Hearings of the
Subcommittee on Legislative and Budget Process
The Rescissions Process After the Line Item Veto: Tools for Controlling Spending
Congressional Research Service, Library of Congress
Mr. Chairman, I appreciate the opportunity to testify on the statutory options that are available to Congress following the Supreme Court's invalidation of the Line Item Veto Act of 1996. First I'll identify the key points in the Court's decision and then turn to statutory responses and how they might affect executive-legislative relations.
The Court's Decision
By a 6 to 3 vote, the Supreme Court held that the Line Item Veto Act (LIVA) violated the Presentment Clause by departing from the "finely wrought" constitutional procedures established for the enactment of law. The Court rejected the argument that the President's power to cancel items was a mere exercise of discretionary authority granted by Congress. Instead, the cancellation authority represented the repeal of law that could be accomplished only through the regular legislative process, including bicameralism and presentment. Clinton v. City of New York, 118 S.Ct. 2091 (1998).
Writing for the majority, Justice Stevens said that if there is to be a new procedure "in which the President will play a different role in determining the final text of what may `become a law,' such change must come not by legislation but through the amendment procedures set forth in Article V of the Constitution." Id. at 2108. However, the dissents by Justices Scalia and Breyer identify a number of statutory procedures used in the past that gave the President substantial discretion over the expenditure of funds, and none of those procedures would be barred by the Court's decision. There are even suggestions in the majority opinion that some statutory alternatives would be acceptable. Finally, there are other procedures-not mentioned by the Court or in the dissents-that would seem well within the constitutional boundaries established by last year's decision.
Do Cancellations "Repeal" or "Amend" Law?
The majority opinion noted that under the Line Item Veto Act a presidential cancellation prevents the item "from having legal force or effect," even though a disapproval bill, if enacted into law, would make the cancellations "null and void." Id. at 2102. In the two cancellations that reached the Court, Congress failed to act upon proposed legislation to disapprove presidential cancellations. Because the cancellations took effect, the Court said that "the President has amended two Acts of Congress by repealing a portion of each." Id. at 2103.
This assertion of "repeal" was crucial to the Court's decision. It cited language from the legislative veto case, INS v. Chadha (1983), that "[R]epeal of statutes, no less than enactment, must conform with Art. I." No provision in the Constitution, said the Court, authorizes the President "to enact, to amend, or to repeal statutes." The Constitution "is silent on the subject of unilateral Presidential action that either repeals or amends parts of duly enacted statutes," and there are "powerful reasons" for construing constitutional silence "as equivalent to an express prohibition." Id.
Did the cancellations by President Clinton constitute a "repeal" of a statute? The statutes remained as they were. Portions of the statute, because of the cancellations, had no effect. In his dissent, Justice Breyer disputed the Court's characterization: "When the President `canceled' the two appropriation measures now before us, he did not repeal any law nor did he amend any law. He simply followed the law, leaving the statutes, as they are literally written, intact." Id. at 2120 (emphasis in original).
The Court pointed to the remark by President Washington that under the Constitution he must either "approve all the parts of a Bill, or reject it in toto." Id. at 2104. The Line Item Veto Act did not depart from that principle. President Clinton had the same choice available to every President: either approve the entire bill or veto it in toto. In fact, only after signing the entire bill could he exercise the cancellation authority.
The Court rejected the government's suggestion that the cancellations at issue in the case did not affect a "repeal" because the canceled items retained a "real, legal budgetary effect" under the lockbox mechanism. Regardless of the operation of the lockbox, the canceled items were "entirely inoperative" for the plaintiffs. Id. The government's handling of the lockbox issue may have pushed several Justices to join the majority. It may have seemed legally too fine a point to argue that cancellations were not a repeal because of the way the lockbox operated.
A central question argued in the briefs and in the lower courts was whether Congress could delegate cancellation authority to the President. The precedents for earlier delegations were quite strong in justifying the statute. However, the Court may have preferred to settle the issue on grounds of the Presentment Clause rather than reopen the doctrine of nondelegation.
Distinguishing Field v. Clark
In previous decisions, the Court had upheld statutes that gave the President authority to adjust provisions in statutes. For example, the Tariff Act of 1890 authorized the President to suspend duty-free arrangements whenever he determined that other countries had imposed duties that were "reciprocally unequal and unreasonable." That statute was upheld by the Court in Field v. Clark (1892). The opinion by Justice Stevens in Clinton v. City of New York rejected the government's argument that the cancellations in the item-veto statute were not "amendments" or "repeals" but rather the exercise of discretionary authority, similar to that granted by Congress in the Tariff Act of 1890.
The Court found "three critical differences" between the tariff act and the item-veto statute. First, the suspension of a duty-free arrangement "was contingent upon a condition that did not exist when the Tariff Act was passed: the imposition of `reciprocally unequal and unreasonable' import duties imposed by other countries." In contrast, the President had to exercise his cancellation authority within five days "based on the same conditions that Congress evaluated when it passed those statutes." Id. at 2105.
This analysis raises a question: Would the Line Item Veto Act have been constitutional if the five-day period had been stretched to a couple of months, allowing the President to take account of conditions that were not available when Congress passed the statute?
Second, the Court said that under the Tariff Act the President had a duty to suspend duty-free arrangements whenever he determined that the contingency had arisen, whereas the President under the item-veto statute had a discretion to cancel even after he determined that the three conditions specified in the statute had been satisfied. Id. Another question emerges: Would the Line Item Veto Act have been constitutional if cancellations had been more mandatory?
Third, the Court argued that under the tariff act the President "was executing the policy that Congress had embodied in the statute," whereas whenever the President canceled an item "he is rejecting the policy judgment made by Congress and relying on his own policy judgment." Id. at 2106. Why is that so? It could be argued just as well that Presidents were executing congressional policy under both the tariff act and the item-veto statute.
To argue that when the President cancels an item he is "rejecting the policy judgment made by Congress and relying on his own policy judgment" overlooks the fact that Congress authorized the President by statute to do precisely that. The Court's argument applies to a far different scenario, where a President, facing an array of congressional tax and spending directives, decides on his own initiative, without a shred of statutory authority, to reject those policy judgments and impose his own prerogatives. That was not the policy enacted by the Line Item Veto Act.
Foreign Versus Domestic Policy
The Court pointed out that the statutes relied upon by the government in defending the item-veto statute "all relate to foreign trade, and this Court has recognized that in the foreign affairs arena, the President has `a degree of discretion and freedom from statutory restriction which would not be admissible were domestic affairs alone involved'" (citing United States v. Curtiss-Wright Export Corp. in 1936). Id. at 2106.
This reference to Curtiss-Wright suggests that the constitutional test for an item-veto statute is not entirely procedural ("repeal" and the presentment clause) but depends on the subject matter as well. If LIVA had confined the President's cancellation authority to "foreign affairs," would it have been constitutional? Is there a clear enough delineation between foreign affairs and domestic affairs? Whatever conditions were when the Court wrote Curtiss-Wright, it is generally conceded that there is substantial overlap between foreign and domestic policy today.1 In 1991, after encountering strong criticism for his travels abroad, President Bush explained that efforts to promote trade agreements with other nations would benefit U.S. exports: "I guess my bottom line . . . is you can't separate foreign policy from domestic." Public Papers of the Presidents, 1991, II, at 1629. President Clinton made a similar comment in 1993: "There is no longer a clear division between what is foreign and what is domestic." Public Papers of the Presidents, 1993, II, at 2.
The treatment of foreign affairs, Field v. Clark, and Curtiss-Wright raises a question about a statement the Court makes toward the end of the decision: "the only issue we address concerns the `finely wrought' procedure commanded by the Constitution." Id. at 2107. Yet the Court seems to address at least two concerns: procedural and substantive.
Discretionary Spending Authority
The Court recognized that Congress has frequently appropriated funds "not exceeding" specific amounts, giving the President wide discretion with respect to "both the amounts to be spent and how the money would be allocated among different functions." Id. at 2107. However, the Court denied that those statutes justified the Line Item Veto Act. Unlike the appropriations statutes with discretionary spending language, LIVA "gives the President the unilateral power to change the text of duly enacted statutes. None of the Act's predecessors could even arguably have been construed to authorize such a change." Id.
I don't see such a fundamental difference. Suppose Congress appropriates "not exceeding" $10,000,000 for a specific program and the President decides not to spend anything. It could be argued that the President has in effect "repealed" part of the statute and "change[d] the text." Yet those statutes have never been declared unconstitutional.
Justice Scalia makes a similar point in his dissent. He said that "there is not a dime's worth of difference between Congress's authorizing the President to cancel a spending item, and Congress's authorizing money to be spent on a particular item at the President's discretion." Id. at 2116 (emphasis in original). He cites a number of statutes that gave the President unbounded discretion to spend appropriated funds, such as language in a 1934 statute that provided $4 billion for general classes of projects to be spent "in the discretion and under the direction of the President." The constitutionality of those grants of discretionary spending authority, Justice Scalia said, "has never seriously been questioned." Id. at 2117. In his judgment, had LIVA authorized the President to "decline to spend" items of spending, "there is not the slightest doubt that authorization would have been constitutional." Id. at 2118.
Is LIVA "Authorized" by the Constitution?
The Court states that the Court's decision "rests on the narrow ground that the procedures authorized by the Line Item Veto Act are not authorized by the Constitution." Id. at 2108. If that means not specifically authorized, the Court would cast a shadow over many powers that are taken for granted today: the power of Congress to investigate, the power of the President to withhold certain documents, and the power of the Court to invalidate executive and legislative actions. None of those powers are expressly granted in the Constitution. The important issue is not whether the procedures in LIVA are specifically authorized by the Constitution but whether they violate core constitutional principles.
Gramm-Rudman-Hollings
In his dissent, Justice Scalia notes that LIVA "is not the first statute to authorize the President to `cancel' spending items," and points to the sequestration procedure in the Gramm-Rudman-Hollings Act of 1985. Id. at 2116. The statute provided that the effect of sequestration was that "amounts sequestered . . . shall be permanently cancelled." Id. When the Court held the statute unconstitutional in Bowsher v. Synar, 478 U.S. 714 (1986), it did so not because it gave the President the power to cancel items but because it gave the Comptroller General executive functions. Id. Justice Scalia acknowledged that the President's discretion under LIVA was "certainly broader" than the Comptroller General's discretion under GRH, "but it is no broader than the discretion traditionally granted the President in his execution of spending laws." Id.
Was the Court "faked out"?
Did Congress complicate the litigation by calling the statute the Line Item Veto Act? I think we all know that LIVA did not grant the President a true item veto, certainly not the kind of item veto that operates in the states, where governors may exercise a partial veto in a bill before it becomes law. It was widely recognized that augmenting presidential power in that fashion would have required a constitutional amendment. Justice Scalia suggested that Congress might have selected the title to simplify public comprehension and comply with the terms of the campaign pledge in the Contract with America, but in selecting this title it "succeeded in faking out the Supreme Court." Id. at 2118. Would the Court have reached a different decision had Congress called the statute what it really was: the Enhanced Rescission Act of 1996?
I also wonder what the Court might have done had Congress restricted LIVA to appropriations. Many critics of the statute warned about the President wandering through the tax code, looking for sections to cancel, which of course is not what LIVA authorized. During oral argument, it seemed to me that some of the Justices were uneasy about the President canceling limited tax benefits and new entitlements.
Certifying Money Items
In his dissent, Justice Breyer concludes that the cancellation authority in LIVA might have been more acceptable to the Court had it been written differently. Instead of allowing the President to cancel an item, suppose the statute directed that a program be implemented unless the Presidents prevents the program "from having legal force or effect if he determines x, y and z. (Assume x, y and z to be the same determinations required by the Line Item Veto Act)." Id. at 2120. Thus, the President could "cancel" an item by making a determination that the program should not be carried out. In doing so, the President would be executing the law, not repealing it. Id.
Justice Breyer points to statutes that give the President discretion to carry a certain program into effect. A section of the Foreign Assistance Act "shall be of no further force and effect upon the President's determination and certification to the Congress that the resumption of full military cooperation with Turkey is in the national interests of the United States and [other criteria]." Id. at 2121 (emphasis in original). A provision in a public law dealing with immigration from Cuba "is repealed . . . upon a determination by the President . . . that a democratically elected government in Cuba is in power." Id. at 2122 (emphasis in original). To Justice Breyer, none of those statutes delegate a power to "repeal" or "amend" a statute, or to "make" a new law. Id.
Expedited Rescission
LIVA added a supplemental procedure to the Impoundment Control Act of 1974. Instead of the President having to obtain the support of both Houses of Congress within a set period of time, LIVA adopted what was called "enhanced rescission." Presidential proposals to cancel items would become law unless both Houses of Congress passed a resolution of disapproval, which would be subject to the President's veto. Congress would need a two-thirds majority in each chamber to reimpose its priorities.
Now that enhanced rescission has been invalidated, a fallback position for Congress is "expedited rescission," which the House passed in 1992, 1993, and 1994. Expedited rescission forces at least one House to vote on a President's rescission package. The impact is on the internal procedures of Congress and does not raise the kind of presentment issues that the Court dealt with in the legislative veto and item veto cases.
Expedited rescission raises a different set of issues. First, does Congress want to change the rescission process to favor executive spending priorities over legislative spending priorities? The current legislative process allows Congress and the President ample opportunities to affect budget priorities. The President begins the process by formulating the budget and lobbying for his programs. If congressional changes are objectionable to the President he can threaten to invoke his veto authority or actually exercise it. If Congress is unable to override his veto, it must make further accommodations in accepting White House direction. Expedited rescission gives the President another card to play.
Second, expedited rescission interferes with the regular procedures followed by Congress. Some of the expedited rescission proposals would prohibit amendments by Congress, either in committee or on the floor. Moreover, they give Presidents substantial power to drive the legislative agenda and direct the traditional prerogatives of party leaders to determine the legislative schedule: what to take up, and when.
Third, expedited rescission would have an impact on congressional workload. There could be as many as 13 separate rescission bills, one for each of the regular appropriations bills, plus rescission bills for each of the other appropriations acts (supplementals and continuing resolutions). Most of the rescission bills would come in September and October, when the appropriations bills clear Congress and are presented to the President. This is the time of the year when Congress is ready to recess or adjourn. Would Congress be forced to stay in session to consider rescission messages? The President's budget submission for the next fiscal year might be delayed because of the need to await final congressional action on these rescission messages.
Fourth, much depends on how Presidents might "game" the expedited rescission. A President could routinely return large rescission messages to Congress for each appropriations bill, expecting rejection by one House in most cases. The White House could then condemn Congress for failing to support presidential proposals to combat waste and "pork." This strategy would produce bad blood between the branches, putting the focus more on scoring points with the public than on selective rescissions.
While not raising the kind of constitutional issues that would interest the courts, expedited rescission implicates important constitutional principles, particularly the capacity of Congress to retain its power of the purse and the ability to decide budget priorities.
Separate Enrollment
Another constitutional option is separate enrollment, which would permit the enrolling clerk to separate each "item" from an appropriations bill and enroll that item as a separate bill or joint resolution to be submitted to the President for his signature or veto. Items are generally defined as any numbered section (containing provisos or conditions) or unnumbered paragraphs (containing dollar amounts).
The obvious purpose of this proposal is to give the President greater discretion than he has now with omnibus appropriations bills. I see no constitutional problem with this approach, especially if the "mini-bills" are returned to the House and the Senate and voted on en bloc before being submitted to the President.
Precisely how cumbersome this procedure would be depends on how Congress chose to write appropriations and other money bills. The greater the specificity, the more the bills. Congress would have to decide what details to put in the bill and which ones would be left in committee reports and other nonstatutory sources.
Separate enrollment raises significant problems of timing and scheduling for Congress. The work of the enrolling clerk would be immense, and the Appropriations Committees would no doubt spend additional time in constructing their bills to channel and minimize presidential power. For example, they could combine sections and paragraphs in such a way that the President, in vetoing something he opposes, loses something he wants.
Modified Separate Enrollment
Separate enrollment would be less burdensome if the mini-bills were restricted to items in dispute between Congress and the President. For example, let us suppose that an appropriations bill is in conference and the White House announces that the President objects to 30 items. Those would be stripped from the bill and the balance passed by both chambers and submitted to the President, who would sign the bill into law. The 30 items in contention would be put in separate bills, passed by both chambers, and submitted to the President, who would veto them. Congress would then have to muster a two-thirds in each House for the override. This process would be similar to the Line Item Veto Act but would present no constitutional problems. However, it would not allow the President the opportunity to do what he did under LIVA: reach into committee reports and cancel programs at that level.
Concluding Thoughts
There are a number of statutory "item veto" proposals that would not run afoul of the Court's decision in Clinton v. City of New York. Enactment of these proposals, however, comes at a cost. They continue to send a not very subtle message that Members of Congress are chronically and incurably irresponsible in exercising their legislative duties and must rely on the finer, nobler instincts of the President to delete wasteful programs and projects. That picture of our political institutions does not seem supported by what I know about the two branches. It seems too demeaning to Congress (and representative government) and too flattering and reverential about the presidency.
