Journal of Economic Perspectives: Vol. 4 No. 2 (Spring 1990)

Carter, John R., and David Schap. 1990. "Line-Item Veto: Where Is Thy Sting?." Journal of Economic Perspectives, 4(2): 103-118.

DOI: 10.1257/jep.4.2.103

Proponents of giving the president the authority to use a line-item veto argue that the institutional change is needed to limit special-interest legislation and restrain spending. Opponents respond that it would grant too much added power to the president, thereby upsetting the delicate balance wisely crafted by the founding fathers. This article focuses on the presumption, evidently shared by both sides in the debate, that adoption of item-veto authority will have significant consequences in terms of budget outcomes and the distribution of power. Curiously, there presently exists little empirical support for the presumption that item-veto authority is important. Most studies comparing states with various types of veto authority have failed to detect significant effects associated with item veto. Additional tests of our own are consistent with these results. After reviewing the empirical evidence, we reconsider the alleged effects of item-veto authority by seating the popular depiction in an explicit model of the budgetary process. Formal modeling exposes logical inconsistencies contained in popular veto discourse. Further, the model makes clear that the predicted consequences of item veto, commonly projected as ubiquitous, in fact arise only in select settings.

Carter, John R. (College of Holy Cross)
Schap, David (College of Holy Cross)

321: Fiscal Policy