The Line Item Veto: One Year After

Share

Mr. Chairman, it is a privilege to have the opportunity totestify on the issue of the effectiveness of the line itemm vetoafter one year. 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 in the104th Congress, who with help from many fiscally conservativeDemocrats, kept their Contract with America promise and enacted theline item veto. This was heroic legislation because it was enacteddespite the fact that Democrat Bill Clinton would be the firstpresident to use the item veto. In the 1970s and 1980s manyopponents of the line item veto accused fiscal conservatives ofsupporting 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 should also note for purposes of full disclosure that I havelong been an advocate of line item veto authority for thepresident. As I told this Committee in a hearing on budget reform 2years ago, "the President should have the line item veto toeliminate the waste in the budget that Congress won't."

I will highlight four points in my testimony regarding theexperience of the line item veto after one year.

First, and most critical, is the question of whether the lineitem veto has worked to reduce wasteful spending. My overallassessment is that this veto power has worked. In 1997 PresidentClinton used this new budget cutting tool 82 times to deleteunnecessary expenditures in 11 spending bills. The total savingshave come to nearly $2 billion over five years. True, in a $1.75trillion annual budget, this is not a huge sum. But $2 billion isnot an insignificant level of savings--even by Washingtonstandards. Moreover, as Gene Sperling, the President's chiefeconomic adviser has noted, "You have to use the line item veto afew times before its deterrent power sinks in."

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

So far President Clinton has used the veto to eliminate fundingfor a $600,000 solar aquatic wastewater treatment demonstrationproject in Vermont; a $2 million Chena River dredging project inFairbanks, Alaska to benefit a single tour boat operator; a $1million corporate welfare grant to the Carter County MontanaChamber of Commerce; $900,000 for a Veterans Admin. cemetery the VAsays it doesn't need; $1.9 million for dredging a Mississippi lakethat primarily 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, has the President abused the power of the line item vetoas his critics have charged? The answer to this question is, onbalance, no. Of course, many complaints have been made about BillClinton's use of the line item veto. Senate AppropriationsCommittee Chairman Ted Stevens, has complained that Clinton's lineitem vetoes have been a "raw abuse of power." Robert Livingston,the Republican House Appropriations Committee Chairman charges thatClinton is using the veto to "threaten and intimidate" members ofCongress. It is also true that there was one incident reported byThe Wall Street Journal where theadministration reportedly offered to withdraw a threatened lineitem veto of a $1.5 million cemetery expansion in Rep. SonnyCallahan's (R-AL) district in exchange for his support of IMFfunding. Such political horse trading would constitute an abuse ofthe item veto.

But other than this single incident, there is no evidence of anypattern of abuse by the White House. Moreover, many of the projectsline item vetoed by President Clinton were in Democratic districts.So it does not appear that partisanship has been a criticaldeterminant of how the veto has been used.

This is not to say that President Clinton's use of the veto hasbeen exemplary. This administration has failed to provide anycoherent justification for why some projects have been terminatedand others have passed muster. I agree with congressional criticsthat the line item veto will work best when the White Houseestablishes understandable and unbendable criteria for the lineitem veto and then carries out the veto according to thosestandards. Establishing clear standards of use is the best way torefute the charge that the item veto is being used capriciously orsimply to "punish" political opponents.

My primary complaint with Bill Clinton's use of this veto is notthat he has 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, as President Clinton has suggested, the criteriafor wielding this veto power is that the program should be fundedat the local level or has costs that exceed public benefits, thenthe savings could be orders of magnitude higher than the $2 billionachieved so far. For example, I have listed in the appendix to thistestimony more than two dozen projects and programs that were notline item vetoed from last year's appropriations bills, but shouldhave been. This list was compiled from fiscal experts at the CatoInstitute, Heritage Foundation and Citizens Against GovernmentWaste. Senators John McCain (R, AZ) and Russ Feingold (D, WI) havealso done heroic work exposing pork in last year's spendingbills.

As this sample list of unproductive federal spendingdemonstrates, we need the president to have the line item vetoauthority; but, we also need a president who is not reluctant towield 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 am not alawyer or a constitutional scholar, so I have no opinion as to thelegality of the particular line item veto legislation enacted inthe 104th Congress. But I have examined the history of the balanceof power between the Executive Branch and the Legislative Branchwhen it comes to fiscal issues. I very strongly disagree with the charge that it tilts the balance ofpower 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 theCongress if that spending 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.

So the line item veto partially restored the rightful authorityof the executive branch that was improperly snatched away in apower grab by the post-Watergate Congress in 1974. Indeed, mypreference would be for this Congress to enact a full restorationof the president's impoundment power. Determining whether moneyappropriated by Congress is or is not actually needed is in my viewan appropriate executive branch function. If the president hadempoundment power restored, he would not need line item veto.

One final point on the balance of powers issue. We saw last yearthat Congress easily voted to override a presidential line itemveto for military projects that lawmakers believed weremeritorious. This incident demonstrated that the item veto does notgive the president dictatorial powers over spending. It is easy toimagine that many line item vetoes will face override votes ashappened last year. The item veto simply requires that Congressgarner a two-thirds vote in both houses to secure funding forquestionable programs. This seems highly reasonable to me.

The fourth and final issue is how should Congress proceed if theline item veto is ruled unconstitutional by the Supreme Court. Theanswer to this question is clear cut: fix the legislationimmediately so it will pass constitutionalmuster. The line item veto is not inherently unconstitutional. Allthat is being challenged is the legality of the procedures for theparticular version passed in 1995. If this version fails, hopefullythe courts will provide a roadmap to determine a line item vetopower that would be constitutional. Congress should waste no timein re-enacting the legislation.

Senator Robert Byrd announced last year that he hoped hisChristmas present would be "for the Supreme Court to rule theline-item veto act unconstitutional." I am convinced that theeagerness of Senator Byrd and many others in Congress (in bothparties) to repeal the line item veto or to have the Supreme Courtstrike it down for them, is a result of the success of this budget cutting tool. Congress likes theline item veto far more in theory than in practice.

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.

Fiscal conservatives should not waver in support of this budgettool. No one on this Committee should delude themselves. If theline item veto is repealed or overturned by the Courts and notre-enacted by Congress, the item veto will be a victim of its ownsuccess. The line item veto has shown itself to be one of thetaxpayers' best friends--and lord knows, taxpayers have far too fewfriends in Washington 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 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 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

Subcommittee on Budget Process
Committee on Rules
United States House of Representatives