Line Item Veto Act of 1996
TITLE X—IMPOUNDMENT CONTROL
PART C—LINE ITEM VETO
line item veto authority
Sec. 1021 (a) In General.—Notwithstanding the provisions of parts A and B, and subject to the provisions of this part, the President may, with respect to any bill or joint resolution that has been signed into law pursuant to Article I, section 7, of the Constitution of the United States, cancel in whole—
(1) any dollar amount of discretionary budget authority;
(2) any item of new direct spending; or
(3) any limited tax benefit; if the President—
(A) determines that such cancellation will—
(i) reduce the Federal budget deficit;
(ii) not impair any essential Government functions; and
(iii) not harm the national interest; and
(B) notifies the Congress of such cancellation by transmitting a special message, in accordance with section 1022, within five calendar days (excluding Sundays) after the enactment of the law providing the dollar amount of discretionary budget authority, item of new direct spending, or limited tax benefit that was canceled.
(b) Identification of Cancellations.—In identifying dollar amounts of discretionary budget authority, items of new direct spending, and limited tax benefits for cancellation, the President shall—
(1) consider the legislative history, construction, and purposes of the law which contains such dollar amounts, items, or benefits;
(2) consider any specific sources of information referenced in such law or, in the absence of specific sources of information, the best available information; and
(3) use the definitions contained in section 1026 in applying this part to the specific provisions of such law.
(c) Exception for Disapproval Bills.—The authority granted by subsection (a) shall not apply to any dollar amount of discretionary budget authority, item of new direct spending, or limited tax benefit contained in any law that is a disapproval bill as defined in section 1026.
Section 1017 (ICA)
Section 1022 (ICA-LIV)
 This section was classified to the U.S. Code at 2 U.S.C. 691. It has been omitted from the Code since it since it has expired under section 5 of the Line Item Veto Act of 1996.
Section 1021 was codified as section 691 in title 2 of the U.S. Code. The Line Item Veto Act (Pub. L. 104–130, §2(a), Apr. 9, 1996, 110 Stat. 1200) amended the Impoundment Control Act of 1974, by adding a new “Part C” that provided line item veto authority.
Joint Statement of Managers on the Line Item Veto Act of 1996
The Conference Report on the Line Item Veto Act of 1996 (H. Rept. 104-491):
Sec. 1021. Line item veto authority
Section 1021(a) permits the President to cancel in whole any dollar amount of discretionary budget authority, item of new direct spending, or limited tax benefit contained in any bill or joint resolution that has been signed into law pursuant to Article I, section 7, of the Constitution of the United States. The cancellation may be made only if the President determines such cancellation will reduce the federal budget deficit and will not impair any essential government function or harm the national interest. In addition the President must make any cancellations within five days of the date of enactment of the law from which the cancellations are made, and must notify the Congress by transmittal of a special message within that time.
The conferees specifically include the requirement that a bill or joint resolution must have been signed into law in order to clarify that the cancellation authority only becomes effective after the President has exercised the constitutional authority to enact legislation in its entirety. This requirement ensures that the President affirmatively demonstrates support for the underlying legislation from which specific cancellations are then permitted.
The term “cancel” was specifically chosen, and is carefully defined in section 1026. The conferees intend that the President may use the cancellation authority to surgically terminate federal budget obligations. The cancellation authority is specifically limited to any entire dollar amount of discretionary budget authority, item of new direct spending, or limited tax benefit. The cancellation authority does not permit the President to rewrite the underlying law, nor to change any provision of that law. The President may only terminate the obligation of the Federal Government to spend certain sums of money through a specific appropriation or mandatory payment, or the obligation to forego the collection of revenue otherwise due to the Federal Government in the absence of a limited tax benefit.
Likewise, the terms “dollar amount of discretionary budget authority,” “item of new direct spending,” and “limited tax benefit” have been carefully defined in order to make clear that the President may only cancel the entire dollar amount, the specific legal obligation to pay, or the specific tax benefit. “Fencing language” may not be canceled by the President under this authority. This means that the President cannot use this authority to modify or alter any aspect of the underlying law, including any restriction, limitation or condition on the expenditure of budget authority, or any other requirement of the law.
The conferees intend that, even once the federal obligation to expend a dollar amount or provide a benefit is canceled, all other operative provisions of the underlying law will remain in effect. If the President desires a broader result, then the President must either ask Congress to modify the law or exercise the President’s constitutional power to veto the legislation in its entirety.
The lockbox provision of the conference report has also been included to maintain a system of checks and balances in the President’s use of the cancellation authority. Any credit for money not spent, or for revenue foregone, is dedicated to deficit reduction through the operation of the lockbox mechanism. This ensures that the President does not simply cancel a particular dollar amount of discretionary budget authority, item of new direct spending, or limited tax benefit in order to increase spending in other areas.
Section 1021(b) requires the President to consider legislative history and information referenced in law in identifying cancellations. It also requires that the President use the definitions in section 1026, and provides that the President use any sources specified in the law or the best available information.
Section 1021(c) states that the President’s cancellation authority shall not apply to a disapproval bill, as defined in section 1026. The provision is intended to prevent an endless loop of cancellations.
[U.S. Congress, Joint Explanatory Statement on the Committee of Conference on S.4; (H. Rept. 104-491), Committee on Government Reform, House of Representatives, 104th Congress, 2d Session, Washington D.C. 1996.]
LEGISLATIVE HISTORY NOTES
Pub. L. 93–344, title IV. Section §1021 was added to the Impoundment Control Act of 1974 by Section 2 of the Line Item Veto Act (Pub. L. 104–130, 110 Stat. 1200).
Section 1017 (ICA)
Section 1022 (ICA-LIV)