Line Item Veto Act of 1996

Section 1024

TITLE X—IMPOUNDMENT CONTROL

PART C—LINE ITEM VETO

deficit reduction

Sec. 1024.^[1]  (a) In General.—

(1) Discretionary budget authority.—OMB shall, for each dollar amount of discretionary budget authority and for each item of new direct spending canceled from an appropriation law under section 1021(a)—

(A) reflect the reduction that results from such cancellation in the estimates required by section 251(a)(7) of the Balanced Budget and Emergency Deficit Control Act of 1985 in accordance with that Act, including an estimate of the reduction of the budget authority and the reduction in outlays flowing from such reduction of budget authority for each outyear; and

(B) include a reduction to the discretionary spending limits for budget authority and outlays in accordance with the Balanced Budget and Emergency Deficit Control Act of 1985 for each applicable fiscal year set forth in section 251(c) of the Balanced Budget and Emergency Deficit Control Act of 1985 by amounts equal to the amounts for each fiscal year estimated pursuant to subparagraph (A).

(2) Direct spending and limited tax benefits.—

(A) OMB shall, for each item of new direct spending or limited tax benefit canceled from a law under section 1021(a), estimate the deficit decrease caused by the cancellation of such item or benefit in that law and include such estimate as a separate entry in the report prepared pursuant to section 252(d) of the Balanced Budget and Emergency Deficit Control Act of 1985.

(B) OMB shall not include any change in the deficit resulting from a cancellation of any item of new direct spending or limited tax benefit, or the enactment of a disapproval bill for any such cancellation, under this part in the estimates and reports required by sections 252(b) and 254 of the Balanced Budget and Emergency Deficit Control Act of 1985.

(b) Adjustments to Spending Limits.—After ten calendar days (excluding Sundays) after the expiration of the time period in section 1025(b)(1) for expedited congressional consideration of a disapproval bill for a special message containing a cancellation of discretionary budget authority, OMB shall make the reduction included in subsection (a)(1)(B) as part of the next sequester report required by section 254 of the Balanced Budget and Emergency Deficit Control Act of 1985.

(c) Exceptions.—Subsection (b) shall not apply to a cancellation if a disapproval bill or other law that disapproves that cancellation is enacted into law prior to 10 calendar days (excluding Sundays) after the expiration of the time period set forth in section 1025(b)(1).

(d) Congressional Budget Office Estimates.—As soon as practicable after the President makes a cancellation from a law under section 1021(a), the Director of the Congressional Budget Office shall provide the Committees on the Budget of the House of Representatives and the Senate with an estimate of the reduction of the budget authority and the reduction in outlays flowing from such reduction of budget authority for each outyear.

Previous: Section 1023 (ICA-LIV)	Next: Section 1025 (ICA-LIV)

COUNSEL NOTES

Endnotes

[1] This section was originally classified to the U.S. Code at 2 U.S.C. 691c (section omitted from code). 

CODIFICATION

Section 1024 was codified as section 691c in title 2 of the U.S. Code, Pub. L. 93–344, title X, §1024, as added by section 2 of Pub. L. 104–130, §2(a), Apr. 9, 1996, 110 Stat. 1202 ; amended Pub. L. 105–33, title X, §10121(b), Aug. 5, 1997, 111 Stat. 696 , related to deficit reduction.

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. 1024. Deficit reduction

Section 1024 establishes a deficit reduction, or “lockbox”, procedure for the cancellations of discretionary budget authority, new direct spending, or limited tax benefits. The conference report’s lockbox procedures are incorporated into existing procedures governing discretionary spending limits and pay-as-you-go requirements under the Balanced Budget and Emergency Deficit Control Act.

The conference report requires the Office of Management and Budget (OMB) to estimate the discretionay [sic] budget authority and outlay savings that result from cancellations from an appropriation law and include those calculations as part of the estimate OMB must submit to Congress under section 251 of the Balanced Budget and Emergency Deficit Control Act. The conference report also requires OMB to calculate a reduction to the spending caps that is equal to the budget authority reduction and related outlay savings that result from a cancellation.
After the expiration of the time period for congressional consideration of a disapproval bill plus 10 days, OMB is required to adjust the spending caps downward by the amount of budget authority and outlay savings in its next sequester report.

In the case of the cancellation of direct spending or limited tax benefits, OMB is required to estimate the deficit decrease as a separate entry in its pay-as-you-go report to Congress. In order to ensure that the savings from the cancellation of new direct spending or limited tax benefits are devoted to deficit reduction and are not available to offset a deficit increase in another law, the conference report provides that the savings from these cancellations shall not be included in the pay-as-you-go balances under the Balanced Budget and Emergency Deficit Control Act. Similarly, if a disapproval bill is enacted that overturns the cancellation of an item of direct spending or a limited tax benefit, OMB will not score this legislation as increasing the deficit under pay as you go.
Section 1024 also requires the Congressional Budget Office (CBO) to submit its estimate of the savings resulting from a cancellation to the Budget Committees of House and Senate. This is consistent with existing provisions in the Balanced Budget and Emergency Deficit Control Act which require CBO estimates and require OMB to make comparisons of its estimates with those made by CBO. The conferees expect CBO and the Budget Committees to carefully monitor OMB’s estimates of cancellations.

The conferees intend that any savings from a cancellation be dedicated to deficit reduction and not used as an offset for future spending. The conference report is silent on congressional enforcement mechanisms because existing scoring conventions will have the effect of dedicating any savings from these cancellations to deficit reduction. Under existing congressional scoring conventions, CBO and the Budget Committees only score the budgetary impacts that directly result from legislation. The cancellation of an item will represent an administrative action and will not be scored as savings. Therefore, the savings from a cancellation will not be available as an offset for congressional scoring purposes. During the period for consideration of a disapproval bill CBO should not score the cost associated with a disapproval of a cancellation.

If there is an effort to include in legislation a cancellation already made by the President and claim the savings from such a cancellation as an offset for a provision that increases the deficit, the conferees expect the Budget Committees to ensure these savings are not used as an offset.

[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, 104^th Congress, 2d Session, Washington D.C. 1996.]

---

LEGISLATIVE HISTORY NOTES

PUBLIC LAWS

Pub. L. 93–344, title X. Section §1024 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).

Pub. L. 105–33, title X, §10121(a), Aug. 5, 1997, 111 Stat. 696. The Budget Enforcement Act of 1997 amended this section.

AMENDMENT

1997

Subsection (b)(1)(F).

Pub. L. 105–33, title X, §10121(a), Aug. 5, 1997, 111 Stat. 696 (Budget Enforcement Act of 1997 (BEA 1997)) struck “section 601(a)(2)” and replaced it with “section 251(c)” of the Balanced Budget and Emergency Deficit Control Act of 1985. This was a necessary conforming amendment because section 601(a)(2) was repealed by section 10121(b) of that Act (BEA 1997).

Previous: Section 1023 (ICA-LIV)	Next: Section 1025 (ICA-LIV)

 

[BCR § 194]