A Presidential Item Veto

A Presidential Item Veto

Order Code RS21991
December 2, 2004
CRS Report for Congress
Received through the CRS Web
A Presidential Item Veto
Louis Fisher
Senior Specialist in Separation of Powers
Government and Finance Division
Summary
During a news conference on November 4, 2004, President George W. Bush stated
that he “would like to see the President have a line-item veto again, one that passed
constitutional muster. I think it would help the executive branch work with the
legislative branch to make sure that we’re able to maintain budget discipline.” The
Supreme Court struck down an earlier version of item-veto authority (the Line Item Veto
Act of 1996) in Clinton v. City of New York, 524 U.S. 417 (1998), but several statutory
alternatives are available. Options to the Line Item Veto Act have been proposed over
the years, including an amendment to the Constitution to grant the President item-veto
authority. The line-item veto is listed among several budget reform proposals included
in the FY2005 budget, but a more specific recommendation is expected to be developed
by the Administration and submitted to Congress at the start of the 109th Congress. This
report analyzes the statutory and constitutional alternatives that are likely to be
considered and will be updated as necessary.
Background
In 1974, Congress passed legislation to place constraints on the presidential practice
of refusing to spend appropriated funds. Impoundment of funds by the President had
severely curtailed and in some cases terminated programs that Congress had enacted into
law. Through this impoundment technique, the President was able to decide which laws
to execute and which to nullify. Lawmakers criticized impoundment as a de facto item
veto, in violation of the constitutional duty of the President to see that all laws are
faithfully executed, and a threat to the legislative prerogative over the purse.1
Impoundment Control Act
The Impoundment Control Act of 1974 recognizes two types of impoundment:
“rescissions” and “deferrals.” Whenever the President wants to rescind (cancel) budget
authority, he must transmit a special message to Congress and obtain the support of both
1 For background on the impoundment dispute, see Louis Fisher, Presidential Spending Power
(Princeton, N.J.: Princeton University Press, 1975), pp. 147-201.
Congressional Research Service { The Library of Congress

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houses within 45 days of continuous session. If denied congressional support during this
time period, the President would have to make the budget authority available to executive
agencies for obligation and expenditure.
The statute also requires the President to submit a special message whenever he
decides to defer (delay) spending, subject to disapproval by either house. Because of the
Supreme Court’s decision in INS v. Chadha (1983), this type of legislative veto is no
longer available to Congress to override deferrals. Decisions in federal court ruled that
the one-House legislative veto in the Impoundment Control Act was tied inextricably to
the deferral authority. The courts concluded that Congress would not have provided for
this deferral authority without retaining the check of the one-house veto. Ruling that the
authority and the check were inseverable, the deferral authority disappeared with the
legislative veto. Congress promptly converted the judicial decision into statutory law.2
As a result of litigation and congressional legislation, deferrals may now be made only for
routine, not policy, reasons.
After a steep increase in budget deficits in the 1980s, Members of Congress began
to debate ways of increasing the President’s power to rescind appropriated funds.
President Ronald Reagan repeatedly asked for item-veto authority. Congress considered
a number of procedures to grant him this power, while at the same time protecting
legislative interests.
Inherent Item Veto
In the 1980s, some newspapers and lawmakers argued that the President already
possessed an “inherent” item veto and did not need to await statutory authority or a
constitutional amendment.3 Advocates of this concept urged the President to exercise an
item veto and provoke a legal challenge in the courts. Charles J. Cooper, then head of the
Office of Legal Counsel in the Justice Department, wrote a lengthy memorandum finding
no legal or constitutional support for an inherent item veto.4 In 1992, President George
H. W. Bush announced that his White House Counsel and Attorney General had
convinced him that there was no legal support for an inherent item veto.
Expedited Rescission
In 1992, 1993, and 1994, the House passed legislation to make it easier for the
President to rescind funds. Instead of allowing Congress to ignore presidential
recommendations for rescissions, “expedited rescission” required at least one House to
vote on his proposals. If one house disapproved, the other House need take no action
because approval by both houses would be necessary. Expedited rescission attracted
support from some lawmakers who thought it would transfer less congressional power to
the President than other reform ideas. The Senate took no action on the expedited
2 City of New Haven, Conn. v. United States, 809 F.2d 900 (D.C. Cir. 1987); 101 Stat. 785, § 206
(1987), codified at 2 U.S.C. § 684.
3 For a conference devoted to this issue, see Pork Barrels and Principles: The Politics of the
Presidential Veto (Washington, DC: National Legal Center for the Public Interest, 1988).
4 12 Op. O.L.C. 128 (1988).

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rescission bills passed by the House, preferring to explore two other approaches:
“enhanced rescission” and “separate enrollment.”
Enhanced Rescission
Enhanced rescission would reverse the balance of power between the branches
established by the Impoundment Control Act. Instead of the President seeking the
approval of both Houses for rescissions, his proposals would become law unless Congress
passed a resolution of disapproval. The President could then veto the disapproval
resolution, forcing Congress to find a two-thirds majority in each house to override the
President. Under the procedure followed to protect the Senate Budget Committee’s
jurisdiction over budget process changes, a vote on enhanced rescission required 60 votes
to waive a provision of the Budget Act. In 1992 and 1993, efforts to pass enhanced
rescission in the Senate attracted votes of 44-54 and 45-52.
The 1992 Standoff
A rescission confrontation in 1992 between President George H. W. Bush and
Congress illustrates how both branches participate in “pork-barrel” spending. The Bush
Administration offered a rescission package of $7.9 billion, focusing on what it
considered to be frivolous programs (e.g., asparagus research, celery research, prickly pear
research, Vidalia onion storage, and manure disposal).5 Congress responded by selecting
as candidates for rescission a number of programs favored by the executive branch,
including studies of the significance of holism in German-speaking society and research
on why people fear going to the dentist.6 Congress also took aim at National Science
Foundation research grants for “monogamy and aggression in fish in Nicaragua; the well-
being of middle-class lawyers; status attainment in Chinese urban areas; sexual mimicry
of swallowtail butterflies; and song production in freely behaving birds.”7 The list of
congressional rescissions came to $8.2 billion. After settling on a compromise bill, the
Administration abandoned its plans to submit additional rescission packages.
Line Item Veto Act of 1996
On September 27, 1994, more than 300 Republican candidates for the House of
Representatives released a “Contract with America,” setting forth a legislative agenda.
It included an item-veto for the President. The particular version the House preferred was
enhanced rescission. Joint hearings by the two chambers suggested that an item veto
would not yield the rescission of large amounts of funds. Based on the experience of
governors at the state level, the impact was more likely to be a preference for presidential
spending priorities over those voted by Congress.8 As enacted, the Line Item Veto Act
(P.L. 104-130) authorized the President to cancel discretionary appropriations, any new
5 Public Papers of the Presidents, 1992-93, I, p. 479; CQ Weekly Report, Mar. 28, 1992, pp. 792-
793.
6 “House Rearranges Bush’s Budget Cuts,” Washington Post, May 8, 1992, p. A8.
7 S.Rept. 102-274, 102nd Cong., 2nd sess. 47 (1992).
8 “Line-Item Veto,” joint hearing before the House Committee on Government Reform and
Oversight and the Senate Committee on Governmental Affairs, 104th Cong., 1st sess. (1995).

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item of direct spending (entitlements and other mandatory programs), and certain limited
tax benefits. Congress would have to pass a resolution of disapproval within 30 days.
The President could veto that resolution and force an override vote in each House.
Canceling Items in Committee Reports
The Line Item Veto Act addressed a central problem in the way that Congress writes
appropriations bills. An “item veto” statute, by itself, would not give the President an
item veto for the simple reason that Congress usually does not put items in appropriations
bills. Unlike the states, where small amounts are included within bills, subject to the
governor’s item veto, Congress appropriations large lump-sums, giving agencies
significant discretion over the expenditure of funds. The Line Item Veto Act was written
in such a way as to allow the President to reach into the appropriations accounts to cancel
projects identified in conference reports. The statute defined “dollar amount of
discretionary budget authority” to mean the dollar amount specified in an appropriations
law or “in any table, chart, or explanatory text included in the statement of managers of
the governing committee report accompanying such law.”
Separate Enrollment
After the House passed the Line Item Veto Act, the Senate committees of jurisdiction
(Budget and Governmental Affairs) could not agree on whether to recommend enhanced
rescission or expedited rescission. They reported both to the floor.9 Those bills were then
pulled back in favor of “separate enrollment,” a process that required a clerk to take an
appropriations or authorization bill (containing new direct spending and targeted tax
benefits), after they had passed both houses, and break the bill into unnumbered
paragraphs (containing dollar amounts) and numbered sections (containing provisos or
conditions), with each part made into a bill and presented to the President. To protect
against attacks that the procedure did not comply with the constitutional requirements of
bicameralism and presentment, the “mini-bills” would first be sent back to each chamber
and voted on en bloc.10 When the line-item veto emerged from conference in 1996, the
separate enrollment procedure was rejected in favor of enhanced rescission.
Dollar Savings
Implementation of the Line Item Veto Act offered support to the predictions of
experts who testified at the 1995 joint hearings. Overall savings were modest. President
Clinton used the statutory authority to cancel a number of discretionary appropriations,
new items of direct spending, and targeted tax benefits. The total savings, over a five-year
period, came to less than $600 million. His cancellations for FY1998 were about $355
million out of a total budget of $1.7 trillion.11 The totals would have been higher had all
of his recommendations been accepted. Congress disapproved his cancellation of 38
9 S.Rept. 9, 104th Cong., 1st sess. (1995); S Rept. 10, 104th Cong., 1st sess. (1995); S.Rept. 13,
104th Cong., 1st sess. (1995); S.Rept. 14, 104th Cong., 1st sess. (1995).
10 Section 4 of S. 4, reprinted at 141 Congressional Record 8941 (1995).
11 “The Line Item Veto,” hearing before the House Committee on Rules, 105th Cong., 2nd sess. 13
(1998). Testimony by June E. O’Neill, Director of the Congressional Budget Office.

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projects in the military construction appropriations bill, which would have saved $290
million over a five-year period. Hearings by the Senate Appropriations Committee
received testimony from the military services, contradicting the claims and arguments
offered by the Administration.12 President Clinton vetoed the disapproval resolution, but
a strong bipartisan majority overrode him, 78 to 20 in the Senate and 347 to 69 in the
House. The Administration also reversed itself on one cancellation package, concluding
that it lacked authority to use item-veto authority in this instance.13
Statute Invalidated
In 1998, by a 6 to 3 vote, the Supreme Court held that the Line Item Veto Act
violated the Presentment Clause of the Constitution. The Court rejected the argument that
the President’s power to cancel items was a mere exercise of discretionary authority
granted by Congress. Instead, the cancellation authority represented the repeal of law that
could be accomplished only through the regular legislative process, including
bicameralism and presentment. In the two cancellations that reached the Court, Congress
did not pass a resolution of disapproval. As a result, the Court concluded that “the
President has amended two Acts of Congress by repealing a portion of each.” Clinton v.
City of New York, 524 U.S. 417 (1998).
Statutory Options
Writing for the majority, Justice John Paul Stevens stated that if there is to be a new
procedure “in which the President will play a different role in determining the final text
of what may ‘become a law,’ such change must come not by legislation but through the
amendment procedures set forth in Article V of the Constitution.” However, a number
of statutory procedures used in the past, without raising constitutional questions, offer the
President substantial discretion over the expenditure of funds. Congress may pass lump-
sum appropriations that provide funds “not exceeding” amounts specified in the statute.
Funds may be made available for expenditure unless the President determines that certain
factors, identified in the statute, prevent the funds from having legal force or effect. In
these cases the President would not be repealing or amending the statute; he would be
following the law and exercising authority given him.
Relying on the 1974 Procedure
The Impoundment Control Act remains available as a tool for rescinding
appropriated funds. From 1974 to 1999, the most recent year for which cumulative
figures are available, the executive branch requested some $76 billion in rescissions. Of
that amount, Congress approved $25 billion. During that same period, Congress chose
to initiate nearly $110 billion in rescissions.14 The Impoundment Control Act requires the
12 Public Papers of the Presidents, 1997, II, p. 1301; 143 Congressional Record 22133-22134
(1997) (statement by Senator Stevens).
13 “Clinton Recants on Item Veto of Pension Switch,” Washington Post, Dec. 20, 1997, p. A1.
14 U.S. Government Accountability Office, “Summary of Proposed and Enacted Rescissions,
Fiscal Years 1974-1999,” OGC-00-19 (Washington: Mar. 9, 2000).

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readiness of the President to submit rescission proposals to Congress and lobby
successfully for their enactment.
Modified Separate Enrollment
Separate enrollment would be less burdensome if the mini-bills were restricted to
items in dispute between Congress and the President. Suppose that an appropriations bill
is in conference and the White House announces that the President objects to 30 items.
Those could be stripped from the bill and the balance passed by both branches and
submitted to the President, who would sign the bill into law. The 30 items in contention
would be put in separate bills, passed by both chambers, and submitted to the President,
who would veto them, subject to a congressional override. However, this process would
not allow the President the opportunity to do what he did under the Line Item Veto Act:
reach into committee reports and cancel programs at that level.
Conclusions
Granting the President an item veto would introduce a new and uncertain dynamic
to executive-legislative relations. Because of informal and private communications
between the branches, it would be difficult to maintain clear accountability for fiscal
decisions. Members would vote with new incentives, subjected to pressures and
calculations that did not exist before.
When the President possesses only general veto authority, Congress is under both
external and internal pressure to produce a budget that both sides can live with.
Availability of an item veto may diminish the incentives for lawmakers to closely control
substantive provisions and the level of appropriations. They would be free to insert more
items than before, knowing that the President could strike them from the bill. Instead of
negotiating in good faith to produce a political accommodation, the objective might be
to “add on” controversial items, shift decisions to the executive branch, and invite further
conflict through presidential rescission proposals and override votes.
In deciding to transfer item-veto authority to the President, Members of Congress
will again consider the extent to which they intend to exercise the congressional power
of the purse. Would Members have to vote up or down on a presidential proposal, or
could they consider a legislative alternative (as in 1992)? Item-veto authority would give
the President additional leverage to influence the votes and independence of Members.
A shift of power may imply that Congress is less able than the President and his aides to
take responsible action over the budget.