Proposal: Today the Administration requested an enhanced rescission authority – a variant on the line-item veto. The proposal (“Reduce Unnecessary Spending Act of 2010”) would:

  • Give the President 45 days to invoke rescission authority and send proposed spending cuts to the Congress who would then,
  • Accept or reject the cuts in their entirety – without amendment – via an up-or-down vote within 25 days.

Policy Analysis – From a policy perspective:

  • The good:
    • It is potentially bi-partisan; line-item veto-style requests have come from both sides of the political aisle
    • 43 Governors have a line-item veto.
  • The bad:
    • The proposal excludes entitlement spending. This is a mistake. To continue preferential treatment of the largest spending problem is to continue to drive off the fiscal cliff.
  • The indifferent:
    • Research literature shows that this is NOT a silver bullet – at best it shapes spending, but does not reduce it.

Political Analysis: Hard to swallow.

  • President Obama himself voted against this authority as a Senator in 2007.
  • Some have suggested that the Administration is just trying to distract from its fiscal record:
    • The tax “extenders” bill and war supplemental are approaching floor action. Each has become a bloated Christmas tree.
    • Both contain faux “emergencies” that bypass PAYGO rules and belie any claim of fiscal discipline.
    • The poster child of budget hypocrisy is the tax extenders bill, which would create nearly $200 billion in additional deficits, but would actually reduce the official PAYGO deficit.

The bottom line: The Administration’s proposal is not a serious step toward addressing the spending problem. Real leadership would be a proposal to actually reduce spending, lower the deficit, and stop adding to the mountain of debt.