Senate's Diminishing Sense of Budget Restraint

Despite the counterterrorism intent of S. 2551, Congress has padded this "emergency" supplemental appropriations bill with funding for a spectrum of programs that could scarcely be considered vital to national security and defense. Funding for Amtrak, farmers, road builders, flood control, New England fishermen, and the Smart Start Child Care Center and Expertise School in Las Vegas are but a few examples of this wasteful pork-barrel spending.2 Yet on June 7, 2002, the Senate passed this troublesome supplemental bill by a vote of 71 to 22.

With the federal budget deficit this year expected to hit $150 billion or more, and with many Members of Congress expressing a willingness to undo some or all of the tax cut to pay for more spending, the hesitant economic recovery that is now underway could be put at risk. Numerous studies and international comparisons of economic performance have found that high and rising levels of government spending are associated with relatively sluggish rates of economic growth and depressed living standards.3

Thanks in part to decades of runaway government spending and escalating taxes in Europe, Canada, and Japan, the gap between the American standard of living--measured either as per-capita personal income or GDP per capita--and that of those countries widened throughout the last decade. Average per-capita incomes in most of Europe and Canada are below the average incomes for many of the historically lower-income segments of the American population, such as African-Americans and residents of Mississippi and West Virginia.4 If America is to continue to avoid the economic stagnation that has afflicted many of her competitors, the gross misallocation of scarce resources and excess government spending must cease.

Why Veto Action Is Necessary

With the last remnants of spending restraint fading fast in Congress, fiscal discipline will be restored only if the White House steps forward and declares a defined limit on government spending for the next fiscal year. The President should make it clear that this limit is the line in the sand beyond which he will exercise the veto authority granted him by Article 1, Section 7 of the Constitution.

President Bush hinted that he is prepared to provide such restraint when he recently declared:

If we restrain spending, even though we're at war, even though our economy is still clunking along, if we react responsibly, we can return to a balanced budget--something I want--as early as 2004. But tough choices on Capitol Hill have to be made.... [Washington shouldn't] get into needless partisan screeching over the budget.... I've got a tool, and that's called a veto.5

However, the power of the President's threat is diminished because he has already signed into law bills that he once strongly opposed. Indeed, the much-discussed veto threat regarding S. 2551 falls short of a credible commitment to action. The President's Statement of Administration Policy merely says that "If the supplemental appropriations bill were presented to the President in its current form, his senior advisors would recommend that he veto the bill."6 With fiscal discipline collapsing, it is time for the President to follow through on his intimated veto threat and exercise his constitutional privilege with vigor and zest.

As Table 1 reveals, recent Presidents have exercised their veto authority frequently--and, for the most part, with great success. President Franklin Delano Roosevelt used his veto power no fewer than 635 times and with a 98.6 percent success rate.7 In fact, no other President has had a success rate of less than 80 percent in having his vetoes sustained.

Because the length of Presidents' service in office varies dramatically (President Gerald Ford served only two and a half years, while FDR served more than 12), comparisons of the use of the veto are indicated more accurately in terms of the average number of vetoes a President issued per year. In Table 1, the next-to-the-last column shows the average number of vetoes per year for the last 12 Presidents, and the final column presents the success rate as measured by the percentage of a President's vetoes that Congress did not override.

Comparing Presidential Veto Rates

A comparison of Presidents' use of the veto in terms of the average annual number of vetoes shows that all recent Presidents have made more extensive use of their veto authority than President George W. Bush has during his term in office. President Bush has not vetoed a single bill since taking office in January 2001, whereas the average veto rate for his 11 nearest predecessors was 17 per year.

In making such comparisons between Presidents, it is important to note that these average veto rates reflect performance over many years; caution should be exercised in comparing long-term performance trends with just a small slice of a President's term. For example, while Bill Clinton averaged five vetoes per year throughout his eight years in office, he did not issue any vetoes until his third year in office, when the Republicans took control of both the House and Senate in the 1994 mid-term elections. Although his relationship with subsequent Congresses was often acrimonious, Clinton's annual average veto rate is tied with that of Lyndon Johnson--lower than any of the Presidents since James A. Garfield, who was assassinated in 1881 after serving only five months in office.

Like Clinton, President George W. Bush began his term in office with his party in control of both houses; but he faced a divided Congress early in the first year when Democrats took control of the Senate in May 2001. Although some political analysts argue that veto trends are influenced by whether or not the same party controls the presidency and Congress, the records of a number of notable Presidents indicate that party control of Congress is not always an accurate predictor of veto trends. President Franklin Roosevelt's veto rate provides a case in point. Throughout his more than 12 years in office, FDR's fellow Democrats controlled both the House and Senate, yet he exercised his veto authority at an annual rate (53 times per year) greater than any other President, with the exception of Grover Cleveland.

In contrast to Bill Clinton's and George W. Bush's below-average use of the veto, President Gerald Ford vetoed his first bill on his third day in office and exercised that constitutional privilege 40 more times during the next 17 months (approximately the same period of time that President Bush has served in office). As mentioned above, the average annual rate of vetoes for the 11 Presidents who most closely preceded George W. Bush was 17, ranging from a high of 53 per year by FDR8 to Clinton's low annual average of five. George H. W. Bush vetoed his first bill five months into his term and vetoed six other bills within his first year in office. Although his annual average veto rate was somewhat below average at 11 per year, his veto rate was higher than Ronald Reagan's. Among postwar Republicans, President Ford, who faced a Democratic-controlled Congress, tops the list with an annual average of 26 vetoes, followed closely by Dwight D. Eisenhower with 23.

As Table 1 also reveals, President George W. Bush, with no vetoes after almost a year and a half in office, ranks at the bottom of the veto-rate list. In contrast, during an average 18-month period, Franklin Roosevelt would have vetoed 80 bills. George H. W. Bush would have vetoed about 17. In late October, Congress will head home after 21 months of work; George H. W. Bush's average veto rate during an equal time span would have been 21, and FDR's would have been 93.

Some defenders of President George W. Bush may argue that his reluctance to exercise his veto power is rooted in his preference for using negotiation and compromise to achieve his legislative goals, and that this strategy has been more successful than threats and confrontation would have been. But for that to be true would require a fundamental reversal of what the President earlier said were his chief policy objectives and core beliefs, either in principle or in detail. The following are among the counterproductive bills that the President originally opposed but subsequently signed into law:

• A costly bailout for airlines;
• A bill to federalize more than 57,000 airline baggage inspectors;
• A farm bill that largely subsidizes the well-to-do;
• An education bill that excludes his key initiatives; and
• "Campaign finance reform" regulations of suspect constitutionality.

(See Appendix A, "Items the President Should Have Vetoed," for details on these missed opportunities.)

 
Had President Bush rejected these five poorly conceived bills, his veto rate would be closing in on that of President Clinton, though still at the bottom of the list. Instead, having not used the veto power even once, George W. Bush ranks alone in last place with regard to his veto rate.

Yet President Bush's veto record could change quickly, and with good cause. The 107th Congress is working to wrap up its two-year session and enact a variety of legislative initiatives--including the 13 appropriations bills--before adjourning this fall and engaging in campaigns for re-election. If President Bush were to veto 10 bills before the session ended, he would edge out Bill Clinton and leave the last-place rank to his predecessor. (He would still be 11 vetoes short of his father's veto performance, however.)

If the legislative record of this Congress is any indicator, the President's desk will soon be the landing pad for a bevy of defective bills that, if enacted into law, would violate principles of fiscal responsibility and personal freedom or jeopardize the nation's economic vitality. Appendix B, "Items the President Should Veto," includes brief descriptions of 19 bills that have been introduced in Congress as of June 2002 and are making their way through the legislative process.

Among the bills that will be sent for the President's signature may be some, or all, of the 13 appropriations bills for the fiscal year (FY) 2003 federal budget that are just now taking shape in committee and will be voted on as early as mid-summer. Because the Senate has failed to pass a budget resolution, for the first time in the 31 years since the Budget Act of 1974 was enacted, Congress may be constructing a budget without the benefit--or restraint--of a binding budget resolution that would establish limits on discretionary spending for each of the 13 appropriations bills.

If the Senate does not produce a budget resolution, President Bush should adopt an alternative benchmark for the acceptance or rejection of individual appropriations bills. Such a benchmark may be found in the budget function allocations established by the House budget resolution for FY 2003 (passed on March 20, 2002) or the allocations implicit in the President's FY 2003 budget proposal (as introduced in February 2002). These are listed in Table 3.

Conclusion

Because President Bush failed to exercise his veto privilege on a number of poorly conceived bills that should not have become law, Congress, lobbyists, and policy advocates increasingly disregard the Administration's concerns and objectives in crafting legislation. By now, they know that, because a veto is highly unlikely, there is no reason to compromise their actions or temper their grasp. When the President signed the farm bill into law, one prominent Washington-based journalist wrote that

President Bush, who will apparently sign absolutely any bill that reaches him, up to and possibly including a bill selling his family into slavery, picked up his pen, threw away his principles, and signed a farm bill that has been universally derided as an expensive monstrosity.9

Even committed advocates of the budget-busting farm bill were taken aback by the Administration's lack of resolve on domestic policy issues. According to one farm lobbyist,

Senator [Thomas] Daschle [D-SD], in a conference call with South Dakota reporters, said...he did not think there would have been bipartisan support for the bill if the president had indicated any opposition. I agree, but the White House long ago signaled it would not veto a farm bill--a virtual mega-call for lawmakers to get as much in the farm bill as possible. They succeeded.10

As more and more overreaching and flawed legislation is signed into law, advocates of higher spending and more expansive government are becoming bolder, both in their demands and in their approach to the White House. Although the constitutional veto privilege offers one of the most powerful threats available to any federal official, the President's failure to use it has encouraged some to go so far as to threaten him.

In June 2002 hearings on Amtrak's pervasive, and worsening, financial failings, for example, Senator Patty Murray (D-WA) proclaimed: "The Bush Administration must quickly ask for enough money to keep Amtrak running through the rest of the fiscal year or be prepared to explain to the American people why it will allow Amtrak to go bankrupt in the middle of the travel season."11 And just in case the President and his aides did not recognize this statement as a threat, Amtrak's new president, David Gunn, was more specific in an interview with the media in which he reportedly "threatened a nationwide shutdown of Amtrak as a prelude to his testimony today in front of the Senate Appropriations Committee."12

It is not too late, however, for President Bush to make up for lost opportunities and to re-establish the credibility of a robust presidential veto threat. Emboldened to push the limits of irresponsible spending, Congress will soon be sending him legislation that deserves to be rejected and sent back for major improvement.

High on the list of this veto-worthy legislation will be the supplemental appropriations bill, which some in Congress now say will soon include an even higher bailout for Amtrak. This larded bill will present a prime opportunity for the President to re-establish his reputation for fiscal restraint. In doing so, he can clarify to Senator Murray and Amtrak President Gunn what the Founders intended: that the Constitution and legislation would work for the good of the people, not the privileged interests that float lightly through senatorial offices and government bureaucracies.

--Dr. Ronald D. Utt is Herbert and Joyce Morgan Senior Research Fellow and Christopher B. Summers is a Research Assistant in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

Appendix A
Items the President Should Have Vetoed

No Child Left Behind Act, H.R. 1

The final bill contained no consolidation, little school choice, watered down bilingual reforms, irresponsible spending levels, and no Straight A's/Charter States provision. Moreover, the act will cost taxpayers an estimated $26.3 billion the first year if fully appropriated. The total could climb to over $37 billion a year by the end of the authorization period. That is more than triple the authorization of the 1994 Elementary and Secondary Education Act. While the bill made some improvements in current law (particularly with regard to testing and reporting), it was not the robust reform initially recommended by the President; nor is it sufficient to provide needed reform in the nation's schools.

Airline Transportation and Systems Stabilization Act, H.R. 2926

The scope and magnitude of this federal bailout of the airlines were both unprecedented and unnecessary. A mandated shutdown and terrorist fears caused severe hardship, but $5 billion in cash grants and $10 billion in federally guaranteed loans was excessive. Concessions to airlines encouraged many other industries to seek similar treatment, and some, such as the steel and agriculture industries, have received it. A more cost-effective solution would have been for the government to commit to a $5 billion advance purchase of airline tickets for future government employee business travel. Airlines would have received the temporary cash infusion they needed, and the government would have received valuable tickets in return.

Aviation and Transportation Security Act, S. 1447

This act authorized the federalization of more than 57,000 private-sector workers, creating a new Transportation Security Administration that will cost an estimated $6.8 billion per year. The act entails one of the largest expansions of the federal government in history. A much better solution would have been to improve oversight and the quality of existing privately operated security systems. Serious lapses in the performance of the Federal Bureau of Investigation and the Immigration and Naturalization Service provide evidence that federal operation is no panacea for low-quality management and poor performance.

Farm Security and Rural Investment Act of 2002, H.R. 2646

The most expensive farm bill in history, this legislation imposes on American taxpayers expenditures of at least $180 billion in federal spending and $272 billion more in inflated food prices throughout the next decade, at a total cost of nearly $4,400 per household. Given that farm legislation historically has spent twice as much as projected, this bill could entail as much as $360 billion in expenditures over the next 10 years. Making matters worse, rather than targeting struggling family farms, nearly three-fourths of the funding for this corporate welfare bill will be distributed to the wealthiest large farms and agribusinesses. Moreover, the farm bill continues the failed and counterproductive farm policies of the past, and its protectionist policies risk violating America's international trade agreements.

Bipartisan Campaign Reform Act of 2002, H.R. 2356

This legislation violates both the Constitution and the President's stated principles on campaign finance reform. It imposes restrictions on the First Amendment right to speech, which should ensure unrestricted participation in the political process. The bill also includes restrictions on advertising that would severely restrict the activities of political parties, organizations, and labor unions that serve as a source of information for voters during election periods. Any bill that attempts to "equalize" citizens' political speech by imposing criminal and civil penalties on "excessive" or "unfair" speech violates the First Amendment, which states in clear terms that "Congress shall make no law...abridging the freedom of speech."

Appendix B
Items the President Should Veto

Railroad Infrastructure and Expansion Act for the 21st Century, H.R. 2950

This bill would authorize states to issue $36 billion in tax-exempt bonds to build high-speed rail infrastructure, $280 million in grants for high-speed rail corridor development, and $42 billion in federal loans and loan guarantees for railroad revitalization. All funds go to states and regional compacts. None of the funds would be available directly to Amtrak. The bill requires no meaningful reform of Amtrak.

High-Speed Rail Act S. 250, H.R. 2329

This act would allow Amtrak to borrow up to $1.2 billion per year in each of the next 10 years using special tax-credit bonds that allow Amtrak to borrow interest-free. Bondholders would receive a tax credit each year equal to the current interest rate. This legislation would cost the U.S. Treasury an estimated $19.1 billion over the life of the bonds while doing nothing to provide high-speed rail service. It requires no meaningful reform of Amtrak.

National Defense Rail Act, S. 1991

This bill proposes to increase Amtrak's annual taxpayer subsidy by 500 percent from its current level of approximately $600 million to $3.6 billion in each of the next five years. In addition, it includes a one-time payment of $1.4 billion for security improvements. The bill absolves Amtrak of its statutory requirement to become financially self-sufficient and adds two more planned high-speed rail corridors to the 11 the federal government has said it will construct. It requires no meaningful reform of Amtrak.

Community Character Act, S. 975, H.R. 1433

This legislation proposes to provide $25 million per year to fund land-use planning by state and local governments. It encourages local communities to cooperate with regional and state master plans and implies that there should be a federal plan. The bill would lead to unprecedented federal involvement in what historically has been a local responsibility.

Providing Reliable Officers, Technology, Education, Community Prosecutors, and Training in Our Neighborhoods Act of 2001, S. 924, H.R. 2009

S. 924/H.R. 2009 will reauthorize the Community Oriented Policing Services (COPS) program to spend $6.9 billion over six years, in spite of the program's dubious impact. According to congressional staff, the Department of Justice has said it will not publicly criticize the legislation. The bill will reserve up to 50 percent of hiring grants for previous hiring grant participants whose original grants have expired. In essence, it creates a new federal obligation to fund local officers' salaries that is tantamount to establishing a new federal entitlement for localities.

National Defense Authorization Act for Fiscal Year 2003 S. 2514

Previously, the Senate version of the National Defense Authorization Act (S. 2514) reduced funding for the missile defense program by $814 million. During recent Senate action on the floor, the $814 million was restored, but with the stipulation that President Bush apply the funds to missile defense or counterterrorism efforts. This requirement creates a false choice, since missile defense is a vital part of homeland defense.

Further, the bill includes restrictive language regarding the management of the program that is all but certain to cripple it. After President Bush spent political capital to withdraw the United States from the ABM Treaty in order to pursue a program for the nation's protection, it should be unacceptable for Congress to impose crippling restrictions on that program. Secretary of Defense Donald Rumsfeld, in a June 12, 2002, letter to Senate Armed Services Committee Chairman Carl Levin (D-MI), says that he will recommend that President Bush veto the bill if the funding cuts and restrictive language regarding missile defense are retained. President Bush should follow Secretary Rumsfeld's advice.

Energy Policy Act of 2002, H.R. 4

This act should be vetoed if it includes any of the following: (1) mandatory renewable portfolio standard for electricity retail suppliers; (2) ethanol mandate to triple the amount of ethanol required in gasoline by 2012, which would drive gasoline prices up and increase the total federal subsidy for ethanol; or (3) global warming provisions in Title X, which would amount to a back-door implementation of the Kyoto Protocol, and Title XI, which would entail a national registry of emissions that would be voluntary in name only.

Clean Power Act of 2001 S. 556

This legislation would adversely affect the nation's energy supply and economy. Moreover, imposing drastic reductions in CO2 emissions would essentially implement a domestic version of the flawed Kyoto Protocol limits, which President Bush declared that the United States would not implement because to do so would jeopardize the nation's economic and energy security. President Bush should threaten to veto any legislation that requires mandatory reductions in CO2 emissions.

Medicare Outpatient Prescription Drug Act of 2002, S. 2625

This bill adds a costly prescription drug option to an already financially crippled Medicare program and takes no steps to improve the viability of the program. The President should veto any proposal that attempts to add prescription drug coverage without incorporating fundamental modernization of the system. Such reform should be designed in accordance with the model of the Federal Employees Health Benefits Program (FEHBP) that covers Members of Congress and other federal employees and retirees and their families. Without such reform, Medicare will continue to lag decades behind the FEHBP in providing seniors the level of care they need.

Greater Access to Affordable Pharmaceuticals Act of 2001, S. 812

This bill would allow generic drug makers to enter the market earlier than current law allows, eroding patent protections on pharmaceuticals. The President should veto any proposal that infringes on any individual's or industry's intellectual property rights. Failure to provide these patent protections will hinder medical and technological advancements in curing or treating diseases.

Prescription Drug Price Parity for Americans Act, S. 2244

This bill would allow individuals, wholesalers, and pharmacists to re-import prescription drugs from Canada. President Clinton opposed a similar proposal because of safety and quality concerns. These concerns are even more relevant in the wake of September 11. With national security on high alert, the President should veto any proposal that could endanger the health and security of U.S. citizens.

A Bill to Provide Health Benefits to Workers and Their Families, S. 2639

This bill would mandate that certain employers provide generous health insurance benefits to their employees and pay the majority of their costs. It would add to the burden of employers who are struggling to provide their employees' benefits. The health care system needs fewer, not more, regulations and government mandates. The President should veto any bill that imposes additional government control that infringes on the free market.

Bipartisan Patient Protection Act, S. 1052, H.R. 2563

This bill would impose federal mandates and expand liability on certain private insurance plans. Such efforts increase the overall cost of health insurance and thereby make it less affordable for many hard-working families. As employers face double-digit premium increases this year, the President should veto any legislation that would further exacerbate the burden of high costs.

Mental Health Equitable Treatment Act of 2001, S. 543

This bill would require private health insurance plans to cover mental health coverage equally with physical health care coverage. Such federal micromanagement of insurance benefits only adds another layer of cost to coverage, making it less affordable for the very people that are supposedly being helped. The President should veto any legislation that forces a one-size-fits-all coverage plan on employers and workers. Instead, he should support efforts to remove the barriers that prevent individuals from choosing a coverage plan that best suits their own medical needs.

Prescription Drug Fairness for Seniors Act of 2001, HR. 1400

This bill would require drug manufacturers to distribute their drugs to Medicare beneficiaries at a certain federally determined price. Federal price-setting would lead to government rationing of the number and types of drugs that would be available to individuals. It would also deter drug manufacturers from making further investments in developing new drugs and treatments. Furthermore, many pharmaceutical manufacturers already voluntarily provide discount drugs to in-need, low-income seniors. The President should veto any bill that could limit an individual's access to lifesaving drugs and treatments or deter the development of medical treatment and cures.

Equal Access to Care Act, S. 1592, S.1606

This bill would prohibit a physician from receiving payment from a federally funded health-care program (for example, Medicare) if he or she receives additional payments for services on behalf of the beneficiary. Patients should be able to pay their physicians for the treatments and services they want access to or for services not covered by the programs. The President should veto any bill that would prohibit patients' access to care and treatments that could improve their health or save their lives.

National Science Foundation Authorization Act, H.R. 4664

This legislation would begin a five-year process of doubling the National Science Foundation's budget to $9 billion. It would substantially increase research funding for education and human resources, which duplicates research performed not only by the Department of Education, but also by states and local school districts. The NSF targets funds to independent research facilities rather than universities and spends billions of dollars on staff and administrative overhead. The inspector general has identified waste, fraud, and financial mismanagement within NSF that have not been adequately addressed in H.R. 4664.

Personal Responsibility, Work, and Family Promotion Act of 2002, H.R. 4737

The President should veto this bill--as Secretary of Health and Human Services Tommy Thompson advised--if the legislation does not (1) require that a minimum of 60 percent of welfare recipients be engaged in work for 24/16 hours per week (24 hours of paid labor and 16 hours of work-related activity); (2) apply "full-check" sanctions to all states without exception and terminate benefits of welfare recipients who refuse to work or participate in work-related activities for two months, until they begin to undertake their 24/16 responsibilities; (3) designate $300 million, as proposed by the President, for projects to promote and restore stable, healthy marriages; and (4) grant full funding for abstinence programs, as legislated in the 1996 welfare reform.

2002 Supplemental Appropriations Act for Further Recovery from and Response to Terrorist Attacks on the United States, S. 2551

Originally introduced for the purpose of improving homeland security and countering terrorism, this bill now includes billions of dollars of wasteful pork-barrel spending projects, including money for Amtrak, farmers, road builders, flood control, New England fishermen, and the Smart Start Child Care Center and Expertise School in Las Vegas. These and other wasteful projects have added more than $4 billion to the bill and have nothing to do with its intent.

Appropriations Bills Under Consideration