the execution stage, but
first invoked the new authority; 81 more
Congress retains oversight responsibilities at
cancellations followed. On February 12, 1998,
this stage as well.
the Line Item Veto Act was held unconstitu-
tional (for the second time) in a district court
The Impoundment Control Act of 1974
ruling, and on June 25, 1998, the Supreme
(Title X of the Congressional Budget and
Court affirmed that decision. In the case of
Impoundment Control Act, P.L. 93-344),
Clinton v. City of New York, the Court held
established two categories of impoundments:
the law unconstitutional on grounds that it
deferrals, or temporary delays in funding
violates the presentment clause; in order to
availability; and rescissions, or permanent
grant the President line-item veto authority a
cancellation of budget authority. With a
constitutional amendment is needed (accord-
rescission, the funds must be made available
ing to the majority opinion).
for obligation unless both houses of Congress
take action to approve the President’s rescis-
Measures seeking to provide a constitu-
sion request within 45 days of “continuous
tional alternative to the Line Item Veto Act
session.”
have been introduced in the 106th, 107th, 108th,
and 109th Congresses. President Bush has
Consideration of impoundment reform
endorsed the effort to restore the President’s
increasingly became joined with that of an
line-item veto authority.
item veto for the President. Many who origi-
Congressional Research Service ˜ The Library of Congress

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MOST RECENT DEVELOPMENTS
On July 14, 2006, the Senate Budget Committee filed the report (S.Rept. 109-283) to
accompany S. 3521, an omnibus budget process reform measure containing expedited
rescission provisions in Title I (named the Legislative Line Item Veto Act). On June 27,
2006, after a meeting with senators at the White House to discuss line item veto legislation,
President Bush called upon the Senate to act quickly and approve such a measure. On June
22, 2006, the House passed H.R. 4890, the Legislative Line Item Veto Act of 2006, by vote
of 247-172.
BACKGROUND AND ANALYSIS
Debate about the appropriate relationship between the branches in the federal budget
process seems endemic, given the constitutional necessity of shared power in this sphere.
Under the Constitution, Congress possesses the “power of the purse” (“No money shall be
drawn from the Treasury but in consequence of appropriations made by law”), but the
President enjoys broad authority as the chief executive who “shall take care that the laws be
faithfully executed.”
The Constitution is silent concerning the specifics of a budget system for the federal
government. Informal procedures sufficed for many years. The Budget and Accounting Act
of 1921 (P.L. 67-14) for the first time required the President to submit a consolidated budget
recommendation to Congress. To assist in this task, the act also created a new agency, the
Bureau of the Budget, “to assemble, correlate, revise, reduce, or increase the estimates of the
several departments or establishments.” In 1970, the budget agency was reconstituted as the
Office of Management and Budget (OMB). The OMB also plays an important role later in
the budget process when funds are actually spent as appropriations laws are implemented.
Impoundment of funds by the President represents an important component in this stage of
budget execution.
Brief History of Impoundment
Impoundment includes any executive action to withhold or delay the spending of
appropriated funds. One useful distinction among impoundment actions, which received
statutory recognition in the 1974 Impoundment Control Act, focuses on duration, whether
the President’s intent is permanent cancellation of the funds in question (rescission) or
merely a temporary delay in availability (deferral).
Another useful contrast distinguishes presidential deferrals for routine administrative
reasons from deferrals for policy purposes. Virtually all Presidents have impounded funds
in a routine manner as an exercise of executive discretion to accomplish efficiency in
management. The creation of budgetary reserves as a part of the apportionment process
required by the Antideficiency Acts (31 U.S.C. 1511-1519) provided formal structure for
such routine impoundments, which originated with an administrative regulation issued in
1921 by the Bureau of the Budget and then received a statutory base in 1950. Impoundments
for policy reasons, such as opposition to a particular program or a general desire to reduce
spending, whether short-term or permanent, have proved far more controversial.
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Controversies Increase
In the 1950s and 1960s, disputes over the impoundment authority resulted from the
refusal of successive Presidents to fund certain weapons systems to the full extent authorized
by Congress. These confrontations between the President and Congress revolved around the
constitutional role of Commander-in-Chief and tended to focus on relatively narrow issues
of weapons procurement. President Johnson made broader use of his power to impound by
ordering the deferral of billions of dollars of spending during the Vietnam war in an effort
to restrain inflationary pressures in the economy. While some impoundments during these
periods were motivated by policy concerns, they typically involved temporary spending
delays, with the President acting in consultation with congressional leaders, so that a
protracted confrontation between the branches was avoided.
Conflict over the use of impoundments greatly increased during the Nixon
Administration and eventually involved the courts as well as Congress and the President.
In the 92nd and 93rd Congresses (1971-1974), the confrontation intensified as the President
sought to employ the tool of impoundment to reorder national priorities and alter programs
previously approved by Congress. Following President Nixon’s reelection in 1972, the
Administration announced major new impoundment actions affecting a variety of domestic
programs. For example, a moratorium was imposed on subsidized housing programs,
community development activities were suspended, and disaster assistance was reduced.
Several farm programs were likewise targeted for elimination. Perhaps the most
controversial of the Nixon impoundments involved the Clean Water Act funds. Court
challenges eventually reached the Supreme Court, which in early 1975 decided Train v. City
of New York (420 U.S. 35 (1975)), on narrower grounds than the extent of the President’s
impoundment authority.
Impoundment Control Act of 1974
During these impoundment conflicts of the Nixon years, Congress responded not only
with ad hoc efforts to restore individual programs, but also with gradually more restrictive
appropriations language. Arguably, the most authoritative response was the enactment of the
Impoundment Control Act (ICA), Title X of the Congressional Budget and Impoundment
Control Act of 1974. The ICA became effective upon signing on July 12, 1974 (88 Stat.
332). As a result of a compromise in conference, the ICA differentiated deferrals, or
temporary delays in funding availability, from rescissions, or permanent cancellations of
designated budget authority, with different procedures for congressional review and control
of the two types of impoundment. The 1974 law also required the President to inform
Congress of all proposed rescissions and deferrals and to submit specified information
regarding each. The ICA further required the Comptroller General to oversee executive
compliance with the law and to notify Congress if the President failed to report an
impoundment or improperly classified an action.
The original language allowed a deferral to remain in effect for the period proposed by
the President (not to exceed beyond the end of the fiscal year so as to become a de facto
rescission) unless either the House or the Senate took action to disapprove it. Such a
procedure, known as a one-house legislative veto, was found unconstitutional by the
Supreme Court in I.N.S. v. Chadha (462 U.S. 919 (1983)). In May of 1986 a federal district
court ruled that the President’s deferral authority under the ICA was inseverable from the
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one-house veto provision and hence was null; the lower court decision was affirmed on
appeal (City of New Haven v. United States, 809 F.2d 900, D.C. Cir. 1987).
In the case of a rescission, the ICA provided that the funds must be made available for
obligation unless both houses of Congress take action to approve the rescission request
within 45 days of “continuous session” (recesses of more than three days not counted). In
practice, this usually means that funds proposed for rescission not approved by Congress
must be made available for obligation after about 60 calendar days, although the period can
extend to 75 days or longer. Congress may approve all or only a portion of the rescission
request. Congress may also choose after the 45-day period to rescind funds previously
requested for rescission by the President. Congress does rescind funds never proposed for
rescission by the President, but such action is not subject to the ICA procedures.
The ICA establishes no procedures for congressional disapproval of a rescission request
during the 45-day period. However, some Administrations have voluntarily followed a policy
of releasing funds before the expiration of the review period, if either the House or the Senate
authoritatively indicates that it does not intend to approve the rescission.
In the fall of 1987, as a component of legislation to raise the limit on the public debt
(P.L. 100-119), Congress enacted several budget process reforms. Section 207 prohibited
the practice, sometimes used by Presidents when Congress failed to act on a rescission
proposal within the allotted period, of submitting a new rescission proposal covering
identical or very similar matter. By using such resubmissions, the President might continue
to tie up funds even though Congress, by its inaction, had already rejected virtually the same
proposal. The prohibition against such seriatim rescission proposals (contained in the 1987
law) applies for the duration of the appropriation, so that it may remain in effect for two or
more fiscal years. Section 206 of P.L. 109-119 served to codify the decision in the New
Haven case, allowing deferrals to provide for contingencies, to achieve savings made
possible through changes in requirements or efficiency of operations, or as provided in
statute. The ICA as amended no longer sanctions policy deferrals.
Alternative of an Item Veto
The U.S. Constitution provides that the President may either sign a measure into law
or veto it in its entirety. However, constitutions in 43 states provide for an item veto (usually
confined to appropriation bills), allowing the Governor to eliminate discrete provisions in
legislation presented for signature. Ten states allow the governor to reduce amounts as well
as eliminate items, and seven States have an “amendatory” veto, permitting the governor to
return legislation with specific suggestions for change.
The first proposal to provide the President with an item veto was introduced in 1876.
President Grant endorsed the mechanism, in response to the growing practice in Congress
of attaching “riders,” or provisions altering permanent law, to appropriations bills.
Over the years many bills and resolutions (mainly proposed constitutional amendments)
have been introduced, but action in Congress on such item veto proposals, beyond an
occasional hearing, has been limited. Contemporary proposals for item veto are usually
confined to bills containing spending authority, although not necessarily limited to items of
appropriation.
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Expanded Rescission Proposals and Enactment of the
Line Item Veto Act of 1996
Consideration of impoundment reform became increasingly joined with the idea of an
item veto. During the Ford and Carter Administrations, the provisions of the ICA proved
relatively noncontroversial. Dissatisfaction increased during the Reagan Administration.
President Reagan, in his 1984 State of the Union message, specifically called for a
constitutional amendment to grant item veto authority, which he considered to be a
“powerful tool” while Governor of California. In his last two budget messages, President
Reagan included enhanced rescission authority among his budget process reform proposals.
President George H. W. Bush also endorsed the idea of expanded rescission authority and
an item veto for the President. During the 1992 campaign, then-Governor Bill Clinton
advocated a presidential item veto, and he subsequently endorsed enhanced rescission
authority. During the 2000 campaign George W. Bush went on record in support of expanded
rescission authority, and as President, he has repeatedly called for some kind of item veto
authority.
Instead of granting true item veto authority to the President via a constitutional
amendment, efforts came to focus on modifying the framework for congressional review of
rescissions by the President. Legislative activity directed toward granting the President
expanded rescission authority extended over several years.
In examining impoundment reform legislation, the distinction often has been drawn
between “enhanced” and “expedited” rescission proposals. With enhanced rescission, the
intent is to reverse the “burden of action” and thereby create a presumption favoring the
President. Such proposals usually stipulate that budget authority identified in a rescission
message from the President is to be permanently canceled unless Congress acts to disapprove
the request within a prescribed period. In contrast, the expedited rescission approach focuses
on procedural changes in Congress to require an up or down vote on certain rescission
requests from the President. Such measures contain expedited procedures to ensure prompt
introduction of a measure to approve the rescission, fast report by committee or automatic
discharge, special limits on floor amendments and debate, and so on. Under expedited
rescission, congressional approval would still be necessary to cancel the funding, but it
would become difficult to ignore proposed rescissions and hence to reject them by inaction.
Action on an expanded rescission measure commenced early in the 104th Congress. This
reflected the results of the November midterm elections, which returned a Republican
majority to both the House and Senate. On September 28, 1994, many House Republican
Members and candidates signed the Republican Contract with America, which pledged
action on a number of measures, including a “legislative line item veto,” within the first 100
days, should a Republican majority be elected.
House floor consideration of H.R. 2 commenced on February 2, 1995. The House
debated the measure for three days, during which time six amendments were approved and
11 amendments were rejected, along with a motion to recommit with instructions. On
February 6, 1995, the House passed H.R. 2, as amended, by vote of 294-134. The date of
passage had special meaning, as it was the 84th birthday of former President Ronald Reagan,
long a supporter of an item veto for the President.
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In the Senate, general debate on the subject of an item veto began on March 16, 1995.
The “Republican compromise” substitute, incorporating the separate enrollment approach,
appeared as Dole Amendment No. 347 on March 20. Floor debate on S. 4 continued on
March 21-23. Eight amendments were adopted by voice vote, including the Dole
Amendment itself, providing for separate enrollment for presentation to the President of each
item of any appropriation and authorization bill or resolution providing direct spending or
targeted tax benefits. The Senate ultimately passed S. 4, with the Dole Amendment in the
nature of a substitute and additional amendments, on March 23, 1995, by vote of 69-29.
The significant differences between the House-passed H.R. 2 (enhanced rescission
approach), and the Senate-passed S. 4 (separate enrollment approach), needed to be resolved
in conference. On May 17, 1995, the House passed S. 4, after agreeing to strike all after the
enacting clause of Senate-passed S. 4 and insert in lieu the language of the House-passed
H.R. 2. The Senate agreed to a conference and named eighteen conferees on June 20. On
September 7, 1995, the Speaker appointed eight House conferees, after a motion to instruct
conferees to make the bill applicable to current and subsequent fiscal year appropriation
measures was agreed to by voice vote.
The conference committee held an initial meeting on September 27, 1995, at which
opening statements were presented, and Representative Clinger was chosen as conference
chairman. The Members present then instructed staff to explore alternatives for reconciling
the two versions. The conferees met again on November 8, 1996, at which time the House
Republicans offered a compromise package.
In his State of the Union message on January 23, 1996, President Clinton urged
Congress to complete action on a line-item veto measure, but negotiations apparently
remained stalled. Following return from the congressional recess in February, the pace of
conference activity appeared to pick up considerably. On March 14, 1996, Republican
negotiators on the conference committee reported that they had reached agreement on a
compromise version of S. 4, and the conference report (H.Rept. 104-491) was filed on March
21, 1996. Although there was no public conference meeting for approval, the Republicans
obtained the signatures of a majority of conferees, thus readying the conference report for
final action.
The conference substitute reflected compromise between the House and Senate
versions, although the enhanced rescission approach of H.R. 2 rather than the separate
enrollment framework of S. 4 was chosen. As in the November compromise package, new
direct spending and certain targeted tax benefits were subject to the new authority of the
President as well as items of discretionary spending in appropriation laws. The measure was
to take effect on January 1, 1997, absent an earlier balanced budget agreement, and would
terminate on January 1, 2005. The Senate approved the conference substitute on March 27,
1996, by vote of 69-31, and the House followed suit on March 28, 1996, by vote of 232-177.
President Clinton signed S. 4 on April 9, 1996 (P.L. 104-130).
The Line Item Veto Act of 1996 amended the Congressional Budget and Impoundment
Control Act of 1974 (P.L. 93-344), to give the President “enhanced rescission authority” to
cancel certain items in appropriations and entitlement measures and also certain narrowly
applicable tax breaks. The act authorized the President to cancel in whole any dollar amount
of discretionary budget authority (appropriations), any item of new direct spending
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(entitlement), or limited tax benefits with specified characteristics, contained in a bill
otherwise signed into law. The cancellation was to take effect upon receipt in the House and
Senate of a special notification message. “Cancellation” in this context meant to prevent
from having legal force; in other words, provisions canceled never were to become effective
unless Congress reversed the action of the President by enacting a “disapproval bill.” The
President was only to exercise the cancellation authority if he determined that such
cancellation would reduce the federal budget deficit and would not impair essential
government functions or harm the national interest; and then notified the Congress in a
special message of any such cancellation within 5 calendar days after enactment of the law
providing such amount, item, or benefit. The act provided 30 days for the expedited
congressional consideration of disapproval bills to reverse the cancellations contained in the
special messages received from the President. Detailed provisions for expedited
consideration of the disapproval bill in the House and Senate were outlined. The Line Item
Veto Act also contained a “lockbox” procedure to help ensure that any savings from
cancellations go toward deficit reduction. This was to be accomplished by binding the new
procedures to existing requirements relating to discretionary spending limits and the PAYGO
requirements of the Budget Enforcement Act of 1990. To facilitate judicial review, the act
provided for (1) expedited review by the U.S. District Court for the District of Columbia of
an action brought by a Member of Congress or an adversely affected individual on the
ground that any provision of this act violates the Constitution; (2) review of an order of such
Court by appeal directly to the Supreme Court; and (3) expedited disposition of such matter
by the Supreme Court. The act became effective on January 1, 1997, but was subsequently
overturned by the Supreme Court on June 25, 1998 (Clinton v. New York City).
Developments During the 105th Congress
During 1997, the first year with the Line Item Veto Act in effect, several noteworthy
developments involved judicial challenges and the first use of the new authority by President
Clinton. In Congress, disapproval bills to overturn the cancellations by the President were
introduced, along with alternative measures for providing the President with expanded
rescission authority, bills to repeal the Line Item Veto Act, and even a bill to correct an
apparent “loophole” in the original Act. In 1998, there were additional court challenges, with
the Supreme Court eventually striking down the new law as unconstitutional.
Initial Court Decisions
On January 2, 1997, the day after the Line Item Veto Act went into effect, another suit
challenging its constitutionality was filed in the same court (referred to as Byrd v. Raines).
The plaintiffs, led by Senator Robert Byrd, now included six Members of Congress: Senators
Byrd, Mark Hatfield, Daniel Moynihan, and Carl Levin, and Representatives David Skaggs
and Henry Waxman. Office of Management and Budget Director Franklin Raines and
Secretary of the Treasury Robert Rubin were named as defendants, because of their
responsibilities for implementing key aspects of the law. The plaintiffs contended that the
act violated the constitutional requirements of bicameral passage and presentment “by
granting to the President, acting alone, the authority to ‘cancel’ and thus repeal provisions
of federal law.”
On March 21, 1997, U.S. District Court Judge Thomas Penfield Jackson heard oral
arguments in the case of Byrd v. Raines. Less than three weeks later, on April 10, Judge
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Jackson ruled that the Line Item Veto Act was unconstitutional because it violated provisions
of the Presentment Clause in the Constitution (Article I, Section 7, Cl. 2). His ruling found
that compared with permissible delegations in the past, “The Line Item Veto Act, in contrast,
hands off to the President authority over fundamental legislative choices.” In so doing,
“Congress has turned the constitutional division of responsibilities for legislating on its
head.”
As already noted, the Line Item Veto Act provided for expedited judicial review,
allowing for appeal of a district court decision directly to the Supreme Court. Such a request
was filed, and on April 23, 1997, the Supreme Court agreed to an accelerated hearing. The
Court heard oral arguments on May 27 and announced its decision in Raines v. Byrd on June
26, 1997. In a 7-2 decision, the Court held that the Members of Congress challenging the
law lacked legal standing, so the judgment of the lower court (finding the act
unconstitutional) was put aside and the Line Item Veto Act remained in force. However, the
Supreme Court confined its decision to the technical issue of jurisdiction and refrained from
considering the underlying merits of the case, that is, whether the Line Item Veto Act was
unconstitutional.
The Line Item Veto in Action
On August 11, 1997, President Clinton exercised his new veto authority for the first
time by transmitting two special messages to Congress, reporting his cancellation of two
limited tax benefit provisions in the Taxpayer Relief Act of 1997 (P.L. 105-34), and one item
of direct spending in the Balanced Budget Act of 1997 (P.L. 105-33). Both measures had
been signed into law on August 5, 1997. The law provided a period of 30 calendar days of
session after receipt of a special message (only days when both the House and Senate are in
session count) for Congress to consider a disapproval bill under expedited procedures.
Upon reconvening in early September, Congress responded quickly to the President’s
cancellations, with the introduction of four disapproval bills. S. 1144 and H.R. 2436 sought
to disapprove the cancellation of the direct spending provision in P.L. 105-33, transmitted
by the President on August 11, 1997, and numbered 97-3, regarding Medicaid funding in
New York. S. 1157 and H.R. 2444 sought to disapprove the cancellations of two limited tax
benefit provisions in P.L. 105-34, transmitted by the President on August 11, 1997, and
numbered 97-1 and 97-2. The first provision dealt with income sheltering in foreign
countries by financial services companies, and the second involved tax deferrals on gains
from the sales of agricultural processing facilities to farmer cooperatives. A compromise was
apparently reached between the White House and congressional leaders on the canceled tax
benefit provisions; a new bill (H.R. 2513) restoring the canceled provisions, with some
modifications, was introduced by the Chairman of the Ways and Means Committee on
September 23, 1997. On November 8, 1997, the House approved H.R. 2513 by voice vote
under suspension of the rules; H.R. 2444 (the disapproval bill) was tabled.
On October 6, 1997, President Clinton exercised the new authority to veto items in
appropriations bills by cancelling 38 projects contained in the FY1998 Military Construction
Appropriations Act (P.L. 105-45). (See CRS Report 97-210 for further discussion of the
specific cancellations.) On October 24, the Senate Appropriations Committee approved S.
1292, with an amendment to exclude two more of the projects from the disapproval bill,
reflecting the wishes of Senators from the states involved; there was no written report. On
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October 30, the Senate passed S. 1292, after the committee amendment was withdrawn,
disapproving 36 of the 38 cancellations, by vote of 69-30. On November 8, 1997, the House
passed its version of the disapproval bill, H.R. 2631 (covering all 38 of the cancellations
originally in the President’s message), by vote of 352-64. On November 9, the Senate passed
H.R. 2631 by unanimous consent, precluding the need for conference action, and clearing
the disapproval measure for the President. On November 13, 1997, the President vetoed
H.R. 2631, the first disapproval bill to reach his desk under the provisions of the 1996 law.
The House voted to override on February 5, 1998 (347-69), and the Senate did likewise on
February 25, 1998 (78-20): so the disapproval bill was enacted over the President’s veto
(P.L. 105-159) . (Cancellations under the Line Item Veto Act became effective on the date
the special message from the President was received by the House and Senate, but the
cancellations became null and void if a disapproval bill was enacted.)
On October 14, 1997, President Clinton vetoed 13 projects in the Department of
Defense Appropriations (see CRS Report 97-205). On October 16, 1997, he used the
cancellation authority on a provision in the Treasury and General Government
Appropriations relating to pension systems for federal employees (see CRS Report 97-202).
On October 17, 1997, the President applied his veto to eight more projects, this time in the
Energy and Water Appropriations Act (see CRS Report 97-207). On November 1, 1997,
President Clinton exercised his line-item veto authority in two appropriations acts, canceling
seven projects in the VA/HUD measure and three projects in the Transportation Act. On
November 20, 1997, the President canceled two projects from Interior and five from the
Agriculture Appropriations Act. On December 2, 1997, President Clinton exercised his line-
item veto authority for a final time in one of the 13 annual appropriations acts for FY1998,
canceling a project in the Commerce-Justice-State measure. This action brought the total
of special messages in 1997 to 11, and the total cancellations under the new law to 82. On
November 13, 1997, President Clinton vetoed H.R. 2631, disapproving the 38 cancellations
in the Military Construction Appropriations; on February 25, 1998, the bill was enacted over
the President’s veto (P.L. 105-159), when the Senate voted 78-20 for the override;
previously, on February 5, 1998, the House agreed to the override (347-69).
More Court Challenges
Once the President used the new authority, other cases were expected to be brought by
parties who could more easily establish standing, having suffered ill effects directly as a
result of the cancellations. On October 16, 1997, two separate cases challenging the Line
Item Veto Act were initiated. A complaint was filed by the City of New York and other
interested parties seeking to overturn the cancellation of the new direct spending provision
affecting Medicaid funding in the Balanced Budget Act in the U.S. District Court for the
District of Columbia (case number 1:97CV02393). On the very same day, the National
Treasury Employees Union (who had brought the first suit challenging the new law in the
spring of 1996, even before it became effective), filed another suit in district court, seeking
to overturn the veto of the federal pension provision in the Treasury Appropriations Act (case
number 1:97CV02399). On October 21, 1997, a third case, seeking to overturn the
cancellation of the limited tax benefit affecting farm cooperatives, was filed in the district
court by Snake River Potato Growers, Inc. (case number 1:97CV02463). On October 24,
1997, the cases of the three suits challenging the Line Item Veto Act, were combined, placed
in the random assignment pool, and ultimately reassigned to Judge Thomas Hogan. On
October 28, 1997, NTEU filed an amended complaint, challenging the specific application
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of the cancellation authority (as well as the constitutionality of the law). A hearing on the
consolidated case was set for January 14, 1998.
Meanwhile, on December 19, 1997, the Clinton Administration conceded that the
President’s cancellation in October of the pension switch provision exceeded the authority
conveyed in the Line Item Veto Act. On January 6, 1998, Judge Hogan approved a
negotiated settlement in the suit between the Justice Department and the National Treasury
Employees Union and ordered that the previously canceled provision in the Treasury
appropriations for an open season to switch pension plans be reinstated. The order found that
the President lacked authority to make this cancellation, and so it was “invalid and without
legal force and effect.” The NTEU’s constitutional challenge was declared moot, but oral
arguments for the two remaining parties in the consolidated case challenging the law’s
constitutionality were to proceed.
On January 14, 1998, there was a three-hour hearing before Judge Hogan. Arguments
were presented by attorneys for the Idaho potato farmers group and for New York City and
co-plaintiffs in the cases involving cancellations by the President in August, 1997, of a
limited tax benefit provision and an item of new direct spending (affecting Medicaid
funding). Judge Hogan on February 12, 1998, issued his ruling, which held the Line Item
Veto Act unconstitutional, because it “violates the procedural requirements ordained in
Article I of the United States Constitution and impermissibly upsets the balance of powers
so carefully prescribed by its Framers.” On February 20, 1998 the Justice Department
appealed that decision to the Supreme Court, and on February 27, 1998, the Supreme Court
agreed to review the case.
The Supreme Court heard oral arguments in the case of Clinton v. New York City on
April 27, 1998. Both sides conceded that a true item veto, allowing the President to sign
some provisions and veto others when presented a piece of legislation, would be
unconstitutional. The Solicitor General sought to distinguish the President’s cancellation of
provisions under the Line Item Veto Act from a formal repeal of the provisions, but several
of the Justices seemed skeptical. Another key argument concerned the matter of delegation
and whether the act conveys so much authority to the President as to violate the separation
of powers. The issue of standing for the two groups of plaintiffs combined in the case also
was examined. On June 25, 1998, the Court rendered its decision, holding the Line Item Veto
Act unconstitutional, because its cancellation provisions were in violation of procedures set
forth in the Constitution’s presentment clause found in Article I, 7. (The decision is available
online at [http://supct.law.cornell.edu/supct/html/97-1374.ZS.html].)
In the immediate aftermath of the Supreme Court decision there was some uncertainly
regarding how funding for projects canceled under the now unconstitutional law could be
restored. In the view of some, OMB might not be required to fund projects eliminated from
appropriations acts, because the cancellations in the consolidated case brought before the
Supreme Court only involved limited tax benefit and direct spending provisions. Some
suggested that each affected party might have to sue, as did New York City in the case
decided by the Supreme Court.
Although it was widely expected that funding for projects not explicitly covered by the
Supreme Court decision would be restored, three weeks passed before the Justice Department
and OMB determined officially that the funds were to be released. On July 17, 1998, OMB
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announced that funds for the remaining cancellations (those not overturned by previous
litigation or the disapproval bill covering the Military Construction appropriations) would
be made available.
Consideration of Alternatives to the Line Item Veto Act
After the President exercised the new authority to cancel items in appropriations acts,
bills were introduced to repeal the Line Item Veto Act. On October 9, 1997, such a bill was
introduced by Representative Skaggs (H.R. 2650, referred to Budget and Rules Committees)
and on October 24, 1997, a similar bill was introduced by Senators Byrd and Moynihan (S.
1319, referred to Committees on Budget and Governmental Affairs).
On March 11, 1998, the House Rules Subcommittee on Legislative and Budget Process
began two days of hearings on the Line Item Veto Act. Although the principal focus of the
hearing was on the operation of the act during its first year, there was some consideration of
possible alternatives should the law be found unconstitutional by the Supreme Court.
After the Supreme Court revisited the Line Item Veto Act on its merits and struck it
down, other legislative approaches were reconsidered. Shortly after the district court decision
in April 1997, such measures were reintroduced in the 105th Congress. On April 15, 1997,
H.R. 1321, an expedited rescission measure similar to that passed by the House in the 103rd
Congress, was introduced, and on the following day, S. 592, a separate enrollment measure
identical to S. 4 as passed by the Senate in the 104th Congress, was introduced. Joint
resolutions proposing an item veto constitutional amendment were also introduced. Another
bill introduced in the fall of 1997, H.R. 2649, combined the features of H.R. 2650 (repealing
the line-item veto) and H.R. 1321 (establishing a framework for expedited rescission).
On June 25, 1998, the same day the Supreme Court held the Line Item Veto Act
unconstitutional, three more bills were introduced. Two new versions of expedited rescission
(similar but not identical measures), seeking to apply expedited procedures to targeted tax
benefits as well as to rescissions of funding in appropriations measures, were introduced as
H.R. 4174 and S. 2220. A modified version of separate enrollment, applicable to
authorizing legislation containing new direct spending, as well as to appropriations measures,
was introduced as S. 2221.
Developments in the 106th, 107th, and 108th Congresses
Upon convening of the 106th Congress in January 1999, measures were again introduced
to propose constitutional amendments giving the President line-item veto authority (H.J.Res.
9, H.J.Res. 20, H.J.Res. 30, and S.J.Res. 31), and to provide alternative statutory means for
conveying expanded impoundment authority to the President (S. 100 and S. 139).
Subsequently, two expedited rescission bills were introduced in the House (H.R. 3442 and
H.R. 3523).
On July 30, 1999, the House Rules Subcommittee on the Legislative and Budget
Process held a hearing to address the subject, “The Rescissions Process after the Line Item
Veto: Tools for Controlling Spending.” Testimony was received from the Office of
Management and Budget, the Congressional Budget Office, and the General Accounting
Office, as well as from a panel of academic experts.
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On March 23, 2000, the House Judiciary Subcommittee on the Constitution held a
hearing to consider measures proposing a constitutional amendment for an item veto. Two
Members testified in support of H.J.Res 9. A second panel, consisting of seven outside
witnesses, provided various viewpoints.
During the presidential election campaign in 2000, the topic of expanded rescission
authority for the President received some attention, with both candidates on record in support
of such legislation. In his budget message transmitted to Congress on February 28, 2001,
titled A Blueprint for New Beginnings, President George W. Bush endorsed several budget
process reforms, including a call to “restore the President’s line item veto authority.” In the
subsequent discussion, the document suggested that the constitutional flaw in the Line Item
Veto Act of 1996 might be corrected by linking the line-item veto to retiring the national
debt. On April 9, 2001, President Bush transmitted to Congress a more detailed budget for
FY2002, without further mention of the line-item veto proposal.
On October 9, 2002, the Congressional Budget Office estimated a total federal budget
deficit of about $157 billion for FY2002, reflecting the largest percentage drop in revenues
in over 50 years and the largest percentage growth in spending on programs and activities in
20 years. On October 29, 2001, the Department of the Treasury released the final monthly
statement of receipts and outlays for FY2001, confirming a deficit in the on-line federal
budget (on-budget accounts exclude the spending and revenues of Social Security and the
Postal Service) of $159 billion. Some hoped that the worsening deficit picture might
stimulate renewed interest in mechanisms thought conducive to spending control, such as a
line-item veto or expanded impoundment authority for the President.
In his budget submission for FY2003, sent to Congress on February 4, 2002, President
Bush again endorsed various proposals for reform of the budget process, including another
try at crafting a line-item veto that could pass constitutional muster. According to the
Analytical Perspectives volume (p. 285), the proposal would restore authority exercised by
Presidents prior to 1974 (and the restrictions imposed by the ICA). Specifically, the proposal
“would give the President the authority to decline to spend new appropriations, to decline to
approve new mandatory spending, or to decline to grant new limited tax benefits (to 100 or
fewer beneficiaries) whenever the President determines the spending or tax benefits are not
essential Government functions, and will not harm the national interest.”
In the 107th Congress, two measures proposing an item veto constitutional amendment
were introduced. H.J.Res. 23 sought to allow the President to disapprove any item of
appropriation in any bill. H.J.Res. 24 sought to allow the President to decline to approve (i.e.,
to item veto) any in whole dollar amount of discretionary budget authority, any item of new
direct spending, or any limited tax benefit. On March 28, 2001, during House consideration
of H.Con.Res. 83 (FY2002 budget resolution), the Blue Dog Coalition substitute was
offered, which contained a sense of the Congress provision calling for modified line-item
veto authority to require Congressional votes on rescissions submitted by the President; the
amendment was rejected 204-221.
In the budget submission for FY2004, President Bush repeated his request for
legislation to provide him with a “constitutional line-item veto” to use on “special interest
spending items.” While discussion the previous year had called for applying savings to debt
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reduction, the explanation now suggested that all savings from the line-item veto would be
designated for deficit reduction.
Early in the 108th Congress, H.R. 180, an omnibus budget reform measure, was
introduced, containing provisions for expedited procedures for congressional action on
proposals from the President to rescind budget authority identified as “wasteful spending”
(Section 252). In the Congressional Record, April 11, 2003, Senator Robert Byrd recounted
the demise of the Line Item Veto Act of 1996 (pp. S5397-S5399). On June 16, 2003,
H.J.Res. 60, proposing a constitutional amendment to authorize the line-item veto, was
introduced by Representative Andrews. On November 19, 2003, S.J.Res. 25, proposing a
constitutional amendment and reading, in part, “Congress shall have the power to enact a
line-item veto,” was introduced by Senator Dole.
In his budget submission for FY2005, transmitted February 2, 2004, President Bush
again called for legislation to provide him with a “constitutional line-item veto” linked to
deficit reduction. According to the Analytical Perspectives volume (pp. 217-218), such a
device is needed to deal with spending or tax provisions benefitting “a relative few which
would not likely become law if not attached to other bills.” The line-item veto envisioned
would give the President authority “to reject new appropriations, new mandatory spending,
or limited grants of tax benefits (to 100 or fewer beneficiaries) whenever the President
determines the spending or tax benefits are not essential Government priorities.” All savings
resulting from the exercise of such vetoes would go to reducing the deficit.
In the second session additional budget reform measures with familiar provisions that
would have granted expedited rescission authority to the President were introduced. H.R.
3800, the Family Budget Protection Act of 2004, contained expedited rescission provisions
in Section 311; and H.R. 3925, the Deficit Control Act of 2004, included such provisions in
Section 301. The budget resolution for FY2005 (S.Con.Res. 95), as approved by the Senate
on March 11, 2004, contained several Sense of the Senate provisions in Title V. Section 501,
relating to budget process reform, called for enactment of legislation to restrain government
spending, including such possible mechanisms as enhanced rescission or constitutional line-
item veto authority for the President. On June 24, 2004, provisions from H.R. 3800 were
offered as a series of floor amendments during House consideration of H.R. 4663, the
Spending Control Act of 2004. An amendment that sought to initiate expedited rescission
for the President to propose the elimination of wasteful spending identified in appropriations
bills was rejected by a recorded vote of 174-237. On August 3, 2004, the Kerry-Edwards plan
“to keep spending in check while investing in priorities and cutting wasteful spending” was
released. Included was a proposal for expedited rescission authority, whereby the President
could sign a bill and then send back to Congress a list of specific spending items and tax
expenditures of which he disapproved, for an expedited, up-or-down vote.
President Bush reiterated his support for restoring presidential line-item veto authority
in his speech to the Republican national convention on September 2, 2004. At his first post-
election news conference, on November 4, 2004, in response to a question about reducing
the deficit, he stated, in part, that the president needed a line item that “passed constitutional
muster,” in order “to maintain budget discipline.” At a press conference on December 20,
2004, the President again called for line-item veto authority, responding that he had not yet
vetoed any appropriations bills, because Congress had followed up on his requested budget
targets; but further observing, “Now I think the president ought to have the line item veto
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because within the appropriations bills there may be differences of opinion [between the
executive branch and Congress] on how the money is spent.”
Developments in the 109th Congress
In his budget submission for FY2006, transmitted February 7, 2005, President Bush
called for a “line item veto linked to deficit reduction,” but no draft proposal followed.
On January 31, 2006, in his State of the Union address, President Bush reiterated his request
for line-item veto authority, noting: “And we can tackle this problem [of too many special-
interest “earmark” projects] together, if you pass the line-item veto.”
On March 6, 2006, President Bush sent a draft bill titled the Legislative Line Item Veto
Act of 2006 to Congress, and the measure was introduced the next day (see H.R. 4890 and
S. 2381 below). Title notwithstanding, the bills would amend the Impoundment Control Act
of 1974 (ICA) to incorporate a typical expedited rescission framework, intended through
procedural provisions to require an up-or-down vote on presidential requests to cancel certain
previously enacted spending or tax provisions. Since congressional approval remains
necessary for the rescissions to become permanent, expedited rescission is generally viewed
as a weaker tool than an item veto. H.R. 4890 and S. 2381, as introduced, also contained
rather novel provisions authorizing the President to withhold funds proposed for rescission
or to suspend execution of items of direct spending for up to 180 days. These latter
provisions arguably sanction the return of policy deferrals, originally provided for in the ICA,
subject to a one-house veto, but invalidated by the Chadha and New Haven decisions, as well
as the statutory provisions in P.L. 100-119.
On March 15, 2006, the House Rules Subcommittee on the Legislative and Budget
Process held a hearing on H.R. 4890. Testimony was received from Representative Paul
Ryan, sponsor of H.R. 4890, and from Representative Jerry Lewis, chairman of the House
Appropriations Committee. The Deputy Director of OMB and the Acting Director of CBO
also appeared before the subcommittee. On April 27, 2006, the House Judiciary
Subcommittee on the Constitution held a hearing on the line item veto and received
testimony from Representatives Paul Ryan and Mark Kennedy; and from two attorneys,
Charles J. Cooper in private practice, and Cristina Martin Firvida of the National Women’s
Law Center. On May 2, the Senate Budget Committee held a hearing on S. 2381; witnesses
included Senator Robert Byrd, Austin Smythe from OMB, Donald Marron from CBO, Louis
Fisher from the Library of Congress, and attorney Charles J. Cooper.
The House Budget Committee held two hearings on H.R. 4890, on May 25 and June
8, 2006. The first day focused on “Line-Item Veto: Perspectives on Applications and
Effects” and featured four witnesses representing private sector groups, including a former
Member and two former congressional aides. The second hearing concentrated on
constitutional issues, with testimony received from Charles Cooper, Louis Fisher, and
Professor Viet D. Dinh from the Georgetown University Law Center.
On June 14, the House Budget Committee held markup of H.R. 4890. Representative
Paul Ryan offered a substitute amendment, which was further amended. An amendment
offered by Representative Cuellar to add a sunset provision, whereby the act would expire
after six years, was approved by voice vote. Also successful was an amendment offered by
Representative Neal, as further amended by Representative McCotter, expressing the sense
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of Congress regarding possible abuse of proposed cancellation authority: no President or
other executive official should make any decision for inclusion or exclusion of items in a
special message contingent upon a Members’ vote in Congress. The Ryan substitute, as
amended, was adopted by voice vote. The Committee then voted 24-10 to report the bill
favorably (see H.Rept. 109-505 Part 1, June 16, 2006).
Several amendments offered by minority Members were rejected, generally with a
straight party-line vote. Democrats sought to exempt future changes in Social Security,
Medicare, and veterans’ entitlement programs from possible cancellations under the LLIVA.
Democrats also attempted unsuccessfully to restore pay-as-you-go budget rules, to strengthen
requirements for earmark disclosures, and enforcement of the three-day lay-over rule for
appropriations bills before floor votes.
On June 15, the House Rules Committee met to markup H.R. 4980 and voted 8-4 to
approve a substitute amendment containing the same version as approved by the Budget
Committee (H.Rept. 109-505 Part 2). Several changes in the substitute version addressed
concerns with the bill as introduced. For example, in response to concern expressed over a
return to policy deferrals by allowing the President to withhold spending for up to 180
calendar days, the substitute would allow the President to withhold funds for a maximum
of 90 calendars days (an initial 45 day period, which could be extended for another 45 days).
Submission of special rescission or cancellation messages by the President may occur only
within 45 days of enactment of the measure, and the President would be limited to
submission of five special messages for each regular act and 10 messages for an omnibus
measure. Submission of duplicative proposals in separate messages would be prohibited.
On the other hand, some changes in the substitute version approved by the Budget and
Rules Committees, and subsequently by the full House, may generate new controversy. The
substitute narrows the definition of a targeted tax benefit to a revenue-losing measure
affecting a single beneficiary, with the chairs of the Ways and Means and Finance
Committees to identify such provisions. The definition in H.R. 4890 as introduced referred
to revenue-losing measures affecting 100 or fewer beneficiaries, as did the Line Item Veto
Act of 1996. The bill as introduced, however, would have allowed the President to identify
the provisions by default, whereas the 1996 law assigned the duty to the Joint Committee on
Taxation. Supporters of the substitute version suggest that it would treat targeted tax benefits
comparably to earmarks in appropriations bills. Critics contend that the new definition is too
narrow, and that few tax benefits would be subject to cancellation.
On June 21, the House Rules Committee voted to report H.Res. 886, providing for the
consideration of H.R. 4890, as amended, favorably by a nonrecord vote (H.Rept. 109-518).
A manager’s amendment offered by Representative Paul Ryan was adopted as a part of the
rule for debate. In response to concerns raised by the Transportation and Infrastructure
Committee, the amendment added clarifying language that any amounts cancelled which
came from a trust fund or special fund would be returned to the funds from which they were
originally derived, rather than revert to the General Fund. The following day the House took
up H.R. 4890, approved the rule (H.Res. 886) by vote of 228-196, and passed the measure
by vote of 247-172. A motion by Representative Spratt to recommit H.R. 4890 to the Budget
Committee with instructions to report it back to the House with an amendment was rejected
by vote of 170-249.
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Meanwhile, on June 20, 2006, the Senate Budget Committee marked up S. 3521.
Minority amendments to exclude Medicare, Social Security, and Veterans’ Health Programs
from possible rescissions were rejected 10-12 on party-line votes. A manager’s amendment
was adopted by voice vote, which among other things would prohibit the resubmission of
items of direct spending or targeted tax benefits previously rejected by Congress, but would
allow the President to resubmit proposed cancellations if Congress would fail to complete
action on them due to adjournment. The committee then voted 12-10 to report S. 3521, as
amended, favorably. On June 27, 2006, the President met with some Senators at the White
House to discuss the Legislative Line Item Veto bill, and subsequently urged that the Senate
act quickly to approve such a measure. The report to accompany S. 3521 was filed on July
14, 2006 (S.Rept. 109-283).
LEGISLATION
H.R. 982 (Mark Udall). Expedited Rescissions Act of 2005. Amends the ICA to
provide for expedited consideration of certain rescissions of budget authority proposed by
the President. Introduced on February 17, 2005; jointly referred to Committees on Budget
and on Rules.
H.R. 2290 (Hensarling). Family Budget Protection Act. Omnibus budget reform bill.
Section 311 establishes expedited procedures for congressional consideration of certain
rescission proposals from the President. Similar expedited rescission provisions were
considered by the House in 2004 and rejected by vote of 174-237. Introduced on May 11,
2005; referred to the Committee on the Budget and in addition to the Committees on Rules,
Ways and Means, Appropriations, and Government Reform for consideration of those
provisions falling within their respective jurisdictions.
H.R. 4699 (Mark Udall). Stimulating Leadership in Cutting Expenditures (SLICE)
Act of 2006. Amends the ICA to provide for expedited consideration of certain presidential
proposals for rescission of budget authority contained in appropriation acts or in P.L. 109-59
(omnibus transportation authorization law). Introduced on February 1, 2006; referred jointed
to Committees on Budget and on Rules.
H.R. 4889 (Gingrey). Separate Enrollment and Line Item Veto Act of 2006. Requires
separate enrollment of each item of appropriation or authorization in measures passed by
both Houses in identical form and provides for congressional consideration of such bills.
(Similar to S. 4 as passed by the Senate on March 23, 1995.) Introduced on March 7, 2006;
referred to the Budget Committee.
H.R. 4890 (Paul Ryan)/S. 2381(Frist). Legislative Line Item Veto Act of 2006.
Amends the ICA of 1974 to provide for expedited consideration of certain rescissions of
budget authority or cancellation of targeted tax benefits proposed by the President in special
messages. Requires any rescinded discretionary budget authority or items of direct spending
to be dedicated to deficit reduction. Grants the President authority to withhold funds
proposed for rescission or to suspend execution of direct spending and targeted tax benefits.
Both bills introduced on March 7, 2006. H.R. 4890 jointly referred to Committees on Budget
and on Rules; S. 2381 referred to Budget Committee. Reported favorably, as amended, by
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House Budget Committee on June 16 (H.Rept. 109-505 Part 1), and by Rules Committee on
June 19, 2006 (H.Rept. 109-505 Part 2). Passed House, as amended, by vote of 247-172 on
June 22, 2006.
H.R. 5667 (Spratt). Deficit Reduction and Effective Legislative Line Item Veto Act
of 2006. Amends the ICA of 1974 to provide for expedited consideration of certain
cancellations of discretionary budget authority and targeted tax benefits. Provides for other
budget process reforms. Introduced on June 21, 2006; referred to Committees on Budget,
on Rules, and Standards of Official Conduct.
H.J.Res. 63 (Mark Kennedy). Constitutional amendment. Allows the President to
disapprove an item of appropriation in any bill. Introduced on July 29, 2005; referred to
Judiciary Committee.
H.J.Res. 67 (Platts). Constitutional amendment. Allows the President to decline to
approve in whole any dollar amount of discretionary budget authority, any item of new direct
spending, or any tax benefit. Introduced on September 21, 2005; referred to the Judiciary
Committee.
S. 2372 (Kerry). Expedited Budget Item Veto Review Act of 2006. Amends the ICA
to provide for expedited consideration of certain proposed cancellations of appropriations,
new direct spending, and limited tax provisions. Introduced on March 6, 2006; referred to
the Budget Committee.
S. 3521 (Gregg). Stop Over Spending Act of 2006. An omnibus budget reform bill.
Title I, the Legislative Line Item Veto Act, amends the ICA of 1974 to provide for expedited
consideration of certain rescissions of budget authority or cancellation of targeted tax
benefits proposed by the President. Introduced on June 15, 2006; referred to the Budget
Committee. Committee voted 21-10 to report bill, as amended, favorably on June 20, 2006.
Report filed July 14, 2006 (S.Rept. 109-283).
S.J.Res. 26 (Dole). Constitutional amendment. Grants Congress the power to enact
a line-item veto. Introduced on September 27, 2005; referred to the Judiciary Committee.
FOR ADDITIONAL READING
CRS Report RL33517, Legislative Line Item Veto Act of 1996:Background and Comparison
of Versions, by Virginia A. McMurtry.
CRS Report RL33365, Line Item Veto: A Constitutional Analysis of Recent Proposals, by
Morton Rosenberg.
CRS Report RL30223 Presidential Rescission Authority: Efforts to Modify the 1974
Framework, by Virginia A. McMurtry.
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