NCPA - National Center for Policy Analysis

Impoundment Is A Kind Of Line-Item Veto

June 1, 1998

The line-item veto gave the president power to cancel individual spending provisions in appropriations bills -- instead of having to veto an entire bill. The law was declared unconstitutional by the Supreme Court, which said Congress could not give this power to the president.

The line-item veto was not a very powerful tool against unnecessary government spending, according to research based on state experience.

  • Some 43 governors have line-item veto power, to greater or lesser degrees.
  • In general, studies based on state experience have found that it mainly affects the composition of spending, but not the overall level of spending.
  • In a typical assessment, economist Douglas Holtz-Eakin wrote, "Examination of the states' behavior suggests that long-run budgetary behavior is not significantly affected by the power of an item veto."

This is confirmed by the limited extent to which President Clinton used his line-item veto authority when he had it. A Congressional Budget Office study found that he canceled just $355 million in spending for fiscal year 1998 in a budget of almost $1.7 trillion.

Nevertheless, Congress could restore the president's power of the purse which was emasculated by the Budget Act of 1974. Prior to this law, every president enjoyed a form of line-item veto power called impoundment. In essence, if a president did not think a particular appropriation was justified, he simply did not spend the money.

Congress abolished the president's authority to impound spending in the depths of Watergate. This has led to more spending on programs that only benefit narrow constituencies.

If Congress still wants the president to have line-item veto authority, it could repeal the law restricting impoundment, which clearly would pass judicial review.

Source: Bruce Bartlett, senior fellow, National Center for Policy Analysis, June 1, 1998.


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