Item Veto and Expanded Impoundment Proposals: History and Current Status

Virginia A. McMurtry
Specialist in American National Government

Conflicting budget priorities of the President and Congress accentuate the institutional tensions between the executive and legislative branches inherent in the federal budget process. Impoundment, whereby a President withholds or delays the spending of funds appropriated by Congress, provides an important mechanism for budgetary control during budget implementation in the executive branch; but Congress retains oversight responsibilities at this stage as well. Many Presidents have called for an item veto, or possibly expanded impoundment authority, to provide them with greater control over federal spending. 

The Impoundment Control Act of 1974 (Title X of P.L. 93-344), established two categories of impoundments: deferrals, or temporary delays in funding availability; and rescissions, or permanent cancellation of budget authority. With a rescission, the funds must be made available for obligation unless both houses of Congress take action to approve the President's rescission request within 45 days of "continuous session." 

Consideration of impoundment reform increasingly became joined with that of an item veto for the President. While Constitutional amendment proposals have not disappeared (see H.J.Res. 15), many who originally favored an item veto constitutional amendment turned to expanded rescission authority for the President as a functionally similar mechanism achievable more easily by statutory change. 

The Line Item Veto Act was signed into law on April 9, 1996 (P.L. 104-130), and it became effective January 1, 1997. Key provisions allowed the President to cancel any dollar amount of discretionary budget authority, any item of new direct spending, or certain limited tax benefits contained in any law, unless disapproved by Congress. On June 25, 1998, the Supreme Court, in the case of Clinton v. City of New York, held the law unconstitutional on the grounds that it violated the presentment clause; in order to grant the President true item veto authority, a constitutional amendment would be needed (according to the majority opinion). 

Measures seeking to provide a constitutional alternative to the 1996 law have been introduced in each subsequent Congress. In the 109th Congress, the House passed H.R. 4890, the Legislative Line Item Veto Act of 2006, by a vote of 247-172, but no further action on the measure occurred before the 109th Congress adjourned. 

Several measures have been introduced in the 111th Congress that would establish expedited rescission procedures, including H.R. 1294, H.R. 1390, H.R. 4921, S. 524, S. 640, and S. 907. Other proposals would provide for expedited rescission along with various other budget process reforms, such as increased earmark accountability or spending controls. In the 111th Congress, H.R. 3268, H.R. 3964, S. 1808, and S. 3026 provide examples of such omnibus budget process bills. Two constitutional amendment proposals have been introduced, H.J.Res. 15 and S.J.Res. 22. On December 16, 2009, there was a Senate hearing on bills providing for expedited rescission authority. The Obama Administration has endorsed an expedited process for congressional consideration of rescission requests and announced on May 24, 2010, the transmittal of a draft bill to Congress, titled "Reduce Unnecessary Spending Act of 2010."


Date of Report: May 24, 2010
Number of Pages: 31
Order Number: RL33635
Price: $29.95

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