The Obama administration recently caused considerable controversy when it sent a proposal to Capitol Hill on May 24 asking for enhanced authority to cut spending already approved by Congress. Fiscal hawks like Rep. Paul Ryan (R-WI) hailed the president’s proposal for "enhanced rescission authority" as "an important tool to target wasteful spending," while congressional appropriators from both parties argued that the proposal would give the president too much power over the spending process. Questions remain about the proposal's potential effects on deficit reduction.

Currently, the president can withhold funding for a spending program for 25 days and ask Congress to rescind the spending, but the legislature is under no obligation to take up the spending cuts. After 25 days, the president must restore the funding. The administration's enhanced rescission authority proposal would provide the president with 45 working days after Congress passes an appropriations bill to cull unwanted spending from the measure. The president would then send all cuts back to Congress as a legislative package for a mandatory up-or-down vote. Congress would have 25 working days to vote on the bundle of spending cuts, which would not be amendable and would be shielded from Senate filibusters.

In a blog post announcing the proposal, Office of Management and Budget Director Peter Orszag said the proposal would "reduce unnecessary or wasteful spending" because "we should never tolerate taxpayer dollars going to programs that are duplicative or ineffective and because, especially in the current fiscal environment, we cannot afford this waste."

Since the proposal only applies to items in appropriations bills, it would exempt entitlement spending and tax expenditures. Tax expenditures, for example, contribute over $1 trillion to the federal budget deficit and represent about the same amount of spending as the cash outlays resulting from discretionary appropriations.

If presidents were granted enhanced rescission authority, the impact would likely fall on congressional earmarks and programs without powerful constituencies. Most likely, spending on homeland security and the military would be protected, while non-security discretionary spending would quickly be bumped to the front of the line for cuts. These programs, like nutrition and housing assistance, consumer and environmental protection agencies, and scientific research, which compete against each other for funding during the annual appropriations process, would become even more vulnerable to cuts.

This is not to say that security spending will remain untouched. The Obama administration earlier in 2010 proposed a $156 million cut to the Coast Guard's FY 2011 budget. Although the recent BP oil spill disaster has drawn heavy scrutiny to this cut, in an enhanced-rescission-authority world, had Congress disregarded Obama’s initial Coast Guard budget request prior to the spill, it is possible that such funding would have seen a red line via Obama’s enhanced rescission authority, leaving the Coast Guard short of resources to deal with the catastrophe.

Cutting programs popular with Congress may lead to intense legislative-executive conflicts. The current dispute between the administration and Congress over the C-17 cargo plane and the F-35 alternate engine are illustrative examples. In 2009, President Obama and Secretary of Defense Robert Gates asked Congress not to fund these two programs because, in the opinion of the Pentagon, the military did not need them. Despite this, Congress included funding to keep both programs going.

Spending programs like the C-17 and the alternate engine for the F-35 employ people throughout the country, often in areas that would lack any manufacturing presence if it were not for these defense programs. It is not hard to imagine all of the representatives and senators from each state represented in the building process of one of these programs to band together or make deals with other representatives and senators to fight off a rescission attempt. The more rescissions a president includes, the more a diverse, bipartisan coalition may coalesce against them.

Giving the president more power over the spending process has appropriators very concerned. A president’s decision to target wasteful and duplicative programs that are draining resources away from other, more effective programs is often a political judgment call, one that has traditionally rested with Congress and that the legislative branch is not likely to give up without a fight.

Some have felt that the rescission authority proposal is similar to earlier gambits to give the president line-item veto authority. That concept was struck down by the U.S. Supreme Court as violating separation of powers in 1998 after Congress granted the power to President Bill Clinton. The current proposal, however, may pass constitutional muster since it requires Congress to vote on the president’s proposals for spending cuts, thereby obviating the obvious separation of powers issues raised by the line-item veto.

Enhanced rescission authority bills were introduced in the Senate by Sen. Russ Feingold (D-WI) and in the House by Rep. Paul Ryan (R-WI) prior to the announcement of the president’s proposal.