Line-item veto power found to have minimal effect on spending

Presidential line-item veto power would probably not have a major impact on government spending, a Congressional Budget Office official told legislators Wednesday.

At a hearing before the House Rules Subcommittee on the Legislative and Budget Process, Donald Marron, the acting director of CBO, testified that proposed legislation to allow the president to veto individual legislative provisions would most likely have a limited effect on actual spending.

Citing a recent precedent, Marron said former President Clinton, who briefly held line-item veto power in 1997 before it was found unconstitutional the following year, accumulated less than $600 million in savings from its use, while total spending in 1998 amounted to about $1.7 trillion.

Presidents have long had the power to recommend rescission of spending authority after its approval, based on the 1974 Congressional Budget and Impoundment Control Act. But between 1976 and 2005, presidents have proposed rescinding only $73 billion, amounting to less than one half of 1 percent of discretionary budget authority, Marron said. Only a third of those proposed cuts were enacted by Congress, he testified.

Historically, Marron said, rescissions have been used not to reduce overall spending but to reallocate funds. Furthermore, the proposed legislation would apply only to discretionary spending, leaving untouched the existing mandatory programs that make up the majority of the federal budget.

While the current rescissions process does not require Congress to vote on presidential proposals (they automatically lapse if not approved within 45 days), a significant change is that current legislation would require Congress to act on any proposals made by the administration.

This change would close a loophole that allows legislators to tacitly turn down a presidential rescission proposal without affecting their voting record.

Marron said the proposed legislation could prompt a subtle shift of legislative and executive branch power, where "the threat of the president's authority to propose rescission of earmarks could restrain the Congress from including some provisions that it might otherwise have incorporated."

On the other hand, he said, the provisions could increase total spending if they resulted in legislators funding presidential priorities in exchange for assurances that their own earmarks would not be vetoed.

Budgetary tools "cannot establish fiscal discipline unless there is a political consensus to do so," Marron concluded. "In the absence of that consensus, the proposed changes…are unlikely to greatly affect the budget's bottom line."