Hoover Daily Report

A Bow to Fiscal Conservatism

Wednesday, December 15, 2004

As the curtain rises on his second term, President Bush doesn't lack for opportunities to secure an enduring legacy. In addition to prosecuting the war on terrorism, the president has indicated that he wants to reform Social Security, simplify the nation's tax code, and institute health savings accounts—all noble yet formidable challenges.

Here's one additional item for that legacy portfolio: a bow to fiscal conservatism by restoring presidential line-item veto authority.

In June 1998, only two years after a Republican Congress and a Democratic president agreed that line-item vetoing was a necessary means to curb Washington's spending appetite, the Supreme Court struck down the president's ability to remove individual projects from congressionally approved legislation. Instead, the president can sign or veto spending and tax bills only in their entirety.

Not surprisingly, Congress has taken full advantage of the situation. According to the budgetary watchdog Citizens Against Government Waste, Congress this past year approved more than 10,600 "pork" items totaling nearly $23 billion—a 13 percent increase over the previous year—at a time when the federal deficit surpassed $422 billion and the national debt topped $7.5 trillion.

With Washington drowning in a sea of red ink, the timing is right to restore line-item authority. The only question is how to proceed.

Here are three options:

  1. Constitutional Amendment. Separate bills currently before the House and Senate would restore line-item authority by amending the Constitution. Although the approval process is steeper (a two thirds-vote in both chambers of Congress, plus 38 states' approval), it improves the chances of a new law surviving an all-but-certain constitutional challenge by line-item opponents.

  2. Impoundment. Up to 1974, presidents enjoyed a power known as impoundment: if a president didn't think an appropriation was appropriate, he didn't spend the earmarked money. But amid Watergate and its various intragovernmental power struggles, Congress restricted impoundment. Three decades later, Congress should right that wrong and give the president the ability not to spend money allocated by Congress if that spending is deemed unnecessary.

  3. Enhanced Rescission. The president does have one option: he can rescind "pork" items and send an entire spending bill back to Congress for reconsideration. However, Congress holds the trump card: if it doesn't act, the president's rescission is automatically rejected. A simple remedy for this would be "enhanced rescission" authority whereby Congress would be forced to vote on the president's request within forty-five to sixty days, thus forcing members to go on the record as for or against fiscal excess.

Will these reforms dramatically reverse the rising deficit tide? Probably not. In the eighteen months that he enjoyed line-item veto authority, President Clinton targeted only eighty-two programs, thirty-eight of which were restored by Congress for an overall savings of a mere $2 billion—a drop in the federal bucket.

Nevertheless, it would send a positive message to a cynical public: if Washington can't halt runaway spending, at least it is willing to hand over the reins to the president and let him try to slow down the horses.