James C. Miller III

Counselor

Citizens for a Sound Economy

1250 H Street, NW, #700

Washington, DC 20005 Citizens for a

FAX: (202) 942-7668

of

JAMES C. MILLER III

before the

SUBCOMMITTEE ON THE CONSTITUTION

of the

COMMITTEE ON THE JUDICIARY

of the

U.S. HOUSE OF REPRESENTATIVES

on

MARCH 23, 2000

There are two reasons why Congress should approve and the states should ratify a constitutional amendment granting the president a line-item veto of expenditures. The first is that such a veto would tend to keep overall spending in check. The second is that the composition of spending would be improved. I will address both motives as well as some of the criticisms of the measure below.

The argument that a presidential line-item veto would restrain spending is more than just a matter of common sense: there is empirical evidence. When Professor Mark Crain of George Mason University and I examined the budget processes of the several states and then estimated the effect on budget growth of various features of budget process, we found that the line-item veto can have a significant effect on spending growth. Interestingly, we found that the ordinary, binary veto did not affect spending growth very much. But the more perfecting item-reduction veto which is available to 10 governors does make a significant difference. That is, when the governor has the "all-or-nothing" decision of whether to leave in a measure or zero it out altogether, too often he or she will opt for the former. But when a governor can take an item and reduce the level of spending (including all the way to zero), he or she is more likely to take action and to prevail against a threat of legislative override. Accordingly, I recommend that the language of the amendment in H.J Res. 9 be changed to allow for reductions in item spending levels as well as canceling them altogether. This can be accomplished quite easily by replacing "disapprove" with "reduce" and "disapproved" with "reduced."

I am quite aware that "one person’s pork is another’s vital measure." But surely no one can examine the list of spending initiatives compiled by the Porkbusters Coalition or by such independent groups as Citizens Against Government Waste or Citizens for a Sound Economy Foundation and protest to the contrary. Admonitions that such spending is essential — or even comes close — simply do not pass the laugh test. In almost any conceivable use of a line-item veto, the president would tend to eliminate less vital spending and thus improve the quality of the spending measures that survive.

Let me now deal with two major criticisms of the line-item veto. The first is that a president would use the threat of such a veto to intimidate members of Congress and thus shift the balance of power in a fundamental way. We’ve had one direct and many indirect tests of this proposition. During the period when President Clinton’s line-item veto was presumed constitutional, his limited use of it did not raise significant charges of intimidation, though there were murmurings of partisanship since typically the items he vetoed had been sponsored by members of the opposing party. (This may have been more a function of which party controlled Congress than which party controlled the White House.) Second, as I have indicated, the majority of governors have line-item veto authority, and there is no hue and cry about executive abuse from the states.

Second, it is said by some that pork is the "glue that holds appropriations together" — as if without it the appropriations process would become "unglued." I find this a peculiar argument for retaining the present system. Pork is an inherent feature of the present system, but need not be essential in a system that provides a way for the president and Congress to avoid it. At best, all that can be said of pork is that if it is the "glue" that holds appropriations together, we should search for a better, more cost-effective glue.

Let me address one final point, and that is the argument that if you grant a line-item veto for spending you should also give veto authority over tax cuts. I am fully aware that targeted tax cuts can be abused just as targeted spending increases. But I believe the appropriate tools for dealing with these two problems are different. The tax code should be abolished and replaced with a simpler, fairer tax without the myriad of features facilitating special tax benefits. Besides, by far the bigger problem is the propensity of congress to ratchet up spending. Congress has shown little bias toward cutting taxes unreasonably.

Mr. Chairman and Members of the committee, that completes my statement. I shall be happy to address any questions you might have.