June 07, 2006

Line-Item Veto Proposal Aims to Cut Back Government Services But Leave Tax Breaks for Special Interests

Congress is considering its latest proposal to give the President something resembling a "line-item veto," the power to sign only part of a spending bill into law. Technically, this proposal is not a true line-item veto (which has been struck down by the U.S. Supreme Court as unconstitutional) but rather allows the President to withhold funds appropriated under a particular provision of a spending bill for 180 days and requires Congress to vote to approve or reject the rescission. Causing some controversy among legislators of both parties, the President's proposal would allow him or her to continue to withhold the funds for the duration of the 180-period even if Congress rejects the rescission. Currently, the President can only withhold funds for 45 days and Congress is not required to vote on a requested rescission. The proposed law has been introduced in the Senate by Majority Leader Bill Frist (R-TN) and in the House by Representative Paul Ryan (R-WI). In its current form it could be used to force Congress to cut back expansions in entitlement programs or to force the defunding of entire discretionary programs, including the 91 discretionary programs the President proposed to eliminate in his last budget proposal.

Most alarming from the perspective of fiscal sanity is that tax breaks targeted towards the rich or towards a very narrow group of people cannot be targeted for elimination by the President under the bill. Representative Ryan recently told an audience at the Heritage Foundation, "The goal of this is not to change tax policy to go after tax pork." Apparently he has an extremely narrow view of what constitutes "tax pork." Under his bill, the President can only hold up a tax provision and request its elimination if 1) the tax breaks will benefit 100 or fewer people and 2) the tax break is not targeted towards people in the same line of business or owning the same type of property.

In effect, Congress can pass any type of tax break that benefits 101 people, or a tax break that benefits 4 people in the same industry or who own the same type of property, and the President will have no power to strip the provision from the larger bill that contains it. The President will, however, be allowed to strip, say, all Head Start funding for 180 days even if Congress then votes to reject such a rescission.

Even the White House's usual allies are balking. Judd Gregg (R-NH), chairman of the Senate Budget Committee which will mark up the bill, said the proposal as drafted is a "'poke a stick in the eye of Congress' bill." For once we'd have to agree with him.


Post a Comment

<< Home