The Line Item Veto Act of 1996 (Public Law 104-130, 110 Stat. 1200), gives the President expanded rescission authority by changing the burden of action and coverage. Under the Impoundment Control Act of 1974 (88 Stat. 332), the President must obtain the support of both Houses within a specified time period for a rescission to become permanent, while the new law puts the burden on Congress to disapprove presidential rescission proposals within a 30-day period. Along with rescission of discretionary appropriations, the new law subjects any new item of direct spending (entitlement) and certain limited tax benefits to cancellation as well.
At various times, Congress has given the President statutory authority not to spend appropriated funds. That authority was elaborated and made more systematic with the Impoundment Control Act of 1974, which permitted the President to delay the expenditure of funds (deferral authority) and to cancel funds (rescission authority). To rescind funds, the President needed the support of both houses within 45 days.
The Line Item Veto Act of 1996 (P.L. 104-130) authorizes the President to cancel discretionary budget authority, new entitlements, and limited tax benefits. When this authority becomes available on January 1, 1997, it will change the dynamics among all three branches of government. In response to presidential decisions to cancel certain provisions, Congress may change the way it drafts bills and committee reports. Lawsuits will bring these presidential and congressional actions before federal courts, raising a number of constitutional and statutory questions.
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