[House Report 104-491]
[From the U.S. Government Publishing Office]
104th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 104-491
_______________________________________________________________________
LINE ITEM VETO ACT
_______
March 21, 1996.--Ordered to be printed
_______________________________________________________________________
Mr. Clinger, from the committee of conference, submitted the following
CONFERENCE REPORT
[To accompany S. 4]
Conference Report (H. Rept. 104-491)
The committee of conference on the disagreeing votes of
the two Houses on the amendments of the House to the bill (S.
4), to grant the power to the President to reduce budget
authority, having met, after full and free conference, have
agreed to recommend and do recommend to their respective Houses
as follows:
That the Senate recede from its disagreement to the
amendment of the House to the text of the bill and agree to the
same with an amendment as follows:
In lieu of the matter proposed to be inserted by the
House amendment, insert the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Line Item Veto Act''.
SEC. 2. LINE ITEM VETO AUTHORITY.
(a) In General.--Title X of the Congressional Budget and
Impoundment Control Act of 1974 (2 U.S.C. 681 et seq.) is
amended by adding at the end the following new part:
``Part C--Line Item Veto
``line item veto authority
``Sec. 1021. (a) In General.--Notwithstanding the
provisions of parts A and B, and subject to the provisions of
this part, the President may, with respect to any bill or joint
resolution that has been signed into law pursuant to Article I,
section 7, of the Constitution of the United States, cancel in
whole--
``(1) any dollar amount of discretionary budget
authority;
``(2) any item of new direct spending; or
``(3) any limited tax benefit;
if the President--
``(A) determines that such cancellation will--
``(i) reduce the Federal budget deficit;
``(ii) not impair any essential Government
functions; and
``(iii) not harm the national interest; and
``(B) notifies the Congress of such cancellation by
transmitting a special message, in accordance with
section 1022, within five calendar days (excluding
Sundays) after the enactment of the law providing the
dollar amount of discretionary budget authority, item
of new direct spending, or limited tax benefit that was
canceled.
``(b) Identification of Cancellations.--In identifying
dollar amounts of discretionary budget authority, items of new
direct spending, and limited tax benefits for cancellation, the
President shall--
``(1) consider the legislative history,
construction, and purposes of the law which contains
such dollar amounts, items, or benefits;
``(2) consider any specific sources of information
referenced in such law or, in the absence of specific
sources of information, the best available information;
and
``(3) use the definitions contained in section 1026
in applying this part to the specific provisions of
such law.
``(c) Exception for Disapproval Bills.--The authority
granted by subsection (a) shall not apply to any dollar amount
of discretionary budget authority, item of new direct spending,
or limited tax benefit contained in any law that is a
disapproval bill as defined in section 1026.
``special messages
``Sec. 1022. (a) In General.--For each law from which a
cancellation has been made under this part, the President shall
transmit a single special message to the Congress.
``(b) Contents.--
``(1) The special message shall specify--
``(A) the dollar amount of discretionary
budget authority, item of new direct spending,
or limited tax benefit which has been canceled,
and provide a corresponding reference number
for each cancellation;
``(B) the determinations required under
section 1021(a), together with any supporting
material;
``(C) the reasons for the cancellation;
``(D) to the maximum extent practicable,
the estimated fiscal, economic, and budgetary
effect of the cancellation;
``(E) all facts, circumstances and
considerations relating to or bearing upon the
cancellation, and to the maximum extent
practicable, the estimated effect of the
cancellation upon the objects, purposes and
programs for which the canceled authority was
provided; and
``(F) include the adjustments that will be
made pursuant to section 1024 to the
discretionary spending limits under section 601
and an evaluation of the effects of those
adjustments upon the sequestration procedures
of section 251 of the Balanced Budget and
Emergency Deficit Control Act of 1985.
``(2) In the case of a cancellation of any dollar
amount of discretionary budget authority or item of new
direct spending, the special message shall also
include, if applicable--
``(A) any account, department, or
establishment of the Government for which such
budget authority was to have been available for
obligation and the specific project or
governmental functions involved;
``(B) the specific States and congressional
districts, if any, affected by the
cancellation; and
``(C) the total number of cancellations
imposed during the current session of Congress
on States and congressional districts
identified in subparagraph (B).
``(c) Transmission of Special Messages to House and
Senate.--
``(1) The President shall transmit to the Congress
each special message under this part within five
calendar days (excluding Sundays) after enactment of
the law to which the cancellation applies. Each special
message shall be transmitted to the House of
Representatives and the Senate on the same calendar
day. Such special message shall be delivered to the
Clerk of the House of Representatives if the House is
not in session, and to the Secretary of the Senate if
the Senate is not in session.
``(2) Any special message transmitted under this
part shall be printed in the first issue of the Federal
Register published after such transmittal.
``cancellation effective unless disapproved
``Sec. 1023. (a) In General.--The cancellation of any
dollar amount of discretionary budget authority, item of new
direct spending, or limited tax benefit shall take effect upon
receipt in the House of Representatives and the Senate of the
special message notifying the Congress of the cancellation. If
a disapproval bill for such special message is enacted into
law, then all cancellations disapproved in that law shall be
null and void and any such dollar amount of discretionary
budget authority, item of new direct spending, or limited tax
benefit shall be effective as of the original date provided in
the law to which the cancellation applied.
``(b) Commensurate Reductions in Discretionary Budget
Authority.--Upon the cancellation of a dollar amount of
discretionary budget authority under subsection (a), the total
appropriation for each relevant account of which that dollar
amount is a part shall be simultaneously reduced by the dollar
amount of that cancellation.
``deficit reduction
``Sec. 1024. (a) In General.--
``(1) Discretionary budget authority.--OMB shall,
for each dollar amount of discretionary budget
authority and for each item of new direct spending
canceled from an appropriation law under section
1021(a)--
``(A) reflect the reduction that results
from such cancellation in the estimates
required by section 251(a)(7) of the Balanced
Budget and Emergency Deficit Control Act of
1985 in accordance with that Act, including an
estimate of the reduction of the budget
authority and the reduction in outlays flowing
from such reduction of budget authority for
each outyear; and
``(B) include a reduction to the
discretionary spending limits for budget
authority and outlays in accordance with the
Balanced Budget and Emergency Deficit Control
Act of 1985 for each applicable fiscal year set
forth in section 601(a)(2) by amounts equal to
the amounts for each fiscal year estimated
pursuant to subparagraph (A).
``(2) Direct spending and limited tax benefits.--
(A) OMB shall, for each item of new direct spending or
limited tax benefit canceled from a law under section
1021(a), estimate the deficit decrease caused by the
cancellation of such item or benefit in that law and
include such estimate as a separate entry in the report
prepared pursuant to section 252(d) of the Balanced
Budget and Emergency Deficit Control Act of 1985.
``(B) OMB shall not include any change in the
deficit resulting from a cancellation of any item of
new direct spending or limited tax benefit, or the
enactment of a disapproval bill for any such
cancellation, under this part in the estimates and
reports required by sections 252(b) and 254 of the
Balanced Budget and Emergency Deficit Control Act of
1985.
``(b) Adjustments to Spending Limits.--After ten calendar
days (excluding Sundays) after the expiration of the time
period in section 1025(b)(1) for expedited congressional
consideration of a disapproval bill for a special message
containing a cancellation of discretionary budget authority,
OMB shall make the reduction included in subsection (a)(1)(B)
as part of the next sequester report required by section 254 of
the Balanced Budget and Emergency Deficit Control Act of 1985.
``(c) Exception.--Subsection (b) shall not apply to a
cancellation if a disapproval bill or other law that
disapproves that cancellation is enacted into law prior to 10
calendar days (excluding Sundays) after the expiration of the
time period set forth in section 1025(b)(1).
``(d) Congressional Budget Office Estimates.--As soon as
practicable after the President makes a cancellation from a law
under section 1021(a), the Director of the Congressional Budget
Office shall provide the Committees on the Budget of the House
of Representatives and the Senate with an estimate of the
reduction of the budget authority and the reduction in outlays
flowing from such reduction of budget authority for each
outyear.
``expedited congressional consideration of disapproval bills
``Sec. 1025. (a) Receipt and Referral of Special Message.--
Each special message transmitted under this part shall be
referred to the Committee on the Budget and the appropriate
committee or committees of the Senate and the Committee on the
Budget and the appropriate committee or committees of the House
of Representatives. Each such message shall be printed as a
document of the House of Representatives.
``(b) Time Period for Expedited Procedures.--
``(1) There shall be a congressional review period
of 30 calendar days of session, beginning on the first
calendar day of session after the date on which the
special message is received in the House of
Representatives and the Senate, during which the
procedures contained in this section shall apply to
both Houses of Congress.
``(2) In the House of Representatives the
procedures set forth in this section shall not apply
after the end of the period described in paragraph (1).
``(3) If Congress adjourns at the end of a Congress
prior to the expiration of the period described in
paragraph (1) and a disapproval bill was then pending
in either House of Congress or a committee thereof
(including a conference committee of the two Houses of
Congress), or was pending before the President, a
disapproval bill for the same special message may be
introduced within the first five calendar days of
session of the next Congress and shall be treated as a
disapproval bill under this part, and the time period
described in paragraph (1) shall commence on the day of
introduction of that disapproval bill.
``(c) Introduction of Disapproval Bills.--(1) In order for
a disapproval bill to be considered under the procedures set
forth in this section, the bill must meet the definition of a
disapproval bill and must be introduced no later than the fifth
calendar day of session following the beginning of the period
described in subsection (b)(1).
``(2) In the case of a disapproval bill introduced in the
House of Representatives, such bill shall include in the first
blank space referred to in section 1026(6)(C) a list of the
reference numbers for all cancellations made by the President
in the special message to which such disapproval bill relates.
``(d) Consideration in the House of Representatives.--(1)
Any committee of the House of Representatives to which a
disapproval bill is referred shall report it without amendment,
and with or without recommendation, not later than the seventh
calendar day of session after the date of its introduction. If
any committee fails to report the bill within that period, it
is in order to move that the House discharge the committee from
further consideration of the bill, except that such a motion
may not be made after the committee has reported a disapproval
bill with respect to the same special message. A motion to
discharge may be made only by a Member favoring the bill (but
only at a time or place designated by the Speaker in the
legislative schedule of the day after the calendar day on which
the Member offering the motion announces to the House his
intention to do so and the form of the motion). The motion is
highly privileged. Debate thereon shall be limited to not more
than one hour, the time to be divided in the House equally
between a proponent and an opponent. The previous question
shall be considered as ordered on the motion to its adoption
without intervening motion. A motion to reconsider the vote by
which the motion is agreed to or disagreed to shall not be in
order.
``(2) After a disapproval bill is reported or a committee
has been discharged from further consideration, it is in order
to move that the House resolve into the Committee of the Whole
House on the State of the Union for consideration of the bill.
If reported and the report has been available for at least one
calendar day, all points of order against the bill and against
consideration of the bill are waived. If discharged, all points
of order against the bill and against consideration of the bill
are waived. The motion is highly privileged. A motion to
reconsider the vote by which the motion is agreed to or
disagreed to shall not be in order. During consideration of the
bill in the Committee of the Whole, the first reading of the
bill shall be dispensed with. General debate shall proceed,
shall be confined to the bill, and shall not exceed one hour
equally divided and controlled by a proponent and an opponent
of the bill. The bill shall be considered as read for amendment
under the five-minute rule. Only one motion to rise shall be in
order, except if offered by the manager. No amendment to the
bill is in order, except any Member if supported by 49 other
Members (a quorum being present) may offer an amendment
striking the reference number or numbers of a cancellation or
cancellations from the bill. Consideration of the bill for
amendment shall not exceed one hour excluding time for recorded
votes and quorum calls. No amendment shall be subject to
further amendment, except pro forma amendments for the purposes
of debate only. At the conclusion of the consideration of the
bill for amendment, the Committee shall rise and report the
bill to the House with such amendments as may have been
adopted. The previous question shall be considered as ordered
on the bill and amendments thereto to final passage without
intervening motion. A motion to reconsider the vote on passage
of the bill shall not be in order.
``(3) Appeals from decisions of the Chair regarding
application of the rules of the House of Representatives to the
procedure relating to a disapproval bill shall be decided
without debate.
``(4) It shall not be in order to consider under this
subsection more than one disapproval bill for the same special
message except for consideration of a similar Senate bill
(unless the House has already rejected a disapproval bill for
the same special message) or more than one motion to discharge
described in paragraph (1) with respect to a disapproval bill
for that special message.
``(e) Consideration in the Senate.--
``(1) Referral and reporting.--Any disapproval bill
introduced in the Senate shall be referred to the
appropriate committee or committees. A committee to
which a disapproval bill has been referred shall report
the bill not later than the seventh day of session
following the date of introduction of that bill. If any
committee fails to report the bill within that period,
that committee shall be automatically discharged from
further consideration of the bill and the bill shall be
placed on the Calendar.
``(2) Disapproval bill from house.--When the Senate
receives from the House of Representatives a
disapproval bill, such bill shall not be referred to
committee and shall be placed on the Calendar.
``(3) Consideration of single disapproval bill.--
After the Senate has proceeded to the consideration of
a disapproval bill for a special message, then no other
disapproval bill originating in that same House
relating to that same message shall be subject to the
procedures set forth in this subsection.
``(4) Amendments.--
``(A) Amendments in order.--The only
amendments in order to a disapproval bill are--
``(i) an amendment that strikes the
reference number of a cancellation from
the disapproval bill; and
``(ii) an amendment that only
inserts the reference number of a
cancellation included in the special
message to which the disapproval bill
relates that is not already contained
in such bill.
``(B) Waiver or appeal.--An affirmative
vote of three-fifths of the Senators, duly
chosen and sworn, shall be required in the
Senate--
``(i) to waive or suspend this
paragraph; or
``(ii) to sustain an appeal of the
ruling of the Chair on a point of order
raised under this paragraph.
``(5) Motion nondebatable.--A motion to proceed to
consideration of a disapproval bill under this
subsection shall not be debatable. It shall not be in
order to move to reconsider the vote by which the
motion to proceed was adopted or rejected, although
subsequent motions to proceed may be made under this
paragraph.
``(6) Limit on consideration.-- (A) After no more
than 10 hours of consideration of a disapproval bill,
the Senate shall proceed, without intervening action or
debate (except as permitted under paragraph (9)), to
vote on the final disposition thereof to the exclusion
of all amendments not then pending and to the exclusion
of all motions, except a motion to reconsider or to
table.
``(B) A single motion to extend the time for
consideration under subparagraph (A) for no more than
an additional five hours is in order prior to the
expiration of such time and shall be decided without
debate.
``(C) The time for debate on the disapproval bill
shall be equally divided between the Majority Leader
and the Minority Leader or their designees.
``(7) Debate on amendments.--Debate on any
amendment to a disapproval bill shall be limited to one
hour, equally divided and controlled by the Senator
proposing the amendment and the majority manager,
unless the majority manager is in favor of the
amendment, in which case the minority manager shall be
in control of the time in opposition.
``(8) No motion to recommit.--A motion to recommit
a disapproval bill shall not be in order.
``(9) Disposition of senate disapproval bill.--If
the Senate has read for the third time a disapproval
bill that originated in the Senate, then it shall be in
order at any time thereafter to move to proceed to the
consideration of a disapproval bill for the same
special message received from the House of
Representatives and placed on the Calendar pursuant to
paragraph (2), strike all after the enacting clause,
substitute the text of the Senate disapproval bill,
agree to the Senate amendment, and vote on final
disposition of the House disapproval bill, all without
any intervening action or debate.
``(10) Consideration of house message.--
Consideration in the Senate of all motions, amendments,
or appeals necessary to dispose of a message from the
House of Representatives on a disapproval bill shall be
limited to not more than four hours. Debate on each
motion or amendment shall be limited to 30 minutes.
Debate on any appeal or point of order that is
submitted in connection with the disposition of the
House message shall be limited to 20 minutes. Any time
for debate shall be equally divided and controlled by
the proponent and the majority manager, unless the
majority manager is a proponent of the motion,
amendment, appeal, or point of order, in which case the
minority manager shall be in control of the time in
opposition.
``(f) Consideration in Conference.--
``(1) Convening of conference.--In the case of
disagreement between the two Houses of Congress with
respect to a disapproval bill passed by both Houses,
conferees should be promptly appointed and a conference
promptly convened, if necessary.
``(2) House consideration.--(A) Notwithstanding any
other rule of the House of Representatives, it shall be
in order to consider the report of a committee of
conference relating to a disapproval bill provided such
report has been available for one calendar day
(excluding Saturdays, Sundays, or legal holidays,
unless the House is in session on such a day) and the
accompanying statement shall have been filed in the
House.
``(B) Debate in the House of Representatives on the
conference report and any amendments in disagreement on
any disapproval bill shall each be limited to not more
than one hour equally divided and controlled by a
proponent and an opponent. A motion to further limit
debate is not debatable. A motion to recommit the
conference report is not in order, and it is not in
order to move to reconsider the vote by which the
conference report is agreed to or disagreed to.
``(3) Senate consideration.--Consideration in the
Senate of the conference report and any amendments in
disagreement on a disapproval bill shall be limited to
not more than four hours equally divided and controlled
by the Majority Leader and the Minority Leader or their
designees. A motion to recommit the conference report
is not in order.
``(4) Limits on scope.--(A) When a disagreement to
an amendment in the nature of a substitute has been
referred to a conference, the conferees shall report
those cancellations that were included in both the bill
and the amendment, and may report a cancellation
included in either the bill or the amendment, but shall
not include any other matter.
``(B) When a disagreement on an amendment or
amendments of one House to the disapproval bill of the
other House has been referred to a committee of
conference, the conferees shall report those
cancellations upon which both Houses agree and may
report any or all of those cancellations upon which
there is disagreement, but shall not include any other
matter.
``definitions
``Sec. 1026. As used in this part:
``(1) Appropriation law.--The term `appropriation
law' means an Act referred to in section 105 of title
1, United States Code, including any general or special
appropriation Act, or any Act making supplemental,
deficiency, or continuing appropriations, that has been
signed into law pursuant to Article I, section 7, of
the Constitution of the United States.
``(2) Calendar day.--The term `calendar day' means
a standard 24-hour period beginning at midnight.
``(3) Calendar days of session.--The term `calendar
days of session' shall mean only those days on which
both Houses of Congress are in session.
``(4) Cancel.--The term `cancel' or `cancellation'
means--
``(A) with respect to any dollar amount of
discretionary budget authority, to rescind;
``(B) with respect to any item of new
direct spending--
``(i) that is budget authority
provided by law (other than an
appropriation law), to prevent such
budget authority from having legal
force or effect;
``(ii) that is entitlement
authority, to prevent the specific
legal obligation of the United States
from having legal force or effect; or
``(iii) through the food stamp
program, to prevent the specific
provision of law that results in an
increase in budget authority or outlays
for that program from having legal
force or effect; and
``(C) with respect to a limited tax
benefit, to prevent the specific provision of
law that provides such benefit from having
legal force or effect.
``(5) Direct spending.--The term `direct spending'
means--
``(A) budget authority provided by law
(other than an appropriation law);
``(B) entitlement authority; and
``(C) the food stamp program.
``(6) Disapproval bill.--The term `disapproval
bill' means a bill or joint resolution which only
disapproves one or more cancellations of dollar amounts
of discretionary budget authority, items of new direct
spending, or limited tax benefits in a special message
transmitted by the President under this part and--
``(A) the title of which is as follows: `A
bill disapproving the cancellations transmitted
by the President on ________', the blank space
being filled in with the date of transmission
of the relevant special message and the public
law number to which the message relates;
``(B) which does not have a preamble; and
``(C) which provides only the following
after the enacting clause: `That Congress
disapproves of cancellations ________', the
blank space being filled in with a list by
reference number of one or more cancellations
contained in the President's special message,
`as transmitted by the President in a special
message on ________', the blank space being
filled in with the appropriate date, `regarding
________.', the blank space being filled in
with the public law number to which the special
message relates.
``(7) Dollar amount of discretionary budget
authority.--(A) Except as provided in subparagraph (B),
the term `dollar amount of discretionary budget
authority' means the entire dollar amount of budget
authority--
``(i) specified in an appropriation law, or
the entire dollar amount of budget authority
required to be allocated by a specific proviso
in an appropriation law for which a specific
dollar figure was not included;
``(ii) represented separately in any table,
chart, or explanatory text included in the
statement of managers or the governing
committee report accompanying such law;
``(iii) required to be allocated for a
specific program, project, or activity in a law
(other than an appropriation law) that mandates
the expenditure of budget authority from
accounts, programs, projects, or activities for
which budget authority is provided in an
appropriation law;
``(iv) represented by the product of the
estimated procurement cost and the total
quantity of items specified in an appropriation
law or included in the statement of managers or
the governing committee report accompanying
such law; and
``(v) represented by the product of the
estimated procurement cost and the total
quantity of items required to be provided in a
law (other than an appropriation law) that
mandates the expenditure of budget authority
from accounts, programs, projects, or
activities for which budget authority is
provided in an appropriation law.
``(B) The term `dollar amount of discretionary
budget authority' does not include--
``(i) direct spending;
``(ii) budget authority in an appropriation
law which funds direct spending provided for in
other law;
``(iii) any existing budget authority
rescinded or canceled in an appropriation law;
or
``(iv) any restriction, condition, or
limitation in an appropriation law or the
accompanying statement of managers or committee
reports on the expenditure of budget authority
for an account, program, project, or activity,
or on activities involving such expenditure.
``(8) Item of new direct spending.--The term `item
of new direct spending' means any specific provision of
law that is estimated to result in an increase in
budget authority or outlays for direct spending
relative to the most recent levels calculated pursuant
to section 257 of the Balanced Budget and Emergency
Deficit Control Act of 1985.
``(9) Limited tax benefit.--(A) The term `limited
tax benefit' means--
``(i) any revenue-losing provision which
provides a Federal tax deduction, credit,
exclusion, or preference to 100 or fewer
beneficiaries under the Internal Revenue Code
of 1986 in any fiscal year for which the
provision is in effect; and
``(ii) any Federal tax provision which
provides temporary or permanent transitional
relief for 10 or fewer beneficiaries in any
fiscal year from a change to the Internal
Revenue Code of 1986.
``(B) A provision shall not be treated as described
in subparagraph (A)(i) if the effect of that provision
is that--
``(i) all persons in the same industry or
engaged in the same type of activity receive
the same treatment;
``(ii) all persons owning the same type of
property, or issuing the same type of
investment, receive the same treatment; or
``(iii) any difference in the treatment of
persons is based solely on--
``(I) in the case of businesses and
associations, the size or form of the
business or association involved;
``(II) in the case of individuals,
general demographic conditions, such as
income, marital status, number of
dependents, or tax return filing
status;
``(III) the amount involved; or
``(IV) a generally-available
election under the Internal Revenue
Code of 1986.
``(C) A provision shall not be treated as described
in subparagraph (A)(ii) if--
``(i) it provides for the retention of
prior law with respect to all binding contracts
or other legally enforceable obligations in
existence on a date contemporaneous with
congressional action specifying such date; or
``(ii) it is a technical correction to
previously enacted legislation that is
estimated to have no revenue effect.
``(D) For purposes of subparagraph (A)--
``(i) all businesses and associations which
are related within the meaning of sections
707(b) and 1563(a) of the Internal Revenue Code
of 1986 shall be treated as a single
beneficiary;
``(ii) all qualified plans of an employer
shall be treated as a single beneficiary;
``(iii) all holders of the same bond issue
shall be treated as a single beneficiary; and
``(iv) if a corporation, partnership,
association, trust or estate is the beneficiary
of a provision, the shareholders of the
corporation, the partners of the partnership,
the members of the association, or the
beneficiaries of the trust or estate shall not
also be treated as beneficiaries of such
provision.
``(E) For purposes of this paragraph, the term
`revenue-losing provision' means any provision which
results in a reduction in Federal tax revenues for any
one of the two following periods--
``(i) the first fiscal year for which the
provision is effective; or
``(ii) the period of the 5 fiscal years
beginning with the first fiscal year for which
the provision is effective.
``(F) The terms used in this paragraph shall have
the same meaning as those terms have generally in the
Internal Revenue Code of 1986, unless otherwise
expressly provided.
``(10) OMB.--The term `OMB' means the Director of
the Office of Management and Budget.
``identification of limited tax benefits
``Sec. 1027. (a) Statement by Joint Tax Committee.--The
Joint Committee on Taxation shall review any revenue or
reconciliation bill or joint resolution which includes any
amendment to the Internal Revenue Code of 1986 that is being
prepared for filing by a committee of conference of the two
Houses, and shall identify whether such bill or joint
resolution contains any limited tax benefits. The Joint
Committee on Taxation shall provide to the committee of
conference a statement identifying any such limited tax
benefits or declaring that the bill or joint resolution does
not contain any limited tax benefits. Any such statement shall
be made available to any Member of Congress by the Joint
Committee on Taxation immediately upon request.
``(b) Statement Included in Legislation.--(1)
Notwithstanding any other rule of the House of Representatives
or any rule or precedent of the Senate, any revenue or
reconciliation bill or joint resolution which includes any
amendment to the Internal Revenue Code of 1986 reported by a
committee of conference of the two Houses may include, as a
separate section of such bill or joint resolution, the
information contained in the statement of the Joint Committee
on Taxation, but only in the manner set forth in paragraph (2).
``(2) The separate section permitted under paragraph (1)
shall read as follows: `Section 1021(a)(3) of the Congressional
Budget and Impoundment Control Act of 1974 shall ________ apply
to ____________.', with the blank spaces being filled in with--
``(A) in any case in which the Joint Committee on
Taxation identifies limited tax benefits in the
statement required under subsection (a), the word
`only' in the first blank space and a list of all of
the specific provisions of the bill or joint resolution
identified by the Joint Committee on Taxation in such
statement in the second blank space; or
``(B) in any case in which the Joint Committee on
Taxation declares that there are no limited tax
benefits in the statement required under subsection
(a), the word `not' in the first blank space and the
phrase `any provision of this Act' in the second blank
space.
``(c) President's Authority.--If any revenue or
reconciliation bill or joint resolution is signed into law
pursuant to Article I, section 7, of the Constitution of the
United States--
``(1) with a separate section described in
subsection (b)(2), then the President may use the
authority granted in section 1021(a)(3) only to cancel
any limited tax benefit in that law, if any, identified
in such separate section; or
``(2) without a separate section described in
subsection (b)(2), then the President may use the
authority granted in section 1021(a)(3) to cancel any
limited tax benefit in that law that meets the
definition in section 1026.
``(d) Congressional Identifications of Limited Tax
Benefits.--There shall be no judicial review of the
congressional identification under subsections (a) and (b) of a
limited tax benefit in a conference report.''.
SEC. 3. JUDICIAL REVIEW.
(a) Expedited Review.--
(1) Any Member of Congress or any individual
adversely affected by part C of title X of the
Congressional Budget and Impoundment Control Act of
1974 may bring an action, in the United States District
Court for the District of Columbia, for declaratory
judgment and injunctive relief on the ground that any
provision of this part violates the Constitution.
(2) A copy of any complaint in an action brought
under paragraph (1) shall be promptly delivered to the
Secretary of the Senate and the Clerk of the House of
Representatives, and each House of Congress shall have
the right to intervene in such action.
(3) Nothing in this section or in any other law
shall infringe upon the right of the House of
Representatives to intervene in an action brought under
paragraph (1) without the necessity of adopting a
resolution to authorize such intervention.
(b) Appeal to Supreme Court.--Notwithstanding any other
provision of law, any order of the United States District Court
for the District of Columbia which is issued pursuant to an
action brought under paragraph (1) of subsection (a) shall be
reviewable by appeal directly to the Supreme Court of the
United States. Any such appeal shall be taken by a notice of
appeal filed within 10 calendar days after such order is
entered; and the jurisdictional statement shall be filed within
30 calendar days after such order is entered. No stay of an
order issued pursuant to an action brought under paragraph (1)
of subsection (a) shall be issued by a single Justice of the
Supreme Court.
(c) Expedited Consideration.--It shall be the duty of the
District Court for the District of Columbia and the Supreme
Court of the United States to advance on the docket and to
expedite to the greatest possible extent the disposition of any
matter brought under subsection (a).
SEC. 4. CONFORMING AMENDMENTS.
(a) Short Titles.--Section 1(a) of the Congressional Budget
and Impoundment Control Act of 1974 is amended by--
(1) striking ``and'' before ``title X'' and
inserting a period;
(2) inserting ``Parts A and B of'' before ``title
X''; and
(3) inserting at the end the following new
sentence: ``Part C of title X may be cited as the `Line
Item Veto Act of 1996'.''.
(b) Table of Contents.--The table of contents set forth in
section 1(b) of the Congressional Budget and Impoundment
Control Act of 1974 is amended by adding at the end the
following:
``Part C--Line Item Veto
``Sec. 1021. Line item veto authority.
``Sec. 1022. Special messages.
``Sec. 1023. Cancellation effective unless disapproved.
``Sec. 1024. Deficit reduction.
``Sec. 1025. Expedited congressional consideration of disapproval bills.
``Sec. 1026. Definitions.
``Sec. 1027. Identification of limited tax benefits.''.
(c) Exercise of Rulemaking Powers.--Section 904(a) of the
Congressional Budget Act of 1974 is amended by striking ``and
1017'' and inserting ``, 1017, 1025, and 1027''.
SEC. 5. EFFECTIVE DATES.
This Act and the amendments made by it shall take effect
and apply to measures enacted on the earlier of--
(1) the day after the enactment into law, pursuant
to Article I, section 7, of the Constitution of the
United States, of an Act entitled ``An Act to provide
for a seven-year plan for deficit reduction and achieve
a balanced Federal budget.''; or
(2) January 1, 1997;
and shall have no force or effect on or after January 1, 2005.
And the House agree to the same.
That the Senate recede from its disagreement to the
amendment of the House to the title of the bill and agree to
the same with an amendment as follows:
In lieu of the matter proposed to be inserted by the
House amendment to the title of the bill, insert the following:
``An Act to give the President line item veto authority with
respect to appropriations, new direct spending, and limited tax
benefits.''.
And the House agree to the same.
Bill Clinger,
Gerald Solomon,
Jim Bunning,
Porter Goss,
Peter Blute,
Managers on the Part of the House.
Ted Stevens,
Bill Roth,
Fred Thompson,
Thad Cochran,
John McCain,
Pete V. Domenici,
Chuck Grassley,
Don Nickles,
Phil Gramm,
Dan Coats,
Jim Exon,
Managers on the Part of the Senate.
JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE
The managers on the part of the House and the Senate at
the conference on the disagreeing votes of the two Houses on
the amendments of the House to the bill (S. 4) to grant the
power to the President to reduce budget authority, submit the
following joint statement to the House and Senate in
explanation of the effect of the action agreed upon by the
managers and recommended in the accompanying conference report:
The House amendment to the text of the bill struck all of
the Senate bill after the enacting clause and inserted a
substitute text.
The Senate recedes from its disagreement to the amendment
of the House with an amendment that is a substitute for the
Senate bill and the House amendment. The differences between
the Senate bill, the House amendment, and the substitute agreed
to in conference are noted below, except for clerical
corrections, conforming changes made necessary by agreements
reached by the conferees, and minor drafting and clerical
changes.
background and need for the legislation
The American people consistently cite run-away federal
spending and a rising national debt as among the top issues of
national concern. Over the past fifteen years alone, the
national debt of the United States has quintupled. From 1789
through 1981, our total national debt amounted to $1 trillion.
Yet today, just fifteen years later, that debt exceeds $5
trillion, and without significant reforms an additional $1
trillion will be added over the next four years. This
astonishing growth in federal debt has fueled public support
for measures to ensure greater fiscal accountability in
Washington. This legislation, along with other measures to
balance the federal budget considered in the 104th Congress,
moves to meet that demand by enhancing the President's ability
to eliminate wasteful federal spending and to cancel special
tax breaks.
No one would contend that a line item veto on its own
will be enough to restrain spending and bring the federal
budget into balance. However, a January 1992 GAO report
indicates that this type of fiscal discipline could have a
significant impact upon federal spending, concluding that if
Presidents had applied this authority to all matters objected
to in Statements of Administration Policy on spending bills in
the fiscal years 1984 through 1989, spending could have been
reduced by a six-year total of about $70 billion.
The conference report on S. 4, the Line Item Veto Act,
delegates limited authority to the President to cancel new
spending and limited tax benefits. This authority is in
addition to the President's existing authority under the
Impoundment Control Act of 1974 (title X of the Congressional
Budget Act). The Impoundment Control Act permits the President
to submit proposed rescissions of discretionary budget
authority to Congress, but prohibits those rescissions from
taking effect without congressional approval. In addition to
applying solely to appropriation laws, the statutory provisions
of the Impoundment Control Act have proven too restrictive.
While Congress has initiated and passed rescissions on its own,
Congress has agreed to only $23.7 billion of $74 billion in
rescissions proposed by Presidents (both Democrat and
Republican) since enactment of title X in 1974.
purpose
The purpose of the conference report is to promote
savings by placing the onus on Congress to overturn the
President's cancellations of spending and limited tax benefits.
In addition, recognizing that discretionary spending represents
only about one-third of the entire federal budget, the
conference report expands the President's current rescission
authority to include both new direct spending and limited tax
benefits.
Under the conference report, the President may cancel any
dollar amount of discretionary budget authority in an
appropriation law or its accompanying reports, or may cancel
any item of new direct spending or limited tax benefit from an
authorization or revenue act. After notifying Congress of his
cancellations in a special message, the Congress is given a
specified period for expedited review of the President's
proposal.
If Congress fails to enact disapproving legislation
within the period for expedited consideration, the savings are
set aside for deficit reduction through a lockbox mechanism.
summary of the senate bill
The Senate bill was introduced by Senator Dole on
Wednesday, January 4, 1995. On March 20, 1995, the Senate began
consideration. During consideration in the Senate, Senator Dole
(for himself, and Senators McCain, Coats and Domenici) offered
an amendment in the form of a substitute.
The Senate bill gives the President line item veto
authority by dis-aggregating certain types of bills under a
procedure known as ``separate enrollment.'' Separate enrollment
requires that the enrolling clerks of the House and Senate
separately enroll each item of spending in an appropriation
bill and each item of new direct spending or any targeted tax
benefit contained in an authorizing bill. Each of these
individual bills is presented to the President. The President
may exercise his Article I power to veto any one, or all, of
the individual bills. The Congress may exercise its
Constitutional prerogative to override the President's
veto(es).
According to the Senate bill, the House and Senate
Appropriations Committees report appropriation measures
following current procedure except that any appropriation bill
reported by the Committee must contain the same level of detail
as is provided in the Committee report that accompanies the
bill. This requirement ensures that appropriation bills do not
contain large dollar lump sums with the details directing how
the money should be expended noted only in the Committee
report.
An authorization bill that contains an item of new direct
spending or a targeted tax benefit that is brought to the floor
must contain such provision in a separate section and must
identify the item of new direct spending or the targeted tax
benefit in the report that accompanies the bill.
Any appropriation or authorization bill that fails to
comply with the above requirements is subject to a point of
order that may only be waived by a three-fifths vote of the
House or Senate.
Upon passage of an appropriation or authorization bill,
the enrolling clerk of the originating House is required to
enroll each item contained in the legislation separately. After
all the items are enrolled as separate bills, both the House
and Senate vote on all the bills en bloc prior to their
submittal to the President.
The provisions of the bill become effective on the date
of enactment and sunset in five years.
As defined in the bill, an item in an appropriation bill
is:
(1) any numbered section;
(2) any unnumbered paragraph; or
(3) any allocation or suballocation contained in a
numbered section or an unnumbered paragraph made to
conform to the level of detail in the accompanying
report.
The following items are not required to be separately
enrolled:
(1) provisions that do not appropriate funds;
(2) provisions that do not direct the expenditures
of funds for a specific project; and
(3) provisions that create an express or implied
obligation to expend funds and
(a) rescind budget authority;
(b) limit, condition or otherwise restrict
the expenditure of budget authority; or
(c) place a condition on the expenditure of
budget authority by explicitly prohibiting the
use of the funds.
By not separately enrolling the items just noted,
language that places restrictions or conditions on the
expenditure of funds, also known as fencing language, may not
be separately vetoed apart from some dollar amount.
An item in an authorization bill is (1) any numbered
section, or (2) any unnumbered paragraph that provides new
direct spending or a new targeted tax benefit.
A targeted tax benefit is any provision that (1) the
Joint Committee on Taxation estimates would lose revenue in the
first fiscal year and over the five fiscal years covered by the
budget resolution, and (2) provides more favorable treatment to
a taxpayer or a targeted group of taxpayers when compared to a
similarly situation taxpayer or group of taxpayers.
The Senate bill contains a ``lockbox'' provision, a
prohibition on emergency spending bills containing non-
emergency spending items, and a sunset of all tax provisions at
least every 10 years.
Finally, the Senate bill contains provisions allowing a
Member of Congress to challenge the constitutionality of the
bill under expedited procedures and a severability clause
stating that if any one provision of the Act is found to be
unconstitutional, the remainder of the Act will be held
harmless.
summary of the house amendment
The House amendment is based on the ``enhanced
rescission'' format. It authorizes the President to rescind all
or part of any discretionary budget authority or veto any
targeted tax benefit if the President determines that such
rescission; (1) will help reduce the federal budget deficit;
(2) will not impair any essential government functions; and (3)
will not harm the national interest.
The amendment requires the President to notify the
Congress of such a rescission or veto by special message within
10 days (excluding Sundays) after enactment of an appropriation
Act providing such budget authority or a revenue or
reconciliation Act containing a targeted tax benefit.
The amendment allows the President in each special
message to propose to reduce the appropriate discretionary
spending limit by an amount that does not exceed the total
amount of discretionary budget authority rescinded by that
message. It also requires the President to submit a separate
special message for each appropriation Act and for each revenue
or reconciliation Act. The President may only transmit one
special message for each Act.
The House amendment makes such a rescission effective
unless the Congress enacts a disapproval bill. Any budget
authority rescinded is no longer available for obligation and a
tax benefit is not effective unless the Congress passes a
disapproval bill within 20 days, and assuming a veto, overrides
that veto within 5 days.
The House amendment provides special procedures for
consideration of a rescission disapproval bill in each House.
Upon receipt of the President's special message, if a
disapproval bill is introduced, it is referred to the
appropriate committee. The specific form of a disapproval bill
is noted in the House amendment, and such disapproval bill must
be introduced within 3 days in order to qualify for the special
procedures in the House. The Senate committee is not required
to report the bill and there is no provision mandating
discharge.
The House committee to which the bill is referred shall
report it without amendment, and with or without
recommendation, no later than the eighth calendar day of
session after the date of its introduction. If the Committee
fails to report the bill, it is in order to move that the House
discharge the bill from committee.
After a bill is discharged from Committee, it is in order
to move that the House move to consideration of the bill. All
points of order against the bill and its consideration are
waived and the motion is highly privileged. Motions to
reconsider the vote by which the motion is agreed to or
disagreed to are not in order.
Consideration of the bill is limited to two hours equally
divided between proponents and opponents of the bill.
Amendments to the bill are not in order, except that a Member
may make a motion to strike the disapproval of any
rescission(s) of budget authority if such a motion is supported
by at least 49 other Members. Motions to reconsider the vote on
the disapproval bill are not in order. It is only in order in
the House to consider one disapproval bill with respect to any
specific Presidential rescission message.
If a rescission disapproval bill is considered by the
Senate, debate is limited to 10 hours to be divided equally and
controlled by the Majority and Minority leaders. Debate on any
motions or appeals in connection with the bill are limited to
one hour each, divided equally. Motions to further limit debate
are not debatable. A motion to recommit is not in order unless
such motion is to recommit the bill with instructions that it
be reported back within one day.
Further, the House amendment mandates that it is not in
order in the Senate to consider any rescission disapproval bill
relating to any matter other than the items noted in the
President's special message. Amendments to a rescission
disapproval bill are not in order. The provisions noted in this
paragraph may only be waived by an affirmative vote of three-
fifths of the Senate.
The House amendment provides for annual General
Accounting Office (GAO) reports on Presidential use of the line
item veto authority. It also specifically prohibits the
President from using the authority under the Act to change
prohibitions or limitations (fencing language) in an
appropriation Act.
The bill generally defines a targeted tax benefit as a
provision in a revenue or reconciliation Act that provides a
tax deduction, credit, exclusion, preference, or concession to
100 or fewer beneficiaries.
Finally, the bill provides a process for expedited
judicial review of provisions of this Act.
conference agreement
Section 1. Short title
This bill, when enacted, may be cited as the ``Line Item
Veto Act.''
Sec. 2. Line item veto authority
Section 2 of the conference report amends title X of the
Congressional Budget and Impoundment Control Act of 1974 to add
a new part C comprising sections 1021 through 1027.
In general, part C grants the President the authority to
cancel in whole any dollar amount of discretionary budget
authority provided in an appropriation law or any item of new
direct spending or limited tax benefit contained in any law.
Congress has the authority to delegate to the President the
ability to cancel specific budgetary obligations in any
particular law in order to reduce the federal budget deficit.
The conferees note that while the conference report
delegates new powers to the President, these powers are
narrowly defined and provided within specific limits. The
conference report includes specific definitions, carefully
delineates the President's cancellation authority, and provides
specific limits on this cancellation authority. The delegation
of this cancellation authority is not separable from the
President's duties to comply with these restrictions. To the
extent the President broadly applies this new cancellation
authority or reaches beyond these limits to expand the
application of this new authority, the President will be
reaching beyond the delegation of these authorities. Given the
significance of this delegation, the conference report includes
a sunset of this authority.
Sec. 1021. Line item veto authority
Section 1021(a) permits the President to cancel in whole
any dollar amount of discretionary budget authority, item of
new direct spending, or limited tax benefit contained in any
bill or joint resolution that has been signed into law pursuant
to Article I, section 7, of the Constitution of the United
States. The cancellation may be made only if the President
determines such cancellation will reduce the federal budget
deficit and will not impair any essential government function
or harm the national interest. In addition the President must
make any cancellations within five days of the date of
enactment of the law from which the cancellations are made, and
must notify the Congress by transmittal of a special message
within that time.
The conferees specifically include the requirement that a
bill or joint resolution must have been signed into law in
order to clarify that the cancellation authority only becomes
effective after the President has exercised the constitutional
authority to enact legislation in its entirety. This
requirement ensures that the President affirmatively
demonstrates support for the underlying legislation from which
specific cancellations are then permitted.
The term ``cancel'' was specifically chosen, and is
carefully defined in section 1026. The conferees intend that
the President may use the cancellation authority to surgically
terminate federal budget obligations. The cancellation
authority is specifically limited to any entire dollar amount
of discretionary budget authority, item of new direct spending,
or limited tax benefit. The cancellation authority does not
permit the President to rewrite the underlying law, nor to
change any provision of that law. The President may only
terminate the obligation of the Federal Government to spend
certain sums of money through a specific appropriation or
mandatory payment, or the obligation to forego the collection
of revenue otherwise due to the Federal Government in the
absence of a limited tax benefit.
Likewise, the terms ``dollar amount of discretionary
budget authority,'' ``item of new direct spending,'' and
``limited tax benefit'' have been carefully defined in order to
make clear that the President may only cancel the entire dollar
amount, the specific legal obligation to pay, or the specific
tax benefit. ``Fencing language'' may not be canceled by the
President under this authority. This means that the President
cannot use this authority to modify or alter any aspect of the
underlying law, including any restriction, limitation or
condition on the expenditure of budget authority, or any other
requirement of the law.
The conferees intend that, even once the federal
obligation to expend a dollar amount or provide a benefit is
canceled, all other operative provisions of the underlying law
will remain in effect. If the President desires a broader
result, then the President must either ask Congress to modify
the law or exercise the President's constitutional power to
veto the legislation in its entirety.
The lockbox provision of the conference report has also
been included to maintain a system of checks and balances in
the President's use of the cancellation authority. Any credit
for money not spent, or for revenue foregone, is dedicated to
deficit reduction through the operation of the lockbox
mechanism. This ensures that the President does not simply
cancel a particular dollar amount of discretionary budget
authority, item of new direct spending, or limited tax benefit
in order to increase spending in other areas.
Section 1021(b) requires the President to consider
legislative history and information referenced in law in
identifying cancellations. It also requires that the President
use the definitions in section 1026, and provides that the
President use any sources specified in the law or the best
available information.
Section 1021(c) states that the President's cancellation
authority shall not apply to a disapproval bill, as defined in
section 1026. The provision is intended to prevent an endless
loop of cancellations.
Sec. 1022. Special messages
Section 1022 provides that, if the President cancels
provisions within a law, a special message must be submitted to
Congress. A separate special message must be submitted for each
law from which a cancellation is made.
Similar to the requirements in section 1012 of the
Impoundment Control Act of 1974, the conference report requires
that the President's special message include relevant
supporting material about each cancellation and its budgetary
impact. The conferees intend this requirement to ensure that
the Congress and the public receive sufficient information with
which to judge the President's action.
Specifically, the President's special message must
include:
(1) the dollar amount of discretionary budget
authority, items of new direct spending or limited tax
benefits which have been canceled;
(2) corresponding reference numbers of each
cancellation;
(3) the determinations required under section 1021
and any supporting material;
(4) the reasons for each cancellation;
(5) the estimated fiscal, economic and budgetary
effect of each cancellation (to the maximum extent
practicable);
(6) all facts, circumstances and considerations
relating to each cancellation;
(7) the estimated effect of each cancellation upon
the objects, purposes and programs for which the
canceled authority was provided (to the maximum extent
practicable); and
(8) the adjustments that will be made pursuant to
section 1024 (``Deficit Reduction'') to the
discretionary spending limits under section 601 of the
Budget Act and an evaluation of the effects of those
adjustments upon sequestration procedures.
The President's special message must specify any account,
department or establishment of the government and any specific
project or governmental functions impacted by each
cancellation.
The conference report requires that, if applicable, the
special message include the specific states and congressional
districts impacted and the total number of cancellations
imposed during the current session of Congress on those states
and congressional districts. This is to ensure that the
Congress has information to determine if there is a
disproportionate impact on a particular state or congressional
district.
The President's special message must be transmitted to
the House of Representatives and to the Senate within five
calendar days (excluding Sundays) of enactment (by the
President's signature) of the law to which any cancellations
apply. It is the intention of the conferees that the
President's cancellations be made as soon as possible after the
enactment of the law. The maximum time of five calendar days is
provided to ensure that all supporting material required for
inclusion in the special message can be provided by the
Administration. It is the view of the conferees that additional
time (beyond five calendar days) would unnecessarily prolong
the process.
The special message must be transmitted to both Houses of
Congress on the same day, and must be received by the Clerk of
the House and to the Secretary of the Senate if either House is
not in session on that day.
Any special message must be printed in the first issue of
the Federal Register published after the transmittal.
Sec. 1023. Cancellation effective unless disapproved
Upon receipt of the President's special message in both
the House of Representatives and the Senate, each dollar amount
of discretionary budget authority, item of new direct spending,
or limited tax benefit identified in the special message is
immediately canceled. The cancellation of a dollar amount of
discretionary budget authority automatically rescinds the
funds. With respect to an item of new direct spending or a
limited tax benefit, the cancellation renders the provision
void, such that the obligation of the United States has no
legal force or effect.
The cancellation of a dollar amount of discretionary
budget authority, an item of new direct spending, or a limited
tax benefit is nullified only if a disapproval bill is enacted
into law. The conferees intend that, if a disapproval bill is
enacted, the President shall expend the funds or implement a
provision as originally directed by Congress. The effective
date for any cancellation disapproved in a disapproval bill is
the original date provided in the law to which the cancellation
applied.
Section 1023(b) provides that, when a dollar amount of
discretionary budget authority canceled by the President is
part of a larger sum in an appropriation law, such cancellation
will result in the commensurate reduction of each relevant
appropriation account by that dollar amount. These reductions
are a necessary conforming change to ensure that all sums
required to be spent by the appropriation law accurately
reflect the cancellation contained in the President's message.
This is a technical mechanism to maintain mathematical
consistency and does not grant the President any additional
authority.
To illustrate the mechanism for commensurate reductions
in discretionary budget authority the conferees provide the
following example:
The FY '96 Agriculture Appropriations Act (Public
Law 104-37) appropriates a total of $421,929,000 for
agricultural research and education, of which
$49,846,000 is made available for special grants for
agriculture research. The conference report
accompanying this law contains a table that allocates
the $49,846,000 total into lesser dollar amounts all of
which correspond to individual research programs. This
table includes, for example, a $3,758,000 allocation
for: ``Wood Utilization Research (OR, MS, NC, MN, ME,
MI)''.
Assuming the President exercised the authority to
cancel this $3,758,000, this dollar amount would be
automatically subtracted from the $421,929,000 total
and from the $49,846,000 earmark. If the $3,758,000 was
included in any other larger dollar amount in the
appropriation law, then all such other dollar amounts
would likewise be simultaneously reduced by $3,758,000.
Sec. 1024. Deficit reduction
Section 1024 establishes a deficit reduction, or
``lockbox'', procedure for the cancellations of discretionary
budget authority, new direct spending, or limited tax benefits.
The conference report's lockbox procedures are incorporated
into existing procedures governing discretionary spending
limits and pay-as-you-go requirements under the Balanced Budget
and Emergency Deficit Control Act.
The conference report requires the Office of Management
and Budget (OMB) to estimate the discretionay budget authority
and outlay savings that result from cancellations from an
appropriation law and include those calculations as part of the
estimate OMB must submit to Congress under section 251 of the
Balanced Budget and Emergency Deficit Control Act. The
conference report also requires OMB to calculate a reduction to
the spending caps that is equal to the budget authority
reduction and related outlay savings that result from a
cancellation.
After the expiration of the time period for congressional
consideration of a disapproval bill plus 10 days, OMB is
required to adjust the spending caps downward by the amount of
budget authority and outlay savings in its next sequester
report.
In the case of the cancellation of direct spending or
limited tax benefits, OMB is required to estimate the deficit
decrease as a separate entry in its pay-as-you-go report to
Congress. In order to ensure that the savings from the
cancellation of new direct spending or limited tax benefits are
devoted to deficit reduction and are not available to offset a
deficit increase in another law, the conference report provides
that the savings from these cancellations shall not be included
in the pay-as-you-go balances under the Balanced Budget and
Emergency Deficit Control Act. Similarly, if a disapproval bill
is enacted that overturns the cancellation of an item of direct
spending or a limited tax benefit, OMB will not score this
legislation as increasing the deficit under pay as you go.
Section 1024 also requires the Congressional Budget
Office (CBO) to submit its estimate of the savings resulting
from a cancellation to the Budget Committees of House and
Senate. This is consistent with existing provisions in the
Balanced Budget and Emergency Deficit Control Act which require
CBO estimates and require OMB to make comparisons of its
estimates with those made by CBO. The conferees expect CBO and
the Budget Committees to carefully monitor OMB's estimates of
cancellations.
The conferees intend that any savings from a cancellation
be dedicated to deficit reduction and not used as an offset for
future spending. The conference report is silent on
congressional enforcement mechanisms because existing scoring
conventions will have the effect of dedicating any savings from
these cancellations to deficit reduction. Under existing
congressional scoring conventions, CBO and the Budget
Committees only score the budgetary impacts that directly
result from legislation. The cancellation of an item will
represent an administrative action and will not be scored as
savings. Therefore, the savings from a cancellation will not be
available as an offset for congressional scoring purposes.
During the period for consideration of a disapproval bill CBO
should not score the cost associated with a disapproval of a
cancellation.
If there is an effort to include in legislation a
cancellation already made by the President and claim the
savings from such a cancellation as an offset for a provision
that increases the deficit, the conferees expect the Budget
Committees to ensure these savings are not used as an offset.
Sec. 1025. Expedited congressional consideration of disapproval bills
Section 1025 adopts the House provision with
modifications providing for expedited procedures to consider
disapproval bills. The conferees clearly intend this language
to stand separate and apart from the language currently found
in part B of title X of the Budget Act with regard to
consideration of proposed rescissions, reservations, and
deferrals of budget authority. The language of the conference
report is directed solely at Congress' ability to respond to
the cancellation authority of the Executive and is in no way
intended to impact on or be defined by existing title X
procedures.
The conference report provides Congress with 30 calendar
days of session to consider a disapproval bill under expedited
procedures. A ``calendar day of session'' is defined as only
those days during which both Houses of Congress are in session.
It is assumed Congress would want to act quickly on any
disapproval bills. This time period is available to provide
Congress with flexibility to schedule consideration of a
disapproval bill during a busy legislative session.
During this time period, a disapproval bill may qualify
for the expedited procedures in each House. However, upon the
expiration of this period, a disapproval bill may no longer
qualify for these expedited procedures in the House of
Representatives. In the Senate, a disapproval bill which began
consideration under these expedited procedures may continue
within such procedures notwithstanding the expiration of the
time period.
Upon final Congressional adjournment, if a disapproval
bill relating to a special message was pending before either
House of Congress or any committee thereof or was pending
before the President (i.e. a pocket veto), and the time period
has not expired, a new disapproval bill with respect to the
same message may be introduced within the first five calendar
days of session of the next Congress. This disapproval bill
qualifies for the expedited procedures outlined above and the
period for Congressional consideration begins anew.
A special Presidential message relating to a law could
include a number of cancellations. In establishing expedited
procedures for the consideration of a disapproval bill, the
conference report seeks to find a balance between providing a
procedure to guarantee that Congress can quickly disapprove the
President's cancellations while giving Congress the flexibility
to pick and choose among the cancellations to include in the
disapproval bill. In both Houses of Congress, quick action is
encouraged in that only one bill may ultimately be acted upon
for each special message using these expedited procedures.
It should be noted that the expedited procedures provide
strict time limitations at all stages of floor consideration of
a disapproval bill. The conferees intend to provide both Houses
of Congress with the means to expeditiously reach a resolution
and to foreclose any and all delaying tactics (including, but
clearly not limited to: extraneous amendments, repeated quorum
calls, motions to recommit, or motions to instruct conferees).
The conferees believe these expedited procedures provide ample
time for Congress to consider the President's cancellations and
work its will upon them.
Section 1025(a) provides for the receipt and referral of
the special message in both Houses of Congress. Upon the
cancellation of a dollar amount of discretionary budget
authority, an item of direct spending or a limited tax benefit
under section 1021(a), the President must transmit to Congress
a special message outlining the cancellation as required by
section 1022.
When Congress receives this special message it shall be
referred to the Budget Committees and the appropriate committee
or committees in each House. For example, the message
pertaining to the cancellation of a dollar amount of
discretionary budget authority from an appropriation law would
be referred to the Committee on Appropriations of each House. A
special message pertaining to the cancellation of an item of
direct spending would be referred to the authorizing committee
or committees of each House from which the original
authorization law derived. Any special message relating to more
than one committee's jurisdiction, i.e. a cancellation message
from a large omnibus law such as a reconciliation law, shall be
referred to the appropriate committees in each House. Each
special message shall be printed as a document of the House of
Representatives.
Procedures in the House of Representatives
In order for a disapproval bill to qualify for the
expedited procedures in the House of Representatives as
outlined in section 1025(b), it must meet two requirements.
First, a disapproval bill must meet the definition of a
disapproval bill as set forth in section 1026. Second, the
disapproval bill must be introduced no later than the fifth
calendar day of session following the receipt of the
President's special message. Any disapproval bill introduced
after the fifth calendar day of session is subject to the
regular rules of the House of Representatives regarding
consideration of a bill.
Any disapproval bill introduced in the House of
Representatives must disapprove all of the cancellations in the
special message to which the disapproval bill relates. Each
such disapproval bill must include in the first blank space
referred to in section 1026(6)(C) a list of the reference
numbers for all of the cancellations made by the President in
that special message.
Any disapproval bill introduced pursuant to 1025(c) shall
be referred to the appropriate committee or committees. It is
not the intention of the conferees that a disapproval bill
pursuant to a special message regarding a reconciliation law be
referred to the Budget Committee. Any committee or committees
of the House of Representatives to which such a disapproval
bill has been referred shall report it without amendment, and
with or without recommendation, not later than the seventh
calendar day of session after the date of its introduction.
If any committee fails to report the disapproval bill
within that period, it shall be in order for any Member of the
House to move that the House discharge that committee from
further consideration of the bill. However, such a motion is
not in order after the committee has reported a disapproval
bill with respect to the same special message. This motion
shall only be made by a Member favoring the bill and shall be
made one day after the calendar day on which the Member
offering the motion has announced to the House that Member's
intention to make such a motion and the form of that motion.
Furthermore, this motion to discharge shall only be made at a
time or place designated by the Speaker in the legislative
schedule of the day after the calendar day on which the Member
gives the House proper notice.
This motion to discharge shall be highly privileged.
Debate on the motion shall be limited to not more than one hour
and shall be equally divided between a proponent and an
opponent. After completion of debate, the previous question
shall be considered as ordered on the motion to its adoption
without intervening motion. A motion to reconsider the vote by
which the motion was agreed to or not agreed to shall not be in
order. It shall not be in order to consider more than one such
motion to discharge a disapproval bill pertaining to a
particular special message.
After a disapproval bill has been reported or a committee
has been discharged from further consideration, it shall be in
order to move that the House resolve into the Committee of the
Whole House on the State of the Union for consideration of the
disapproval bill. If the bill has been reported, the report on
the bill must be available for at least one calendar day prior
to consideration of the bill. All points of order against the
bill and its consideration, except a point of order pertaining
to a one-day layover requirement, shall be waived. If the bill
has been discharged, all points of order against the bill and
its consideration shall be waived. The motion that the House
resolve into the Committee of the Whole shall be highly
privileged. A motion to reconsider the vote by which the motion
is agreed to or disagreed to shall not be in order.
During consideration of the bill in the Committee of the
Whole, the first reading of the bill shall be dispensed with.
General debate on the disapproval bill shall be confined to the
bill and shall not exceed one hour equally divided between and
controlled by a proponent and an opponent of the bill. After
completion of the one hour of general debate, the bill shall be
considered as read for amendment under the five minute rule.
Only one motion that the Committee rise shall be in order
unless that motion is offered by the manager of the bill.
No amendment shall be in order, except that any Member,
if supported by forty-nine other Members (a quorum being
present), may offer an amendment striking the reference number
or reference numbers of a cancellation or cancellations from
the disapproval bill. This process allows Members the
opportunity to narrow the focus of the disapproval bill,
striking references to cancellations they do not wish to
disapprove, while retaining in the disapproval bill references
to cancellations they wish to overturn. A vote in favor of the
disapproval bill is a vote to spend the money the President
sought to cancel. A vote against the disapproval bill is a vote
to agree with the President to cancel the spending.
No amendment shall be subject to further amendment,
except pro forma amendments for the purposes of debate only.
Consideration of the bill for amendment shall not exceed one
hour excluding time for recorded votes and quorum calls. At the
conclusion of consideration of the bill for amendment, the
Committee shall rise and report the bill to the House with such
amendments as may have been adopted. The previous question
shall be considered as ordered on the bill and amendments
thereto to final passage without any intervening motion. A
motion to reconsider the vote on passage of the bill shall not
be in order.
All appeals of decisions of the Chair relating to the
application of the rules of the House of Representatives to
this procedure for consideration of the disapproval bill shall
be decided without debate.
It shall be in order to consider only one disapproval
bill pertaining to each special message under these expedited
messages except for consideration of a similar Senate bill.
However, if the House has already rejected a disapproval bill
with respect to the same special message as that to which the
Senate bill refers, it shall not be in order to consider that
bill.
In the event of disagreement between the two Houses a
conference should be promptly convened. It shall be in order to
consider a conference report in the House of Representatives
provided such report has been available to the House for one
calendar day (excluding Saturdays, Sundays or legal holidays,
unless the House is in session on such a day) and the
accompanying statement has been filed in the House.
Debate in the House of Representatives on the conference
report and any amendments in disagreement on any disapproval
bill shall each be limited to not more than one hour equally
divided and controlled by a proponent and an opponent. A motion
to further limit debate shall not be debatable. A motion to
recommit the conference report shall not be in order and it
shall not be in order to reconsider the vote by which the
conference report is agreed to or disagreed to.
Procedures in the Senate
Any member of the Senate may introduce a disapproval bill
containing any combination of cancellations included in the
President's special message. The disapproval bill shall be
referred to the appropriate committee or committees. If
necessary, referral to multiple committees is permissible to
accommodate disapproval bills which relate to cancellations
from omnibus bills (i.e. reconciliation bills). A committee
shall report the bill with or without amendment within seven
days during which the Senate is in session or be discharged. A
disapproval bill received from the House of Representatives
shall not be referred but shall be automatically placed on the
Calendar. It is the intent of the conferees that only one
disapproval bill for each special Presidential message be
considered under the expedited procedures. This however, is not
meant to limit the Senate's ability to choose between a Senate-
originated and a House-originated disapproval bill, it is
intended that there be only one legislative vehicle.
A motion to proceed to the consideration of a disapproval
bill is not debatable. Section 1025(e)(6) provides a ten hour
overall limitation for the floor consideration of a disapproval
bill. Except as provided in section 1025(e)(9) (which addresses
disposition of a Senate disapproval bill), this limit on
consideration is intended to cover all floor action with regard
to a disapproval bill. This section is specifically meant to
preclude the offering of amendments or the making of dilatory
motions after the expiration of the 10 hours. Consideration of
a message from the House of Representatives with respect to a
disapproval bill is limited to four hours, as is consideration
of a conference report and any amendments reported in
disagreement. Again the intent of the conferees is to preclude
the offering of amendments or motions after the expiration of
time so as to facilitate the adoption of any conference report
or the disposition of any message from the House. In limiting
the time for consideration the conferees do not intend to allow
the process to be halted by the delay in the making of
necessary and appropriate motions. Therefore motions to concur,
disagree or disagree and request a new conference may be made
at the expiration of time.
Amendments to a disapproval bill, whether offered in
committee or from the floor of the Senate, are strictly limited
to those amendments which either strike or add a cancellation
that is included in the President's special message. The
conferees note that these expedited procedures are reserved
solely for disapproval bills which overturn one or more
cancellations contained in a President's special message. No
other matter may be included in such bills. To enforce this
restriction in the Senate, a point of order (which may be
waived by a three-fifths vote) would lie against any amendment
that does anything other than strike or add a cancellation
within the scope of the special message. To the extent that
extraneous items are added to disapproval bills, and the Senate
has not waived the point of order against such an item, the
conferees intend that such legislation would no longer qualify
for the expedited procedures.
The conference report also provides that any conferees on
a disapproval bill must include any cancellations upon which
the two Houses have agreed and may include any or all
cancellations upon which the two Houses have disagreed, but may
not include any cancellations not committed to the conference.
Sec. 1026. Definitions
(1) Appropriation Law. As used in this Act, the term
``appropriation law'' includes any Act which provides general,
special, supplemental, deficiency, or continuing appropriations
of federal funds, which has been presented to the President in
accordance with Article I, section 7 of the Constitution of the
United States, and which has been affirmatively signed into law
by the President.
(2) Calendar Day. The term ``calendar day'' means a
standard 24-hour period beginning at midnight.
(3) Calendar Day of Session. The term ``calendar day of
session'' means only those days on which both Houses of
Congress are in session. This definition excludes periods of
recess and adjournment by either House.
(4) Cancel. In the case of discretionary budget
authority, the term ``cancel'' means to rescind an entire
dollar amount. The term rescind is clearly understood through
long experience between the Executive and Legislative branches
with respect to appropriated funds. The conferees do not intend
that any new interpretation be applied to the term rescind, but
rather intend to narrow the scope of cancellation authority as
compared with the authority provided under section 1012 of the
Budget Act.
For items of new direct spending, three definitions are
provided to specifically tailor the cancellation authority to
the type of direct spending involved. In the case of direct
spending that is budget authority provided by law other than an
appropriation law, the term cancel means to prevent that budget
authority from having legal force or effect. For example, in
the case of budget authority that provides authority to
contract for a particular project, the effect of a cancellation
by the President would be to foreclose the ability of the
Federal Government to enter into an agreement to pay the amount
of money provided in the law. The cancellation affects only the
money that would otherwise be spent, and may not be used to
alter or terminate any condition contained in the law.
For entitlement authority, the term cancel means that the
President may prevent the specific provision that results in
the deficit-increasing obligation of the Federal Government
from having legal force or effect. The cancellation affects
only the legal obligation to pay a benefit, and does not change
or affect any other aspect of the law.
With respect to direct spending that is conducted through
the food stamp program, the term cancel means that the
President may prevent the specific provision of law that
results in an increase in expenditures from having legal force
or effect. Again, the authority is narrowly defined, and is
limited only to eliminating the increase in food stamp
obligations that would otherwise occur. No other aspect of the
law could be altered, terminated or otherwise affected.
Finally, with respect to limited tax benefits, the term
cancel means to prevent the specific provision of law that
provides the benefit from having legal force or effect. Again,
the authority granted the President is very narrow--only to
collect the tax that would otherwise not be collected or to
deny the credit that would otherwise be provided. The President
may not change, alter, or modify any other aspect of the law.
(5) Direct Spending. The term ``direct spending'' is an
existing term that is defined in section 250(8) of the Balanced
Budget and Emergency Deficit Control Act of 1985. The
conference report makes technical modifications to the
definition to make it appropriate for use in part C of title X,
but the conferees intend the term ``direct spending'' to have
the same meaning as it does under the Balanced Budget and
Emergency Deficit Control Act.
(6) Disapproval Bill. For the purposes of the conference
report, the term ``disapproval bill'' is defined as a bill or a
joint resolution which only disapproves one or more
cancellations of dollar amounts of discretionary budget
authority, items of new direct spending or limited tax benefits
in a special message transmitted by the President under section
1022.
The disapproval bill is defined to include a list by
reference number of one or more of the cancellations in the
President's special message, allowing the opportunity for
amendments relating to specific cancellations. The structure of
the disapproval bill is carefully defined and proscribed to
ensure that only a list of reference numbers identifying
cancellations from a particular special message, and nothing,
more are included in a bill that is eligible for the expedited
procedures that are provided under section 1025. Since it is
the intent of the conferees to ensure that the expedited
procedures are reserved for bills that only disapprove any or
all of the President's cancellations, the definition is
designed to ensure that matters beyond the scope of the
President's special message are not permitted to be added to a
disapproval bill. However, the conferees recognize the
legitimate interest members may have in limiting the focus of a
disapproval bill to include only a subset of the cancellations
in a President's special message.
Specifically, a disapproval bill referencing the
President's cancellations has the following title: ``A bill
disapproving the cancellations transmitted by the President on
________,'' with the blank space being filled with the date of
transmission of the relevant special message and the number of
the relevant public law.
The disapproval bill does not have a preamble and
provides only the following: ``That Congress disapproves of
cancellations ________, as transmitted by the President in a
special message on ________, regarding ________.'' The first
blank space is to be filled in with a list by reference number
of one or more of the cancellations contained in the
President's special message. The second blank space is to be
filled in with the date of transmission of the President's
special message. The third blank space is to be filled in with
the number of the public law to which the special message
relates.
(7) Dollar Amount of Discretionary Budget Authority. The
term ``dollar amount of discretionary budget authority'' is
carefully defined in section 1026(7) in order to ensure that
the President's authority to cancel discretionary spending in
appropriation laws is clearly delineated. The conference report
delegates the authority to the President to cancel in whole any
dollar amount specified in an appropriation law.
In addition, to increase the President's discretion, the
conference report allows the President to cancel a dollar
amount of budget authority provided in an appropriation law by
specific amounts identified by the Congress in the statement of
managers, the governing committee report, or other law. By
limiting the delegation of authority, the conferees intend to
preclude arguments between the Executive and Legislative
Branches and to ensure that the delegation is not overbroad or
vague. As is described in further detail below, the conferees
have sought to provide the President the ability to rescind
entire dollar amounts, even if not specified as a dollar amount
in the law itself, so long as the dollar amount can be clearly
identified and is in an indivisible whole with which Congress
has previously agreed.
The conferees note that the definition specifically
excludes certain types of budget authority that are addressed
by other provisions in part C of title X, as well as any
restriction, condition, or limitation that Congress places on
the expenditure of budget authority or activities involving
such expenditure. The exclusion of restrictions, conditions, or
limitations is included to make clear that the President may
not use the authority delegated in section 1021(a) to cancel
anything other than a specific dollar amount of budget
authority.
The cancellation authority cannot be used to change,
alter, modify, or terminate any policy included by Congress,
other than by rescinding a dollar amount. Obviously, if the
Congress has included a restriction in the law that prohibits
the expenditure of budget authority for any activity, there is
no dollar amount to be rescinded by the President, nor would
any money be saved for use in reducing the federal budget
deficit, which is a requirement for the use of the authority
provided under section 1021(a).
As described in subparagraph (A)(i), the President may
cancel the entire dollar amount of budget authority specified
in an appropriation law. The term ``entire'' means just that;
the President may rescind, or ``line out'' the dollar amount of
budget authority specified in the law, so that the dollar
amount provided in the law becomes zero after the cancellation.
For example, in Public Law 104-37, the Agriculture
Appropriations Act for Fiscal Year 1996, $49,486,000 was
provided in the law for special grants for agriculture
research. Using the authority granted under section 1021(a)(1),
as defined under section 1026(7)(A)(i), the President could
cancel only the entire $49,486,000.
Further, again under subparagraph (A)(i), if the
appropriation law does not include a specific dollar amount,
but does include a specific proviso that requires the
allocation of a specific dollar amount, then the President may
rescind the entire dollar amount that is required by the
proviso. A fictitious example of what the conferees intend in
this case follows:
An appropriation law includes a provision that
states ``for the operation and maintenance of the Army,
$1,400,000,000, provided Fort Fictitious is maintained
at Fiscal Year 1995 levels,''. In this instance, the
President could ascertain what the operation of Fort
Fictitious cost in FY 1995, and could rescind that
entire amount from the $1.4 billion provided for Army
O&M. The conferees note that the President would have
to take the entire dollar amount required to operate
Fort Fictitious in FY 1995, and could not simply take
part of that amount. It is intended to be an all or
nothing decision.
As a further specific illustration, the conferees note
that the General Construction Account in Public Law 104-46, the
Energy and Water Development Appropriations Act, 1996, states:
``$804,573,000 to remain available until expended,
of which such sums as necessary pursuant to Public Law
99-662 shall be derived from the Inland Waterways Trust
Fund, for one-half of the costs of construction and
rehabilitation of inland waterways projects, including
rehabilitation costs for the Lock and Dam 25,
Mississippi River, Illinois and Missouri * * *''
In this example, the President could cancel the entire
$804,573,000 or could cancel an amount equal to the entire
dollar amount that would be required to fund the rehabilitation
costs of the Lock and Dam 25 project, noting in his message all
information as required by section 1022.
In subparagraph (A)(ii) the President is given the
authority to rescind the entire dollar amount represented
separately in any table, chart, or explanatory text included in
the statement of managers or the governing committee report
that accompanies an appropriation law. The term ``governing
committee report'' is included to address the fact that the
current practice in preparing the statement of managers for a
conference report on an appropriation law is to simply address
changes that were made in the statutory language and the
accompanying committee reports, thus leaving intact and
incorporating by reference tables, charts, and explanatory text
in one of the two committee reports that were not modified by
the conference.
An example of the authority described in subparagraph
(A)(ii) is found in the Conference Report accompanying the FY
1996 Military Construction Appropriations Act (Public Law 104-
32). The statement of managers accompanying the conference
report contains a chart denoting allocations of dollars to
various installations and projects. On page 38 there is an
allocation of $10,400,000 for a physical fitness center at the
Bremerton Puget Sound Naval Shipyard. Except for this chart
there is no other reference to the physical fitness center in
either the statute or narrative explanation in the Conference
Report. Under the authority provided by the definition in
subparagraph (A)(ii), the President could cancel the entire
$10,400,000 provided for the physical fitness center, but could
not cancel only a part of that amount.
The inclusion of subparagraph (A)(ii) is not intended to
give increased legal weight or authority to documents that
accompany the law that is enacted. Rather, as an exercise of
its authority to specify the terms of the delegation to the
President, Congress is choosing to use those documents as a
means of allowing the President increased discretion to reduce
dollar amounts of discretionary budget authority provided in an
appropriation law. In order to ensure that the delegated
authority is clear, the conferees have limited that authority
to dollar amounts identified by Congress in the appropriation
law, the accompanying statement of managers, the governing
committee report or other law. Since Congress often provides
detailed identification of dollar amounts in the accompanying
documents, they represent an agreed upon set of dollar amounts
that the President may rescind in their entirety.
Subparagraph (A)(iii) has been included by the conferees
to address a specific circumstance where neither the
appropriation law nor the accompanying statement of managers or
committee reports include any itemization of a dollar amount
provided in that appropriation law. However, another law
mandates that some portion of the dollar amount provided in the
appropriation law be allocated to a specific program, project,
or activity that can be quantified as a specific dollar amount.
In this case, the President could rescind the entire dollar
amount required to be allocated by the other law, since that
dollar amount has been identified by Congress as a specific
dollar amount that must be spent. As is the case with the
earlier provisions, the President could not rescind part of the
dollar amount mandated by the other law. It is an all or
nothing decision. Likewise, the President could not use the
cancellation authority to change, alter, or modify in any way
the other law.
An example of the authority provided in subparagraph
(A)(iii) is found in section 132 of Public Law 104-106, the
National Defense Authorization Act for Fiscal Year 1996.
Section 132 states that ``Of the amounts appropriated for
Fiscal Year 1996 in the National Defense Sealift Fund,
$50,000,000 shall be available only for the Director of the
Advanced Research Projects Agency for advanced submarine
technology activities.'' In this example the President could
``look through'' the appropriation law to the authorization law
that mandates that $50 million is available only for advanced
submarine technology activities, and could cancel the entire
$50 million.
However, had the appropriation law contained a provision
that contradicted or otherwise made the mandate in the
authorization law ineffective with respect to the allocation of
the National Sealift Fund, then the President would not be able
to use the amount in the authorization law as the basis for the
cancellation of a dollar amount of discretionary budget
authority. As with appropriation laws, the President cannot use
the authority in subparagraph (A)(iii) to change, alter, or
modify any provision of the authorization law.
Subparagraphs (A)(iv) and (A)(v) are variations on the
authority granted in clauses (i) through (iii), and are
intended to address the circumstance where Congress does not
specify in the appropriation law, the accompanying documents,
or other law a specific dollar amount, choosing instead to
require the purchase of a particular quantity of goods.
Subparagraphs (A)(iv) and (A)(v) allow the President to rescind
the entire dollar amount of discretionary budget authority
represented by the quantity specified in the law or documents.
To determine the specific dollar amount, the President is
required to multiply the estimated procurement cost by the
total quantity of items specified in the law or documents. The
President may then rescind the entire dollar amount represented
by the product of those two figures. The conferees expect that
the President will use the best available information, as
represented by the President's budget submission or binding
contract documents, to estimate the procurement cost.
The conferees have included the following examples in
order to more clearly explain the definition of dollar amount
of discretionary budget authority as defined by section
1026(7). These examples are used solely for illustrative
purposes and the conferees are in no way commenting on the
merit of any of these programs. The conferees do not intend for
these examples to represent all instances where cancellation
authority may be used.
The FY 1996 Agriculture Appropriations Act (Public Law
104-37) appropriates $49,846,000 in special grants for
agriculture research. The Conference Report accompanying this
law contains a table that allocates the $49,846,000 total into
lesser dollar amounts all of which correspond to individual
research programs. This table, for example, contains a
$3,758,000 allocation for ``Wood Utilization Research (OR, MS,
MN, ME, MI)''.
Using the definition in section 1026(7)(A) (i) and (ii),
the President could cancel either the entire $49,846,000
specified in the statute or the entire $3,758,000 described in
the chart in the Conference Report. However, because the
Congress did not break down the allocations for each state
associated with this project the President would not have the
authority to take a portion of the $3,758,000 allocated to wood
utilization research.
The conferees intend that cancellation authority only
applies to whole items. If an item (or project) occurs in more
than one state, and the law or a report that accompanies an
appropriation law lists an item (project) and then lists a
series of states, it is the entire item that must be canceled.
In the example listed above, ``Wood Utilization
Research'' appears in the report as: ``Wood Utilization
Research (OR, MS, NC, MN, ME, MI).''
The conferees believe it is important to note that this
line in the report must be canceled in its entirety. The
President's cancellation authority is strictly limited. The
President has no authority in this example to cancel wood
utilization research for Michigan only.
To further illustrate this example, the conferees submit
the following example that corresponds to a chart contained in
the same conference report: ``Aflatoxin (IL), 133,000; Human
Nutrition (AR), 425,000; Human Nutrition (IA), 473,000; Wool
Research (TX, MT, WY) 212,000.''
In this case, the President may cancel aflatoxin (IL),
Human Nutrition (AR), Human Nutrition (IA), and/or Wool
Research (TX, MT, WY). Although there are two human nutrition
research projects listed in two different states, because of
the manner in which they are listed, each project may be
separately canceled. Again, the President may only cancel the
entire wool research program and may not cancel only wool
research in Texas.
Section 1026(7)(B) describes what is not included in the
definition of ``dollar amount of discretionary budget
authority.'' Subparagraphs (B)(i) and (B)(ii) exclude items of
new direct spending, for which cancellation authority is
provided under other sections of part C of title X.
Subparagraph (B)(iii) excludes from the definition any budget
authority canceled or rescinded in an appropriation law in
order to ensure that those cancellations or rescissions cannot
be undone by the President using the cancellation authority.
As described earlier, subparagraph (B)(iv) excludes from
the definition any restriction, condition, or limitation in an
appropriation law or the accompanying statement of managers or
governing committee report on the expenditure of budget
authority or on activities involving such expenditure. The
following two examples illustrate the conferees' intent that
the President cannot use the cancellation authority to alter
the Congressional policies included in these restrictions,
conditions, or limitations.
The Labor, Health and Human Services and Education and
Related Agencies Appropriations Act, H.R. 1217, as amended by
the Senate Appropriations Committee contained the following
section:
``Sec. 103. No amount of funds appropriated in this
Act for fiscal year 1996 may be used to implement,
administer, or enforce any executive order, or other
rule or order, that prohibits Federal contracts with,
or requires that debarment of, or imposes other
sanction on, a contractor on the basis that such
contractor or organizational unit thereof has
permanently replaced lawfully striking workers.''
The President's cancellation authority only applies to
entire dollar amounts. The above example of ``fencing
language'' is a limitation and contains no dollar amount.
Therefore, the President has no authority to alter or cancel
this statement of Congressional policy.
If a limitation or condition on spending--``fencing
language''--is not written as a separate numbered or unnumbered
paragraph, but instead is written as a proviso to an
appropriated amount, the President still has no power to cancel
the proviso.
The Energy and Water Development Appropriations Act,
1996, (Public Law 104-46), Title II, Department of the
Interior, General Administrative Expenses, states:
``For necessary expenses of general administration
and related functions in the office of the
Commissioner, the Denver office, and offices in the
five regions of the Bureau of Reclamation, $48,150,000,
of which $1,400,000 shall remain available until
expended, the total amount to be derived from the
reclamation fund and to be nonreimbursable pursuant to
the Act of April 19, 1945 (43 U.S.C. 377); Provided,
that no part of any other appropriation in this Act
shall be available for activities or functions budgeted
for the current fiscal year as general administrative
expenses.
Using this example, the President may cancel $48,150,000
or the $1,400,000 noted, but may not cancel or alter in any way
the proviso restricting the use of other appropriated funds
contained in this Act.
The conference report also allows the President to cancel
the entire amount of budget authority required to be allocated
by a specific proviso in an appropriation law for which a
specific dollar figure was not included. The conferees
recognize that from time to time, budget authority may be
mandated to be spent on a specific program or project without a
specific dollar amount being listed. However, in order to
comply with the proviso, the President would have to expend
appropriated funds.
(8) Item of New Direct Spending. The term ``item of new
direct spending'' means a provision of law that results in an
increase in budget authority or outlays relative to the
baseline set forth pursuant to section 257 of the Balanced
Budget and Emergency Deficit Control Act of 1985.
Under the Balanced Budget and Emergency Deficit Control
Act of 1985, a reauthorization or an extension of a major
entitlement program would not result in an increase in direct
spending. As a consequence, such legislation would not
constitute an item of new direct spending pursuant to the
conference report. This does not mean that legislation must
result in a net increase in spending in order to be subject to
this cancellation authority. A provision of a future law that
increases direct spending would be subject to the President's
cancellation authority whether or not it is offset by another
provision that reduces direct spending or increases revenues in
the same law.
Unlike an appropriation law, which specifically
designates a dollar amount for a specific program, direct
spending can arise from a number of interactions among
provisions in a new law, other provisions in that same new law,
and underlying law. The conference report provides the
President with the authority to cancel the legal obligation
provided by the new law that results in new direct spending.
The cancellation authority is limited to the specific
provisions in the new law signed by the President that result
in the legal obligation to expend funds and does not extend to
other previously enacted laws.
The following are examples of direct spending increases
that have been enacted. These examples are given to illustrate
how cancellation authority could apply to similar items of new
direct spending if included in a law to which part C of title X
would apply. These examples are used solely for illustrative
purposes and the conferees are in no way commenting on the
merit of any of these programs. The conferees do not intend for
these examples to represent all instances where cancellation
authority may be used.
The 1995 Balanced Budget Act included provisions that
increased direct spending, but this Act was vetoed in its
entirety by the President using his Constitutional authority
and thus no provisions of that Act would be subject to the
cancellation authority under part C. In the Omnibus Budget
Reconciliation Act of 1993, the Congress enacted provisions
that led to a net reduction in direct spending of $78.8 billion
over five years. While this law led to a net reduction in
direct spending, it included several provisions that increased
direct spending. More specifically, the following are selected
examples of provisions that increased direct spending that
illustrate how the President's cancellation authority could be
applied:
Section 13982 increased Forest Service payments and
section 13983 increased Bureau of Land Management (BLM)
payments to counties affected by the Northern Spotted
Owl. These provisions were estimated to increase direct
spending by $43 million in fiscal year 1994 and $215
million over the period of fiscal years, 1994-1998. The
President could cancel the entire amount of the legal
obligation created by section 13982 for the Forest
Service to make payments or the entire amount of the
legal obligation in section 13983 for BLM to make
payments.
Sections 13811 through 13813 dealt with Customs
overtime pay, additional benefits, and user fees.
Section 13812(c) provided cash awards for foreign
language proficiency to Customs Officers that was
estimated to increase direct spending by $2 million in
fiscal year 1994 and $10 million over the period of
fiscal years 1994-1998. The President could cancel that
legal obligation for the entire amount of funding
provided for cash awards to Customs Officers. However,
the President could not reach to provisions that
reduced direct spending, such as the extension of
Customs fees and overtime reform or other provisions
that did not directly deal with an increase in direct
spending.
Sections 13901 through 13971 of that law made a
number of changes to the food stamp program that were
estimated to lead to a net increase in direct spending
of $56 million in fiscal year 1994 and $2.7 billion
over the period of fiscal years 1994-1998. More
specifically, section 13923 increased direct spending
by raising the asset test and indexed this asset test
for inflation for determining eligibility for food
stamps. The President would have the authority to
cancel the entire specific legal obligation so that the
increase in the asset test would have no legal force or
effect. In addition, the President could cancel the
entire legal obligation to make the inflation
adjustment so that this asset test would not be indexed
for inflation. However, the President's cancellation
authority would not apply to provisions that did not
affect direct spending or reduced direct spending, such
as section 13951 that expedited claim collections and
adjustments to error rate calculations.
(9) Limited Tax Benefit. In general, a ``limited tax
benefit'' is any provision under the Internal Revenue Code that
is either (1) a revenue-losing provision that provides a
Federal tax deduction, credit, exclusion, or preference to 100
or fewer beneficiaries (unless the effect of the provision is
that all similarly situated persons receive the same
treatment); or (2) a provision that provides transitional
relief to 10 or fewer beneficiaries.
The number of beneficiaries affected by a provision is
determined by considering each fiscal year in which the
provision will be in effect; if the number of beneficiaries
falls below the requisite threshold for any one of those fiscal
years, the provision could be identified as a limited tax
benefit. For purposes of determining the number of
beneficiaries, certain individuals and businesses would be
aggregated: all businesses and associations which are related
(within the meaning of Internal Revenue Code sections 707(b)
and 1563(a)) would be treated as one beneficiary; all qualified
plans of a single employer would be treated as one beneficiary;
all holders of the same bond issue would be treated as one
beneficiary. However, individual shareholders of a corporation,
partners of a partnership, members of an association, or
beneficiaries of a trust would not be counted as separate
beneficiaries simply because a benefit is provided to the
respective corporation, partnership, association, or trust.
Revenue-losing Provisions that Affect 100 or Fewer
Beneficiaries. A provision is defined as ``revenue-losing'' if
it results in a reduction in federal tax revenues for any one
of the following two periods: (1) the first fiscal year for
which the provision is effective; or (2) the period of the five
fiscal years beginning with the first fiscal year for which the
provisions is effective.
A revenue losing provision that affects 100 or fewer
beneficiaries is not a limited tax benefit if one of the
exceptions is met. First, if a provision has the effect of
providing all persons in the same industry or engaged in the
same activity with the same treatment, the item is not a
limited tax benefit even if there are 100 or fewer persons in
the affected industry. For example, a provision that sets forth
the depreciation treatment for equipment that is used only by
automobile manufacturers will not be treated as a limited tax
benefit solely because there are fewer than 100 automakers
located in the United States.
Similarly, a provision that provides the same treatment
for all persons who engage in research and development
activities, or all persons who adopt children, or all persons
who engage in drug testing, would not be treated as a limited
tax benefit simply because 100 or fewer persons are expected to
engage in that activity in any of the fiscal years in which the
provision is effective. In such circumstances, the benefit is
provided as an incentive to anyone who chooses to engage in the
activity rather than to a closed group of specific taxpayers.
A second exception applies to provisions that have the
effect of extending all persons owning the same type of
property, or issuing the same type of investment instrument,
the same treatment. For example, a provision that sets forth
the depreciation treatment for a highly-specialized type of
computer equipment that is owned by fewer than 100 taxpayers
(who are not necessarily in the same industry) would not be
treated as a limited tax benefit as long as any person who
purchases such equipment is entitled to the same treatment.
Similarly, a provision that affects the deductibility of
interest with respect to certain types of debt instruments
would not be a limited tax benefit, as long as any person who
issued that type of debt instrument receives the same
treatment.
The conference report further clarifies that a provision
is not a limited tax benefit if the only reason the provision
affects different persons differently is because of (1) the
size or form of the business or association involved (e.g., a
provision that gives preferential treatment to small
businesses); (2) general demographic conditions affecting
individuals, such as their income level, marital status, number
of dependents, or tax return filing status; (3) the amount
involved (e.g., a cap based on the dollar amount of a
taxpayer's investment or the number of units produced by a
taxpayer); or (4) a generally-available election provided under
the Internal Revenue Code (e.g., if taxpayers who engage in a
certain activity are given a choice between two alternative
treatments, and fewer than 100 taxpayers are expected to choose
one of the alternatives).
Transition Rules
Any Federal tax provision that provides temporary or
permanent transitional relief to 10 or fewer beneficiaries in
any fiscal year would be a limited tax benefit except to the
extent that the provision provides for the retention of prior
law for all binding contracts (or other legally enforceable
obligations) in existence on a date contemporaneous with
Congressional action specifying such a date. For example, a
provision in a chairman's mark which retains current law with
respect to binding contracts in existence on the date the mark
is released would not be a limited tax benefit. In addition, a
technical correction to previously enacted law (if it is scored
as having no revenue effect) would not be a limited tax benefit
for this purpose.
This provision covering transition rules is intended to
address the type of special rules used extensively in prior tax
legislation. For example, in the Tax Reform Act of 1986 (the
``1986 Act''), which included a number of revenue raising tax
provisions, various specifically identified taxpayers were
provided special rules that exempted them from treatment under
the general revenue raising provisions. One provision in the
1986 Act changed the rules for how multinational corporations
could allocate interest expenses for foreign tax credit
purposes. The provision included a favorable rule for banks,
and also included a special exception allowing ``certain'' non-
banks to use the favorable bank rule. The special exception
applied to any corporation if ``(A) such corporation is a
Delaware corporation incorporated on August 20, 1959, and (B)
such corporation was primarily engaged in the financing of
dealer inventory or consumer purchases on May 29, 1985, and at
all times thereafter before the close of the taxable year.''
Public Law 99-514, 100 Stat. 2548, sec. 1215(c)(5). If 10 or
fewer taxpayers were expected to benefit from the special
exception, this provision would constitute a limited tax
benefit under the conference agreement definition, and would be
subject to the President's cancellation authority.
The conferees submit the following two examples for what
may or may not be a limited tax benefit. All examples are used
solely for illustrative purposes and the conferees are in no
way commenting on their merit. Furthermore, the conferees do
not intend for these examples to represent all instances where
cancellation authority may be used.
The Omnibus Reconciliation Act of 1993 included a
provision that created an income tax credit for entities that
make qualified cash contributions to one of 20 ``community
development corporations'' to be selected by the Secretary of
Housing and Urban Development using certain selection criteria.
Under the conference report, the Joint Committee on
Taxation (JCT) would estimate how many contributions would be
designated as eligible for the credit, based on the information
available to the Committee at the time the legislation was
being considered. If the JCT determined more than 100
contributors would benefit from the credit, then the provision
could not be canceled. If fewer than 100 contributors were
estimated to benefit from the provision, then the provision
could be canceled.
If the conference report did not include the information
from JCT in the required form, then the President would have
the authority to make the determination.
H.R. 831 (enacted in the 104th Congress) included a
provision to restore a prior-deduction for 25 percent of the
amount paid for health insurance for self-employed individuals
and the individuals' spouses. The 25 percent deduction had
expired after December 31, 1993. H.R. 831 restored the 25-
percent deduction for 1994 and increased the deduction to 30
percent for taxable years beginning after 1994.
Under the conference report, this provision would not be
a limited tax benefit because it applies to all self-employed
individuals who purchase their own health insurance, and thus
this provision would benefit more than 100 individuals.
(10) OMB. The term ``OMB'' means the Director of the
Office of Management and Budget.
Sec. 1027. Identification of limited tax benefits
The conferees intend to limit the authority delegated to
the President by Congress under section 1021 with respect to
the application of that authority to limited tax benefits. A
limited tax benefit is a carefully delineated provision under
the definition in section 1026(9). This section ensures the
proper application of this definition, and hence the
President's cancellation authority, to any tax provision. The
conference report provides the conferees on any revenue or
reconciliation measure with the opportunity to identify for the
President what may constitute a limited tax benefit, under the
procedures in this section, in each revenue or reconciliation
law.
The conference report states that the JCT shall examine
any revenue or reconciliation bill or joint resolution (that
amends the Internal Revenue Code) prior to its filing by a
committee of conference in order to determine whether or not
that bill or joint resolution contains any limited tax benefits
under the definition in section 1026(9). The statement from the
JCT shall state that the bill either contains no limited tax
benefits or contains limited tax benefits.
In the case of a revenue or reconciliation bill or joint
resolution containing one or more limited tax benefits the
statement shall list each of those provisions. In the case of a
revenue or reconciliation bill or joint resolution containing
no limited tax benefits, the statement shall state that
determination. This statement shall be submitted to the
conference committee on such a bill or joint resolution and
shall be made available by the JCT to any Member of Congress
upon request.
If the conference report includes the information from
the JCT and that information identifies provisions in the
conference report which quality as limited tax benefits under
the definition in section 1026(9), then the President may
cancel those, and only those, items as identified. On the other
hand, if such a conference report contains a statement from the
JCT stating that there are no provisions in the conference
report qualifying under the definition in section 1026(9) as a
limited tax benefit, then the President may not exercise the
cancellation authority under section 1021(a)(3) because
Congress has provided that no tax provisions are eligible for
cancellation under this authority.
The conference report specifies how the information
provided by JCT may be included in the bill. At the end of the
bill, the permitted separate section should read as follows:
``Section 1021(a) of the Congressional Budget and Impoundment
Control Act of 1974 shall ________ apply to ________'', with
the blank spaces being filled in with the appropriate
information. In the case in which the JCT identifies limited
tax benefits in a conference report, the word ``only'' would
appear in the first blank and a list of all of the provisions
of the bill or joint resolution identified by the JCT in that
Committee's statement shall appear in the second blank. In the
case in which the JCT declares that there are no limited tax
benefits in the conference report, the word ``not'' would
appear in the first blank and the phrase ``any provision of
this Act'' would appear in the second blank.
The conferees intend that the decision to include the
information provided by JCT in the bill or joint resolution
that amends the Internal Revenue Code shall be left to the
discretion of the appropriate conferees. With respect to any
potential violations or any rules relating to the scope of a
conference, the conferees intend that the inclusion of such an
identification shall not constitute a violation of any rules of
the House of Representatives or the Senate, respectively.
In the event the legislation amending the Internal
Revenue Code is signed into law that does not contain the
information provided by JCT, any identification of what
constitutes a limited tax benefit under the definition in
section 1026(9) may be made by the President. If any provision
qualifies as a limited tax benefit (within the confines of the
definition of such a benefit in section 1026(9)) and the
President identifies such a benefit, the President may exercise
the cancellation authority under section 1021(a)(3).
Section 3. Judicial review
Any Member of Congress or other adversely affected
individual is given standing to seek declaratory judgement and
injunctive relief on the ground that any provision of this law
violates the Constitution. Suit must be brought in the United
States District Court for the District of Columbia. A copy of
any complaint brought under this Act must be promptly filed
with the Secretary of the Senate and Clerk of the House, and
each House reserves the right to intervene in any action
according to its own internal rules.
Appeals from the District Court must be filed within 10
calendar days after an order is entered and may be taken
directly to the Supreme Court of the United States. A period of
30 calendar days is provided for filing a jurisdictional
statement with the Supreme Court, and the conference report
prohibits any single Justice from issuing a stay of the
District Court's order. Both the District Court and the Supreme
Court are directed to advance on the docket and expedite to the
greatest extent possible any action brought with regard to the
constitutionality of this law.
Section 4. Conforming amendments
Section 4 makes three conforming amendments. First, this
section amends the short title of the Congressional Budget and
Impoundment Control Act of 1974 to clarify that the short title
of Impoundment Control Act shall refer to parts A and B of
title X. The amendment further specifies that part C of title X
shall be cited as the Line Item Veto Act of 1996.
Second, section 4 makes a conforming amendment to the
table of contents in the Congressional Budget and Impoundment
Control Act to include a listing of the contents of part C,
referencing sections 1021 through 1027.
Third, section 4 amends section 904(a) of the
Congressional Budget Act of 1974 to clarify that the provisions
of sections 1025 and 1027, relating to Congressional
consideration of a disapproval bill and identification of
limited tax benefits, in an exercise of the rulemaking powers
of the House of Representatives and the Senate. As a result,
sections 1025 and 1027 are considered part of the rules of each
House, respectively, and it supersedes other rules only to the
extent that it is inconsistent with those rules. This is also a
recognition of the constitutional right of both Houses to
change these rules at any time, in any manner and to the same
extent as in the case of any other rule of each House.
Section 5. Effective dates
Section 5 provides an effective date of the earlier of
(1) the day after the enactment of an Act entitled ``An Act to
provide for a seven-year plan for deficit reduction and achieve
a balanced Federal budget.''; or (2) January 1, 1997. It
provides that this part shall sunset January 1, 2005.
Bill Clinger,
Gerald Solomon,
Jim Bunning,
Porter Goss,
Peter Blute,
Managers on the Part of the House.
Ted Stevens,
Bill Roth,
Fred Thompson,
Thad Cochran,
John McCain,
Pete V. Domenici,
Chuck Grassley,
Don Nickles,
Phil Gramm,
Dan Coats,
Jim Exon,
Managers on the Part of the Senate.