Mr. Chairman, it is a privilege to have the opportunity to testify on the issue of the effectiveness of the line itemm veto after one year. In order to comply with the Truth in Testimony laws, I will note for the record that neither I, nor the Cato Institute, receive any funds from the federal government. Nor have we ever.
Allow me to begin my testimony by praising Republicans in the 104th Congress, who with help from many fiscally conservative Democrats, kept their Contract with America promise and enacted the line item veto. This was heroic legislation because it was enacted despite the fact that Democrat Bill Clinton would be the first president to use the item veto. In the 1970s and 1980s many opponents of the line item veto accused fiscal conservatives of supporting the measure only as a partisan power grab because Republicans had generally controlled the White House, and Democrats had long controlled Congress. The 104th Congress proved these allegations to be wrong.
I should also note for purposes of full disclosure that I have long been an advocate of line item veto authority for the president. As I told this Committee in a hearing on budget reform 2 years ago, “the President should have the line item veto to eliminate the waste in the budget that Congress won’t.”
I will highlight four points in my testimony regarding the experience of the line item veto after one year.
First, and most critical, is the question of whether the line item veto has worked to reduce wasteful spending. My overall assessment is that this veto power has worked. In 1997 President Clinton used this new budget cutting tool 82 times to delete unnecessary expenditures in 11 spending bills. The total savings have come to nearly $2 billion over five years. True, in a $1.75 trillion annual budget, this is not a huge sum. But $2 billion is not an insignificant level of savings—even by Washington standards. Moreover, as Gene Sperling, the President’s chief economic adviser has noted, “You have to use the line item veto a few times before its deterrent power sinks in.”
I reviewed the long lists of programs that were vetoed by President Clinton. I am confident that virtually none of these projects served the national interest.
So far President Clinton has used the veto to eliminate funding for a $600,000 solar aquatic wastewater treatment demonstration project in Vermont; a $2 million Chena River dredging project in Fairbanks, Alaska to benefit a single tour boat operator; a $1 million corporate welfare grant to the Carter County Montana Chamber of Commerce; $900,000 for a Veterans Admin. cemetery the VA says it doesn’t need; $1.9 million for dredging a Mississippi lake that primarily serves yachts and pleasure boats; $500,000 for the Neabsco Creek Project in Virginia for removal of creek debris; and other such absurdities.
Congress approved the line item veto and the public demanded it, precisely to purge the budget of these kinds of white elephant projects. So, yes, on balance the line item veto works as intended.
Second, has the President abused the power of the line item veto as his critics have charged? The answer to this question is, on balance, no. Of course, many complaints have been made about Bill Clinton’s use of the line item veto. Senate Appropriations Committee Chairman Ted Stevens, has complained that Clinton’s line item vetoes have been a “raw abuse of power.” Robert Livingston, the Republican House Appropriations Committee Chairman charges that Clinton is using the veto to “threaten and intimidate” members of Congress. It is also true that there was one incident reported by The Wall Street Journal where the administration reportedly offered to withdraw a threatened line item veto of a $1.5 million cemetery expansion in Rep. Sonny Callahan’s (R-AL) district in exchange for his support of IMF funding. Such political horse trading would constitute an abuse of the item veto.
But other than this single incident, there is no evidence of any pattern of abuse by the White House. Moreover, many of the projects line item vetoed by President Clinton were in Democratic districts. So it does not appear that partisanship has been a critical determinant of how the veto has been used.
This is not to say that President Clinton’s use of the veto has been exemplary. This administration has failed to provide any coherent justification for why some projects have been terminated and others have passed muster. I agree with congressional critics that the line item veto will work best when the White House establishes understandable and unbendable criteria for the line item veto and then carries out the veto according to those standards. Establishing clear standards of use is the best way to refute the charge that the item veto is being used capriciously or simply to “punish” political opponents.
My primary complaint with Bill Clinton’s use of this veto is not that he has used it too recklessly — but too sparingly. The 1998 Energy and Water bill, for example, contained 423 unrequested projects — conveniently, just about one for every district. Clinton cancelled just 8 of them. Most of the other 415 deserved the same fate. If, as President Clinton has suggested, the criteria for wielding this veto power is that the program should be funded at the local level or has costs that exceed public benefits, then the savings could be orders of magnitude higher than the $2 billion achieved so far. For example, I have listed in the appendix to this testimony more than two dozen projects and programs that were not line item vetoed from last year’s appropriations bills, but should have been. This list was compiled from fiscal experts at the Cato Institute, Heritage Foundation and Citizens Against Government Waste. Senators John McCain (R, AZ) and Russ Feingold (D, WI) have also done heroic work exposing pork in last year’s spending bills.
As this sample list of unproductive federal spending demonstrates, we need the president to have the line item veto authority; but, we also need a president who is not reluctant to wield this power.
I am convinced that a judicious use of the line item veto could save taxpayers $2 to $5 billion annually. In the 1980s, for example, President Reagan requested but was denied rescission requests of this magnitude on average each year. If Reagan had had the line item veto, the national debt might have been $40 to $50 billion lower over the period than it was.
The third issue with respect to the line item veto is whether it shifts too much power of the purse to the White House? I am not a lawyer or a constitutional scholar, so I have no opinion as to the legality of the particular line item veto legislation enacted in the 104th Congress. But I have examined the history of the balance of power between the Executive Branch and the Legislative Branch when it comes to fiscal issues. I very strongly disagree with the charge that it tilts the balance of power too far toward the presidency.
The line item veto does not involve a huge and unprecedented power shift in the direction of the White House. The item veto should be more accurately thought of as a relatively weak and partial restoration of the rightful budgetary powers of the President that were stripped from the executive branch by the 1974 Budget Act. The Budget Act stripped the President of his right to impound funds—a power that was exercised routinely by every president from Thomas Jefferson through Richard Nixon. Jefferson first employed this power to refuse to spend appropriated funds in 1801 when he impounded $50,000 for Navy gunboats.
The founders believed that the President, as the head of the executive branch and therefore responsible for executing the laws and spending taxpayer funds judiciously, had a unilateral authority not to spend money appropriated by the Congress if that spending was unnecessary.
This was an extremely powerful White House authority that was exercised often for nearly the first 200 years of our nation. Presidents Kennedy, Johnson and Nixon used the impoundment power routinely—and in some years used it to cut federal appropriations by more than 5 percent. In one year Richard Nixon impounded more than 7 percent of domestic appropriations. In 1974 the Congress stripped the president of his lawful impoundment powers and instead gave him two very weak substitutes: the deferral and rescission authority. But as the members of this committee know well, rescissions require Congress to affirmatively approve a presidential request not to spend money. Most rescissions are simply ignored by Congress and never even voted on. And thus through congressional inaction, they are killed.
So the line item veto partially restored the rightful authority of the executive branch that was improperly snatched away in a power grab by the post-Watergate Congress in 1974. Indeed, my preference would be for this Congress to enact a full restoration of the president’s impoundment power. Determining whether money appropriated by Congress is or is not actually needed is in my view an appropriate executive branch function. If the president had empoundment power restored, he would not need line item veto.
One final point on the balance of powers issue. We saw last year that Congress easily voted to override a presidential line item veto for military projects that lawmakers believed were meritorious. This incident demonstrated that the item veto does not give the president dictatorial powers over spending. It is easy to imagine that many line item vetoes will face override votes as happened last year. The item veto simply requires that Congress garner a two-thirds vote in both houses to secure funding for questionable programs. This seems highly reasonable to me.
The fourth and final issue is how should Congress proceed if the line item veto is ruled unconstitutional by the Supreme Court. The answer to this question is clear cut: fix the legislation immediately so it will pass constitutional muster. The line item veto is not inherently unconstitutional. All that is being challenged is the legality of the procedures for the particular version passed in 1995. If this version fails, hopefully the courts will provide a roadmap to determine a line item veto power that would be constitutional. Congress should waste no time in re-enacting the legislation.
Senator Robert Byrd announced last year that he hoped his Christmas present would be “for the Supreme Court to rule the line-item veto act unconstitutional.” I am convinced that the eagerness of Senator Byrd and many others in Congress (in both parties) to repeal the line item veto or to have the Supreme Court strike it down for them, is a result of the success of this budget cutting tool. Congress likes the line item veto far more in theory than in practice.
On its merits, the line item veto should be preserved. The critics were wrong: we now have documented evidence showing that the line item veto does save money; it does repel preposterous spending projects that offend the sensibilities of taxpayers.
Fiscal conservatives should not waver in support of this budget tool. No one on this Committee should delude themselves. If the line item veto is repealed or overturned by the Courts and not re-enacted by Congress, the item veto will be a victim of its own success. The line item veto has shown itself to be one of the taxpayers’ best friends—and lord knows, taxpayers have far too few friends in Washington already.
A BRIEF SAMPLE OF PORK SPENDING IN FY 1998 APPROPRIATIONS
- $286,000 for research to enhance the flavor of roasted peanuts;
- $250,000 for pickle research;
- $3.3 million for shrimp farming studies in Hawaii, Mississippi, Massachusetts, California, and Arizona;
- $700,000 for an “aquatic and fitness center” at Cedar Crest College in Allentown, PA.
- $1.5 million for the Southeastern Pennsylvania Consortium for Higher Education to collect data for social public policy.
- $1.2 million for a business innovation laboratory in Hoboken, NJ.
- $1.35 million to renovate the Paramount Theater in Rutland, VT.
- $2.5 million for a New Mexico Hispanic cultural center.
- $950,000 for a fish hatchery in Ruskin, FL.
- $1.4 million for the Lake Tahoe, California intermodal center.
- $2 million for New Orleans streetcar named “Desire.”
- $3 million for Reno Nevada buses.
- $51 million for a regional bus plan in Houston.
- $2 million for the renovation of an Art Gallery in Buffalo.
- $500,000 for continuation of a study of livestock pollution (cow dung) at Tarteton State University.
- $1.5 million for the National Alternative Fuels Training program.
- $1 million for the World Congress on Information Technology in Fairfax, VA.
- $150,000 for development of the George C. Marshall Memorial Plaza in Uniontown, PA.
- Renovation of a theater in Windber, PA.
- $100,000 for hops research in the Pacific Northwest.
- 950,000 for rice research in Arkansas and Texas.
- $250,000 for food fermentation research in North Carolina.
- $500,000 for honey bee research in Texas.
- $1.2 million for potato research
- $150,000 for the National Center for Peanut Competitiveness.
- $100,000 for maple syrup research in Vermont.
- $33 million for wind energy research.
- $55 million for the International Thermonuclear Experimental Reactor.
Source: The Heritage Foundation, Cato Institute, and Citizens Against Government Waste.