Commentary

The Case for a Balanced Budget Veto

By Anthony Hawks
March 13, 2004

For weeks now, libertarian and conservative commentators have been criticizing the spiraling spending of a Republican Congress and the White House. If government were instead divided between the parties, there may be a political dynamic that encourages presidential spending vetoes and serious spending trade-offs. Since 9/11 the Republicans have eschewed fiscal constraint and the federal budget has exploded.

The recently enacted Omnibus spending bill is only the latest example. Stuffed with 8,000 earmarked spending projects, the Omnibus was a prime candidate for President Bush’s first veto. Instead, he announced how pleased he was that Congress had passed this legislation, despite strong misgivings in his signing statement that it was riddled with unconstitutional provisions.

Similarly, in releasing in fiscal 2005 budget, the administration was desperate for talking points to placate its conservative base and found them in claims that growth in non-defense, non-homeland security spending would be held to half of 1 percent. This portion of the budget is traditionally is rife with pork-barrel spending so restraint and cuts make a lot of sense. But Bush’s own actions are not very reassuring. Bush is calling for an $18 million increase in funding for the arts, for example.

Bush needs to stiffen his spine and spending restraint, but he also needs more constitutional power to control spending pressures in Congress. In particular, a new form of line item veto is needed for the president to make the budget cuts that are needed with today’s $500 billion deficit. A constitutional amendment should be considered that would give Bush veto power not merely to strike discrete “items” like the Omnibus’s 8,000 earmarks, but also the ability to reduce spending across-the-board (subject to a two-thirds congressional override). The amendment would specify that the new executive power would be operational when the federal budget was unbalanced.

This new power is called a “Balanced Budget Veto.” Unlike a “Balanced Budget Amendment” that was considered in the 1990s, a balanced budget veto power would actually enforce the goal of a balanced budget. How? By imposing a political cost on Congress if the budget was not balanced. Indeed, a balanced budget veto would compel Congress to spend less on big-ticket items because members of both parties would fear having a president of the opposing party selectively vetoing their parochial spending projects.

This past December, Washington tax activist Grover Norquist was quoted in the Washington Post as being “disappointed that the [conservative] movement … has not yet figured out how to assign responsibility for spending.” The balanced budget veto would solve this accountability problem in two ways: First, it would diminish Congress’s power of the purse whenever it fails to balance the budget; second, it would raise public expectations on the president to use his enhanced veto power to cut wasteful spending.

From President Bush’s perspective, advocating a balanced budget veto in this year’s election would be a “win-win” situation. He would now have a campaign issue on which he could take the offensive with respect to federal spending. Also, assuming his reelection, any near-term ratification of a balanced budget veto would occur during a time of deficits, so he would immediately gain significant leverage in the budget battles of his second term. If he then lost the veto power because of a balanced budget, he would share in the political credit as well.

The irony here is that, if President Bush does not become serious about confronting his own party over federal spending, a Democratic president would have no such qualms and, in fact, would need the leverage of a balanced budget veto to deal effectively with a Republican Congress. The president should act now to make this issue his own.

Anthony W. Hawks is an attorney practicing in Alexandria, Virginia and author of Cato Policy Analysis no. 487, “The Balanced Budget Veto: A New Mechanism to Limit Federal Spending.”