Line Item Veto for the President

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Mr. Chairman, thank you for the opportunity to address theSubcommittee on the Constitution on an issue of vital importance toour nation's fiscal future: the line item for the president. Ishare the opinion of three-quarters of the American public that theline item veto is an essential fiscal tool for weeding outexcessive and wasteful spending from the federal budget.

I have been writing about and advocating the line item veto forover ten years--first when I worked at the Heritage Foundation inthe 1980s, and for the last several years as director of fiscalpolicy studies at Cato. In the 1980s many liberals accused fiscalconservatives of supporting line item veto authority only as apartisan power grab.

In hindsight, it is understandable why they would think that.Republican Ronald Reagan was in the White House while the Democratshad firm control of the Congress. But in 1992 after the election ofBill Clinton as President and at a time when the Democratscontrolled the Congress and the White House, I and other long timesupporters argued that now was the time to enact the line itemveto. Republicans in Congress surprised the critics by supporting aline item veto for Democrat Bill Clinton.

The line item veto failed two years ago because theDemocrat-controlled Congress refused to give the president of theirown party this budget tool to eliminate excessive spending. This isnot a partisan issue, it is a balance of power issue.

How ironic, but appropriate, it would be if after all of theseyears a Republican-controlled Congress enacted a line item veto tobe first used by Democratic president .

Before getting to the major focus of my testimony, I wish torespond to one flawed but often repeated criticism of the line itemveto. This is the charge that item veto would confer too much powerover the purse strings to the executive branch. Indeed, the lineitem veto debate has never been a partisan battle as a battlebetween the executive and legislative branches of government.

The line item veto would 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 that spendingwas 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 is vital because it partially restores therightful authority of the executive branch that was improperlysnatched away in a power grab by the post-Watergate Congress in1974. Indeed, my first choice would be for this Congress to enact afull restoration of the president's impoundment power. Then thepresident would not need line item veto.

It is worth noting that although some critics say that the lineitem veto would not save taxpayers money, one way to measure thepotential impact is to add up the foregone savings from rejectedrescissions. If all of Ronald Reagan's rescissions had beenapproved by Congress, the federal debt would have been $27 billionlower than it was from 1981-89.

This leads me into the main focus of my remarks and that is theissue of how well the line item veto works on the state level.

In 1992 the Cato Institute conducted a survey of 118 governorsand former governors on the issue of what budget process measuresthat Washington should adopt to help balance the budget.Sixty-seven of the respondents were Republicans, 50 were Democrats,and one was an independent. I wish to submit the entire study forthe record if I may.

Many of the budget measures that Congress is nowconsidering--including the balanced budget amendment, mandaterelief, supermajority requirements to raise taxes, and line itemveto--are already commonplace on the state level. For example, 43states grant their governor some form of line item veto authority.All but one state have balanced budget requirements of one kind oranother.

The reason we consulted the governors is that they are the onegroup that has hands-on experience working with many of the deficitreduction ideas that are now under consideration in Washington.They can bring a special perspective to the issue. Some governors,such as Tommy Thompson of Wisconsin, have relied heavily on theline-item veto to cut expenditures and balance the budget.

The major findings of our survey were as follows (see also theattached charts):

1) Sixty-nine percent of the governors described the line itemveto as "a very useful tool in helping balance the statebudget.

2) Ninety-two percent of the governors believe that "a line-item veto for the president would help restrain federalspending."

3) There was very strong bipartisan support for the line itemveto. Among only the Democratic governors, 88 percent believe theline-item veto would be useful.

4) Fifty-five percent of the governors think that Congress has"too much authority over the federal budget," against only 2percent who think that the president has too much authority. Therewas a very large difference in opinion among Democrats andRepublicans on this issue, with Democrat governors thinking thebalance is right and the overwhelming majority of Republicangovernors believing Congress has too much power.

On two other budget reform issues we also found high levels ofsupport:

* By a two-to-one margin the governors approve of abalanced-budget amendment to the Constitution. Fifty-five percentof them said that a balanced-budget amendment was "very desirable";22 percent said it was "somewhat desirable"; and 24 percent said itwas "not desirable."

* Nearly nine of ten of the governors believe that the federalgovernment should reimburse state governments for the cost offederal mandates.

When we asked the governors why they supported or opposed theline item veto, here are some of the more interesting responses wereceived:

"I support the line item veto because it is an executive branchfunction to identify budget excesses and wasteful items. It is anantidote for pork."

Hugh l. Carey, Democratic Governor of New York, 1975-83.

"Legislators love to be loved, so they love to spend money. Lineitem veto is essential to enable the executive to hold downspending."

William Weld, Republican Governor of Massachusetts,1991-present.

"When I was governor of California, the governor had the lineitem veto, and so you could veto parts of the spending in a bill.The president can't do that. I think, frankly--of course, I'mprejudiced--government would be far better off if the president hadthe right of line-item veto."

Ronald Reagan, Republican Governor of California, 1967-75.

"I support the line item veto. As the governor has directaccountability to the entire state while the legislators report toa relatively small constituency, so the president must account tothe entire nation as members of Congress respond to the needs of535 varying constituencies."

Joan Finney, Democratic Governor of Kansas, 1991-995.

"Tremendous tool for saving money."

Mike O'Callaghan, Democratic Governor of Nevada, 1959-63.

"To the detriment of the federal process, the president is notheld accountable for a balanced budget....Without the line itemveto, the president has minimal flexibility to manage the federalbudget after it is passed."

L. Douglas Wilder, Democratic Governor of Virginia,1990-1994.

The findings of Cato's governor survey contradict the critics ofline item veto who argue that such measures would not help resolvethe nation's fiscal crisis. Many inside-the-beltway punditscomplain, "The budget needs leadership not process reform." That iswrong. Process reform leads to better leadership and betterdecision-making.

Finally, let me voice one word of caution about the line itemveto. Although I am an enthusiastic supporter of this budgetdisciplining tool, we proponents should not oversell the case forthis measure. Critics are right when they say that it will not byitself balance the budget. In my opinion, the president could parethe budget by $5 to $10 billion a year with line item veto. That isa far off distance from our $200 billion annual deficits.Nonetheless, on balance, the line item veto is a long overdue wayto stop the fiscal bleeding.

Stephen Moore

Subcommittee on the Constitution
Committee on the Judiciary
United States Senate