CHN: Service Slashers Trying Again To Make Rules to Ensure Cuts

New efforts are under way in both the House and Senate to change the rules to make it far easier to cut services.  The first is a retooling of President Bush’s request for a variant on the line item veto, which will be taken up in the House during the week of June 19.  It is also possible that the House will take up a bill to establish a “sunset commission” – an unelected body to recommend termination or reduction of any number of federal programs.  In addition, Senator Judd Gregg (R-NH), chair of the Senate Budget Committee, has introduced legislation to create binding caps on spending, as well as a sunset commission and another commission to shrink entitlements, all of which are packaged in Chairman Gregg’s Stop Over-Spending Act of 2006 (S. 3521) for Budget Committee action, scheduled for Tuesday, June 20.  Many of these proposals have surfaced before and have faced opposition.  The multiple proposals about to be considered increases the risk that one or more will get serious consideration.
House Action on the Line Item Veto.  The House Budget Committee approved a bill to hand the President massive new powers to hold up spending on June 14.  The Legislative Line Item Veto Act of 2006 (H.R. 4890, sponsored by Rep. Paul Ryan, R-WI) allows the President to propose cuts in annual appropriations, entitlement programs, and “targeted tax benefits.”  (The legislation apparently leaves the definition of the targeted tax benefits to the President; the President’s earlier proposal limited this category to tax breaks that affected 100 people or fewer.)  The President would be able to suspend expenditures for up to 90 days without Congressional approval as long as he has submitted one or more messages to Congress specifying the cuts.  The Presidential messages require a speedy up-or-down vote from Congress (no amendment is possible).

Senate Package.  Chairman Gregg’s legislation includes a version of the line item veto, but much, much more.  S. 3521 calls for a balanced budget by 2012, with enforceable limits set both on discretionary (annually appropriated) and entitlement spending.  There would be a cap on appropriations that, if exceeded, would trigger across-the-board cuts.  On the entitlement side, if Medicare comes within 7 years of costing more than it takes in, all entitlements will be subject to a point of order that will require reductions.  (Other entitlements include Medicaid, Food Stamps, Temporary Assistance for Needy Families, Supplemental Security Income, etc.)  The legislation also proposes an unelected commission to make recommendations on ways to cut entitlements and its own version of a sunset commission.  The legislation pointedly does not subject most current or future tax cuts to similar scrutiny.

If Congress were to enact legislation aimed at reducing the deficit by cutting services or benefits, without taking tax cuts into consideration, the outcome will inevitably result in a giant further shift of federal resources away from low- and average-income people and towards the wealthy.  Cuts will shrink support for Medicaid or public health programs, for example, while tax breaks for Health Savings accounts, benefiting upper-income people, will continue or even be expanded.  There will be multiple ways to cut services with little opportunity for advocates in or out of Congress to stop this juggernaut approach.

For more information, consult the Center on Budget and Policy Priorities website ( for upcoming publications on many of these proposals.  Also, see OMB Watch’s materials about sunset commissions, at**BROKEN LINK**.

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