Constitutionality of Proposed Budget Process Reform Legislation

Constitutionality of Proposed Budget Process

Reform Legislation

Proposed legislation that would assign the Congressional Budget Office the duty to determine

whether a spending bill would exceed current spending limits, thereby requiring a supermajority

(tw o-thirds) vote in each House o f Congress for passage, is constitutional. Such a delegation

would not raise problems under INS v. Chadha, because Congress may by rule require a

superm ajority m ajority vote in each House for passage of certain legislation under Art. I, § S,

cl. 2.

The proposed legislation may also subject spending bills passed in this manner to rescission by

the President. W ith respect to entitlem ents, however, Congress must enact legislation specifi­

cally m aking the expenditure o f a certain percentage o f the appropriated funds non-mandatory

before such rescission authority m ay be exercised.

May 26, 1987

M em orandum O p in io n for th e C o un sel to the P r e s id e n t

At the request of your staff, this Office has considered the constitutionality

of draft legislation, prepared by the White House Working Group on Budget

Reform, entitled the “Budget Process Reform Act of 1987.” We are satisfied

that the basic process that the bill would establish would be constitutional. The

following comments suggest ways certain specific provisions of the bill might

be changed in order to avoid or minimize possible constitutional issues.

I. Determinations by the Congressional Budget Office

A central feature of the draft bill is the assignment (in § 21) to the Congres­

sional Budget Office (CBO) of the duty to determine, with respect to each

spending bill, whether passage of the bill would cause the budget category

within which the bill falls to exceed the spending ceiling established by the

“budget law” enacted earlier in the year (or the previous year’s spending level,

if no budget law is enacted). This determination has two important conse­

quences under the draft bill: (1) under § 7, a supermajority (two-thirds) vote in

each House of Congress would be required for passage of the spending bill if

CBO determines it would exceed its spending ceiling (or previous year’s

spending level); and (2) under § 25, any bill that would thus be subject to a

supermajority vote requirement would also be subject to the rescission author­

ity that would be granted to the President under that section.

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This delegation to CBO of authority to make a determination that has such

significant consequences gives rise to a possible constitutional question of

whether that determination constitutes legislative action, and if it does, whether

the constitutional requirements for legislative action would be satisfied. The

Supreme Court has made it clear that any legislative action — i.e., any congres­

sional action that has binding legal effect outside the Legislative Branch —

must comply with the constitutional requirements of bicameral passage and

presentment to the President. INS v. Chadha, 462 U.S. 919, 952 (1983).

It seems clear that the first consequence of a positive CBO determination —

requirement of a supermajority vote in each House of Congress — does not run

afoul of these requirements. Its effect would only be on the internal legislative

practices of each House of Congress, and would thus be limited to the Legisla­

tive Branch. It would therefore not constitute legislative action within the

meaning of Chadha. Moreover, because “[e]ach House may determine the

Rules of its Proceedings,” U.S. Const, art. I, § 5, cl. 2, it is within Congress’

constitutional authority to adopt legislative procedures of this kind.

We note in passing that, unlike a constitutional amendment, the draft legisla­

tion would not have a truly binding effect on Congress. Clearly, Congress

cannot by legislation prevent itself from enacting future legislation pursuant to

whatever procedures it chooses to follow at that future time. A future Congress

can always legislatively change what a previous Congress has done. In a

legally enforceable sense, therefore, such future lawmaking would be regulated

only by the requirements of the Constitution. Thus, notwithstanding the provi­

sions of the draft bill, a future Congress could follow whatever procedures it

chooses to apply with respect to a particular appropriations bill, including

passage by less than a supermajority. Or it could choose simply to disregard the

CBO determination. Although strong political pressures would certainly oper­

ate against defiance of the budget process requirements, and the President

could surely cite noncompliance as a basis for a veto decision, a subsequent

appropriations law passed in compliance with constitutional requirements would

be valid, notwithstanding any noncompliance with the procedures of this bill.

We also believe that the second consequence of a positive CBO determina­

tion — identification of appropriations that would be subject to Presidential

rescission — does not violate the bicameral action and presentment require­

ments, but we base this conclusion on different grounds from those applicable

to the first consequence. The practical effect in this regard of the CBO determi­

nation would indeed be to bind parties outside the Legislative Branch, because

the President’s authority to rescind appropriations would extend only to appro­

priations based on bills that are enacted under the supermajority requirement,

which in turn is based on the CBO determination. Legislative action would thus

be involved, but in our view the actual legislative action would be the enact­

ment of the spending bill subsequent to the CBO determination and prior to the

rescission authorization to the President becoming effective. The essential

point is that the scope of the President’s rescission authority would be defined

not by the CBO determination itself, but rather by the subsequent congressional

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enactment of the spending bill. That enactment would satisfy the bicameral

action and presentment requirements.1

We stress that under the draft legislation the ultimate decisionmaker on

defining the scope of the President’s rescission authority would not be an arm

of the Congress, but rather would be Congress itself acting in compliance with

the constitutional requirements for legislative action. The budget process role

that is contemplated for CBO under this bill thus differs in a critical respect

from the role the General Accounting Office (GAO) was given under the

Gramm-Rudman-Hollings Act. See Bowsher v. Synar, 478 U.S. 714 (1986).

Under Gramm-Rudman-Hollings, GAO was authorized to present binding

budget reduction calculations directly to the President. In contrast, under the

draft bill, CBO’s implicit instructions to the President concerning what pro­

grams are subject to his rescission authority are presented through the Con­

gress, pursuant to procedures that satisfy constitutional requirements.2

Although, for the reasons stated above, we believe that a strong argument

can be made to sustain the role of CBO in defining the scope of the President’s

rescission authority, that argument turns principally on whether the subsequent

enactment of the spending bill may properly be viewed as congressional action

that itself has the effect of defining that scope. Under the draft bill, it would

appear that any such congressional action would have to be viewed as implied.

We suggest, therefore, that consideration be given to requiring in the draft bill

that the congressional action be express. Under one possible version of such a

requirement, any spending bill enacted pursuant to a CBO determination would

have to include, most likely in introductory language (such as the “whereas”

section), a statement that a two-thirds vote was required on the basis of the

CBO determination that the bill would exceed the spending ceiling. An alterna­

tive approach would be to require that each such spending bill state that

appropriations authorized under the bill would be subject to the President’s

rescission authority.

II. Rescission of Enittitlemeinit Appropriations

Section 25 of the draft bill would add a new § 689 to Title 2, United States

Code. Under that section, the President would be authorized to rescind any

spending appropriations that are authorized by legislation enacted pursuant to

the supermajority voting requirement. Thus, under the regime established by

1 A n alternative w ay to analyze this second consequence o f the CBO determ ination is to take the view that

the subsequent appropriations law — w hich is passed pursuant to a superm ajority vote triggered by the CBO

determ ination — w ould am ount to an im plied congressional ratification or adoption o f the CBO determ ina­

tion. W e p refer the analysis taken in the text, because in o ur view it is based on a more accurate description of

the process contem plated under the d ra ft legislation. U nder either analysis, however, the critical fact is that

intervening betw een the C B O determ ination and the establishm ent o f the President’s rescission authority is a

legislative actiun effected in com pliance with constitutional requirem ents.

2 A n additional d istinction — although o f less significance for this analysis — is that G ramm-Rudman-

H ollings involved a d elegation to G A O o f an executive function (determ ining how to im plem ent spending

reductions), w hile the draft b ill involves a delegation to C B O o f a legislative function (defining the program s

w ith respect to w hich the President is b ein g delegated rescission authority).

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the draft bill, any such appropriations law would by clear implication provide

that all appropriations are non-mandatory.

Congress certainly may make expenditure of a particular appropriation non­

mandatory. See Train v. City o f New York, 420 U.S. 35 (1975). A fortiori,

Congress may expressly grant the President the authority to rescind any appro­

priation pursuant to a congressionally established procedure. In contrast to the

non-mandatory appropriation situation, however, a Presidential rescission of a

mandatory appropriation would amount to an unconstitutional unilateral amend­

ment of the appropriations law. Congress may not authorize the President to

circumvent the constitutionally required process for amending previously en­

acted laws any more than it may authorize itself to do so. C f INS v. Chadha, supra.

Application of the draft bill’s Presidential rescission authority to entitlement

appropriations presents a special situation. Unlike spending based on the usual

appropriations bill, entitlement payments are generally made on the basis of

two separate statutory enactments. The first statute establishes the entitlement

and generally fixes a specified amount to which each person meeting the

statutory requirements is entitled. The second statute is an appropriations bill

that authorizes the expenditure of funds up to a given amount.3 Thus, if the

President utilized the rescission authority granted by the draft bill to reduce

entitlement payments below the statutorily prescribed level, he would, in

effect, be amending unilaterally the previously adopted entitlement statute.

However, entitlement statutes may be changed only by other duly adopted statutes;

Congress may not delegate to the President unilateral power to do so himself.

This conclusion does not mean, however, that it would be impossible for

Congress to delegate to the President power to control expenditures under

entitlement programs. To the contrary, the statute could be drafted so as to

provide such authority. First, it is clear that Congress itself has the power to

amend or reduce entitlements that it has previously granted. For example, the

Supreme Court has held with respect to Social Security that “a person covered

by the Act has not such a right in benefit payments as would make every

defeasance of ‘accrued’ interests violative of the Due Process Clause of the Fifth

Amendment.” Flemming v. Nestor, 363 U.S. 603, 611 (1960). The Court has

also held that the “fact that social security benefits are financed in part by taxes

on an employee’s wages does not in itself limit the power of Congress to fix the

levels of benefits under the Act or the conditions upon which they may be paid.

Nor does an expectation of public benefits confer a contractual right to receive

the expected amounts.” Richardson v. Belcher, 404 U.S. 78, 80 (1971).

Congress could utilize this power to effect a general cross-cutting amend­

ment to all entitlement statutes that would make a certain percentage of the

entitlement amounts subject to limitation or complete withdrawal either by

Congress through the appropriations process, or by the President through the

rescission process proposed by the draft bill. Thus, the draft bill could include a

3 In many cases, such appropriations bills set no absolute lim its on entitlem ent expenditures, but rather state

that the Executive may expend an amount sufficient to pay all individuals who qualify under the provisions o f

the relevant entitlem ent statute.

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provision explicitly amending all entitlement acts so as to permit some Presi­

dential control over entitlement expenditures in the same way as the draft bill

would permit control over expenditures pursuant to appropriations bills. A

cross-cutting provision would thus avoid the constitutional problem by making

the expenditure of a certain percentage of appropriated funds non-mandatory.4

HII. Limiting the Reasons on which the President Can Rely

Wlhen Exercising the Rescission Aratiooty

Proposed 2 U.S.C. § 689(b) (see § 25 of the draft bill) would permit the

President to rescind “excess budget authority” only for “reasons of economy,

efficiency, or fiscal management of the Government.” The apparent purpose of

this provision would be to indicate that the President’s authority is not intended

to extend to situations in which the President’s primary reason for desiring to

rescind budget authority is disagreement with congressional programmatic

objectives. Although the provision does not give rise to an issue of constitu­

tional law, you may wish to consider its separation of powers policy implications.

The distinction that § 689(b) would draw might turn out to be illusory and

unenforceable. It would be very difficult to separate motives of economy from

policy judgments concerning the efficacy of a particular program. Moreover,

although we believe that disputes arising under this section between Presidents

and Congress would almost always involve only “political questions” that

should not be resolved by the courts,5 the litigation potential created by such a

provision should be recognized. Giving the courts an additional excuse to

attempt to second-guess or inquire into the motives of the President could

potentially give the courts an opportunity to seek to exercise significant “politi­

cal” power, a role that is not contemplated under the Constitution and that they

are institutionally ill-suited to exercise.

IV. Technical Language Change to Avoid

Amtlnoiriizimg Legislative Veto

Proposed 2 U.S.C. § 689(d)(1) (see § 25 of the draft bill) is clearly intended

to provide for congressional disapproval of a Presidential rescission by the

constitutionally permissible means of a bill that is enacted in compliance with

4 W e note that C ongress has already effected such an am endm ent to a specific entitlem ent statute in the

context o f the food stam p program. The so-called L ugar A m endm ent authorized the Secretary o f Agriculture

to reduce the otherw ise required food stam p allotm ents if insufficient funds w ere appropriated to fund the

program at its full level, and additionally authorized the Secretary to change the allocation form ula if such a

redu ctio n w ere necessary. 7 U.S.C. § 2027(b)-<d).

5 See Goldwater v. Carter, 444 U.S. 9 9 6 , 1002-06 (1979) (R ehnquist, J., concurring); Barnes v. Kline , 759

F.2d 21, 57 (D .C. C ir. 1985) (Bork, J ., dissenting) (“ [I]t is absolutely inconceivable that Fram ers who

intended the federal courts to arbitrate directly d isputes between the President and C ongress should have

failed to m ention that function or to h a v e mentioned ju d icial review at all. The statesmen who carefully

spelled out the functions o f Congress a n d the President and the details o f how the executive and legislative

b ran ch es m ight check each other could hardly have failed even to m ention the judicial linchpin o f the

con stitu tio n al system they w ere creating — not if they had even the rem otest idea that the judiciary was to

play such a central and dominant role ”), vacated on other grounds sub nom. Burke v. Barnes, 479 U.S. 361 (1987).

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the bicameral action and presentment requirements of the Constitution. As

written, however, the provision technically provides instead for a two-house

legislative veto: a rescission would take effect unless within 45 legislative

days of Congress’ receipt of the President’s rescission statement, “Congress

shall have completed action on and sent to the President fo r his approvaP’ a bill

disapproving the rescission. Id. (emphasis added). Thus, the disapproval would

technically take effect upon presentment to the President, and the constitutional

requirement that the President have an opportunity to veto the disapproval bill

would be circumvented. See INS v. Chadha , supra.

To accomplish the purpose that we assume is intended, we suggest that the

above-quoted language be deleted and the phrase “is enacted into law” be

added at the end of the sentence. Thus, under the draft bill as revised, a

rescission would take effect “unless within 45 legislative days of the receipt of

the President’s rescission message, a bill dealing solely with such rescission

that restores all or part of such excess budget authority is enacted into law.” If

you believe that 45 days would not be enough time to allow for a congressional

attempt to override a Presidential veto,6 you might consider allowing instead

for some longer period, such as 60 days.

C harles J. C ooper

Assistant Attorney General

Office o f Legal Counsel

6 A veto would be alm ost a certainty. B ecause the joint resolution w ould be a rejection o f the President’s

rescission, a veto would constitute a sim ple reassertion o f the rescission.

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