BACKGROUNDER:
ENHANCED RESCISSION MASQUERADING AS ITEM VETO

The "line-item veto" (LIV) is a budget process reform proposal that repeatedly emerges when budget deficits get out of control or wasteful earmarks make the headlines. A line-item veto was enacted into law in 1996 – and subsequently struck down by the Supreme Court as unconstitutional in 1998 (Clinton v. City of New York). However, memories in Washington appear to be very short, because the LIV has once again emerged as an "answer" to burgeoning deficits.

The Constitution is clear about the process for enacting a law: Every bill which shall have a passed the House of Representatives and the Senate, shall, before it become a Law, be presented to the President of the United States; if he approve he shall sign it, but if not he shall return it, with his Objections to that House in which it shall have originated…

The Constitution gives the President the option of signing a bill or returning (vetoing) the bill (which Congress can override by a two-thirds vote). The Constitution clearly does not allow the President to sign or return a "part" or a "provision" of a bill.

Nevertheless, in 1994, Republicans swept the mid-term elections promising to enact into law a "Contract with America" that called for enactment of a line-item veto. President Clinton who had, himself, called for LIV authority, instructed his Office of Management and Budget to negotiate LIV legislation with the Republican Congress. The result of these negotiations was the Line Item Veto Act of 1996.

The LIV Act attempted to finesse the absence of constitutional authority to veto an individual provision of a bill, by empowering the President to "cancel" a dollar amount of discretionary budget authority, an item of direct spending, or a limited tax benefit (i.e. a tax earmark). The concept of the LIV Act drafters was that "canceling" a budget provision would not be the same as vetoing a provision of law.

Not surprisingly, the Justices didn't buy this distinction. The Court in 1998 struck down the LIV Act holding that the "cancellation" scheme did in fact amount to an unconstitutional grant of item veto authority to the President. The Court reaffirmed that the President has authority to sign or veto an entire bill – not a portion of a bill.

But that hasn't dissuaded backers of the item veto from once again advocating passage of an LIV. In a November 4, 2004 press conference, President Bush stated that he "would like to see the President have a line-item veto again" and reiterated the request again this year. In mid-January, Senator Gregg proposed an item veto amendment to pending legislation… or at least, that's what most people were calling it.

However, the Gregg proposal is not a Line-Item Veto. It's an enhancement of the "rescission" power the President already has…masquerading as an LIV.

Under the 1974 Budget and Impoundment Control Act, the President is permitted to propose to Congress "rescissions" of appropriated funds. The President can withhold the funds for 45 days, but if Congress does not enact the rescissions into law, the President must release the funds. This requirement was placed in law as a result of President Nixon's "impoundment" of (refusal to spend) appropriated funds.

The Gregg proposal would "enhance" the existing rescission authority by: (1) requiring that Congress vote, within ten days and without amendment, on the President's proposed rescissions; and (2) expanding the reach of proposed rescissions, beyond appropriations, to include tax benefits and new entitlement spending. The President could propose up to four rescission packages per year. The amendment would also prohibit rescinded funds from being used as "offsets" for other new spending (as they often have been by the Appropriations Committees).

So what can be said of all the recent rhetoric about granting the President the LIV? First, the proposals on the table are not a clever new way to enact a "constitutionally valid" Line Item Veto. LIV is not constitutional; the Court made clear that Presidents do not have constitutional authority to veto pieces of bills.

Second, the proposals under consideration are "enhanced rescission" proposals masquerading as a new type of "constitutional Line Item Veto." "Enhanced rescission" apparently didn't sound very potent…so proponents have been calling it a new type of LIV.

Third, the real debate should focus on whether enhancing the President's current rescission authority will upset the balance of powers between the Executive and Legislative Branches. In a nutshell, after the Congress sends the President a bill, should the President have the authority to require Congress to vote again on certain provisions of that bill?

Proponents of enhanced rescission say yes—it would allow the President to bring wasteful spending or tax loopholes to light. Opponents of enhanced rescission say no—it would allow a President to put undue pressure on individual Members of Congress by requiring special votes on provisions important to their States or Districts.

Opponents also point out that major legislative packages are often the result of extensive compromises among competing interests. Giving the President authority to force separate votes, after the fact, on individual provisions of such legislation could undermine Congress' ability to assemble important legislation.