The Line Item Veto

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Thank you for the opportunity to testify on the issue of theline item veto. In order to comply with the Truth in Testimonylaws, I will note for the record that neither I, nor the CatoInstitute, receive any funds from the federal government. Nor havewe ever.

Allow me to begin my testimony by praising Republicans andfiscally conservative Democrats, who kept their promise in 1995 toenact the line item veto. This was heroic legislation because itwas enacted despite the fact that Democrat Bill Clinton would bethe first president to use the item veto. In the 1970s and 1980smany opponents of the line item veto accused fiscal conservativesof supporting the measure only as a partisan power grab becauseRepublicans had generally controlled the White House, and Democratshad long controlled Congress. The 104th Congress proved theseallegations to be wrong.

I have long been an advocate of line item veto authority for thepresident. I have seen it work in the states. And now, I have seenit work in Washington.

I wish to make four points in my testimony regarding the lineitem veto.

First, and most critical, is the question of whether the lineitem veto worked to reduce wasteful spending. My overall assessmentis that this veto power has worked while it was in operation forone year. In 1997 President Clinton used this new budget cuttingtool 82 times to delete unnecessary expenditures in 11 spendingbills. The total savings have come to nearly $2 billion over fiveyears. True, in a $1.8 trillion annual budget, this is not a hugesum. But $2 billion is not an insignificant level of savings--evenby Washington standards. Moreover, as Gene Sperling, thePresident's chief economic adviser has noted, "You have to use theline item veto a few times before its deterrent power sinksin."

In 1998 I reviewed the lists of programs that were vetoed byPresident Clinton. I am confident that virtually none of theseprojects served the national interest.

President Clinton used the veto to eliminate funding for a$600,000 solar aquatic wastewater treatment demonstration projectin Vermont; a $2 million Chena River dredging project in Fairbanks,Alaska to benefit a single tour boat operator; a $1 millioncorporate welfare grant to the Carter County Montana Chamber ofCommerce; $900,000 for a Veterans Admin. cemetery the VA says itdoesn't need; $1.9 million for dredging a Mississippi lake thatprimarily serves yachts and pleasure boats; $500,000 for theNeabsco Creek Project in Virginia for removal of creek debris; andother such absurdities.

Congress approved the line item veto and the public demanded it,precisely to purge the budget of these kinds of white elephantprojects. So, yes, on balance the line item veto works asintended.

Second, did the President abuse the power of the line item vetoas was feared? The answer to this question is, on balance, no. Ofcourse, many complaints have been made about Bill Clinton's use ofthe line item veto. Senate Appropriations Committee Chairman TedStevens, complained that Clinton's line item vetoes have been a"raw abuse of power." Robert Livingston, the Republican HouseAppropriations Committee Chairman charges that Clinton is using theveto to "threaten and intimidate" members of Congress. It is alsotrue that there was one incident reported by The Wall StreetJournal where the administration reportedly offered towithdraw a threatened line item veto of a $1.5 million cemeteryexpansion in Rep. Sonny Callahan's (R-AL) district in exchange forhis support of IMF funding. Such political horse tradingconstituted an abuse of the item veto.

But other than this single incident, there was no evidence ofany pattern of abuse by the White House. Moreover, many of theprojects line item vetoed by President Clinton were in Democraticdistricts. So it does not appear that partisanship has been acritical determinant of how the veto has been used.

This is not to say that President Clinton's use of the veto wasexemplary. This administration failed to provide any coherentjustification for why some projects were terminated and otherspassed muster. The line item veto works best when the White Houseestablishes understandable and unbendable criteria for the lineitem veto and then carries out the veto according to thosestandards.

My primary complaint with Bill Clinton's use of this veto is notthat he used it too recklessly -- but too sparingly. The 1998Energy and Water bill, for example, contained 423 unrequestedprojects -- conveniently, just about one for every district.Clinton cancelled just 8 of them. Most of the other 415 deservedthe same fate. If the criteria for wielding this veto power is thatthe program should be funded at the local level or has costs thatexceed public benefits, then the savings could have been orders ofmagnitude higher than the $2 billion achieved so far.

Senator John McCain (R, AZ) and Russ Feingold (D, WI) have doneheroic work in recent years exposing pork in the FY 1998, 1999, and2000 spending bills.

As their lists of unproductive federal spending demonstrates, weneed the president to have the line item veto authority; but, wealso need a president who is not reluctant to wield this power.

I am convinced that a judicious use of the line item veto couldsave taxpayers $2 to $5 billion annually. In the 1980s, forexample, President Reagan requested but was denied rescissionrequests of this magnitude on average each year. If Reagan had hadthe line item veto, the national debt might have been $40 to $50billion lower over the period than it was.

The third issue with respect to the line item veto is whether itshifts too much power of the purse to the White House? I haveexamined the history of the balance of power between the ExecutiveBranch and the Legislative Branch when it comes to fiscal issues. Ivery strongly disagree with the charge that it tilts thebalance of power too far toward the presidency.

The line item veto does not involve a huge and unprecedentedpower shift in the direction of the White House. The item vetoshould be more accurately thought of as a relatively weak andpartial restoration of the rightful budgetary powers of thePresident that were stripped from the executive branch by the 1974Budget Act. The Budget Act stripped the President of his right toimpound funds--a power that was exercised routinely by everypresident from Thomas Jefferson through Richard Nixon. Jeffersonfirst employed this power to refuse to spend appropriated funds in1801 when he impounded $50,000 for Navy gunboats.

The founders believed that the President, as the head of theexecutive branch and therefore responsible for executing the lawsand spending taxpayer funds judiciously, had a unilateral authoritynot to spend money appropriated by the Congress if thatspending was unnecessary.

This was an extremely powerful White House authority that wasexercised often for nearly the first 200 years of our nation.Presidents Kennedy, Johnson and Nixon used the impoundment powerroutinely--and in some years used it to cut federal appropriationsby more than 5 percent. In one year Richard Nixon impounded morethan 7 percent of domestic appropriations. In 1974 the Congressstripped the president of his lawful impoundment powers and insteadgave him two very weak substitutes: the deferral and rescissionauthority. But as the members of this committee know well,rescissions require Congress to affirmatively approve apresidential request not to spend money. Most rescissions aresimply ignored by Congress and never even voted on. And thusthrough congressional inaction, they are killed.

A line item veto would partially restore the rightful authorityof the executive branch that was improperly snatched away in apower grab by the post-Watergate Congress in 1974.

My recommendation is that we should enact a constitutionalamendment for a presidential line item veto with a two-thirdsoverride provision. Determining whether money appropriated byCongress is or is not actually needed is in my view an appropriateexecutive branch function. Of course, if the president hadempoundment power restored, he would not need line item veto.

One final point on the balance of powers issue. It is easy toimagine that many line item vetoes will face override votes. Theitem veto simply requires that Congress garner a two-thirds vote inboth houses to secure funding for questionable programs. This seemshighly reasonable to me.

On its merits, the line item veto should be preserved. Thecritics were wrong: we now have documented evidence showing thatthe line item veto does save money; it does repel preposterousspending projects that offend the sensibilities of taxpayers.

The line item veto has shown itself to be one of the taxpayers'best friends--and lord knows, taxpayers have far too few friends inWashington already.

APPENDIX

A BRIEF SAMPLE OF PORK SPENDING IN FY 1998 APPROPRIATIONS

  • $286,000 for research to enhance the flavor of roastedpeanuts;
  • $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 CrestCollege in Allentown, PA.
  • $1.5 million for the Southeastern Pennsylvania Consortium forHigher 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 intermodalcenter.
  • $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 inBuffalo.
  • $500,000 for continuation of a study of livestock pollution(cow dung) at Tarteton State University.
  • $1.5 million for the National Alternative Fuels Trainingprogram.
  • $1 million for the World Congress on Information Technology inFairfax, VA.
  • $150,000 for development of the George C. Marshall MemorialPlaza 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
  • $250,000 for food fermentation research
  • $500,000 for honey bee research in Texas.
  • $1.2 million for potato research
  • $150,000 for the National Center for PeanutCompetitiveness.
  • $100,000 for maple syrup research in Vermont.
  • $33 million for wind energy research.
  • $55 million for the International Thermonuclear ExperimentalReactor.

Source: The Heritage Foundation, Cato Institute, and CitizensAgainst Government Waste.

Stephen Moore

Committee on the Judiciary
United States House of Representatives