AUGUST 11, 1997
President Clinton used his line-item veto power to strike out three provisions of the balanced budget agreement. Presidents since Ulysses S. Grant have been calling for a line-item veto, but President Clinton is the first executive to have such power. If some lawmakers have their way, he may also be the last. After a background report, The Wall Street Journal's Paul Gigot and the Boston Globe's Tom Oliphant analyze the President's moves.
CHARLES KRAUSE: Now to look at the political ramifications of the line item veto we're joined by NewsHour regular and Wall Street Journal columnist Paul Gigot and also political columnist Tom Oliphant of the Boston Globe. Tom and Paul, welcome.
A RealAudio version of this segment is available.
August 11, 1997:
Kwame Holman reports on the President's use of the line-item veto.
August 8, 1997:
Gigot and Oliphant discuss the line-item veto in the weekly, Political Wrap.
August 6, 1997:
President Clinton's latest press conference.
August 5, 1997:
Background on the budget deal.
June 20, 1997:
The Online NewsHour Freshmen debate the line item veto.
April 11, 1997:
Shields & Gigot discuss discuss the Federal Court ruling striking down the Presidential line-item veto.
April 9, 1996:
The history of the line item veto.
Browse the Online NewsHour's campaign finance and Congressional coverage.
Paul, tell me, politically, what did the President gain from his decision to use the line item veto?
PAUL GIGOT, Wall Street Journal: Well, Charles, he got a substantial new political power, be able to pick out specific items. He hasn't had that. Every President since U.S. Grant has had it. He gets to appear at the same time fiscally frugal, which is an image he's trying to project for the Democratic Party; sends a substantial deterrent message to members of Congress, Democrat or Republican, in future budgets. He makes a few enemies here. The specific sponsors of the items on the bill--but as Machiavelli said, it's better to be feared than loved. And I think they'll fear him for this.
CHARLES KRAUSE: Tom.
TOM OLIPHANT, Boston Globe: I might even go little bit further. And I think the President was helped today by the way he made this first use of this new power. Remember, we haven't even come to a pure spending bill yet and won't for some time. But he took on a tax issue, an entitlement issue, and an industry-driven tax break issue, all supported by rather powerful people in Washington, not weak people, so that it was an assertive, vigorous use of this new power in a way that I think made him look strong just in exercising it.
A change in the rules of Washington? "We should be so lucky."
PAUL GIGOT: The President did make a claim that I thought was too extravagant when he said the rules of Washington have changed for good. We should be so lucky. I mean, if he vetoes ethanol subsidies, then I'll say the rules of Washington have changed for good. But he did exercise the power. And just by exercising that power, he shows members of Congress that in the future they must be careful because if they put something in that turns out to be focused on by the President to veto, the run the risk of significant embarrassment not only to the people that they sponsored, who they said, look, I'll deliver for you, but also to the voters.
TOM OLIPHANT: How about this as an additional point? I think in the future if you've got a little special interest goodie in mind, you might want to consider going down to the President and talking to somebody close to him ahead of time before you go ahead and do it.
CHARLES KRAUSE: Well, let's take a look at the special interest goodies, as you call them, that he vetoed today. Let's start, Tom, with the agri-business tax provision that was vetoed. What was that about and who lost politically?
TOM OLIPHANT: Well, this involved the sale by a processor of an asset to what turned out to be a food cooperative. In this case I believe it was involved with sugar beets. Now, there is some dispute about this even at this hour, but my understanding is that the person who did the selling, who turned out to be a mega-bucks Republican contributor, has already benefited from this and is not really affected directly by what the President did today. My understanding from the administration officials is that the impact of this line item veto is on deals like this in the future, so that the revenue estimate that was made in the veto message is really based on a fore test of what might happen had the President not acted. And, remember, that in doing this the President specifically encouraged those involved, including Minority Leader Tom Daschle in the Senate, to draw this again with a little bit more care so it doesn't have the effects that he singled out.
CHARLES KRAUSE: Who was behind this, though? Who loses politically?
PAUL GIGOT: The sponsors, including a lot of farm state Democrats. Charlie Stenholm of Texas, for example, power on the Agriculture Committee in the House, Tom Daschle, Tom Harkin of Iowa, the Farm Bureau Federation supported it--a lot of farm interests did because there are farm coops who'd stand to benefit from this, so they're the big losers.
CHARLES KRAUSE: Let's move on to the next one. The foreign tax provision; what was that about, and who loses?
Losers come from both parties
PAUL GIGOT: Well, insurance companies and banks had wanted to have their foreign-sourced income treated the way manufacturing companies have it, which is sometimes they can wait until the district is taxed; they can delay until it is taxed, until it's distributed to the U.S. entities. And the sponsors of this included the Senate Majority Leader, Trent Lott, working on behalf of financial interests, as well as an awful lot of Democrats, Barbara Kennelly of Connecticut, who is a power in the House. She happens to have a lot of insurance companies in the state of Connecticut. Some other Democrats, I'm told, in the Ways & Means Committee in California, Bob Matsui. So it's--it was an industry-wide support for this.
CHARLES KRAUSE: And cut across both parties.
PAUL GIGOT: It cut across both parties. That's correct.
CHARLES KRAUSE: The last provision or the last part of this was this New York Medicare spending provision.
TOM OLIPHANT: Medicaid actually.
CHARLES KRAUSE: Sorry.
TOM OLIPHANT: Here is an entitlement program where, in effect, what Congress did was overturn a federal regulatory ruling involving the use by New York State and New York State alone of certain revenues from taxes on health care providers to kind of make up part of its share of this joint state federal program, something no other state can do. And interestingly, again, in terms of taking on the powerful, rather than the weak, the President singled this provision out, and it had the backing of the governor of the state, Republican George Pataki, who just happens to be up for reelection next year--no coincidence. But it was also very much supported by Sen. Pat Moynihan, senior Democrat, opponent of the line item veto, a Congressman, Democratic Congressman from the state, and, in effect, he was prohibiting Congress from using the back door to get around the rules governing entitlement programs that other states have to abide by.
Will the vetos be sustained?
CHARLES KRAUSE: So to all of these provisions there are a lot of important Democrats and Republicans both who are affected. Do you get any sense that Congress will decided to try to override the President's vetoes?
PAUL GIGOT: They will look at it. They will look at it carefully. There's a great irony here, though, politically, and this will, I think, restrain Republicans, and that is this would never be a power that this President had if it weren't for the Republican Congress. It wouldn't--in not a million years would Dick Gephardt give this to the President if he were Speaker of the House. They didn't give it to Reagan. So the Republicans are going to have to think twice about whether now with a Democratic President standing up for fiscal integrity, or claiming to, they're going to override him? I don't know that this is a fight that they want to pick. And the puzzling thing here is Newt Gingrich's reaction when he called it petty politics. I don't think you want to take credit for it and then say we'll look at these things on the merit.
TOM OLIPHANT: You have to understand the route that overriding this has to take. It takes two-thirds of each body, and it has to be a separate piece of legislation providing for this particular tax break so the route is almost impossible, and I think it understands how the court case on appropriations this fall will be much more important than what happens after this.
CHARLES KRAUSE: We're going to have to leave it there. Tom, Paul, thank you very much.