February 3, 1995
"The Zen of the Line-item Veto"
San Jose Mercury News
By Timothy Taylor
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THE BIG players seem to agree that the time has come for a line-item veto, in which the president could veto part or all of any discretionary spending item passed by Congress.

The line-item veto is part of the Republican's "Contract With America"; it has passed the House Government Reform and Oversight Committee, and appears headed to the House floor. If it passes Congress, President Clinton doesn't seem likely to veto the veto; on the contrary, he advocated a line-item veto in his State of the Union address.

But despite bipartisan support and political momentum, the line-item veto appears unlikely to accomplish its main goal: holding down government spending. This may seem paradoxical. After all, members of Congress are well-known for trying to insert pork barrel projects for their state or district into larger bills. Under current procedures, the president must either accept or veto the entire bill.

At least in theory, it seems obvious that a president with a line-item veto could sort through these omnibus bills, weed out the special interest projects, and reduce spending. If the president was an especially tough budget-cutter (a description not typically applied to Clinton), the cutting might be even more severe.

However, both empirical and theoretical evidence argue convincingly that these effects will be minimal or non-existent. In fact, in certain scenarios the line-item veto could even lead to higher government spending.

One type of evidence comes from comparing the effect of the veto in different states. In some states, a governor can only veto entire bills; in other states, governors can veto lines in bills; in still other states, a veto can reduce an item, rather than eliminating it altogether. The procedures for the legislature to override a veto also vary from state to state.

If a line-item veto really holds down spending, states in which governors have more extensive veto powers and are tougher to override should have lower spending, after adjusting for other factors.

But as Robert Reischauer, head of the non-partisan Congressional Budget Office, testified before Congress a couple of years ago, "The evidence from studies of the use of the line-item veto by the states, however, indicates little support for the assertion that it has been used to reduce state spending."

Another source of evidence comes from trying to figure out what items would have been cut, if the president had a line-item veto.

For example, the General Accounting Office examined what are called SAPs -- Statements of Administration Policy -- that Ronald Reagan's Office of Management and Budget provided to Congress from 1984 to 1989. SAPs express the administration's objections to bills going through Congress. In the words of the GAO: "We used the broadest possible interpretation of SAP items to shown the maximum possible savings estimates."

Over those six years, the federal government spent $6 trillion. The "maximum possible savings" from giving Reagan a line-item veto, according to GAO, were $70 billion, or a bit more than 1 percent.

Even a savings estimate of 1 percent is probably too high. The Congressional Research Service went back over the GAO study and tried to estimate not the maximum, but the likely actual savings. The service concluded: "We believe that a more realistic and more useful estimate would be $2-3 billion over the six-year period and probably less."

Why is the line-item veto so weak in controlling spending? One reason is that for much of the budget, much of the time, the executive and legislative branches are in broad agreement. For example, interest payments, Social Security, defense and health spending add up to more than 70 percent of federal spending -- and neither Democrats nor Republicans are calling for substantial cuts in any of those areas.

Even when disagreement exists, a president might hesitate to use a line- item veto if it seems likely that members of Congress can and will retaliate by attacking the president's priority items.

A line-item veto could also create situations where spending would increase. For example, it might create this game: Congress would pass lots of additional pork barrel projects, and take credit with constituents for doing so. Then the president would veto many of these projects, and take credit for being tough on spending. But if every year Congress proposed 1,000 extra projects, and the president vetoed only 900 of them, then overall spending would be going up, not down.

Or consider a president who wants a substantial spending increase on some program. To persuade wavering legislators, the president threatens to use the item veto against projects in their districts. They cut a deal. Both the president's extra spending and the pork barrel project become law.

A line-item veto could result in higher or lower spending, depending on how it affects the political dynamics between Congress and the president. But in either case, it gives the president greater negotiating power with Congress and its members. This power could be used for budget issues, and also for any other presidential priority.

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