Hearings of the
Subcommittee on Legislative and Budget Process
The Rescissions Process After the Line Item Veto: Tools for Controlling Spending
Dan Crippen
Director, Congressional Budget Office
1. Generally speaking, what is the budgetary effect of the current rescissions process? What, if any, interrelation do you see between the way the current rescissions process is used and the discretionary spending limits set in law? What incentive structure do you see for both the President and the Congress in proposing and enacting rescissions?
The current rescission process has little effect on overall budget totals. The reasons are that the amounts rescinded are small compared with the size of the budget, the savings in outlays are frequently not commensurate with the amounts of budget authority rescinded, and rescissions are typically used to offset new spending.
The discretionary spending caps function as overall controls on discretionary spending. The rescission process provides a way for the Congress and the President to reconsider and modify spending priorities and thus may facilitate trade-offs within the capped spending levels. The Congress and the President always have incentives to use budgetary resources wisely. Those incentives are particularly strong when discretionary resources are limited, as they are under the current caps. The rescission process enables lawmakers to shift funds to newly recognized needs without having to increase overall spending above the previously agreed upon limits.
2. What is the role of CBO in the current rescissions process? Do you have any guidance on how that role might change (or should be changed) were the process to be revised?
CBO tracks the status of rescissions as part of its responsibilities for scorekeeping. CBO determines whether the resources proposed for rescission are still available (that is, whether they have already lapsed or been obligated) and estimates the outlay savings, if any. Proposals to change the rescission process could affect CBO. For example, our workload would increase dramatically if individual cost estimates for each “bill” had to be provided under a separate-enrollment procedure. An expedited rescission process could require CBO to estimate the impact of Presidential proposals more quickly. In both cases, however, our fundamental scorekeeping role in the process would not change. Nor would we recommend any changes.
3. Do you share the concern expressed by some that any change to the existing rescissions process that would require Congress to act on proposed rescissions would disadvantage the Congress in the balance between the Executive and Legislative branches?
Proposals to change the current process are likely to result in gains as well as losses for the Congress. The extent to which those changes would shift power between the executive and legislative branches depends on the approach. Expedited rescission, for example, would involve a smaller shift to the executive branch than would other proposals. It is designed to achieve a Congressional up-or-down vote on the President’s proposals. However, an expedited process would establish a strict timetable for moving Presidential rescission proposals through the legislative process, which could adversely affect the Congressional schedule. The seriousness of that effect would depend on both the number of proposals submitted by the President and the level of controversy each entailed. By contrast, an enhanced rescission process would result in a much greater power shift to the executive branch. Under that approach, the President could withhold funding until the Congress acted to make the funds available. (The Line Item Veto Act was a version of an enhanced rescission process.)
4. Periodically we hear of disagreements in scoring between OMB and CBO regarding the budgetary impact of certain legislation. Do these types of problems come into play in any way in the current rescissions process?
CBO serves as the Congress’s scorekeeper during the legislative process. Scorekeeping differences between OMB and CBO could affect rescission proposals, but they are likely to be insignificant, for several reasons: most scorekeeping differences are small to begin with, amounts proposed for rescission are fairly small, and rescinded amounts are used mostly to offset new spending. Over the 1990-1999 period, enacted rescissions averaged $6 billion per year in budget authority and only $1 billion in outlays. Given the small amounts involved in most rescission proposals, CBO does not see scorekeeping differences as much of a problem in the current rescission process.
