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Rescission, What’s That?

Tuesday, April 10, 2018

Bill Hoagland, senior vice president at BPC, explains rescission as the president prepares to use this budget tool.

What is rescission and is it unusual for a president to use it?

A rescission is a request to rescind funds that were previously appropriated by Congress. If Congress approves the president’s rescission proposal, it would mean that particular appropriation would no longer be available to the agency to spend. This budget tool is not regularly used by a president, the last time was by the Clinton administration.

While it is unusual for a president to seek a rescission, Congress itself regularly does rescission packages within annual supplemental appropriations so that funds that have not been spent can be used elsewhere.

How much is the president’s rescission package?

We do not know at this moment what the level of rescission will be, he has not submitted anything to Congress yet. We do know that the president proposed a budget for the current fiscal year – FY2018 – that was about $113 billion less on domestic appropriations than what Congress actually appropriated. When the president signed the omnibus appropriations bill in March he was upset about the amount of spending, so one can assume the president is going to propose to rescind some portion of that $113 billion.

While it is unusual for a president to seek a rescission, Congress itself regularly does rescission packages within annual supplemental appropriations. 

I am confident the president will submit it because of his statement that he was upset at having to sign the omnibus bill and because of what the politics are — he feels he needs to firm up that conservative base now and show his bona fides that he’s a fiscal conservative. I think he will submit it within the next two weeks.

What happens after the president sends the rescission package to Congress?

It is an appropriation measure and is sent to the appropriation committees, which have 25 days to either approve, disapprove or amend the request. If the committees do not take action within 25 days, the measure is subject to discharge from the committee and can go to the full House and Senate for action. If either of the committees, full House or Senate disapproves the measure, the process stops.

Congress overall has a total of 45 days, defined as 45 consecutive days of session, to act on the rescission package. Congress probably would not go out of session for this reason, so it would basically be 45 calendar days. Congress will want to act rather quickly because there is not a lot of time left in the current fiscal year which ends September 30, and some of these appropriations are limited for use only in this fiscal year.

If Congress doesn’t approve the president’s rescissions within 45 days, the president has to release the rescinded monies to the agencies. So, he needs a positive vote from Congress, and on this issue that is a simple majority vote in the House and Senate.

Is this similar to a line-item veto?

No. The term line-item veto means the president in an appropriations bill could eliminate a particular provision on his own without any congressional approval. The Budget Act of 1974 specifically created the rescission process by which the president could eliminate appropriations, but only with approval of Congress. All presidents have wanted a line-item veto, but the most recent effort by the Bush administration was ruled unconstitutional because of how it was crafted.

KEYWORDS: 115TH CONGRESS, FY2018, G WILLIAM HOAGLAND, PRESIDENT BILL CLINTON, PRESIDENT DONALD TRUMP, PRESIDENT GEORGE W. BUSH