[Senate Hearing 111-618]
[From the U.S. Government Publishing Office]
S. Hrg. 111-618
THE LEGALITY AND EFFICACY OF LINE-ITEM VETO PROPOSALS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON THE CONSTITUTION
of the
COMMITTEE ON THE JUDICIARY
UNITED STATES SENATE
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
__________
MAY 26, 2010
__________
Serial No. J-111-94
__________
U.S. GOVERNMENT PRINTING OFFICE
58-438 PDF WASHINGTON : 2010
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Printed for the use of the Committee on the Judiciary
PATRICK J. LEAHY, Vermont, Chairman
HERB KOHL, Wisconsin ARLEN SPECTER, Pennsylvania
DIANNE FEINSTEIN, California ORRIN G. HATCH, Utah
RUSSELL D. FEINGOLD, Wisconsin CHARLES E. GRASSLEY, Iowa
CHARLES E. SCHUMER, New York JON KYL, Arizona
RICHARD J. DURBIN, Illinois JEFF SESSIONS, Alabama
BENJAMIN L. CARDIN, Maryland LINDSEY O. GRAHAM, South Carolina
SHELDON WHITEHOUSE, Rhode Island JOHN CORNYN, Texas
AMY KLOBUCHAR, Minnesota TOM COBURN, Oklahoma
EDWARD E. KAUFMAN, Delaware
AL FRANKEN, Minnesota
Bruce A. Cohen, Chief Counsel and Staff Director
Nicholas A. Rossi, Republican Chief Counsel
------
SUBCOMMITTEE ON THE CONSTITUTION
RUSSELL D. FEINGOLD, Wisconsin, Chairman
DIANNE FEINSTEIN, California TOM COBURN, Oklahoma
RICHARD J. DURBIN, Illinois JON KYL, Arizona
BENJAMIN L. CARDIN, Maryland JOHN CORNYN, Texas
SHELDON WHITEHOUSE, Rhode Island LINDSEY O. GRAHAM, South Carolina
ARLEN SPECTER, Pennsylvania
Robert F. Schiff, Democratic Chief Counsel
Brook Bacak, Republican Chief Counsel
C O N T E N T S
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STATEMENTS OF COMMITTEE MEMBERS
Page
Coburn, Hon. Tom, a U.S. Senator from the State of Oklahoma,
prepared statement............................................. 37
Feingold, Hon. Russell, a U.S. Senator from the State of
Wisconsin...................................................... 1
prepared statement........................................... 49
WITNESSES
Alexander, Ryan, President, Taxpayers for Common Sense,
Washington, DC................................................. 15
Carper, Hon. Thomas R., a U.S. Senator from the State of Delaware 3
Cooper, Charles, Partner, Cooper & Kirk, PLLC, Washington, DC.... 13
Fraser, Alison, Director, Thomas A. Roe Institute for Exonomic
Policy Studies, The Heritage Foundation, Washington, DC........ 17
Liebman, Jeffrey, Acting Deputy Director, Office of Management
and Budget, Washington, DC..................................... 7
SUBMISSIONS FOR THE RECORD
Alexander, Ryan, President, Taxpayers for Common Sense,
Washington, DC, statement...................................... 24
Byrd, Hon. Robert C., a U.S. Senator from the State of West
Virginia, prepared statement................................... 29
Carper, Hon. Thomas R., a U.S. Senator from the State of
Delaware, prepared statement................................... 35
Cooper, Charles, Partner, Cooper & Kirk, PLLC, Washington, DC.
statement...................................................... 39
Fraser, Alison, Director, Thomas A. Roe Institute for Economic
Policy Studies, The Heritage Foundation, Washington, DC,
statement...................................................... 52
Liebman, Jeffrey, Acting Deputy Director, Office of Management
and Budget, Washington, DC..................................... 59
statement and attachment..................................... 62
Morrison, Alan B., Dean, Public Interest and Public Service Law,
George Washington, University Law School, Washington, DC,
statement...................................................... 110
Ryan, Paul, a Representatives in Congress from the State of
Wisconsin, prepared statement.................................. 113
THE LEGALITY AND EFFICACY OF LINE-ITEM VETO PROPOSALS
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WEDNESDAY, MAY 26, 2010
U.S. Senate,
Subcommittee on the Constitution,
Committee on the Judiciary,
Washington, D.C.
The Subcommittee met, pursuant to notice, at 10:05 a.m., in
room SD-226, Dirksen Senate Office Building, Hon. Russell D.
Feingold, Chairman of the Subcommittee, presiding.
Present: Senators Feingold and Whitehouse.
OPENING STATEMENT OF HON. RUSSELL D. FEINGOLD, A U.S. SENATOR
FROM THE STATE OF WISCONSIN
Chairman Feingold. I call the Committee to order. Good
morning. Welcome to this hearing of the Constitution
Subcommittee. This morning, the Subcommittee will review the
legality and efficacy of expedited rescission proposals, which
are more commonly referred to as ``line-item veto proposals.''
Every year since I was first elected to the U.S. Senate, I
have held listening sessions in each of Wisconsin's 72
counties. I have held over 1,200 of them so far, and I have
heard from tens of thousands of people across the State. And
while over those many years health care reform has been the top
issue discussed at these listening sessions, the need to rein
in wasteful spending, and especially wasteful earmark spending,
has been raised consistently. And it has never been a more
urgent issue.
That is why it was especially encouraging to have the
President come forward just 2 days ago with his own proposal
for an expedited rescission, or line-item veto, measure.
When he took office, President Obama was handed perhaps the
worst economic and fiscal mess facing any administration since
Franklin Roosevelt took office in 1933. The legacy President
Obama inherited poses a gigantic challenge.
There is no magic bullet that will solve all our budget
problems. Congress has to make some tough decisions, and there
will be no avoiding them if we are to get our fiscal house in
order. But we can take some steps that will help Congress make
the right decisions and that can sustain the progress we make.
A line-item veto, properly structured and respectful of the
constitutionally central role Congress plays, can help us get
back on track. And that is what we will explore in today's
hearing.
I have advocated for giving the President expedited
rescission, or line-item veto, authority for a long time. Over
the past two Congresses, I have been pleased to join with my
colleague from Wisconsin, Congressman Paul Ryan, the Ranking
Member of the House Budget Committee, in offering a proposal
that specifically targets earmark spending. He and I have
worked on this issue for several years. While we belong to
different political parties and differ on many issues, we do
share at least two things in common: our hometown of
Janesville, Wisconsin, and an abiding respect for Wisconsin's
tradition of fiscal responsibility.
Now, among the many members who have joined us in that
particular effort is the Ranking Member of this Subcommittee,
the Senator from Oklahoma, Dr. Tom Coburn. I am delighted to
have Senator Coburn as a cosponsor of our bill. There is no
more energetic foe of wasteful earmark spending, and I have
been pleased to work with him on a number of different efforts
to rein in that practice.
At this time I would ask that Senator Coburn's statement be
placed in the record, without objection.
[The prepared statement of Senator Coburn appears as a
submission for the record.]
Chairman Feingold. There have been a number of line-item
veto proposals offered in the past several years. But the
measure we proposed is unique in that it specifically targets
the very items that every line-item veto proponent cites when
promoting a particular measure, namely earmarks.
When President Bush asked for this kind of authority, the
examples he gave when citing wasteful spending he wanted to
target were Congressional earmarks. When members of the House
or Senate tout a new line-item veto authority to go after
Government waste, the examples they typically give are
Congressional earmarks. When editorial pages argue for a new
line-item veto, they, too, cite Congressional earmarks as the
reason for granting the President this new authority.
While we have made some progress on earmarks, they continue
to be a serious problem. By one estimate, in 2004 alone more
than $50 billion in earmarks were passed. Just last year, the
Omnibus Appropriations bill for fiscal year 2009, which passed
in March of 2009, contained more than 8,000 earmarks costing $7
billion. And the Consolidated Appropriations bill for fiscal
year 2010, which passed in December, included nearly 5,000
earmarks, costing $3.7 billion.
There is no excuse for a system that allows that kind of
wasteful spending year after year, and while I have opposed
granting the President line-item veto authority to effectively
reshape programs like Medicare and Medicaid, for this specific
category, I support giving the President this additional tool.
Under the bill Congressman Ryan and I proposed, wasteful
spending would have nowhere to hide. It will be out in the open
so that both Congress and the President have a chance to get
rid of wasteful projects before they begin. I invited my
colleague from Wisconsin to testify today, but unfortunately,
his schedule does not permit him to be with us in person. He
will submit written testimony, and we will include that in the
hearing record.
Of course, there are other expedited rescission or line-
item veto ideas that have merit as well. The Senator from
Delaware, Senator Carper, who will lead off our hearing today,
has a proposal, which he may wish to discuss. I have been proud
to work with Senator Carper on a number of critical budget
issues, including the restoration of the PAYGO budget rule
which was so central to our ability to balance the government's
books during the 1990's. He has been a true champion of
taxpayers, and his work in this area is another example of that
leadership.
And then there is the President's expedited rescission, or
line-item veto, proposal that Senator Carper and I will be
introducing shortly. We are pleased to have Jeffrey Liebman
from the Office of Management and Budget with us today to
discuss the President's proposal, which is an exciting and
important development. The President's approach includes most
of what Congressman Ryan and I have targeted and I believe what
Senator Carper targets in his measure as well.
While we seek to find ways to support our goal of cutting
wasteful spending, it is essential that any new budget tools we
create be constitutional. That is part of the core mission of
this Subcommittee, and to help us in this regard, we are
privileged to have a distinguished Washington attorney and
former Assistant Attorney General for the Office of Legal
Counsel under President Reagan, Charles J. Cooper.
Helping us assess the potential value a line-item veto
might bring to budget discipline is another of today's
witnesses, Ryan Alexander, from Taxpayers for Common Sense, a
respected budget watchdog group. Finally, joining Mr. Cooper
and Ms. Alexander on the third panel will be Alison Fraser from
the Heritage Foundation.
I look forward to an open dialog on these important
questions, and I thank the witnesses for the time they have
devoted and the effort they have made to be here with us today.
At this point, of course, I would normally turn to the
Ranking Member, who cannot be here today. He is tied up in
another important meeting about our debt crisis. But I again
want to thank Senator Coburn for his cooperation in organizing
this hearing.
So we will start off this morning by hearing from Senator
Tom Carper. Senator Carper, thank you so much for agreeing to
testify at today's hearing. You have been a long-time ally on
budget issues. We have worked together on a number of different
proposals to combat government deficits and rein in other
fiscally irresponsible practices. Senator Carper's expedited
rescissions bill, the Budget Enforcement Legislative Tool Act,
or BELT Act, would significantly enhance the President's
ability to eliminate earmarks and other discretionary spending.
And I am delighted to be joined by Senator Carper in
introducing the President's expedited rescissions, or line-item
veto, proposal.
Senator, thank you for taking the time from your busy
schedule to be here today. I look forward to hearing from you,
and you may proceed.
STATEMENT OF HON. THOMAS R. CARPER, A U.S. SENATOR FROM THE
STATE OF DELAWARE
Senator Carper. Mr. Chairman, thank you so much. It is
great to be with you. It seems like a month or two ago when you
were good enough to come and testify before a Subcommittee that
I chair on the Homeland Security and Governmental Affairs,
which has a big, long title, but it is really a Subcommittee
that focuses on waste, wasteful spending, inefficient spending.
And we appreciated very much hearing from you that day on
providing another tool in the toolbox for, in this case, the
President to rein in wasteful spending, and I am just delighted
that we are going to be able to work together going forward in
this venue.
If we look at our budget deficit that we face, from the
years 2001 to 2008 we racked up as much new debt in those 8
years as we did in, I think, the previous 208 years of our
Nation's history. Just in 8 years, doubled our Nation's debt.
We are on course right now, if we do not do something about it,
to double our Nation's debt again by the end of this decade. We
have seen from what is going on in Greece and in Europe that
that path is not sustainable, and it is important that we
diverge from it as quickly as possible.
When Barack Obama was a mere mortal and he was one of us--
still one of us. In fact, his last day as a U.S. Senator, he
had been elected President, but he gave a farewell address on
the floor of the Senate. I was there. A number of our
colleagues were there because we thought, well, this could be
historic. It turned out, I think, it was. And when he finished
his address, I had been writing down literally on the back of
an envelope about six or seven or eight ideas that his
administration might find helpful in terms of reining in
deficit spending.
Among the things that I wrote down were cost overruns in
major weapons systems were up to about $300 billion per year by
2008. I wrote down tax gap, the tax gap, the amount of money
that is owed to the Treasury not being collected, roughly $300
billion per year. I wrote down the idea of sort of like
replicating the Greenspan Commission back in 1982 for trying to
address Social Security.
On that list was improper payments. We make tens of
billions of dollars of improper payments, the Federal
Government does, mostly overpayments. And I wrote down
recovering monies that had been misspent, fraudulent spent,
going out and recovering that money, not just saying, well, we
will just scratch that off or wipe that off, but going out and
getting the money.
I wrote down the list surplus property. We have all this
surplus property, thousands, tens of thousands of pieces of
property, many of which we do not use, but we pay utilities for
them, security for them, and it is just a waste of spending.
I wrote those down, and before he left the floor, he was
over talking with a page and shaking hands with all the pages.
They wanted to shake the hand of a future President. And I
stood in line with the pages. When he came to the end of the
line, he reached out to shake my hand, and he said, ``You are
kind of big for a page.'' And I said, ``Mr. President,'' and we
walked off the floor together. I gave him my envelope, and I
said, ``I think these are eight pretty good ideas for reducing
budget deficits, and obviously you are going to inherit a big
one.'' I did not know how big it was going to be. But I am
pleased to say that if you look at some of the things that this
administration is doing with respect to going after major
weapons systems' cost overruns, F-22s, C-17s--which is not a
cost overrun, but just an airplane we have plenty of and do not
need more--tax gap, deficit commission, surplus properties,
improper payments, post-audit cost recovery efforts. He was
really going down the list. He said to me when he took my list,
he said, ``You know, I cannot read your writing.'' And I said,
``Well, we will put it in a form that you can read,'' and later
I gave it to him.
I do not know what ever happened to that list, but I am
delighted to say that when we watch what this administration is
doing, a lot of the things that were on that list they are
actually doing. One of the things on the list was statutory
line-item veto power, something that our Chairman has supported
for a number of years, something I have supported literally
since 1992. As a House member, I offered legislation. I called
it a 2-year test drive for line-item veto power for the
President, where the President could rescind as much as 100
percent of spending. He would have the power for 2 years.
Congress could override it with a simple majority in either the
House or the Senate. It did not affect entitlement programs,
did not affect taxes, but the idea was to really do a test
drive for 2 years with something like line-item veto power for
the President. Then if after 2 years the President abused the
powers, they would go away. If he did not abuse the powers and
it was actually effective, we could extend it for another 2, 4,
8 years, or make it permanent.
When I came to the Senate, George Voinovich and I a couple
years ago introduced a version of the same bill, and we now
have, I think, over 20 cosponsors, and I am very pleased that
the administration has come and met with us, as I am sure they
have with Senator Feingold and his staff, but just to say,
``What do you think we ought to do? '' and to take ideas from
our bill, as I am sure they have from your bill. Today we are
going to be marrying our fortunes together.
When I was Governor for 8 years, we had line-item veto
power, and it was interesting. One of my former colleagues who
was a Governor, he used to describe line-item veto power as
having a bazooka under his desk. And he said, ``It was a
bazooka I almost never had to use, but the legislature knew it
was there. And if we could not talk them out of wasteful
spending or inefficient spending, bad ideas,'' he said, ``then
we would use the bazooka.''
I do not know that what we are talking about is a bazooka
under the desk, but what it is, I think, is a very helpful tool
for this Chief Executive to use, and I would suggest that we
provide him the power, probably not forever but for maybe 4
years, do a test drive, see how it works. If it is abused, then
it goes away. If it is effective or if we learn that it can
maybe be more effective, then we have the opportunity maybe 4
years down the road to enhance it and to improve it.
I do know this: As much as I like the idea of silver
bullets, I do not think there is one. I do not think there is
one for reining in the budget deficit. Maybe if we had a magic
wand and could sort of wave it, and all of a sudden GDP growth
would be 10 percent a year for the next, you know, 50 years or
even 10 years, I think that would pretty well wipe out the
deficit.
Unfortunately, I do not have that magic wand, and neither
do the rest of us. What we do have are a bunch of good ideas,
and this administration is beginning to implement a bunch of
good ideas. And I think we have the opportunity here for us,
for Senator Feingold and myself, and hopefully Senator
Voinovich and Senator Coburn and others to join forces on
another good idea, and that is, to give this President the
opportunity to single out spending that does not make sense,
that is inefficient, that is wasteful, and require us to vote
on it. We can vote it--if a majority of us think that, no, that
is reasonable spending, that is a good one, that is a good
idea, then so be it. But I have always said on an idea of mine,
if I cannot get 50 of my colleagues to vote with me for it in
the U.S. Senate, then maybe we should not be spending that
money. And I think that pertains to ideas of almost all of us.
So, Mr. Chairman, I am delighted to be here with you before
your Committee. I am very much looking forward to working with
you and your team as we put together a bipartisan coalition
around this idea, and with the support of the President,
actually enact it this time.
Chairman Feingold. Senator, thank you. I think this will be
not only a terrific opportunity for us to work together on
something we both care a lot about, but as I think you said
yesterday, this is really a time when maybe the stars are
aligned and we can actually get this done.
I was struck by your comments about your experience as
Governor with the line-item veto, because in Wisconsin, we had
the most, if you will, extreme line-item veto where the
Governor was able basically to use a computer and move numbers
and letters around in a way that actually made the people of
the State kind of squeamish about a line-item veto and fearful
of it, and we had to modify it.
Senator Carper. That is a couple of bazookas.
[Laughter.]
Chairman Feingold. And it was called the King George III
veto.
So what I am struck by, Senator, is how popular this idea
is even in that context, because I, of course, reassure people
this is not what this is. This is a much more narrow, targeted
technique. So I really appreciate your testimony. Thank you.
Senator Carper. It is my pleasure. Thanks so much. We look
forward to it.
Chairman Feingold. Now I will turn to the testimony from
the Office of Management and Budget. Mr. Liebman, will you
please stand and raise your right hand to be sworn in as soon
as you are up there?
Do you swear or affirm that the testimony you are about to
give before the Committee will be the truth, the whole truth,
and nothing but the truth, so help you God?
Mr. Liebman. I do.
Chairman Feingold. Thank you. You may be seated.
Our first witness on this panel is Jeffrey Liebman, the
Acting Deputy Director of OMB, where he has served as executive
associate and chief economist. Mr. Liebman is a renowned
economist and is currently on leave from Harvard University's
Kennedy School of Government, where he teaches courses on U.S.
economic policy and public sector economics. Mr. Liebman
previously served in the Clinton administration as a Special
Assistant to the President for Economic Policy at the National
Economic Council.
Sir, we appreciate you being here today and look forward to
hearing more about the administration's proposal, and you may
proceed.
STATEMENT OF JEFFREY B. LIEBMAN, ACTING DEPUTY DIRECTOR, OFFICE
OF MANAGEMENT AND BUDGET, WASHINGTON, DC
Mr. Liebman. Thank you, Chairman Feingold, for inviting me
to testify today about the President's new proposal, the Reduce
Unnecessary Spending Act of 2010. And I also want to thank
Senator Carper for his leadership on this issue.
This legislation would create an expedited procedure that
guarantees an up-or-down vote on certain rescissions proposed
by the President, helping to eliminate unnecessary spending and
discouraging waste in the first place.
Since taking office, the administration has made a priority
of identifying and cutting wasteful spending, proposing
approximately $20 billion of terminations, reductions, and
savings in both the fiscal year 2010 and fiscal year 2011
budget proposals. While recent administrations have seen
between 15 and 20 percent of their proposed discretionary cuts
enacted, we were pleased to work with Congress last year to
succeed in achieving 60 percent of the discretionary cuts that
the President proposed in his budget. So for that, I thank you
and your colleagues.
Further, the administration has worked with Congress to
curb earmarks, and the appropriations bills for this year saw a
significant decline in earmarks--a drop of 17 percent in number
and 27 percent in dollar value over the previous year. These
reductions build on the progress that Congress has made on
earmarks since 2006; reductions prompted by a series of reforms
that then Senator Obama helped to write with Senator Coburn and
others, which helped to bring more transparency and disclosure
to the process.
In this year's budget, the administration also committed to
restraining spending more broadly and has proposed a 3-year
freeze on non-security discretionary funding, saving $250
billion over 10 years compared to what would happen if this
spending grew with inflation over that time period. This
spending restraint complements other measures in the budget
that, together, produce more deficit reduction than has been
proposed by any President's budget in over a decade.
Furthermore, the administration proposed, and Congress
enacted, statutory pay-as-you-go legislation. PAYGO forces us
to live under a very important planning--that the Federal
Government can only spend a dollar on entitlement programs or
pass a tax cut if it saves a dollar elsewhere, and this
encourages the kinds of tough choices that are going to be
critical to putting our country back on a path toward fiscal
sustainability.
Significant progress has been made on cutting unnecessary
spending, including earmarks, but more can be done. The
President's proposal for expedited rescission would create an
important tool for reducing such spending. In short, the bill
would provide the President with additional authority to
propose a package of rescissions that would then receive
expedited consideration in Congress and a guaranteed up-or-down
vote.
Here is how it works.
Under this new authority, the President can propose fast-
track consideration of rescissions of discretionary and non-
entitlement mandatory spending. The President is limited to
proposing changes that reduce funding levels and cannot use
this authority to propose any other changes to law. The fast-
track process is thus limited only to reducing or eliminating
funding, for which a straight up-or-down vote is desirable.
After enactment of funding, the President has 45 days
during which Congress is in session to decide whether to submit
a rescission package using this expedited procedure.
A rescission package submitted under this authority
receives fast-track consideration in Congress. Debate is
limited in both Houses, and the package is guaranteed an up-or-
down vote without amendment. From the package's introduction to
the final vote, the process can take no more than 25 days.
Following submission of a rescission request using this
expedited procedure, the President may withhold funding for up
to 25 days, after which the funding must be released. This
ensures that agencies do not obligate funds before Congress has
had an opportunity to consider the rescission package.
The proposal has been crafted to preserve the
constitutional balance of power between the President and
Congress. Under our proposal, Congress, which is empowered to
set its own rules, changes those rules under which it considers
rescission packages submitted by the President--using well-
established fast-track procedures. Rescissions can only occur
if Congress enacts them into law. In other words, our proposal
does not expand the Presidential veto authority in any way.
A number of members from both parties, including the
Chairman and Senator Carper who testified on the first panel,
have introduced proposals that would, like our proposal, target
unnecessary spending by fast-tracking consideration of
rescissions. We applaud these efforts, and we look forward to
working with Congress to resolve any remaining differences and
enact this authority into law.
Thank you.
[The prepared statement of Mr. Liebman appears as a
submission for the record.]
Chairman Feingold. Thank you so much. Let me just ask you a
few questions.
I want to start by asking you about the practical impact of
the proposal you have laid out. Could you give me some examples
of the type of unnecessary spending and wasteful programs you
are hoping that this proposal will end? How much money do you
think something like this could save U.S. taxpayers?
Mr. Liebman. Yes, thank you, Senator. I think there are
several types of spending that this proposal could be effective
in targeting. One type of spending are programs that are
heavily earmarked or allocated on methods other than merit-
based or competitively based methods of allocating spending.
And so the President in his budget has proposed ending several
categories of programs of this sort.
For example, there are State assistance grants for water
infrastructure at the EPA, where we spend $157 million on a
heavily earmarked program, and we have other programs where we
address similar needs in competitive and merit-based ways.
Similarly, there are earmarked surface transportation programs
at the Department of Transportation. We spend $293 million on
those programs, and, again, there are other ways to meet our
surface transportation needs where the allocation is merit-
based. So heavily earmarked programs is one example.
The other category of programs where I think we can achieve
real savings from this are in duplicative programs. For
example, we have programs at both the Department of Commerce
and at the USDA that are supposed to fund public broadcasting,
but we have also very effective programming through the
Corporation for Public Broadcasting, and going after that kind
of duplicative program could also be accomplished by this
spending.
In terms of the total magnitude, the President last year
and this year proposed about $20 billion in this category of
spending. You know, we achieved some of that working through
the normal appropriations process. I think with this tool we
could achieve a lot more of it. This comes back to something
that was said in the opening remarks. It is not simply reducing
spending after it has occurred that will be able to reduce the
deficit through this approach; it is also discouraging people
from proposing these things in the first place. And, really, I
think that is probably the biggest impact of this proposal.
Chairman Feingold. I agree with you that the deterrent
effect is probably the most effective aspect of it.
As you note, the President's proposal focuses only on
rescissions of discretionary spending and on non-entitlement
mandatory spending. It does not cover entitlement programs or
tax expenditures of any kind.
Now, I strongly believe that enacting a line-item veto
measure for this sort of discretionary earmarked spending would
be very significant on its own, but some critics might contend
that our major fiscal challenges stem in large part from
entitlements and tax expenditures.
What would you say to those who want to include
entitlements and tax expenditures in this kind of an expedited
rescissions or line-item veto bill?
Mr. Liebman. I think the answer to that very good question,
Senator, is that this particular tool aims to be a very
streamlined tool for letting us, you know, within weeks after
discretionary or non-entitlement mandatory spending is enacted
to go after wasteful programs. And the idea here, in order to
keep it streamlined and very transparent, is to permit only a
very simple thing to happen, which is spending levels for these
programs to be reduced or eliminated altogether. And, in
particular, the President's proposal does not allow any
amendments to the proposal. It is just a matter of reducing
dollar amounts.
When one makes changes to tax or to entitlement programs,
one typically needs to make statutory changes as part of that
legislation because these programs are complicated, they
interact with each other, and it is typically not the case that
one can make a change to those programs in a simple sort of
yes-or-no, up-or-down approach. And so we do not think this
kind of streamlined simple approach matches well with those
needs.
But it is absolutely the case that if we were going to get
control over the country's budget situation, we are going to
have to continue to make progress not simply on the
discretionary side, but on the entitlement side, on the tax
expenditure side. And as you know, the President worked very
hard to the largest fiscal challenge, controlling health care
costs, right from the beginning of the administration, and he
has proposed the bipartisan fiscal commission as a way to work
on these bigger programs. So I think we need different tools
for different tasks, and this is not a silver bullet at all, as
Senator Carper said. This is just a way to go after one
particular and very important aspect of the spending challenge
we face.
Chairman Feingold. The legislation I introduced with
Congressman Ryan requires that any savings realized from a
line-item veto be used to reduce our budget deficits. Is there
a reason that feature was not included in the President's
proposal? And do you have any objection to including it?
Mr. Liebman. That is a good question. Under the rescission
proposal from the President, only one thing can happen:
spending can get reduced. There is no way to reallocate
spending to other programs. There is no other way to introduce
new spending into it. In the President's proposal, the direct
effect is simply to reduce spending and reduce the deficit. But
as you note, other proposals have gone a step further and have
said that the discretionary spending allocation should be
reduced by the amount of the rescissions, and we did not do
that in this proposal because we think, although in many, and
maybe even most cases, what one will want to happen when
spending is eliminated through a rescission is to reduce the
deficit and not to have that spending replaced with another
program. In other cases, what may happen is that there may be
ineffective programs targeting a real need where Congress wants
to eliminate those ineffective programs, and then they want to
come back later in the session and try to address that need
with a more effective merit-based approach. So in drafting this
proposal, we left that flexibility.
That said, there are many features of this proposal,
including this one, where we would be very happy to work with
you and figure out whether we got it right.
Chairman Feingold. So you do not necessarily object to
tying that down a little more tightly.
Mr. Liebman. No. We would be happy to work with you on
that.
Chairman Feingold. Thank you. As I understand it, the
administration's proposal gives the President up to 45 session
days after enactment of a spending bill to send a proposed
package of rescissions to Congress, and depending on the time
of year, as you well know, that could end up being 3 months or
even longer. Does the administration really need that much time
to review an appropriations bill and submit proposed
rescissions? Could you live instead with 30 calendar days, as I
previously proposed in my legislation?
Mr. Liebman. The key goal of this provision and one of the
main differences with the existing Impoundment Control Act is
that it requires a rapid submission by the President, that it
has to be done within 45 days, unlike the existing rescission
authority where submissions can be delayed much later. And the
reason we chose 45 days is that at the end of the year, in
December or January, frequently there are large omnibus
appropriations bills exactly at the same time that we are
putting together the President's budget. And so if one gets one
of these huge bills and we need the time to go through it and
figure out exactly what is in it, do the analysis of the policy
and figure out which things need rescissions, we thought that
something like 45 days might well be what is needed at that
period. Most times of the year, on smaller, more traditional
appropriation vehicles, 45 days is longer than one needs.
We decided to go simple and just have a single number of
days, but one could perhaps have 45 days only for things passed
in December or January in an omnibus procedure and a shorter
time period on other ones.
Chairman Feingold. It sounds like something we could work
out.
Mr. Liebman. Absolutely.
Chairman Feingold. Thank you.
I now want to ask you about the specific procedures
governing Congressional consideration of the rescissions
package. Correct me if I am wrong, but it appears that the
House could avoid a direct vote on the rescissions package
itself by defeating the motion to proceed to it. By contrast,
the proposal for consideration by the Senate ensures that the
rescissions package comes to the floor for debate and a vote.
Why is the process structured the way it is in the House?
Is there some quirk of House procedure that makes that
necessary?
Mr. Liebman. Well, fundamentally, the Constitution empowers
each chamber of Congress to set its own rules, and so this
procedure tries to respect that, and we tried to write a
procedure that was consistent with the culture in each House of
Congress. But, frankly, that is something we would be very
happy to work with you on and figure out what procedures work
best. Our goal here is quite simple. We want to have an up-or-
down vote. We want the President to have to introduce something
quickly. We want there to be no amendments. And the details
around that are all things that I think we can work together to
get right.
Chairman Feingold. For the deterrent effect on this to
work, you and I both discussed the need for a substantive vote
where somebody has to own keeping these expenditures important.
It occurs to me that we do not want to have somebody have the
excuse that they simply wanted to proceed to something else.
Mr. Liebman. That is a good point.
Chairman Feingold. Thank you for that candid response.
Finally, I want you to know--and this is more of a comment
for your reaction--that I will be pushing hard to pass the
line-item veto as the President has proposed. You and I both
know it will be an uphill struggle, so we will need the full
support of the administration. So I hope you will take that
request back with you.
But I also have another request to pass on, and that is
that the administration not wait until it has the line-item
veto to aggressively challenge wasteful spending and
unjustified earmarks. You have already mentioned some of the
things that the administration has already done in this regard,
and I congratulate you on that.
Let me say this: The next time Congress sends you a massive
spending bill, stuffed with over 8,000 earmarks totaling more
than $7 billion, like last year's omnibus, I hope the President
vetoes it and tells Congress to try again. Your reaction?
Mr. Liebman. Well, I thank you for that advice. I think one
of the reasons, clearly, why this particular authority is
needed is that the veto pen is a very blunt instrument, and as
you well know, one often gets a bill where 90 percent of it is
essential, and then there is 10 percent that you wish were not
there, and it makes it very difficult to get rid of the
wasteful spending.
And so, you know, I do hope we will continue to be
successful in this year's appropriation process as we were in
last year's appropriation process in going after wasteful
spending, and I will certainly take your message back, and
thank you very much.
Chairman Feingold. Thank you, Mr. Liebman, for your
excellent testimony. I look forward to working with you on
this.
Mr. Liebman. Thank you.
Chairman Feingold. We will now turn to testimony from our
third panel of witnesses. Will you all please stand and raise
your right hand to be sworn in? Do you swear or affirm that the
testimony you are about to give before the Committee will be
the truth, the whole truth, and nothing but the truth, so help
you God?
Mr. Cooper. I do.
Ms. Alexander. I do.
Ms. Fraser. I do.
Chairman Feingold. Thank you. You may be seated. Welcome to
all of you. Thanks for being with us here this morning. I am
extremely impressed with the caliber of the witnesses on this
panel. I look forward to hearing from all of you. I ask that
each of you limit your remarks to 5 minutes. As always, your
full written statements will be included in the record.
Our first witness on this panel is Charles Cooper, a
constitutional scholar and expert on line-item veto proposals.
Mr. Cooper served as Assistant Attorney General in the Office
of Legal Counsel in the Reagan administration and had, I am
told, the unfortunate and unenviable task of telling President
Reagan that there is no legal or constitutional support for an
inherent line-item veto. Mr. Cooper is one of the lawyers who
was retained by several Members of Congress to challenge the
constitutionality of the Line Item Veto Act of 1996 and is,
therefore, uniquely suited to discuss how the 1996 Act is
different from the legislative proposals we are talking about
today.
Mr. Cooper has over 25 years of legal experience in
Government and private practice. He was named by the National
Law Journal as one of the ten best civil litigators in
Washington. He is a graduate of the University of Alabama Law
School and is a founding member and Chairman of the law firm of
Cooper & Kirk where his practice is concentrated in the areas
of constitutional, commercial, and civil rights litigation.
So, Mr. Cooper, thank you so much for being here today, and
you may proceed.
STATEMENT OF CHARLES J. COOPER, PARTNER, COOPER & KIRK, PLLC,
WASHINGTON, DC
Mr. Cooper. Thank you very much, Mr. Chairman. I very much
appreciate the Committee's invitation to me to present my views
on the constitutionality of the recently proposed measures
designed to give the President an authority akin to a line-item
veto.
The analysis of the constitutionality of the various line-
item veto measures that have been proposed is controlled by the
Supreme Court's decision in Clinton v. City of New York, which
struck down the Line Item Veto Act of 1996. That Act provided
that the President may cancel any dollar amount of
discretionary budget authority, any item of new direct
spending, or any limited tax benefit by sending Congress a
special message within 5 days after signing a bill containing
such items. Cancellation took effect when the Congress received
the special message.
The term ``cancel'' was defined by that Act as ``to
rescind'' and to ``prevent...from having legal force or
effect,'' which made it clear that the President's action would
be both permanent and irreversible. Thus, a Presidential
cancellation under the 1996 Act extinguished the canceled
provision, as though it had been formally repealed by an act of
Congress. And neither the President who canceled the provision
nor any successor President could exercise the authority that
the provision, before the cancellation, had granted. It could
be restored to the status of law only if a ``disapproval bill''
was enacted according to the bicameral passage and presentment
requirements of Article I, Section 7.
In striking down the Line Item Veto Act of 1996, the
Supreme Court in Clinton concluded that vesting the President
with unilateral power to cancel a provision of duly enacted law
could not be reconciled with the requirements established under
Article I, Section 7; that is, bicameral passage and
presentment to the President. The Court struck down the 1996
Act because--and these are the Court's words, Mr. Chairman--
cancellations pursuant to the Line Item Veto Act are the
functional equivalent of partial repeals of Acts of Congress
that fail to satisfy Article I, Section 7.
The various measures that are now pending before this body
for your consideration are very much in contrast to that Act.
They are framed in careful obedience, I believe, to Article I,
Section 7, and to the Supreme Court's teaching in Clinton. The
President is not authorized by these bills to cancel any
spending or tax provision or otherwise to prevent such a
provision from having legal force and effect. Instead, the
purpose of the proposed measures is simply to provide a fast-
track procedure to require the Congress to vote up or down on
rescissions that have been proposed by the President. In other
words, the President's proposed rescissions are just that--
proposals. Thus, any spending or tax provision duly enacted
into law remains in full force and effect under all of these
measures that I have seen unless and until it is repealed the
old-fashioned way--by this body through bicameral passage and
presentment.
To be sure, the current proposals--that I have seen,
anyway--would authorize the President to temporarily defer or
to suspend execution of the spending or the tax provision at
issue for a single specified period of time. Now, the purpose
of that deferral authority, obviously, is simply to allow the
Congress adequate time to consider the President's rescission
proposals and vote them up or down before the funds at issue
are obligated or spent. The President would be authorized to
terminate the deferral, however, at any time that he determined
that continuation of the deferral would not further the
purposes of the Act.
So the President would be free at any time to change his
mind--and that is critical--any time to change his mind about
the deferred spending item or tax provision and to commit the
funds. Likewise, if Congress does not approve the President's
rescission proposal, the President would be required under the
law to make the funds or tax benefits available no later than
the end of the statutory deferral period--which, again, cannot
exceed a single specified period of time.
Thus, the President is authorized only to defer a spending
or tax provision under the proposal, not to cancel or otherwise
prevent the provision from having legal force and effect. And
the Congressional practice of vesting discretionary authority
such as this in the President to defer and even to decline
expenditure of Federal funds has been commonplace since the
beginning of the Republic, and its constitutionality has never
seriously been questioned and, in fact, was sustained and
confirmed in the Clinton case itself.
So the short of my testimony, Mr. Chairman, is this: The
Supreme Court's decision in Clinton recognizes and enforces the
constitutional line established by Article I, Section 7,
between the power to exercise discretion in making or unmaking
a statute, which cannot be delegated to the President, and the
power to exercise discretion in execution of the statute, which
can be and has for centuries been delegated to the President.
And, in my opinion, the provisions pending now before you, the
one that you have introduced, the one that President Obama has
just submitted earlier this week, seem to me to be on the
constitutional side of that line.
Thank you again for inviting me to share my views with you,
Chairman Feingold.
[The prepared statement of Mr. Cooper appears as a
submission for the record.]
Chairman Feingold. Thank you, Mr. Cooper, for your
excellent testimony.
Our next witness is Ryan Alexander, the President of
Taxpayers for Common Sense, an organization dedicated to making
sure that the government spends taxpayer dollars in a
responsible, transparent manner. A graduate of Wesleyan
University and, I am pleased to note, of the University of
Wisconsin Law School, Ms. Alexander has dedicated her career to
the public sector and to halting government waste. She has been
the President of Taxpayers for Common Sense for the last 4
years and has worked in some capacity for TCS for the last two
decades. Prior to that, she served as Executive Director of the
Common Cause Education Fund and co-founded the Appalachian
Center for the Economy and the Environment. She also sits on
the Board of Directors of the Project on Government Oversight.
Ms. Alexander, we welcome you, and thank you for taking the
time to be here, and you may proceed.
STATEMENT OF RYAN ALEXANDER, PRESIDENT, TAXPAYERS FOR COMMON
SENSE, WASHINGTON, DC
Ms. Alexander. Thank you. I am also a Wisconsin native, so
I have that fiscal responsibility----
Chairman Feingold. What town?
Ms. Alexander. Thiensville. Thank you for the invitation to
testify today. Taxpayers for Common Sense is an independent and
non-partisan voice for taxpayers working to increase
transparency and expose and eliminate wasteful and corrupt
spending. As many people in this room know, we have created
databases of all appropriation earmarks for the past 6 years.
Our mission is to achieve a Government that spends taxpayer
dollars responsibly and operates within its means. All of our
work stems from our belief that no one--no matter where they
find themselves on the map or the political spectrum--wants to
see their money wasted.
TCS supports the Reduce Unnecessary Spending Act of 2010.
It would establish a useful tool to cut wasteful spending
without unconstitutionally impinging on Congress' power of the
purse. The current appropriations process makes it difficult to
cut unnecessary spending, as few Members of Congress will vote
against entire appropriations bills because of individually
wasteful earmarks or programs.
The President's proposal would increase transparency and
accountability of the spending process by giving the public
more information about where their elected representatives
stand on specific requests that are often buried in omnibus
spending or authorization bills.
Enactment of RUSA, for lack of a better acronym, would
provide an opportunity for the administration and Congress to
identify and cut duplicative or obsolete spending.
In 2006, TCS supported the Line Item Veto Act, in part
because we found that the number of earmarks in appropriations
bills had increased sixfold from 1998 to 2006. At the time, we
argued that it would enable the President to shine a spotlight
on specific spending and tax provisions. The same logic applies
now: it is difficult to believe that majorities in both Houses
of Congress would publicly support many of the current
earmarks. The 2010 appropriations bills contain almost 9,500
earmarks worth almost $16 billion. Especially at this time when
there are so many demands for Federal dollars, it is hard to
believe that those provisions would all be supported.
Congress has also become increasingly reliant on omnibus
spending packages that wrap several appropriations bills
together. The bills are thousands of pages long, frequently not
available to the public for very long before they are voted on,
and hide earmarks and other spending provisions.
At the same time, the general recognition--outside of
Wisconsin--that Federal spending continues to grow at an
unsustainable rate relative to revenue has led to a series of
mostly insufficient attempts to rein it in. PAYGO rules, which
require that any new funding be paid for without additional
borrowing, include an exemption for emergency spending bills,
which can often amount to tens or hundreds of billions in
additional spending. Moreover, emergency spending bills
routinely contain spending that fails to meet Congress' own
definition of ``emergency'' and are therefore often as likely
as any spending bill to contain politically driven plus-ups,
earmarks, or other spending. If Congress is indeed serious
about the budget deficit, it should embrace all opportunities,
including this legislation, to identify and cut unneeded
spending.
Both voters and Congress would be well served by expedited
rescission authority. Many times, lawmakers are asked to accept
smaller spending proposals contained within broader
legislation. Though relatively small in the context of a
massive spending bill, these projects may become examples of
Government waste that damages Congress' credibility with the
public. In some cases, lawmakers have demonstrated the ability
to eliminate wasteful spending after sufficient public
attention. After many, many attempts, Congress did strip
funding for the Bridge to Nowhere in subsequent legislation,
and more recently the so-called Cornhusker Kickback was removed
from the recent health care legislation. Expedited rescission
authority will potentially enable Congress to eliminate these
kinds of fiscal stains more quickly and decisively.
But there are other Bridges to Nowhere that pass through
the appropriations process with very little public attention.
Our hope is that this new process will help bring to light,
reduce, and eliminate some of the more unnecessary spending
proposals approved by Congress.
The principle that our tax dollars are too precious to be
wasted is true even in times of surpluses and sustained
economic growth. But the need to rein in wasteful spending
takes on greater urgency in the face of the challenges we face
today: the costs of wars in two theaters, growing costs of
addressing domestic needs, and the threat of historically high
deficit and debt levels. And while economists and politicians
may disagree about the importance of reducing the deficit and
the debt in times of high unemployment, no one advocates for
the growth of deficit spending and increased borrowing to fund
wasteful spending. Congress and the administration both need to
take a hard look at the practices and options available to them
to increase discipline in the spending arena. The Reduce
Unnecessary Spending Act of 2010 would provide a tool for
eliminating and curbing this wasteful spending, and we hope to
see it enacted.
Thank you.
[The prepared statement of Ms. Alexander appears as a
submission for the record.]
Chairman Feingold. Thank you. I admire that you have
devoted yourself to this issue, but it is not a big surprise
because there is nowhere in Wisconsin where people like
wasteful spending, but in Thiensville, they feel very, very
strongly about that, as you well know.
Ms. Alexander. I believe that. Yes.
Chairman Feingold. Our final witness this morning is Alison
Fraser, the director of the Thomas A. Roe Institute for
Economic Policy Studies at the Heritage Foundation. Ms. Fraser
oversees the Heritage Foundation's research on a range of
domestic economic issues, including Federal spending, taxes,
and long-term threats to our fiscal stability. Prior to joining
Heritage, Ms. Fraser was the deputy director of the Oklahoma
Office of State Finance and the budget manager for Orange
County, California.
Ms. Fraser, thank you for taking the time to testify today,
and you may proceed.
STATEMENT OF ALISON FRASER, DIRECTOR, THOMAS A. ROE INSTITUTE
FOR ECONOMIC POLICY STUDIES, THE HERITAGE FOUNDATION,
WASHINGTON, DC
Ms. Fraser. Thank you very much. It is a pleasure to be
here today. The views I express are my own and not those of the
Heritage Foundation. I am an economist and not a lawyer, and as
such, it is my view that any additional tool to restrain
Federal spending that meets constitutional muster should be
available. This is all the more important today with trillion
dollar deficits that are nearly 10 percent of GDP, while the
national debt is on track to double over the next decade,
reaching nearly 90 percent of the economy, and 100 percent of
GDP is sort of an international benchmark for approaching
crisis. So I am truly concerned about the fiscal path that we
are on.
Spending today is around 25 percent of GDP, and as you
know, other than World War II, that has never happened. But
unlike World War II, we really face a structural problem where
spending will continue to track upwards as we move from
recession-driven spending to entitlement-driven spending. And
as we watch the fiscal contagion that started with Greece's
budget crisis, spread across Europe and other countries, the
concerns and attention to unsustainable Federal spending on our
own shores have taken on crucial new urgency.
So toward that end, though existing rescission authority
has been used by Presidents regularly until George W. Bush, one
of my concerns about this is that it has not had a really
material effect on spending. For example, of the $43 trillion
in Federal spending since 1990, Presidents have proposed
rescinding around $20 billion, of which Congress has approved
just $6 billion. So that is less than one one-hundredth of a
percent of total Federal spending. To be sure, if President
Bush had used this as other Presidents had, that number would
have been a little bit higher, but not materially. And, of
course, deterrence is something that is very, very difficult to
measure, and that is certainly an important element to consider
here.
But this Congressional Accountability and Line Item Veto
Act and the President's proposal would make important changes
to the existing authority that Presidents have--we have heard
that before; let me just run through them quickly--by requiring
to act, that is, I think, the most important one, requiring it
on fast track, and an up-or-down vote. All of those I think are
really important improvements to the existing authority. And
they get closer to what Governors had. I worked for a Governor
for 8 years, and he really used the veto pen and his line-item
veto authority. It is an important tool.
This Act would focus on earmark spending, targeted tax
benefits, and limited tariff benefits. These are all very
important fiscal issues for Congress and the administration to
focus on. However, my concern is that they do not add up to a
lot of money. For example, the numbers I am going to use, there
are about 9,500 earmarks in all 2010 appropriations bills worth
around $16 billion. So even under this enhanced authority, if
the President were to have proposed rescinding all of these
earmarks, which is somewhat doubtful, discretionary spending,
which is a small part of the budget, as we all know, would
still have grown by 8 percent as opposed to 9 percent. And it
is really hard to imagine a scenario where members would give
up any, let alone all of their earmarks in a rescission package
considering all of the negotiations, as you know, that go into
appropriations bills in the first place. So my concern would
like to have a much bigger effect.
I think one of the improvements--and you mentioned this
with earlier witnesses--is we could have more impact if more
spending categories were included, so I would like to see more
broadly discretionary spending and even new entitlement
spending that would increase over the baseline included.
To tackle the serious spending problems facing the Nation
before they become a crisis, I really feel that stronger
additional tools are necessary in addition to this legislative
line-item veto. We heard no single bullet is going to solve the
problem that we face, so let me quickly run through three
additional tools that I would like Congress to consider.
The first is easy. It is budget transparency, adding in the
unfunded obligations from Social Security and Medicare, which
total $43 trillion--a lot bigger than the current debt limit--
would provide transparency for lawmakers and the public to see
what our real long-term fiscal future is. I think that major
policy changes should be scored over the long term in addition
to the 5- and 10-year budget windows so that we can measure
what their effect would be on our long-term fiscal
sustainability.
And, finally, entitlements are not budgeted. They have no
appropriations, and these three, the big three, are not even
reauthorized on a regular basis like, say, the farm bill is. So
I think this spending should be taken off of autopilot and put
onto long-term, say 30-year budgets that are regularly re-
evaluated and put entitlement and mandatory spending on an even
playing field so that all priorities are debated on a regular
basis, not just the smaller window of discretionary spending.
So, in short, I think that this is a useful tool. There are
many more things that are going to be needed, and I welcome
your comments, and thank you very much for the opportunity to
talk to you today.
[The prepared statement of Ms. Fraser appears as a
submission for the record.]
Chairman Feingold. Ms. Fraser, thank you for your
testimony. I certainly do not dispute that additional things
need to be done. Of course, this is a hearing of the Senate
Judiciary Constitution Subcommittee, and we are particularly
addressing the issue that the previous line-item veto--which I
did vote for--was struck down by the Supreme Court. But I am
also a member of the Budget Committee, and I will take to heart
your additional ideas.
Ms. Fraser. Thank you.
Chairman Feingold. Thank you for your testimony.
Mr. Cooper, thank you for your very thorough written
testimony and particularly for your summary of the history of
the 1996 law and its journey through the courts. Understanding
that background is very helpful to the analysis of the
constitutionality of the current proposals, and many who are
watching or will watch this hearing are not lawyers or legal
scholars, let alone constitutional scholars. But they probably
remember that the line-item veto that Congress passed in 1996
was struck down by the Supreme Court. I think you have done a
very good job explaining why you think both the President's
proposal and the bill that Congressman Ryan and I have
introduced are constitutional.
Let me ask you, in addition, do you see any constitutional
risk in explicitly requiring that any savings realized by this
proposed new rescissions process be used only for deficit
reduction? We might do that, for example, by requiring that the
annual budget caps be adjusted down to reflect the reduced
spending. Do you see any constitutional infirmity in that?
Mr. Cooper. I do not, Mr. Chairman. I will confess to you
that I have not spent a lot of focused and concentrated thought
and research on that particular question. But I do not see----
Chairman Feingold. On the face of it, you do not----
Mr. Cooper [continuing]. On the face of it any reason why
Congress limiting itself in that fashion would pose a
constitutional difficulty.
Chairman Feingold. Thank you, sir.
Ms. Alexander, let me turn to you. As I noted in my
questioning of Mr. Liebman, the administration's bill does not
include the same requirement that the rescissions be used to
reduce the deficit. Would you support an effort to include such
a requirement?
Ms. Alexander. Yes, we would support--TCS has supported
your proposal in the past, and we would support that as an
amendment to the President's proposal.
Chairman Feingold. Any other changes you would consider
making to the President's proposal to cut back on Government
waste?
Ms. Alexander. I would say based on your questions, your
back-and-forth with Mr. Liebman, I think we also agree that a
faster timeframe would be helpful.
Chairman Feingold. In terms of sessions days and----
Ms. Alexander. In terms of session days, and while I am
sensitive to the concern he raised of omnibus spending bills
and the budget happening at the same time, it would also just
be helpful to not just push all the omnibus CRs to the end of
the year. So there are other solutions.
Chairman Feingold. Very good.
Ms. Fraser indicated--I agree with you--that the line-item
veto is definitely not going to solve all of our budget
problems, but I think it can be used to shine a light on
wasteful programs or at a minimum to help dial down spending in
accounts that have grown too large over time.
Even if we did not broaden the President's proposal in the
way you suggest by extending it to cover entitlement changes,
as Senator Frist proposed a few years ago, do you think it is
still worth trying?
Ms. Fraser. I absolutely do. I think that, you know, we
should have all constitutional framework adherent proposals,
you know, at both the Congress' and the President's disposal.
And I think that even though, you know, the bigger problem that
we face is not discretionary spending and is not earmarks,
these are very, very important things to do in the public eye,
to show them that strong steps are being taken, you know, on
sort of parallel tracks.
Chairman Feingold. Thank you.
Mr. Cooper, as you note in your testimony, the current
proposal allows the President to temporarily defer or suspend
implementation of a spending provision in order to give
Congress time to consider a rescissions package, and I agree
with you that such a deferral period does not violate the law
or the Constitution. Can you just walk through a little bit
what the constitutional limits of that temporary deferral
authority might be?
Mr. Cooper. Senator Feingold, it has been the practice of
this body to delegate to the President the power to defer
spending or even to decline to spend in so-called lump-sum
appropriations really since the time of President Washington.
And the lapsing of that appropriation authority has never been
viewed as being in any way a constitutional problem. In fact, I
think the Clinton case acknowledges that history and the
constitutionality of that longstanding practice.
For that reason, I do not believe that there would be a
constitutional difficulty even if, for example, during the
deferral period that the measures are before you would provide
to the President extended beyond the appropriation
authorization in the bill that the President was studying for
purposes of exercising his power to recommend rescissions.
So I do not see a constitutional difficulty. I think the
issues there are more for this body in terms of the kinds of
policy issues that it thinks are important in this area.
Chairman Feingold. Thank you, sir.
Ms. Alexander, finally, what do you think of Ms. Fraser's
argument that a line-item veto will not solve all of our
massive fiscal problems? Should we, nonetheless, support a
proposal like this?
Ms. Alexander. Certainly there is no silver bullet. I think
that is a true statement. I think in the context of these
proposals and focusing on earmarks, limited tax benefits, and
tariffs, the bigger issue there that makes this very important,
I think, is that there are special opportunities for
corruption, and the public understands that those narrowly
targeted benefits are what they do not like about how Congress
spends money. And so focusing on things that have really
undermined confidence in Congress and that while not every
earmark is corrupt, not every special tax benefit is corrupt,
they do present special opportunities for corruption, and we
have seen that in the past. So I think addressing them is an
important first step, although it certainly will not address
the deficit on its own.
Chairman Feingold. Thank you all for answering my
questions.
We are pleased to be joined by our colleague Senator
Whitehouse. You may take a round of questions.
Senator Whitehouse. Thank you, Chairman Feingold, and thank
you for your work on this issue. I think it is a promising area
and one certainly that merits our inquiry and exploration.
Obviously, a proposition like this, if enacted, will create
political effects in addition to economic effects, and I noted
with considerable interest Senator Conrad's concern expressed
in the newspaper, I think yesterday. He is a gentleman who has
been around here a very long time who has an exemplary
reputation, who is our Chairman on the Budget Committee, and he
expressed the concern that this might lend itself to selective
and abusive application by the executive branch, not with the
intention to reduce spending and control waste, but to punish
and reward legislators for their support of or opposition to
various things. And I think it is a legitimate concern as to
whether unintended consequences of the balance of power between
executive and legislative could emerge from this.
So I am particularly interested in probably the most boring
section of all, which is Section 4, which, as I read it,
sunsets this provision at the end of 2014. Do you all see it as
a complete sunset at the end of 2014?
Mr. Cooper. I am not sure I understand, Senator Whitehouse,
what you mean by ``complete,'' but the provisions that I have
read do seem to suggest that the Act itself will go away
completely.
Senator Whitehouse. It will go out of business in 2014.
Mr. Cooper. Yes, sir.
Senator Whitehouse. And would need to be readopted if we
were going to continue it beyond then.
Mr. Cooper. Exactly. The power that the President is
authorized to exercise in connection with these bills would
expire, and if he is ever to exercise it again, it will have to
be on the say-so of this body in another bill of that kind.
Senator Whitehouse. It strikes me that the sunset provision
accomplishes two things: one, it enables us to have a trial
period during which we cannot only evaluate the economic and
waste-cutting effects of this provision, but also evaluate the
extent to which it affects the balance of power between
executive and legislative and does so in a helpful or unhelpful
way; and the second is that because the executive branch could
see the 2014 sunset and the need to renew it basically ab
initio ahead of itself, I would think it would restrain the
worst behavior that the bill might otherwise permit for fear
that if you blow it now, you blow it forever, because if you
abuse this, Congress will never give you back this authority
again.
And it strikes me that both as a trial period and as a
potential deterrent against the worst political abuses of this
provision, Section 4 is a pretty important piece of this
legislation and a good element when we are stepping out into
something new like this. And I would like to hear your
reactions to those two thoughts about Section 4. Ms. Alexander.
Ms. Alexander. We do not object to the sunsetting. I think
there is some merit to the argument that there is a trial
period, and this is a rearrangement of the dance between any
administration and Congress, particularly on spending. We think
there is room for that relationship to change because it is not
working to the best interests of the taxpayers right now.
I think, you know, unintended consequences are notoriously
hard to predict, whether or not----
Senator Whitehouse. By definition.
Ms. Alexander. Right. The political consequences of a
President abusing this authority. Part of the strength of these
proposals is that they shed light on specific provisions, and
if by highlighting those specific provisions it is easy for a
Member of Congress or any special interest to say they have
been singled out, I am quite confident that people would do
that. You know, sunlight goes both ways, so whoever feels like
they might be the victim of being singled out would have a
platform and have their interest highlighted. I think, you
know, nobody runs for office without knowing what business they
are getting into. And might these be political? Yes. Is that
necessarily going to be popular with the public? Maybe not. And
that may be the reason not to do it for the President and the
reason for Congress to be deterred from including particularly
egregious spending items.
Senator Whitehouse. Ms. Fraser, what do you think about----
Ms. Fraser. Yes, I think you raise an excellent point, and
there is certainly a lot of unintended consequences to be
concerned about. One of the things that could happen is, in
fact, this tool for the President could actually see spending
go up. And I think that is something that none of us on this
panel would like to see. So it could be that the sunset
provision could be an important sort of check and balance in
this new authority itself. And as I spoke about earlier, I do
think that that is one of the reasons that you need to combine,
you know, a tool like this with other strong spending
limitation kinds of tools.
Senator Whitehouse. Mr. Cooper, final thoughts? I did not
hear from you on this, and we have about 48 seconds.
Mr. Cooper. Well, Senator Whitehouse, I do not have any
thoughts with respect to the constitutional dimension of your
question because I just do not think there is a constitutional
issue raised by this----
Senator Whitehouse. My question did not have a
constitutional dimension. It just had a practical political
dimension that----
Mr. Cooper. Yes. Well, the only thing I think I would add--
and I think your points are well taken. Certainly the concerns
you voiced and that other Senators have, even Senator Byrd back
during the days when I represented him in connection with the
challenge to the earlier Line Item Veto Act, this was one of
his major concerns. But there are other potential unintended
consequences of the sunset, and that is that, to whatever
extent the President aggressively uses in the way that this
body and its intendment would expect, that too could lead to
Members of the Senate or Members of the House not being
particularly fond of the idea of reenacting it, because, let us
face it, the practice of earmarks is one that is a very
difficult one to eliminate or to control. And to the extent
this measure becomes effective in that, it may create the
unintended consequence of something that produced the very good
that this seeks to produce would provide the impulse to let it
sunset.
So I guess there is another side to that coin----
Senator Whitehouse. It might deter the deterrence.
Mr. Cooper. There may be another side of that coin, but I
do think the points that you have made are very well taken.
Senator Whitehouse. Thank you.
Thank you for the time, Chairman Feingold, and thank you
for drawing attention to this.
Chairman Feingold. Senator Whitehouse, thank you for your
thoughtful involvement in this. I look forward to working with
you on this issue.
I want to thank all of our witnesses today. I again want to
thank the Ranking Member, Senator Coburn. Even though his
schedule did not permit him to take part in the hearing, he and
his staff extended every courtesy to us in putting this hearing
together, and we thank them for that.
Given the budget challenges facing our country, the line-
item veto could not be a more timely issue, and the President's
line-item veto proposal is a welcome addition to the measure
several of us have already proposed.
President Obama inherited the worst economic mess ever left
a new President in our Nation's history, and the crushing
recession, which he also inherited, has made it only worse. So
we have to get our fiscal house in order. I do not think there
is anyone here who would disagree with that.
I realize that an expedited rescissions or line-item veto
bill will not solve all of our budget problems. But if it is
structured properly, a line-item veto measure can help us
reduce wasteful spending and shine a light on unnecessary
projects that benefit a few groups at great cost to the rest of
the nation. We need to take a step toward addressing our
serious fiscal challenges, and I think the administration's
proposal will set us on the right track to reducing spending
and improving government accountability.
I will be introducing the President's proposal in
legislative form shortly with Senator Carper, and I will be
pushing to have the Senate pass it this year.
Thanks for all your time, and the hearing is adjourned.
[Whereupon, at 11:14 a.m., the Subcommittee was adjourned.]
[Submissions for the record follow.]
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