Line Item Veto

If presidential line item veto/line item reduction authority had been applied to all items to which the President objected during fiscal years 1984 through 1989, spending could have been cut by about $70 billion. This would have reduced federal deficits and borrowing by 6.7 percent, from $1,059 billion to $989 billion. These estimates, however, are fraught with uncertainties, and other administration documents suggest that they may overstate savings. GAO found that more than 70 percent of the line item veto savings in fiscal years 1984 through 1989 would have occurred in five areas that account for 20 percent of discretionary spending: (1) transportation; (2) commerce and housing credit; (3) education, training, employment, and social services; (4) income security; and (5) natural resources and the environment. Conversely, only two percent of the possible savings would have come in four areas that account for 70 percent of discretionary spending: (1) science, space, and technology; (2) national defense; (3) international affairs; and (4) veterans benefits and services.

GAO found that: (1) if the President had line-item veto authority from fiscal years (FY) 1984 through 1989 and used that authority to reduce or eliminate each item to which the Statements of Administration Policy (SAP) objected, the federal government could have saved $70 billion; (2) the line-item veto savings would have reduced federal deficits and borrowing by 6.7 percent, to $989 billion; (3) 72 percent of the line-item veto savings between FY 1984 and 1989 would have occurred in five spending areas that accounted for 20 percent of discretionary spending, including transportation, commerce and housing credit, education, training, and social services, income security, and natural resources and the environment; (4) only 2 percent of the possible savings would have occurred in the four spending areas that accounted for 70 percent of discretionary spending; and (5) administration documents indicated that the line-item veto estimates could be overstated, since the President might not have chosen to veto all of the items SAP objected to and Congress might have overridden some line-item vetoes.