White House makes case for authority to perform spending surgery

The White House urged House lawmakers on Thursday to provide the Obama administration with a new tool to crack down on unnecessary spending.

Testifying before the House Budget Committee, Jeffrey Liebman, acting deputy director of the Office of Management and Budget, called on Congress to swiftly to pass the 2010 Reduce Unnecessary Spending Act. The bipartisan legislation, introduced in May, provides the administration with expedited rescission authority -- a tool that allows the president to sign a spending bill into law while at the same time proposing cuts to certain items in the bill. The authority would be limited to changes that reduce funding levels under discretionary spending and nonentitlement mandatory spending.

Liebman told skeptical lawmakers that the proposal would allow the legislative and executive branches to work together to eliminate unnecessary spending.

"We recognize that our proposal is not a magic bullet," he said. "While it lifts procedural barriers, the president and Congress will still have to make the tough choices to cut back unnecessary spending. Furthermore, restoring fiscal sustainability in the medium- and long-term will require not only targeting unnecessary spending in specific programs, which our proposal aids, but also making larger choices about overall budget priorities and revenue levels." The rescissions, which would take effect only if they are approved by a majority in each chamber, would be used for deficit reduction, Liebman added.

Under the proposal, the White House would have 45 congressional working days after a spending bill is passed to recommend specific funding for elimination. Congress then would have 25 days to debate the merits of the rescission package before casting an up or down vote. The proposal does not allow for a filibuster.

The proposal received a mixed response from panel lawmakers, who are notoriously protective of preserving their constitutional spending powers.

Minnesota Democrat Betty McCollum argued the White House already has several other spending reduction authorities, including veto power, and rescission could "become a blank check."

But Liebman noted the proposal has been carefully crafted to preserve the constitutional balance between Congress and the White House. "Rescissions only occur if Congress affirmatively enacts them into law," he said. "In other words, our proposal does not expand the presidential veto authority in any way."

Committee members also raised concerns that the bill fails to define "unnecessary spending" and does not include the authority to cut tax expenditures, one of the largest categories of government spending.

While some lawmakers remain skeptical, the legislation received support from one of the House's leading fiscal hawks. Rep. Paul Ryan, R-Wis., ranking member of the Budget Committee, argued that the power of rescission authority is not necessarily its ability to balance the budget, but rather to scare lawmakers away from inserting earmarks into spending bills.

"This brings transparency and accountability to the process," said Ryan, who has introduced similar rescission legislation.

But it is unclear how quickly lawmakers plan to move on the Reduce Unnecessary Spending Act. House Speaker Nancy Pelosi, D-Calif., said last week that she would not commit to scheduling a vote for a bill until it was clear the provision had enough legislative support to pass.

The bill, sponsored by Rep. John Spratt, D-S.C., chairman of the Budget Committee, currently has 20 co-sponsors. Sens. Russ Feingold, D-Wis., and John McCain, R-Ariz., last week introduced a companion bill in the Senate.

The administration, which recently has presented a number of spending cut proposals, is planning to announce a new initiative on Friday to crack down on waste, fraud and abuse.

According to a White House announcement, Vice President Joe Biden and OMB Director Peter R. Orszag will demonstrate a tool, currently being used by the Recovery Accountability and Transparency Board, to help identify fraud in government spending. OMB declined to provide details of the initiative on Thursday.