Rescissions: Just when you thought it was safe to move on!

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By Domenic Ruscio, Partner

You’ve probably seen the headlines: “Republicans Mull Cutting Omnibus Funds Under Little-Used Law.” According to press accounts, President Trump and congressional Republican leaders are mulling a way to effectively cut some of the funds they just approved in the 2018 Consolidated Appropriations Act. 

As if we didn’t endure enough drama leading up to the enactment of the latest omnibus spending bill, some in Congress are looking for ways to roll back spending by impounding (i.e. not spending) billions of dollars in nondefense appropriations contained in the bill.

How would they do it?

Evidently, the plan is to rescind some enacted appropriations through a mechanism first established under the Congressional Budget and Impoundment Control Act of 1974. That law came about because Congress was frustrated with President Nixon’s impoundment of appropriated funds. Not that other presidents hadn’t done the same thing. Historically the amounts impounded were small, the rationale was sound, and appropriators were consulted. But Nixon took it to a new level, impounding tens of billions of dollars, usually to gut programs he didn’t like.

In addition to creating the budget committees, CBO and a budget resolution process, Title X of the 1974 law limits when and how a president can impound funds.

How does the rescission process work?

First and foremost, the law established new reporting requirements. The president, through OMB, must inform Congress of all proposed rescissions in a special message. GAO is responsible for overseeing compliance with the law and report to Congress if the president fails to report an impoundment.

Once a rescission or package of rescissions are officially transmitted to Congress, lawmakers must act within 45 legislative days of continuous session. (Weekends and recesses of more than three days are not counted towards the 45-day deadline.) The funds may only be impounded until the 45-day period elapses.

If the president continues to impound funds beyond 45 days, GAO’s Comptroller General is empowered to sue the executive branch for any violations of the impoundment law.

What options does Congress have?

Congress can alter the amount proposed for rescission, either up or down, or approve it or disapprove it in toto. If Congress rejects a rescission, the law prohibits the president from proposing it again (i.e. seriatim rescissions) simply to re-start the 45-day clock.

But here’s the rub: Absent a specific request from the president, Congress on its own accord can initiate a rescission by cancelling previously appropriated funds in a subsequent law.  

In other words, even though the 45-day period may have elapsed—and provided that the funds have not been obligated—Congress can initiate its own rescission. (A GAO study covering 1974-1992 found that the total amount rescinded came to nearly $107.7 billion, of which 80 percent came from congressionally-initiated rescissions.)

What are the legislative steps involved?

Once a rescission bill is introduced, it is referred to the appropriate committee, which has 25 calendar days of continuous session to act. If the committee hasn’t reported it out at the end of 25 days, a motion can be made to discharge the committee from further consideration of the proposal. In the House a motion to discharge requires only one-fifth of the House and debate on the motion is limited to one hour. Senate debate on the motion is also limited to one hour.

In the House, floor debate on a rescission bill is limited to no more than two hours. In the Senate, debate is limited to 10 hours, but no more than two hours on any amendment.

As with any other legislation, differences between a House- and Senate-passed rescission bill are resolved by a conference committee.

It’s worth noting here that Senate rules do NOT permit a filibuster on a rescission bill. The bill can pass with only a simple majority.         

Finally, what are the long-term implications of a rescission bill?

The deal struck in early February to raise the spending caps on discretionary programs reflected broad bipartisan acknowledgement that those caps were far too low to meet our nation’s needs. On the nondefense side of the equation, even the higher spending caps leave discretionary spending below its 2010 level, when adjusted for inflation.

Apart from the fact that relitigated the FY2018 appropriations process would only further delay work on FY2019 spending bills, if Congress were to renege on this year’s budget deal by rescinding already enacted appropriations—appropriations that were negotiated in good faith—it’s hard to envision any degree of bipartisan cooperation in the foreseeable future. This may be a bridge too far, particularly for moderate Senate Republicans.  

Lisa Ellington

Big Thinkery, LLC, 1011 Kenilworth Court Northwest, Concord, NC, 28027