By Alexis Simendinger and National Journal
July 8, 1997
Here's the quiz of the day: The Line Item Veto Act, unleashed for now by the Supreme Court for President Clinton to use, promises to A) cut pork spending; B) reduce the federal budget deficit; C) improve accountability; or D) none of the above. The correct answer, according to some budget analysts, is "none of the above." When it comes to fiscal restraint, they believe, the line-item veto is all bluff and no bite.
Sought by Presidents since Ulysses S. Grant and available to 43 of the nation's 50 governors, the line-item veto is the authority to cancel selected tax and spending programs without rejecting an entire bill. The GOP majority that swept Congress in 1994 spent two years working out line-item veto legislation, which Clinton eagerly signed in March 1996. The Court's recent 7-2 ruling--that the lawmakers who filed the lawsuit had no standing to do so--leaves Clinton free to wield his new power, but knowing that its constitutionality will be tested again.
"I'm glad the Court restored the power, as we go into the appropriations season," budget director Franklin D. Raines said in an interview. "And I hope, if there is a further testing of the statute, that we can get an expeditious decision by the Court, so that we can turn this into more of a routine matter."
The law gives the President five days after first signing a measure to tell lawmakers he has decided to cancel "discretionary budget authority provided in an appropriation law or any item of new direct spending or limited tax benefit." But he must cancel all of the item or none of it. To restore the spending, Congress must pass a bill by a veto-proof margin within 30 days.
Clinton, who had item-veto power as governor of Arkansas, recently called the federal law a "valuable tool for eliminating waste in the federal budget and for enlivening the public debate over how to make the best use of public funds." With this power, Clinton asserted, he can "ensure the federal government is spending public resources as wisely as possible."
Not likely, according to budget experts who have studied the law. "There are a lot of myths associated with it," said Philip G. Joyce, an assistant professor of public administration at Syracuse University. "Lots of people view this as being primarily about fiscal responsibility, or cutting budgets, but there's very little evidence at the state level that that's the way it's been used."
Myth No. 1--The line-item veto will reduce wasteful spending. "In fact, it could threaten to increase spending on the discretionary side," said Susan A. Tanaka, vice president of the Committee for a Responsible Federal Budget. "It's going to be more of a political tool than anything else. . . . The President wants this authority because then he can use it to get his priorities." He could strike bargains with lawmakers, experts say, to protect their pork if they go along with his pet spending. The reason a President is more likely to bargain than to veto a bill is that the law requires him to sacrifice any spending he cancels, which would reduce the total amount of money he can spend. A President can't cancel a spending item and then use the money for a program he prefers.
Raines disagreed. "I don't see any scenario where this increases the amount of pork," he said. But Clinton himself is on record applauding the veto as a potent political tool to reduce spending--or whatever else. "When I was a governor, after a year or two, the most important thing about it was not when it was used, but that it existed in the first place," he recently told reporters.
Myth No. 2--The line-item veto will help balance the budget. Even Raines agreed that this assertion is untrue as long as the veto is largely powerless to cut spending on entitlement programs. Clinton's snips and tucks aren't likely to have an observable impact on the already declining federal deficit. "If you're talking in the neighborhood of a $300,000 project," Tanaka said, "that's not much deficit reduction, and who knows whether or not it's even worth the political pain?"
Myth No. 3--The line-item veto will bring sunshine to the budget process. Think again, analysts warn. By encouraging private pork swapping between the President and appropriators, the veto could make the budget process murkier to voters who want to know what their elected officials have bankrolled. "People really miss the point if they want to judge the line-item veto only in terms of looking at, `When did the President use it, and what was the cumulative effect of that use?' " Joyce said. "That masks an awful lot that can go on behind the scenes."
Congress may try to dodge the President's veto by taking advantage of the law's definition of a line item, which is an appropriation that's specified either in the bill itself or in the accompanying committee report. Congress could try to avoid a veto by communicating its desires informally. "What's likely to happen is more back-channel communication--between an executive agency and its appropriations committee or between the President and Congress--that will not show up anywhere," Tanaka said.
Raines had a different view. If Congress works informally to instruct the White House and agencies about even the smallest expenditure, he hopes it's because lawmakers trust them to do the right thing. "If it's subterfuge, I hope it's exposed," Raines said. "If it's simply getting out of micromanagement, I think that would be a good thing."
Now that he has a line-item veto to brandish, Clinton must decide when to fire it off. "I hope I don't have to use it at all," the President told reporters on June 27. The White House has a dilemma, Joyce said, in that the earlier Clinton uses the veto, the earlier the courts may consider a challenge and take it away. But if he doesn't use it, his threat on Capitol Hill will prove hollow.
"I don't think we will pass up items that should be subject to the veto, just to have an attractive first case," Raines said. "But I think we'll use an enormous amount of care because it's an important tool, and we want to ensure that Congress understands that we know both its utility and its limitations."
By Alexis Simendinger and National Journal
July 8, 1997