Hearings of the
Committee on Rules
Friday, July 30, 1999
The subcommittee met, pursuant to call, at 9:30 a.m. in Room H-313, The Capitol, Hon. Porter J. Goss [chairman of the subcommittee] presiding.
Present: Representatives Goss, Pryce, Hastings, Myrick, and Dreier.
Also Present: Representative Linder.
Mr. Goss. The Subcommittee will be in order. The distinguished chairman of the Rules Committee, David Dreier of California, has honored us with his presence and perhaps will honor us with his words.
Mr. Dreier
Mr. Dreier. Thank you, Mr. Chairman. And let me thank you for embarking on this very important bipartisan -- well soon to become bipartisan, I assume
Mr. Goss. Kristi is here.
Mr. Dreier. Kristi is here, making it a bipartisan review of the rescissions process. As one of the House committees responsible for the programmatic oversight of our budget process and the relationship between the executive and legislative branches, this hearing will allow us to proactively assess the history, mechanics and effectiveness of the Congressional Budget Act with respect to the rescissions process.
I hope that this programmatic oversight will lead to bipartisan recommendations for legislative improvements to this process. Regardless of the status of our Nation's balance sheet, I believe that the budget process should always be a mechanism for promoting accountability and fiscal discipline. We have a track record with which to review this law. The rescissions process has been utilized by five Presidents and responded to by 12 Congresses.
In the aftermath of the Supreme Court's ruling on the line item veto and 25-year dual branch record in the rescissions process, now is the time for Congress to prudently review this statute.
Our distinguished witnesses bring with them many backgrounds, institutional perspectives and fiscal experiences, and I appreciate their willingness to take part in this analysis today.
Since the majority of the work of the Rules Committee involves matters that are internal to the legislative branch, really inside baseball, it is rare that we actually hear testimony from a representative of the executive branch. So I want to extend a special welcome to our witness from the OMB.
Again I want to congratulate Chairman Goss and Mr. Frost, who has, as Porter said, his representative here, for putting together this bipartisan hearing, and I look forward to the testimony of our witnesses.
Mr. Goss. Thank you very much, Mr. Chairman. I want to thank the chairman for his leadership in this and allowing the subcommittee to become heavily involved in this subject over the past several years, and all the staff that has also stayed very much on top of this issue.
First of all, I do want to make an administrative announcement. There is a memorial service at 11:00, so we are going to try and honor the timeline, and we will move expeditiously as we can on this.
The hearing falls into the category of promises made and promises kept. As people know, many of us labored long and hard to enact the historic Line Item Veto Act, and I was personally sorry to see its demise. The Supreme Court in its wisdom disagreed with our view that the new law met the necessary constitutional test, and as we all know, last summer the Court struck the law down.
While smart legal minds can and do disagree on the weighty constitutional issues at play in the Court's ruling, the miracle of our democratic system of checks and balances among the branches of government provides that the Court shall be the final arbiter on such questions.
Immediately after the Court's ruling, I joined with many of my colleagues, including Chairman Dreier, in pledging to go back to the drawing board to find a way to meet the two primary goals of the Line Item Veto Act but still remain within the parameters that have been set for us by the high Court.
I note that one of our witnesses today referred to the line item veto as a one-year blip on the Federal budgeting radar screen. While the law was found invalid by the Court, I believe that the court of public opinion and the majorities of both Houses of Congress still find validity in the goals of the act.
And so I hope that blip will ultimately prove to have been worth the effort, and I think it will. It seems to be a work in progress. The goals of the line item veto, fiscal discipline and accountability, are still worthy of our attention, even in the current happy circumstance, when we have a budget surplus. At least I think we do.
So today, once again, we are focusing on the rescissions process as established in 1974 by the Impoundment Control Act, the ICA. We have asked our witnesses to talk about the process by which the President may propose to cancel budget authority that has already been appropriated. How does the existing process work? How well does it function when measured by the twin tests of accountability and fiscal discipline?
Should Congress consider ways to strengthen the process? What options are available for doing so, and what are the their pros and cons? What are the parameters we must live within after the Court's ruling, after line item veto.
When we were considering a line item veto statute, some of our colleagues brought forward proposals to tighten up the existing rescissions process without going the whole way to the disapproval model envisioned by the statutory item veto. Our view at the time was to first attempt to achieve the whole loaf and implement a line item veto that truly shifted the bias away from spending
Everyone knew that the matter would ultimately find its way to the Court, and now the Court has spoken on the subject. It is appropriate for us to consider what intermediate steps we can and should take to use the law and to strengthen the law.
For what it is worth, it is my view that we were very much on the right track when we fought for and won for the President tough line item veto authority. I note some governors have used it well. And I still believe we should implement it. Although we now have to explore doing it through a constitutional amendment, that is a subject for another day and another process.
With that as introduction, let me now introduce our witnesses. And I am pleased to see so many of our members here this morning. We will hear first from a panel of distinguished experts. Sylvia Mathews, Deputy Director of OMB, who has been allowed to come in through our intense security. We appreciate it. We apologize for your disruption. Dan Crippen, Director of the CBO, Gary Kepplinger, Associate General Counsel of GAO.
We welcome you all. The second panel will include Lou Fisher, Scholar from the Congressional Research Service, Phil Joyce, Professor at George Washington University, and Allen Schick, Visiting Fellow at the Brookings Institution and Professor at the University of Maryland.
There are background books for each of our members and guests, and because of the constraints on of our time, because of the George Brown memorial this morning, I am not going into a long introduction. I am merely going to again welcome you and turn the floor over to Sylvia Mathews from OMB, who I understand is going first. The floor is yours.
STATEMENT OF SYLVIA MATHEWS, DEPUTY DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET
Ms. Mathews. Thank you. Mr. Chairman, and distinguished members, I want to thank you for inviting me to testify and having the executive branch here as part of this testimony on the existing rescissions process and on the subject of enhanced or expedited rescission. In your invitation you requested my assessment of the current rescission process, its history, mechanics and its effectiveness, as well as judgment about its ability to foster accountability and fiscal discipline.
I welcome the opportunity to be here. Fostering accountability and fiscal discipline are as important today, when the Federal budget is in surplus, as they were during the deficit years. Regardless of whether there is a budget surplus or deficit, the Federal Government should always use taxpayer dollars wisely.
This hearing addresses one of the tools available to the Congress and the executive branch for fostering accountability and fiscal discipline. Through the rescission process, the President can identify to Congress particular uses of taxpayer dollars that are wasteful or unneeded or that serve special interests rather than the national interests. In my testimony, I will discuss the current process and proposals for its improvement.
I would first like to describe the current rescission process. The President's existing rescission authority was put in place 25 years ago and is contained in the Impoundment Control Act of 1974, passed by Congress in response to President Nixon's impoundment of appropriated funds. The act reinforces the congressional power of the purse. The act does so by requiring the President to obtain the approval of both Houses of Congress through the enactment of a law before appropriated funds may be permanently withheld.
Under the Impoundment Control Act, the President can send a request to Congress asking that it rescind budget authority. If Congress does not enact a rescission law during the 45-day period, then the rescission proposal has been defeated and the President must release the withheld funds.
An important feature of the current process is that the Congress is not required to vote on the President's request. Since 1974, Congress frequently has not voted on the President's proposals. This means that many opportunities may have been lost for Members of Congress to vote up or down on whether they support the spending which the President has proposed a rescission on.
As a result, the current rescission process is not as effective as it could be. As Congress noted 3 years ago in the conference report to the Line Item Veto Act, "the statutory provisions of the Impoundment Control Act have proven too restrictive."
Because of the problems inherent in the current rescission process, there have been many calls over the years for the President to have enhanced rescission authority. One form that these proposals took is the line item veto. From the beginning of our administration, President Clinton asked for a line item veto that would enable a President to reject wasteful items from an appropriations bill. Congress considered a variety of enhanced rescissions and line item veto approaches. In addition, the President made numerous statements and OMB Directors Panetta and Rivlin testified before Congress, providing the administration's views on the Impoundment Control Act and impending legislation to reform it.
There have been a number of approaches to improving the rescission process in the Impoundment Control Act which has several common features, broader scope beyond budget authority and requiring Congress to vote on Presidential rescission proposals. One approach was to replace the current discharge petition process with congressional fast track procedures that would require a Congress to vote on the President's rescission proposals.
Another variation was the separate enrollment approach, which would require enrolling clerks in the House and the Senate to separately enroll each covered item in a bill. For each separately enrolled provision that the President vetoed, Congress would be required to override the veto by 2/3 vote in each House, if it wanted to preserve the provision.
Another approach was the line item veto. In March '95, the President stated he supported the strongest possible line item veto. Congress in the following year passed and the President signed into law the Line Item Veto Act. Under that act, the President had 5 days after signing a bill to cancel discretionary budget authority, new direct spending, and targeted tax benefits.
In perhaps its sharpest departure from the Impoundment Control Act, the Line Item Veto Act required Congress to enact a law in order to reverse the President's action. Under the Line Item Veto Act, when the President canceled a spending or tax item, members had 5 days in which to introduce a disapproval bill to overturn the cancelation. The disposition of the disapproval bill was governed by fast track procedures.
If Congress passed a disapproval bill, then the bill, like other legislation, would be subject to the President's constitutional veto. Therefore, if the President vetoed a disapproval bill, Congress would then have to override the veto by a 2/3 vote in each House, in order to restore the canceled spending or tax item.
The Line Item Veto Act went into effect on January 1st, 1997 and was in effect for the next 18 months until the Supreme Court declared the act unconstitutional in 1998. During that time, the President canceled 82 items, the total savings from these cancellations was approximately $2 billion. With respect to one of those sets of cancellations, of 38 projects funded in the Military Construction Appropriations Act, Congress responded to the President's cancellations by enacting a disapproval bill into law over the President's veto. For the remaining 44 cancellations, however, Congress did not vote in favor of disapproval of the bill.
In fact, no disapproval bill was ever introduced for many of those cancellations. As you know, the Supreme Court in June of last year held that the Line Item Veto Act was unconstitutional by a 6-3 vote. The Court held that the act violated the presentment clause of the Constitution. In the Court's view, the President's cancellation authority constituted, in effect, the power to veto parts of a bill or, alternatively, the power to repeal legislation.
Such authority they felt was not consistent with the Constitution, because the President may only veto a bill in its entirety, and legislation may only be repealed through the enactment of another law.
In reaching this conclusion, the Court majority, but not the 3 dissenting justices, rejected the government's position that the President when using his line item veto authority was not vetoing or repealing legislation, but rather was carrying out the law which authorized him to decide whether budgetary resources should be dedicated to the purposes in the particular spending or tax items or instead to deficit reduction. As a result of the Supreme Court's decision, the remaining cancellations were all reversed.
Where do we go from here? Requiring a second vote on certain items is a reasonable response to the realities of the legislative process. The existing rescission process is not as effective as it could be because Congress is not required to vote on the President's rescission packages, but can simply take no action.
We believe that the Congress should vote on a President's rescission proposal. That is what an enhanced rescission authority would provide; an expedited schedule for congressional consideration of the President's proposal, requiring an up and down vote within a reasonable period. Such enhanced rescission authority would preserve the power of congressional majorities to make budgetary decisions.
The administration respects the role of the congressional power of the purse in our system of government, and understands the desire of members to protect that power. Rather than changing the balance of power between the branches, enhanced or expedited rescission authority would increase the accountability of both branches. Enhanced rescission would increase the ability of the Congress to review individual spending programs tucked away in very large appropriations bill. Their fate would be decided by the majorities in each House. In this way, programs that benefit special interests at the expense of public interests would no longer escape proper scrutiny and the congressional power of the purse would be fully respected
I would be happy to answer any questions you have. Thank you.
[The statement of Ms. Mathews follows:]
Mr. Goss. Thank you very much. I appreciated your succinct description of how line item veto works. I wish I had that paragraph when we were trying to explain it to our colleagues when we tried to pass it
Mr. Crippen. And maybe the Supreme Court as well
Mr. Goss. Justice Scalia got it, a couple others did.
Mr. Crippen of the Congressional Budget Office, we welcome you, sir, and your testimony.
STATEMENT OF DAN CRIPPEN, DIRECTOR, CONGRESSIONAL BUDGET OFFICE
Mr. Crippen. Mr. Chairman, thank you for having us here. I want to tell you that we appreciate these Friday morning hearings, without which I would be tempted to linger at home too long
Mr. Goss. As would we.
Mr. Crippen. Mr. Chairman, what I have to say today I think you will probably not find particularly profound, given the subject and the source. Sylvia has done a superb job of summarizing the history, which I won't repeat for you.
We have a very good written statement that I hope that you would accept for the record.
Mr. Goss. Without objection
Mr. Crippen. -- I will quickly paraphrase a couple of observations, in addition to what Sylvia said. It seems to me, Mr. Chairman, you have only two impediments to effective rescission. One is the Constitution; the other is the Senate rules. If you can figure out a way around both of those at the same time, you will have effectively done a superb deed.
In my testimony I will make two observations: one, the current process of rescissions has very little impact on the overall budget, and two, the major proposals to change the process might improve fiscal discipline or strengthen accountability, but each proposal has drawbacks which won't be surprised to hear.
As Sylvia said, the Congressional Budget and Impoundment Control Act created the rescission process as a congressional check on unilateral action by the President to impound appropriated funds. More recently, rescissions have been used to accommodate changed priorities, helping to offset new spending with cancellations of funding previously made available. In that respect, the rescission process can promote fiscal discipline and help limit spending. However, Mr. Chairman, most enacted rescissions, have been included in supplemental appropriation acts and are explicitly intended to offset the spending contained in those acts. The other general type of rescission is enacted in regular appropriation acts for a variety of purposes.
I would call your attention to Table 1 in my written statement, which details the history of the use of existing rescission authority, both in supplementals and in regular appropriation bills, over the years.
More recent efforts to reform the rescission process, in contrast to the reasons for the Congressional Budget and Impoundment Control Act, would shift authority back to the executive branch. By reducing spending, rescissions can contribute to deficit reduction or the preservation of surpluses. Thankfully, we all agree we are going to have some surpluses. But tools to promote fiscal discipline are necessary in times of surplus as well as in times of deficit. Rescissions are not likely to affect bottom-line surpluses or deficits, however.
Strengthening the President's role in the rescission process could serve as a deterrent to lawmakers who might insert provisions of little benefit to the general public into larger legislation. I think Sylvia also addressed that issue. Rescissions contribute only modestly to the fiscal goals that proponents of reform and others advocate, however. Frequently, the resulting outlay savings are not commensurate with the rescinded budget authority.
CBO estimates that the budget authority rescinded during the past decade resulted in first-year outlays that ranged from a high of 49 percent of the total rescinded budget authority in 1990 to a low of 5 percent in 1997. Again, see Table 1 for the history of that.
For a variety of reasons, the first-year outlay rate for a particular rescinded item can be estimated as zero. In fact, it often is.
Looking beyond first-year outlays, the extent to which rescissions eventually constitute full offsets of outlays is unclear. Many of the rescissions during the past decade that have zero outlays in the first year were also estimated at zero for the next 4 years. Obviously, Mr. Chairman, very often the budget authority rescinded was not going to be spent.
Although the executive branch may favor a stronger role in making rescissions, critics argue that such a change would shift power from the Congress to the President. A review of enacted rescissions reveals that the Congress initiated rescissions that matched or exceeded the amounts proposed for rescission by the President in all but one of the past 10 years. Indeed, some 60 percent of all rescissions were instigated or initiated by the Congress
What I am passing through here in my written testimony is the history of rescissions and the various proposals, which again Sylvia did for all of us.
In summary, Mr. Chairman, it is hard to conclude that any of the proposed changes to the rescission process would greatly affect the budget's bottom line. There is, however, always room for more tools of fiscal discipline, and improved accountability should always be desirable whether the budget is in a surplus or deficit and whether the amounts involved are large or small.
The Congress will obviously have to weigh the potential for modest budget benefits from proposed changes against possible drawbacks, which include shifts of power to the executive branch and effects on the legislative process.
Thank you.
[The statement of Mr. Crippen follows:]
Mr. Goss. Thank you very much, Mr. Crippen.
At this time we will go directly to Mr. Kepplinger, the Associate General Counsel of GAO. We welcome you. We welcome your testimony and your remarks.
STATEMENT OF GARY KEPPLINGER, ASSOCIATE GENERAL COUNSEL, GENERAL ACCOUNTING OFFICE
Mr. Kepplinger. Thank you, Mr. Chairman. I am pleased to be here today to discuss GAO's role in the Impoundment Control Act and to provide some perspective on the use and impact of rescissions. Sylvia described the current process, so I will go directly to a description of GAO's role.
Under the Impoundment Control Act, the President is required to send a copy of the special message proposing rescissions or deferrals to the Comptroller General on the same day it is submitted to Congress. Under the act, the Comptroller General is required to review each special message and report the findings of that review to the Congress as soon as practicable.
We review the special message to verify the facts surrounding, as well as the justification for, and the estimated program effect of, the proposed impoundment. We do this by talking with program officials, reviewing the latest agency budget documents and discussing the proposed rescission with OMB. We also review each message to ensure that it is not misclassified, such as a rescission proposal reported as a deferral.
We report our findings on each special message to the Congress, typically within 25 working days after receipt of the message. The act also requires the Comptroller General to report to the Congress any impoundments which the President has failed to report. Obviously, it would be impractical to attempt to review every account of the government, but we found that this is not necessary.
When an unreported withholding takes place concerned members or committees of the Congress, intended recipients, the media or our auditors typically bring it to our attention. After the President submits an impoundment message, we are responsible for monitoring the status of affected funds.
For example, we monitor deferred budget authority to ensure that the funds are released in time to allow for prudent obligation. Well before the expiration of deferred appropriations, we initiate inquiries at OMB to verify that the funds will not be permitted to lapse.
If it appears that a lapse may occur, we report the deferral to the Congress as a de facto rescission. We also monitor the 45-day statutory time limit associated with proposed rescissions to ensure that funds are released promptly at the expiration of the 45 days. If the funds are not promptly released after expiration of the 45-day period, we are empowered to bring a civil action in the United States District Court for the District of Columbia to require release of the budget authority.
Prior to filing suit, we must report to the House and the Senate the circumstances giving rise to the need to bring suit. We may not initiate a suit until our report has laid before Congress for 25 continuous days of session. During the initial years of the Impoundment Control Act, we filed suit on one occasion and filed 25-day reports on several others. In each of these cases, the funds were released. In recent years, it has not been necessary to resort to these procedures.
Finally, we periodically submit to the Congress formal summaries of the number and dollar amounts of the President's proposed and enacted rescissions, as well as congressionally instigated rescissions. Attachments 1 and 2 to my prepared statement summarize all proposed and enacted rescissions since 1974.
Rescissions under the Impoundment Control Act have not historically served as a significant spending reduction tool. Since enactment of the Impoundment Control Act in '74, Presidents have proposed 1,172 rescissions totaling about $75 billion. The Congress has accepted about 39 percent of these proposals, 459, totalling about 25 billion, or one-third.
At the same time, Congress has an initiated about 105 billion in rescissions to revise spending decisions. Apart from looking at these aggregate numbers, it is also useful to look at them over the history of the Impoundment Control Act. During the first years of the Impoundment Control Act from 1974 to 1984, Congress accepted about 18-1/2 billion of the 38 billion of Presidential rescission proposals. At the same time, Congress enacted about 11 billion in congressionally initiated rescissions.
Looking at the last 8 years, Congress has enacted approximately 6 billion of the 19 billion proposed for rescission by the President while enacting about 64 billion in congressionally initiated rescissions. This data suggests an evolution in the use of rescissions as a budgetary tool.
In 1974, at the time of enactment of the Impoundment Control Act, the rescission procedure was envisioned as a mechanism to accommodate a President's desire to impound funds by providing for congressional review and approval of Presidential rescission proposals.
Congress, of course, can always rescind enacted budget authority on its own initiative, either to reduce spending or to justify spending priorities. As noted above, over time, the share of total rescissions enacted each year, which were originally proposed by the President, has fallen, and the share originating in the Congress has increased.
While our rescissions statistics highlight Congress' increasing use of rescissions, the relatively small amounts rescinded makes clear that rescissions have not been a major tool to reduce spending. Under the Impoundment Control Act, the President can propose rescissions only for funding provided by annual appropriations or supplementals, referred to as discretionary spending.
Today, this spending I think, as Sylvia mentioned, represents only about one-third of the budget and is constrained by statutory caps. It is the remaining two-thirds of the budget which is spent on such programs as Social Security and Medicare and interest on the Federal debt that has driven past deficits. Under the act, the President cannot propose rescissions on mandatory spending.
Also, enacted rescissions do not reduce total spending if the rescinded amount is used to offset spending of an equivalent amount of budget authority in another account. In such cases, the rescission in effect transfers funds from one program to another, thereby shifting budget priorities rather than reducing spending. Our sense is that rescissions have often been used to offset new appropriations under the discretionary spending caps.
This is not to say that rescissions are unimportant. Certainly the President's rescissions proposals can foster debate between the President and the Congress of overfunding priorities and cuts in specific programs. There have been, however, a number of proposals for an expedited rescission process. These have been presented in Congress over the years to enhance accountability and further public debate over spending priorities.
Although the details of the proposals vary, expedited rescission proposals are designed to ensure rapid and formal congressional consideration of rescissions proposed by the President. An essential element of an expedited rescission process is a prompt up or down vote in the Congress on the President's proposal to reduce enacted budget authority.
Conceptually an expedited rescissions process would avoid the constitutional issues that led the Supreme Court to strike down the line item veto.
Thank you, Mr. Chairman, I would be happy to answer any questions.
[The statement of Mr. Kepplinger follows:]
Mr. Goss. Thank you very much. The panel, I think, has given us a very useful summary of what the situation is and what the prospects are for our efforts relative to the amount of support there is to pursue this track.
And I guess my first question would be, in light particularly of your testimony, Mr. Kepplinger, is it worth pursuing expedited rescission where we go to a system such as requiring Congress to vote in a short-day period, given the trends and given all of the other checks and balances and tools, do you think that going down this road is worth it?
Mr. Kepplinger. I would say, Mr. Chairman, that ultimately that is a policy decision that you all in Congress have to make. I would suggest that there are a couple of considerations. Certainly, the argument that expedited rescission is a good government spotlight on wasteful spending has some appeal. There are, on the other hand, I think, as Mr. Crippen referred to, some other drawbacks that you need to consider.
There is an argument, for example, I think, Sylvia mentioned the discharge procedure that currently exists in the Impoundment Control Act which requires essentially 20 percent of the members to go on record as all in favor of discharge and of a rescission. If you can't gather 20 percent of the members in support of a particular item, you need to think about whether it is worth the time of the legislative calendar to be voting on every proposal that the President may be sending up. And so I think you really need to think about what is the effect of this on the legislative calendar, and I think you also need to think what is the effect of this in terms of the distribution of powers between the branches. Those are really issues that you all need to grapple with
Mr. Goss. Well, I would like to also have your two judgments about it. We started out with the remarks I made at the beginning. We started out with the idea that there were goals that were worthwhile, and I think those assumptions remain valid, so we will assume that those assumptions are valid.
The question I think really is, is this tool relative to all the other tools and time constraints that we talked about, is this a workable tool that is useful that is worth the effort?
Mr. Kepplinger. If I can just add one remark, with respect to the existing rescission process, you know, the whole act has evolved, it is now being used, as I mentioned, as a way to identify unnecessary spending and as a way also to offset other spending needs. I think the '98 supplemental was an example of that where we had most of the rescissions proposed by the President that were specifically designated to offset money that they needed in the supplemental.
Mr. Goss. Right. That is a good point. Other comments, Mr. Crippen, Ms. Matthews
Ms. Mathews. I think that the administration believes that it is a tool that is worthwhile pursuing to meet the goals that we discussed for a number of reasons. One is, while it is used often to offset what we do and what the Congress does, our rescissions are used as offsets. I think we believe strongly that the caps have been a powerful tool. Because these are tools that help us stay within the caps and relieve some of that pressure on the caps, they are positive for what may be a stronger fiscal discipline tool, the caps.
The second thing, which is what was just highlighted, is special projects. I think you all are probably more familiar with what is happening right now in the appropriations process. In the past couple of years, we have seen a pretty dramatic increase in earmarking. While we understand and respect the importance of earmarks to members in their districts and that there are special needs and that sort of thing, if you look at the VA-HUD bill last year, there was a dramatic increase in the earmarking and our understanding is that there will again be a dramatic increase this year. I think rescissions are a disciplining mechanism. Hopefully it would send a signal if we had the ability to ensure that some of these projects and proposals meet the tests of congressional majority support, not simply special interest group support.
So I think the administration position is that it is worth it, and you can do it in a way that is consistent with the Constitution, and in a way that maintains the executive congressional balance. In terms of balance of powers that we currently have, using an expedited rescissions process wouldn't be too onerous to either you or the executive branch.
Mr. Goss. Well, I agree. We made a pledge that we were going to look into this with line item veto, and one of the things that nobody has been able to testify to, because nobody can testify to it, is what, if any, dampening effect did the line item veto have in its brief glorious history of 18 months, what dampening effect did that have on mischief that otherwise might have happened? We will never know.
Judge Pryce.
Ms. Pryce. Thank you, Mr. Chairman. I really don't have any questions. Just in the short half hour I have been here, I have learned an awful lot. So I appreciate the time you have taken to help to educate this member at least. And thank you for the opportunity
Mr. Goss. Mr. Linder.
Mr. Linder. I just have a comment to Ms. Matthews. It seems incredibly arrogant for the White House and the administration and people to decide what we do which is wasteful or which is special or national interests. Some of us think going into Somalia because of a lead story on the evening news and coming out of Somalia because of a lead story on the evening news was wasteful. And yet I am sure that the President believes that was in the national interest. So on the whole notion that you can sit down and determine what we do in special interests orientation and you will fix it, to do what you want that is national interests is incredibly arrogant.
Ms. Mathews. I think that we would like to think that we have a process where we work together. It is the vote of the Congress that makes the determination. I think what we are doing is highlighting things that we think are problematic. But by having the Congress vote, having both bodies vote, you have a situation where the powers lies with the Congress to make the determination of what is or is not appropriate. And I think that is why we believe a process requiring votes would be a helpful thing to keep the power of making those determinations with the Congress.
Mr. Goss. Thank you. Doc.
Mr. Hastings. At the risk of opening up a whole new can of worms, I understand the Impoundment Control Act dealt only with discretionary spending which is now only about one-third of the budget. And as we proceed forward, trying to come up with a concept of a line item veto, do we need to look at some other way, at the other two-thirds of the budget, and, if so, how?
Ms. Mathews. I think that in the line item veto that passed, there were provisions that sort of expanded what you were looking at. New tax items and new mandatory or direct spending items were included. We included several tax items, as well as a mandatory item when we used the line item veto.
And I think the line item veto was bringing new items that were coming on-line in the two-thirds that you are talking about under closer scrutiny. I think there is another process and another tool that we already use that I think we should use more aggressively, which is the reconciliation process. This is a means by which we attempt to aggressively examine both our programs, their policy effects and their dollar costs. For example, questions of Medicare cuts, or different approaches to Medicare changes are appropriately discussed in a reconciliation process.
So I think the two things together, an enhanced or an expedited rescission using the same criteria that you used in the line item veto, and I think aggressively using the reconciliation process, which has been a tool that we haven't all agreed on over time, could help. To address the BBA cuts that we are now having discussions about extending, whether or not that is a good idea or a bad idea, we will use that process. But the problem is very real, two-thirds of the money we are spending is in a particular area not focused on.
Mr. Crippen. I will make a quick historical note. The Budget Act, as Sylvia said, was passed in an era of constitutional tension on spending appropriations. So all of the verbiage that we have and the history here is developed around appropriations; entitlements at that time were not viewed quite as seriously in terms of their budgetary impact as they are now. And, as Sylvia just said, reconciliation was turned on its head from its original intent in order to deal more with entitlements or mandatory programs. But there is no reason that, if you can find a way to overcome the impediments of the Constitution and the Senate rules, you can't include mandatory spending and taxes, as was tried in the last time, or whatever breadth you want to give the President in his purview.
Mr. Hastings. Do you have anything?
Mr. Goss. Ms. Myrick.
Mrs. Myrick. Mr. Crippen, when you talk about the fact of Congress being able to vote on the rescissions process and the President's submitting those rescissions, do you see any -- do you have any concern about this tying up Congress' legislative calendar process, because of the President submitting these rescissions and then we have to act on them, which totally interferes with what we are trying to do otherwise?
Mr. Crippen. It certainly has that potential, and particular proposed rescission enhancements could have more consequences than others. One notion that has been around for a long time is to split appropriations bills into multiple bills. You could literally envision hundreds of bills coming from one appropriation act, and then the President could pick and choose and use the line item veto effectively. Clearly, in that case you could create an administrative burden by splitting the bills, and the whole process could be gamed by both sides But more important, you have the likelihood of official veto messages coming back from the President, and that could affect your legislative schedule.
Again, even in the old days, when rescission was thought to be constitutional and a fair number of them were proposed, there didn't seem to be that much impediment to the legislative schedules then. In theory, it is probably cumbersome; in practice, probably not so.
Mrs. Myrick. Thank you. Ms. Matthews, I just wanted to ask, if this process were changed, where Congress voted on the rescissions that the President submitted, do you think that would have any effect on the way that the President chose what he included in rescissions, and would it change the process in the way he does this now?
Ms. Mathews. I think that the one thing that it might potentially do is what the line item veto did for us -- influence the nature of how aggressive you are in terms of what you can put forward. If you know that there will be a vote, you might be more of less aggressive. While I think people feel we may have been too aggressive with our military construction projects in the line item veto, that is not something we would have generally done in a rescission process as it currently exists.
So I think for those things that are not getting voted on, at a minimum, you would see an up and down vote. If you did have it, you know that items put forward would get checked.
Mrs. Myrick. Thanks
Mr. Goss. Thank you.
Mr. Crippen. Mr. Chairman, may I make one concluding remark?
Mr. Goss. Please do
Mr. Crippen. It is an obvious one, which is that this hearing rightfully dwells on the single topic of enhanced rescission.
Mr. Goss. Exactly.
Mr. Crippen. And our assessment today is limited today to that subject. But in the context of an overall budget reform legislation or movement, there will be balancing provisions that would make this more attractive. For example, if you see that this would be giving up some legislative power to the executive, there may be offsetting things you would do in the bill. So the point is that our commentary today shouldn't be restricted in its overall consideration, as I know you won't, if you are talking about a process of budget reform.
Mr. Goss. Well, I am worried because I am not a statistician or a numbers person, and I actually had the same thought and I was about to make it because of Doc's question, and there is an ongoing, as you know, a comprehensive budget reform process, and one of the reasons we are having this side hearing on this specific subject is to figure out how important it should be.
I thank the panel. I have one additional question for Ms. Mathews to follow on Ms. Myrick's second point. When we have the line item veto, to the extent you know the answer, the President had the choice of two tools, the line item veto or rescission process, is there a guide list of determination for the President to say, well, this is going to work here, this is going to work here? Is there some kind of organized system to deal with that?
Ms. Mathews. We used the line item veto only one time and we developed our system as we did it in using it.
Mr. Goss. Okay.
Ms. Mathews. We tried to set standards by which we would judge things that would be communicated in the President's message. In other words, for example, in military construction, we used: the FYDP, the future year defense plan, if something wasn't in it, if something did not have a significant benefit to our servicemen and women and their families; and if we would not, because of engineering and architectural constraints, be able to spend money in '98. We used those standards and applied them to the bills that we received.
At the same time, in that year, we also did our rescissions process. And the way our rescission process currently works is, we work with our departments, and there are two large standards that we generally use. One is there are times when, in order to implement programmatic decisions that we have all agreed to, the Congress and the administration, sometimes more money is appropriated than you need to achieve the programmatic goal that you set. And you go back and you take and rescind.
The other place that we do rescissions is when we believe that things are of a lower priority nature, and that is often in the context of some of the types of prioritization we were speaking of, such as paying for supplemental legislation or other things. For that reason the rescission process was used at the same time we were using the line item veto. But it was only once, and I think we would have done it again.
Mr. Goss. It sounds like it was useful, that it was worth having.
Ms. Mathews. I think there is generally one thing that I would add in terms of things that we learned. And it does get to the congresswoman's point about difficulty and that sort of thing. I think as -- if you were crafting legislation, I think one of the things, and GAO may have some comment on this, is creating time frames that work so that we were able to have standards that you can have apply the facts to.
I don't know -- I think we found it challenging. I was not at OMB at that time but was at the White House. It was challenging to ensure that you had the right facts to apply your standards to. I think you all know there were a couple of cases where we made mistakes. And I think in crafting the legislation that you would want to think through how can you do that so that you provide enough time that, at our end, we can at least apply facts to standards, and, at your end, you have the time to apply facts to standards to do this right.
Mr. Goss. We would like very much to reserve the right to ask for some further guidance on that and other matters perhaps and solicit some answers to further questions from your testimony, if that is agreeable to all of you.
Thank you very much, I want to thank this panel and thanks for coming early on a Friday morning after a very late Thursday night, preceeded by an even later Wednesday night. Thank you for being here.
I will now call the second panel. I guess I should say this is one of the few times in my life that I have seen OMB and CBO at the same table agreeing on something
Mr. Crippen. It actually happens a lot. Only the differences are what you read about
Mr. Goss. I see.
Ms. Mathews. Thank you very much
Mr. Goss. Thanks very much.
I will call our second panel, Louis Fisher, Congressional Research Service, Library of Congress; Philip Joyce, Department of Public Administration, George Washington University, Mr. Joyce, I guess you ought to sit in the middle, since I called you second; and Allen Schick of the Brookings Institution. And I will let you determine which ends.
We are going to start with Mr. Fisher of the Congressional Research Service. We welcome your testimony. It will be accepted without objection for the record, and we look forward to hear your comments.
STATEMENTS OF LOUIS FISHER, CONGRESSIONAL RESEARCH SERVICE, LIBRARY OF CONGRESS; PHILIP JOYCE, DEPARTMENT OF PUBLIC ADMINISTRATION, GEORGE WASHINGTON UNIVERSITY; AND ALLEN SCHICK, BROOKINGS INSTITUTION
STATEMENT OF LOUIS FISHER
Mr. Fisher. You already heard I think enough about the Supreme Court decision, so I won't go into what the Court decided: that the Line Item Veto Act results in "repeal" and that it was invalid under the presentment clause. I would like to say that the decision, although it ends on the note that you have no alternative other than to amend the Constitution, even in Justice Stevens' decision and certainly in the dissents there are some green lights for you to do some things by statute.
Justice Stevens talked about some situations where previous statutes allowed the Presidents to depart from a statute, and he said those were okay because those actions were done over a couple of months, and conditions change, whereas the Line Item Veto Act provided only 5 days. So that suggested maybe if it is a month or so, it might be okay. He had some other suggestions. The two dissenters, Justice Scalia and Justice Breyer, talked I thought more realistically about previous statutes that would tell the President you may spend "not in excess of," and that meant you didn't have to spend anything. There should be nothing wrong with that.
Justice Breyer talked about situations where Congress would tell the President spend it unless you don't think you should, and you have to certify why you don't think you should. There are many statutes like that around. So there certainly are ways for Congress by statute to give the President discretion. I am going to concentrate mostly on some of the things we talked about here today, separate enrollment and expedited rescission.
Separate enrollment, as the Senate had passed in 1995, I don't think has any constitutional problem, as long as those small bills, the minibills, are sent back to both Chambers and passed again. That would comply with what the Court says. So I think that second step is a requirement, you could do it. It would be an administrative nightmare but it is a possibility.
Making it less cumbersome is something that I call modified separate enrollment, where the President, once a bill was in conference, would say I don't like these 30 things, you take those 30 things out of the bill, he signs the balance, then each of those 30 items in dispute are put in separate bills, and they pass each Chamber and that should be okay.
Expedited rescission looks more modest in terms of the Line Item Veto Act. I still have trouble with expedited rescission for several reasons. One, I think it does allow a President to spend what he thinks is high priority. It is an encouragement for executive spending priorities to take precedence over legislative spending priorities, something that Mr. Linder brought up.
Secondly, I think it is a way for the President to drive your agenda. He could, I guess, send up a rescission bill for each appropriation bill and each supplemental bill and maybe continuing resolutions, so you could have at the end of the year in September and October, you could have more than a dozen rescission packages coming up to you, just when you are trying to recess or adjourn.
It also affects workload and scheduling. The expedited bills I have looked at would prohibit the appropriation committee from making any changes in the President's package. The only changes would be on the floor, where you would need 50 Members on the floor, then all that the Members could do would be to strike. So if the President asked for 3 billion, you can strike, strike, strike, and get it down to 2 billion. That I think the White House could use for public relations to show that look: again the President is asking for 3 billion and Congress is only coming up with 2, even though elsewhere you might rescind on your own initiative money that comes up to his aggregate.
So I just think that these mechanisms lead to a lot of work for you and give the White House, the President, a lot of chance to spend money the way the President wants, not the way you want, and makes it look like the President is the responsible party and Congress and the representative government is not, and I think that is the big message.
So I will stop at that.
[The statement of Mr. Fisher follows:]
Mr. Goss. That is a very interesting point of view. I think that might generate a question or two.
Mr. Joyce, we welcome you, sir, from the Department of Public Administration, George Washington University. Thanks for making the trip over.
STATEMENT OF PHILIP JOYCE
Mr. Joyce. Thank you very much, Chairman Goss, and members of the subcommittee. I am happy to be here to talk to you today. You might remember I last appeared before this subcommittee in April of 1998, and we were discussing at that point the experience of the Congress with the act to that point. In light of the Supreme Court decision, what I really want to do today is go beyond that testimony to talk about the legislative actions that the Congress might take and some of the same ones that you have already heard about and whether I view such actions to be warranted.
I would like to submit my entire testimony for the record
Mr. Goss. Without objection.
[The statement of Mr. Joyce follows:]
Mr. Joyce. In addition, an article that I recently published in the journal Public Budgeting and Finance on the experience with the line item veto to date.
Mr. Goss. Without objection.
Mr. Joyce. There are really a couple of points beyond talking about the options which you really already heard about that I want to draw out in my oral statement.
The first is that, the Line Item Veto Act that you passed and that was invalidated by the Supreme Court was really not intended primarily in my view to address the problem of deficits. If that were the case, then you might have as well just decided not to pursue any alternative, because presumably we now have a surplus, not a deficit. In my view, the Line Item Veto Act was about affecting the composition of spending by making it more difficult to enact so-called narrow interest provisions, or what some people might call pork. For this reason, despite the elimination of the deficit, I think supporters might find ample reason to continue to push for some version of a line item veto, since the belief that pork is wasteful, narrow interest spending does not really have a relationship to the presence of a surplus or a deficit. It has to do again with the composition of spending.
A couple words, though, about the Impoundment Control Act and what it was intended to do. The Impoundment Control Act was never intended to ensure fiscal discipline or spending accountability in the Congress. Rather it was intended to protect the prerogatives of the Congress by preventing Presidents from unilaterally disregarding congressional budget priorities by refusing to spend money that had been legally appropriated.
If the Congress now believes that congressional spending accountability, not Presidential spending accountability is an important issue, as it presumably did when it passed the Line Item Veto Act, it is essentially arguing for some shift of power back to the President. And I don't think there is any way that you can get around the fact that these proposals that you are considering as alternatives, as the Line Item Veto Act did, shift some power back to the President.
The question really is what are the legislative options now and what are the advantages and disadvantages of each of those? You have already heard about the three options available, amending the Constitution, providing for separate enrollment, and expedited rescission.
Each of the first two options -- a Constitutional amendment and separate enrollment -- have substantial potential drawbacks from my point of view. Constitutional amendments are notoriously difficult to enact. Separate enrollment would be -- probably to understate it -- administratively cumbersome.
But I think the biggest negative to those two options is substantive, not procedural. Both the constitutionally provided line item veto and separate enrollment would only allow the President to veto items that were specifically provided for in appropriations bills. But most Federal line items are not found in statute, they are found in report language accompanying statutes. This substantially limits the effectiveness of these two options to get at their intended target, which is pork barrel spending.
In fact, in April of 1998, a CBO report illustrated this fact by noting that in 76 of the 79 cases where the President, under the Line Item Veto Act, proposed items for cancellation in the fiscal year 1998 appropriations bills, those items were found only in report language, so neither a constitutional amendment nor separate enrollment would have permitted the President to reach beyond the statute to identify those items.
This brings me to expedited rescission. I think expedited rescission has a major substantive advantage over separate enrollment and a constitutional amendment, because the President could presumably identify, not just entire line items or entire appropriated amounts, but portions of those amounts and could say exactly what he was proposing to cancel, and those presumably might be portions that were reflected in report language.
And you have already heard that the way that that process would work, there would be a guaranteed up or down vote in some way on the President's proposal. I think that expedited rescission might improve marginally the accountability of the Congress by subjecting spending to greater scrutiny.
I am somewhat more positively disposed towards expedited rescission than I used to be, because of the tendency of the Congress and the President to appropriate in these large omnibus spending packages. When you do that, it is quite likely that some things may have a greater tendency to sneak through without having as much scrutiny, and it seems like it might be reasonable in that case to allow the President to identify some of those items after the fact and have them voted on again.
I would say that this would not do anything to curb the tendency of the President to pursue his own priorities. There I very much agree with Mr. Fisher, that you have to understand that you are shifting power to the President, allowing him to identify things that you have done, and you don't necessarily have that same power in reverse.
One other caution, and then I will conclude. Any of these attempts to get at special interest provisions by focusing only on the appropriations process, of course, ignore the effects of narrow interest provisions provided in tax bills. The Line Item Veto Act did attempt to address that by talking about targeted tax benefits and by allowing the President to apply the line item veto to new entitlements.
And I think that the Congress, if not this committee, has to think about what actions it might want to take to try to address new entitlements and to try to address what were called targeted tax benefits in the Line Item Veto Act and should not assume that simply by amending the rescissions process that by itself is going to get at a very large percentage of the accountability problem.
So in conclusion, I think there is some argument to be made for subjecting budgetary actions to greater scrutiny. I would caution you away from the constitutional amendment and separate enrollment approach and to focus on expedited rescission, but to consider carefully whether you think expedited rescission is going to tie up the legislative process or shift too much power from the Congress to the President.
Thank you very much.
Mr. Goss. Thank you very much, Mr. Joyce.
Mr. Schick, you have the last word, but it is only the last word for this panel, because this is going to go on for a long time. We welcome you here. Your comments will be -- your prepared testimony will be accepted in the record, without objection. We welcome your comments.
STATEMENT OF ALLEN SCHICK
Mr. Schick. Okay, thank you, Mr. Chairman. I think it won't be the last word on the subject, because politics is never-ending, and I urge that this issue is almost entirely a political one, rather than in legal terms. When the Line Item Veto Act was passed, it became a political weapon, not a legal one, and Congress responded with a political arms race.
It adopted its own counter measures in order to thwart the President's capacity, not legal, but political interests in applying the line item veto, which was given by legislation. So if we look at the appropriations and other bills that the President was able to apply the line item vetoes to, there was a sharp downward slope. MILCON, the military construction appropriation, had a very large number.
When Congress counted and said we will make life a little harder on this President, the President, not because of the Supreme Court decision, because of the political balance of power, refrained from exercising that.
I might note that the President has a weapon which is significantly more powerful than the line item veto and is so underestimated by virtually every Member of Congress but has never been underestimated by the gentleman at the other end of Pennsylvania Avenue, the President of the United States, and that is the veto power. The line item veto is an M-16, the veto power is a Howitzer. One takes out a sniper, the other takes out a platoon.
And it is not only President Clinton who has demonstrated the capacity of the veto power, President Bush had every veto except the last one upheld by Congress. And so I don't see any need to give the President significantly more power than he has. If the President is weakened by omnibus bills, it is because the President chooses to be weakened by these bills.
Bill Clinton has vetoed omnibus bills and, more importantly, he has gone through protracted negotiations with Congress, not only about the contours of priorities about ominous bills, but about the details. That is why the negotiations take days and weeks.
When President Reagan was in the White House, he signed a number of omnibus bills. And I asked a senior official in OMB why he signed them. Because, he said, the President couldn't afford to shut down government. A President who takes that position has already lost the balance of his Congress.
A President who disarms his veto power is not going to be armed by a line item veto. So we are talking about a political relationship between the two branches, and that political relationship has fundamentally altered the rescission power enacted in the Impoundment Control Act of 1974.
We are now celebrating literally to the day the 20th anniversary, 25th anniversary of enactment of that law. During those 25 years, 19 of them have been divided government, the President of one party, or one branch, and the Houses of the Congress the other party, and it is not only that we have divided government, but the two parties, Mr. Chairman, I think you can attest to it, the two parties do differ on budgetary policies, and this is one of the hallmarks of being a Democrat and a Republican these days.
They fight over the budget because they disagree over the budget, and this is the way our constitutional system is wired. As a consequence of the divided government and differences in budgetary priorities, the initial rescission authority, in which the President proposes a rescission and Congress then responds has been virtually deactivated, okay?
It is hardly used any more. In its place has come a congressionally initiated rescission power, and, that is, for every dollar rescinded by the President through Presidential initiative 4 or $5 are rescinded by congressional initiative, and the ratio is going up very sharply year by year. And we know why; the discretionary spending caps.
That has changed the congressional calculation as to what it means to rescind money. And rescission now is not a way of Congress responding to a Presidential initiative, it is the way that Congress makes room within a budgetary constraint for more spending.
I think that in considering an expedited rescission, it is not in itself going to make a very big difference, in terms of the balance between the two branches, that is, the only proposal that should be considered, not a constitutional amendment, not separated enrollment, which would be such a colossal disaster, I know it passed the Senate, but I can't think of a single good thing happening from it -- and by the way, the Senate version of that bill did reach to the report language. It said any item identified in a congressional report appropriations bill would then have been enrolled as a separate bill.
We don't have thousands and thousands and thousands of such bills. In terms of an expedited rescission authority, I think this Congress -- this committee ought to consider the following three issues, one is, should any rescinded money be put in a lockbox as the line item veto proposal considered? My own preference is for a supple rule rather than a rigid rule; in other words, where the Congress or a President proposes a rescission; at the time of proposing the rescission, it should be accompanied by a statement with respect to the disposition of those savings as an offset or as a lockbox.
Second, the rules for offset have to be clarified, and that goes well beyond the issue of rescission. It goes to what has happened since 1996 and every year since 1996 in relation between the President and the Congress. It goes to what is happening these very days in the appropriations process. It goes to a situation where honest politicians in Washington are required to lie in order to pass bills, and that is a very horrible situation to be in. So I would urge that the issue of offsets be treated.
And, finally, related to this, I think that the issue of emergency spending should be clarified. On the other hand, emergency spending should never require an offset. On the other hand, the definition and criteria for emergency should be strengthened. If you do not permit emergency spending to be offset -- if you require that emergency spending be offset, then surely you will require mischief in this House.
You will require Members to be forced to do what they cannot do and they will engage in evasive tactics.
So in conclusion, Mr. Chairman, it is not merely a matter of impoundment or line item veto rescission, it is a political relationship. That political relationship has to recognize a long stretch of divided government, great disagreements between the President and Congress over budgetary priorities. It has to recognize that the rescission process has been fundamentally altered by those political divisions, and it has to recognize and come to grips with the way that rescission is now used under congressional initiative as an offset with virtually no criteria for defining what an offset is.
Thank you, Mr. Chairman.
[The statement of Mr. Schick follows:]
Mr. Goss. Thank you. I want to thank all three of you. That was very good testimony across the board and right to the point, and I appreciate the different views and the contributions to the discussion. I didn't think this discussion could advance much further than it had advanced when we got to that point of the line item veto.
Actually, it has advanced, and one of the reasons it has is that things have changed in the way we do business and lots of -- they have changed, in my view, geometrically much faster than things used to change around here, maybe because that is I just don't understand what is going on half the time. I don't think most of us do, because we see it as a surprise.
But the points you are making I know are reflective of the situations as they exist today and I think that your comments, Mr. Schick, about emergency, one of the guidelines for rules for emergency have rather specific relevance for the times we live in.
And I also think that the questions about the positions on the sharing of power and the Presidency and what the original Impoundment Act was designed to do and what we have tried to craft it into doing are extremely useful.
Mr. Fisher, I wanted to ask you in particular, when we were talking about the rescission process, one of the alternatives you had spoken of is a selective database, shall we say, before the process is complete, so you can have sort of a limited mini-enrollment by basically having the President -- having the White House or the administration identify 20 or 30 items and so forth. Some would say that the President is already in the room in the conference.
The question is, would that give you pause to say, well, that puts one more seat at the conference table that really does have the appearance of muddling the balance of power and the separation of the branches?
Mr. Fisher. I think that is true what Allen said about the threat of a veto power. Through that threat he can force conferees already to delete a lot of things, otherwise he would exercise his veto. So the separate enrollment or the modified separate enrollment would give him a second bite at the apple, and every times he does that, he is able to spend more and more money the way he wants and less and less the way you want. And Presidents like to spend money.
Any thought that they are great economizers, just look at their State of the Union addresses and show what programs they would push on the public
Mr. Goss. I understand your point very well indeed. The other point I wanted to go back to, Mr. Schick, was your metaphor about the sniper and the carbine and the howitzer. Where does the public fit in to the weaponry in your metaphor?
Mr. Schick. Well, the public is fascinated by things about pork and consequently having legislation like the line item veto, which is a pork buster, seems to be a good idea. The public thinks that pork is why we had a deficit for so many years, and pork is why taxes are so high. I don't think there is any possibility of uneducating the public about this.
Mr. Fisher is absolutely right, the driving force over the last half century or more for spending has been the White House, and it doesn't matter whether the President has been a Democrat or a Republican, they do spend on different things. But every President proposes substantial initiatives, gets some of those initiatives enacted into law, then turns around and blames Congress for being a spender. And I don't think you should put either, either a howitzer or an M-16 in the arms of the President so that he can then say to the public Congress is the culpable party.
Mr. Goss. Thank you. Mr. Joyce, my last question. I think you probably talked about the omnibus bills and some of the recent phenomena that existed here, and I agree totally with your comments about our efforts to get a tax piece, as well as the spending piece.
One of the points we had in the line item veto, you remember from your previous testimony and our discussions here I think was we were trying to create a bias against spending, granted we didn't -- we weren't talking in the aura of the surplus language that is going on today, but, nevertheless, do you think it is still worth trying to pursue a bias against spending? I am not putting that as a political position
Mr. Joyce. Right
Mr. Goss. I am saying that I think most Americans would agree that somehow or another, despite all of the hard work and great statements, government has not quite yet gotten rid of all of the waste redundancy, out-of-date unnecessary programs and expenditures.
So accepting that is an assumption, do you think there is still justification that we ought to pursue the idea of creating biases against spending?
Mr. Joyce. Well, I am not sure, Mr. Chairman, I guess I guess you are making me accept the --
Mr. Goss. I want to get it out of the partisan realm.
Mr. Joyce. I don't think it would be partisan of me to respond by saying that I am not sure that that is what the Line Item Veto Act did, whether it was intended to do that or not, as opposed to saying we have a belief that the President, as somehow a representative of the general interests, is going so spend money better and less parochially than might occur in the Congress.
And I think that all of your discussions about what to do from this point ought to perhaps start with that question, do we trust the President in terms of the composition of spending more than we trust the sum total of what comes out of the legislative process? And I think that the fact that the President used the line item veto power aggressively on the military construction bill and did not use it at all on the Labor-HHS bill does not mean that by some objective standard there was more waste or more pork in the military construction bill versus Labor-HHS. It probably says a lot more, to go to Mr. Schick's point, about the President's priorities. One administration official made the statement that on the Labor-HHS bill they are usually fighting for more money; therefore, they are not going to use the line item veto power on that.
So I don't know if that is directly responsive to your question.
Mr. Goss. It is. The bias against spending was not the only point. We had many other points, and accountability was clearly one of them. But there were those that felt, and this could cut either way, that this was not an invitation for every Member of Congress to heap as much stuff as they could on every appropriations bill and, say, well, the President didn't chop it, so it must be okay. I think it was looked at rather the other way. Folks said "I don't think I will put this very embarrassing piece of pork here because the White House is going to blow the whistle on me, and I am going to have to explain this, and this is not going to stand up on the front pages of the newspaper."
I think it was more that way, and that was the comment I was making earlier: who will ever know whether there was ever a dampening effect? I wonder if you think it is still worth trying to do that, with the idea of waste and expenditure and, you know, always examining our expenditures, should we continue to try and do that?
Mr. Joyce. I think it is worth making people think more carefully before they do something, that perhaps benefits a narrow constituency, although, I am reminded of former Speaker Foley's statement that "one man's pork is another man's wise investment in the local infrastructure". And so it is sort of hard somehow to define exactly what pork is. But I think a much more effective curb on spending has been the spending caps if you are looking at overall spending as opposed to the composition, and clearly you have affirmed that you want those spending caps to continue. The struggle that you have right now is that because of, for example, the declaration of emergencies across the board to try to sort of get beyond those spending caps, the spending caps are really straining at this point. In the end though, I think that -- but I think a much more effective restraint on spending has been the caps, not something like the Line Item Veto Act, which as I say is really about the composition of spending.
Mr. Goss. Well, I am going to yield to Doc. I am taking too much time. Just one more point I wanted to make on that line.
Mr. Hastings. Go ahead
Mr. Goss. Let us take something that isn't pork, it is infrastructure, it is legitimate infrastructure, it is roads, but, you know, roads are finite, you can drive on them. Now the question is, is the road going to go here or going to go here, and Congress may have one view, the President may have another view, and it might have to do with the fact that there is an election coming or the President knows better about his neighborhood, about these superhighways more than some other neighborhoods. So the President uses his judgment to prioritize, and that gets back to your lockbox, your supple lockbox issue. Should the money that is saved from the infrastructure go in the lockbox, which is probably what Congress would think, or should the President rearrange how those monies are spent by rescinding and offsetting and reallocating over here?
That part of the process -- we are getting a little beyond the scope of this, but that part of the process interests us very much. We are concerned about making sure that when these expenditures come they look something like what they thought they were going to come. And how much latitude do you give the President in trying to do these other good things that we are doing? Are we creating an opportunity for the President to do something that we don't want him to do?
Mr. Joyce. Right; I think the answer to that is that even under an expedited rescission process, you are shifting the presumption to the President in terms of spending things that he wants to spend money on. You might really want to ask yourself whether you want that to happen or whether you want whatever money is rescinded to be unable to be spent more on anything else, keeping in mind that appropriated spending is not the primary explanation for the increase in spending, that appropriated spending has been declining and mandatory spending has been increasing
Mr. Goss. Absolutely. Mr. Fisher
Mr. Fisher. Just a point on this. Sylvia Mathews said that rescission still has a value because if you get close to the caps, rescissions will build some room. I would say that if you are going to do that, I would like a situation where the President says, as he did in 1992, I want to rescind, George Bush said 7.9 billion, and Congress says, fine, we will meet that aggregate, but we will change the mix, and you are going to bleed some just like us. And, therefore, I think whatever rescission process you set up, I would allow committees of Congress and on the floor to meet the total but change the mix, and that is not the way the rescission, expedited rescission bills are usually written
Mr. Goss. No, not at all.
Mr. Fisher. Yes.
Mr. Goss. Do you agree, Mr. Schick ?
Mr. Schick. Well, what has happened in 1992 is an interesting story about rescissions. President Bush, I think it was in March of 1992, decided he was going to run against Congress, that was the opponent, and he used rescission as a means of running against Congress and he said he is going to propose a rescission package every month. He sent one package to Congress. It was his last package, because Congress took it hostage. It scooped out of the package, as Dr. Fisher said, virtually everything that the President recommended, stuffed it with the President's priorities, rescinded those, and so we are back to a political arms race between the two branches. It has very little to do with total spending, and it has to do with who is going to run this town.
Mr. Goss. Yes. I think that is about as plain as you can say it. Doc.
Mr. Hastings. This has been very enjoyable for me to listen. I come from a state where the governor does have a line item veto, not only on spending bills but on policy bills. And when I was in the legislature, I worked with a Democrat governor and a Republican governor and a Democrat legislature. And I mean I find this fascinating, not that I know the politics play into all of this, but the one thing that intrigued me, as mentioned several times, and I hadn't really thought about it a great deal, is the enrollment process and modified enrollment process that you had mentioned.
And, Porter, you asked the question that gets the President really in the conference committee, and I see that as a problem.
Mr. Schick, you were very -- I heard you to be very adamant against the whole enrollment process. I would just like you to, if you would, it is my only question, is to elaborate on all the pitfalls that you see
Mr. Schick. In separate enrollment
Mr. Hastings. Yes, enrollment or modified enrollment. I am not trying to criticize. I can see a little bit of value with what you are saying in the modified enrollment. I would like the wisdom that you have on the enrollment issue.
Mr. Schick. I think it would congest the legislative calendar particularly if it is combined with expedited procedures. You would have, depending on how you counseled, thousands of separate appropriations bill which would have to be enrolled and enacted into law and signed or vetoed by the President.
There will be enormous confusion as to what is happening. There probably would be a risk that the appropriations process itself would fragment. After all if we are going to separately enroll the bills, why not separately act on them in the first instance, why pass only 13 appropriations bill, why not 1300 or 13,000. So I can't find a good thing to say about the separate enrollment or modified separate enrollment, except that we are searching for something that would pass constitutional muster. And if we want to do that, then let us amend the Constitution.
Mr. Hastings. One last question, which is entirely unrelated to the line item veto, but since you went into other things that we ought to be looking at, all three of you give me the benefit of the biennial budget.
Mr. Schick. We are getting there. Last year we didn't have a budget resolution finally adopted, and if we look at the cadence of the reconciliation process and reconciliation let us keep in mind is the only weapon, instrument that Congress now has for making big changes in budgetary policy.
Years in which we have reconciliation almost always followed by years in which we do not have reconciliation. So we had reconciliation in 1990, but not in '91 or '92. We had it in '93, but not in '94. We had one passed but vetoed by the President in '95. We had a very limited rescission in 1996, only with respect to welfare. We had a big rescission bill in 1998 -- 1997 rather, the balanced budget one, and we didn't have one in 1998. We had it in '97.
So we are moving de facto to a biennial budget process. The big holdout are the appropriations committees. And they would rather do it annually, even when they can't do it annually.
Mr. Joyce. To follow on that, I was going to say roughly the same thing, which is that a biennial budget resolution makes a lot more sense to me than a biennial appropriations process in terms of whether it would work or not. And one of the things you have to ask in the House, where appropriations is an exclusive jurisdiction, is are the members on the appropriation committee going to sit around every other year and not do anything, or are they going to want to make their mark on priorities in those years.
And I think that the major drawback I can see to biennial budgeting particularly in the appropriations process is, I think, a tendency to oversell it, because I think what you might end up with is an annual process de facto, even if you had a biennial process sort of on paper, where you would have supplementals every other year that were so substantial and so fundamental in changing priorities that you might as well just have an annual process anyway.
Mr. Fisher. I testified on biennial budgeting about three times. I think it would shift power to the President. OMB has testified for it, and it would put Congress in the position, since you are looking at it so far, you would have to appropriate very much beyond what you can predict. Otherwise, you would be in the supplemental situation. So I think the executive branch would probably be awash with funds. And it also borrows from the state model which doesn't apply any more. They had biennial budgeting because they met every other year. Now most of them meet each year, and they are going towards annual budgeting
Mr. Schick. Can I add a footnote to this, Mr. Chairman? First of all, there is all the difference in the world between supplementing appropriation in the alternate year and the big difference is not what happens in Congress and the executive branch, we have to be mindful of the hundreds of thousands of work hours, particularly at the higher levels of government, taken by appropriations. We don't move more than a few dollars here or there.
Secondly, look at what has happened to the appropriations process in the House of Representatives. It is collapsing. For the first time in the history of the United States, the President -- the Senate is moving forward first on appropriation bills and the House is permitting it to do so, because the House cannot act on appropriations bill. We have to do something to remedy, to rebuild the appropriations process. And I think a biennial process is one of the ways of starting to do so.
Mr. Goss. Well, certainly we are getting a little off the subject, but it is fascinating. You identified a huge problem, and we are all very much aware of it. Last year after the omnibus bill, there was this huge momentum to say, well, we have to deal with budget process. So we put together a budget process bill with the help of a lot of people in this room. We worked long and hard on it, and we tried it out in the middle of the summer, and they said, gee, that was last year, and this year we are doing taxes, we will see you if we need you. So we sort of lost our momentum there. We are trying to go and get it back, because I agree totally the process needs fixing.
I always have thought that 13 appropriation bills were more than enough. And I think some people have been able to prove that it is more than enough, given the time allotted. If we went to 500 or whatever, I think the Senate will try a balloon on a mini-enrollment thing, which I think is hopeless.
The question is how to package, if you make it more or less than 13, how to package it. It isn't just the authorizers versus the appropriators, it is the turf guys within the appropriations process that drive you crazy. At least they drive me screaming out of the room, and I think that is the experience that many other people have.
We take a normal simple subject. We divide it into unequal parts. We pass the parts around and ask them to fund those parts and get it back looking for something the same. Not a prayer. I think it is bizarre.
Do you have any other questions?
Mr. Hastings. No
Mr. Goss. Out of respect for our colleague the Honorable George Brown, we are going to adjourn. I want to thank you very much. We would like to reserve the right to pursue some of these lines in written questions for you based on your testimonies, if you would be agreeable to that.
Thank you very much. The meeting is adjourned.
[Whereupon, at 11:05 a.m., the subcommittee was adjourned.]
