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Statement on Signing the Omnibus Budget Reconciliation Act of 1989

December 19, 1989

I am today signing into law H.R. 3299, the "Omnibus Budget Reconciliation Act of 1989." This bill contains significant deficit-reduction measures for fiscal year 1990. These measures accomplish substantial savings in mandatory spending programs, increase receipts in a manner consistent with my pledge not to raise new taxes, and retain part of the Gramm-Rudman-Hollings across-the-board spending cut, or sequester, that was ordered on October 16, 1989.

The reconciliation legislation this year had a long gestation, stretching back to my budget proposals in February. In April the bipartisan congressional leadership agreed with the Administration on deficit-reduction goals for a budget resolution and a reconciliation bill. The resulting Bipartisan Budget Agreement called for $14 billion in reconciled deficit-reduction measures. The budget resolution passed in May, but the House and Senate failed to reach agreement on a bill prior to the sequester deadline. As a result, a sequester of fiscal year 1990 budget authority was ordered on October 16, in accordance with requirements of the Gramm-Rudman-Hollings Act. The across-the-board cuts imposed would have disrupted some important Federal activities had they remained in effect all year.

Accordingly, on November 2, I challenged the Congress to "pass a truly clean reconciliation bill that produces real deficit reduction -- without new taxes, without spending measures that increase the deficit in the future, and without scoring gimmicks." I said that "any such reconciliation bill should achieve at least the $14 billion in reconciled deficit reduction agreed to in the Bipartisan Budget Agreement." The bill I am approving today is the Congress's response to my challenge.

The reduced sequester and the other budget savings and receipts enhancements in this reconciliation legislation satisfy the conditions I set for an acceptable bill. The bill reaches the $14 billion deficit-reduction target, and it excludes the objectionable extraneous provisions that encumbered earlier versions. Further, the bill contained some technical ambiguities, particularly with regard to the payment of overvalued Medicare physician services. I appreciate the efforts of the conferees to clarify the intent of the legislation in a joint letter that was sent to Secretary Sullivan, and I sign the bill based on the understandings provided in the conferees' letter.

I must note, however, that several provisions of this reconciliation bill raise constitutional concerns.

One section of the bill could be interpreted to require the Secretary of Education to agree with certain representatives of interest groups prior to formulating a National Student Loan Data System. Such a mechanism would raise serious constitutional questions by circumventing the appointment procedures established by the Constitution. To avoid raising this troubling constitutional question, this provision must be interpreted as mandating that the Secretary conduct full and detailed consultation with representatives of interested and expert private groups, but leaving the final decision -- as the Constitution requires -- in the Secretary's hands.

Other troublesome provisions of the bill purport to make certain decisions of subordinate officials in the Department of Health and Human Services (HHS) unreviewable, thus depriving the Secretary of HHS, and, through him, the President, of his constitutional authority to supervise their actions. One such provision, for example, concerns a new board within HHS to review geographical classifications of certain hospitals for Medicare purposes. Provisions of this type raise serious constitutional questions. Accordingly, the Attorney General and the Secretary will consider and propose next year such corrective legislation as is necessary to accomplish the Congress' legitimate objectives in a manner consistent with the Constitution.

Provisions of the bill amending the National Vaccine Injury Compensation Program also raise concerns. These provisions would provide for initial adjudications of vaccine injury claims by a group of special masters appointed and removable by the United States Claims Court. Although I understand and strongly sympathize with the desire of the Congress to ensure speedy and equitable settlement of meritorious claims, such dispute resolution must take place within the structure of responsible Government established by our Constitution.

The bill's imposition of an "arbitrary and capricious" standard for review of special master decisions by Claims Court judges could raise constitutional questions by vesting significant authority pursuant to the laws of the United States in persons whose appointment and removal are inconsistent with the requirements of Article II of the Constitution, and by circumscribing the ability of Article I and Article III judges to review the decisions of these persons. Accordingly, to place this issue beyond doubt, the Attorney General and the Secretary of HHS will work together to submit legislation that would ensure de novo review of decisions rendered by the special masters.

George Bush

The White House,

December 19, 1989.

Note: H.R. 3299, approved December 19, was assigned Public Law No. 101 - 239.

George Bush, Statement on Signing the Omnibus Budget Reconciliation Act of 1989 Online by Gerhard Peters and John T. Woolley, The American Presidency Project

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