The Line-Item Veto Is A Bad
Idea*
By
George Reisman**
(February 14, 1998)
Federal-District Judge Thomas Hogan has done exactly the right thing in finding the
line-item veto to be unconstitutional. It is. Closely connected with its
unconstitutionality is the fact that it would inevitably defeat the purpose of its
supporters, which is to restrain Congressional spending. For it places the President in a
position in which he can bargain with the members of Congress with respect to which items
he will exercise the line-item veto or not exercise it. Remarkably, hardly anyone seems to
have realized that this must put the President in the position of being able to join
four-square in the Congressional pork-barrel and log-rolling process himself. In exchange
for not exercising the line-item veto power over the pet projects of Congressmen, the
President can demand the inclusion of his own pet projects in appropriation bills. In
effect the line-item veto power thereby grants the President implicit legislative powers.
This is clearly not the way to restrain Congressional spending; indeed, in the long-run it
can only increase it
The problem of runaway Congressional spending is a serious one and it demands a serious
solution, not a self-defeating gimmick. How far we are from a
real solution becomes clear almost as soon as the real solution is named, for in the in
the very next instant it is almost certain to be rejected out of hand, as simply
unthinkable. That solution, as the late Ludwig von Mises showed, is the adoption of a
full-bodied gold standard, with practically all of the gold in the physical possession of
the citizens. Under such a monetary system, Congress and the government are made
financially dependent on the citizens. The only money they can spend is money obtained
from the citizens. Under such a gold standard, government spending is automatically
limited by the physical limitation of the money available to the government from the
people.
Under today's system, in contrast, Congress and the government are not limited to
spending money that is obtained from the citizens. Through the instrumentality of the
Federal Reserve System, they have the power to create new and additional money, virtually
out of thin air. This power is what has removed the restraints on government spending and
created the problem of chronic budget deficits. It is what has created the delusion that
the government can support and enrich the people. For it has made the government literally
into a source of money to the people. To control government spending, the government must
be deprived of the ability to create money and thus of any source of money other than what
it can obtain from the citizens, through taxes. Then, because it will be clear who
supports whom, and who must pay for all government spending, it will be far more difficult
to gain support for government spending and the problem will be brought under control.
To put all this another way, what we need to do to control government spending is not
to further destroy the United States' Constitution, by upsetting the balance of powers
between the Legislative and Executive branches, but to reinstate the vital portion of the
Constitution that upholds the gold standard and thereby serves to limit government
spending and thus the power of the government.
For further reading on this subject, see:
Ludwig von Mises, The Theory of Money and Credit
(Irvington-on-Hudson,
New York: The Foundation For Economic Education, 1971) Part IV, "Monetary
Reconstruction," pp. 413-457.
George Reisman,
Capitalism: A Treatise on Economics
(Ottawa, Illinois: Jameson Books, 1996), pp. 927-928, 951-963.
George Reisman,
"Only A Gold Dollar Will End Deficits."
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