|OVER THE LINE?
Is the Line-Item Veto constitutional?
May 5, 1998
in this forum:
Is the line-item veto that big a shift in power? What will be the impact of the Court's ruling? Is the veto giving the president more control over something he is held accountable for? Isn't the line-tem a half-step up from the regular veto authority? Will the line-item veto streamline government, or just backlog it even more? A question from Lisa Graver of Charlottesville, VA: I was wondering about something that may turn out to be a minor point but, is there any significance to that fact that these are tax provisions (the Idaho and New York City cases) that are before the Court? Could this have an impact on the decision that is handed down? What do you think the Court is going to do?
John Cooney, former OMB deputy counsel, responds:
You have identified an important point that was missed in most press accounts of the Supreme Court argument, but which was of critical importance in the courtroom. Several of the Justices, notably Justice Breyer, raised questions that specifically challenged the application of this new authority to invalidate narrow tax preferences. (The Breyer hypothetical is if Congress exempted 100 persons from taxation, but gave the President the power to reimpose taxation on some or all of these people, would the statute be unconstitutional.)
There is substantial historical justification for Congress' granting the President power to decline to spend appropriations (recission authority), under properly defined standards. There is some limited Supreme Court precedent (Field v. Clark from the 1890s and J.W. Hampton from the 1920s) for granting the President the power to raise or lower the rate of an existing tax, within defined limits. (The Breyer hypothetical appears to have been intended to focus on imposition of a tax in the first instance, rather than modifying a rate according to a scale Congress had established, as in these two cases). There is no precedent whatsoever for granting the President the power to cancel a tax preference. And there are substantial reasons for concern that giving the President this authority would be a dangerous precedent that, taken to an extreme, would allow a future Executive to rule by decree, canceling whatever provisions of law with which he disagrees. The extension of the Line Item/recission authority to give the President authority to cancel a freestanding, substantive provision of law appears almost certain to be declared unconstitutional if and when the Court decides the issue on the merits.
The most interesting, but illusive moment at oral argument was an aside by Justice Scalia, observing that there was substantial precedent for giving the President greater discretion with respect to declining to spend appropriations than for the kind of tax provisions attacked in the two cases before the Court. Scalia's remark could be interpreted as a description of a consensus reached by the Justices in their conference on the 1997 Line Item Veto case; as a summary of a point made by the government and essentially conceded by the challengers; or as a plea to his colleagues not to throw out the President's standing authority to refuse to spend appropriations as a by-product of the (anticipated) rejection of the taxation provision, but to leave that question for decision at a later time, in a case that squarely involves the recission aspect of the statute. No Justice took up Scalia's point, however, so observers were left guessing about its meaning.
The most likely outcome of the case is that the Supreme Court will declare the Line Item Veto Act unconstitutional as applied to cancellation of substantive tax provisions. The second most likely outcome is that the Court will refuse to decide the case on standing grounds, an issue that consumed more than half the challengers' time at oral argument. The third most likely outcome is that the Court will strike down the entire statute, as applied to both taxes and recissions of appropriations. The least likely outcome is that the Court will sustain the provision as applied to taxes.
If the Court strikes down the entire provision, great credit will be due the challengers' lawyers, for setting up test cases that involved the tax provisions and thus avoided the weight of authority that would have been raised against them in a straight appropriations/recission case.
Alan Morrison, head of the Public Citizen Litigation Group, responds:
Actually, the New York City case is not a tax case, in the sense that it is not the tax liability of New York or the other plaintiffs that is at issue; rather, the dispute is over whether the taxes that were paid are properly allowable under Medicaid. But your general point is possibly significant since there are some people who believe that discretionary spending is a matter that Congress could allow the President to control much more than it could allow him to control taxes (Justice Scalia suggested at oral argument that he might be in that group), in part because of how they read historical precedent in the area of discretionary spending. So far, the 2 district court judges who ruled against the veto, and Justice Stevens in last year's case that was decided on standing grounds, all have seen no such difference.
There is another argument that was made in a brief that we filed on behalf of three members of the House (Reps. Waxman, Skaggs & Slaughter) in which we argued from the historic record leading to the passage of the Line Item Veto Act that Congress would never have given the President any such power, unless he could also cancel tax benefits that helped only a limited group of taxpayers. If that argument prevails, then the Court could strike the entire law if it finds the tax provisions unconstitutional, without reaching the issue of whether the same rule would apply to discretionary spending.