August 11, 1997|By NEW YORK TIMES NEWS SERVICE
WASHINGTON -- After a week of high-level White House deliberations, President Clinton has decided to exercise his line-item veto authority today for the first time by deleting at least one narrow tax break and one spending measure from the balanced-budget and tax-cut legislation he signed last week.
Treasury Secretary Robert E. Rubin and Rahm Emanuel, Clinton's senior adviser, announced the decision on television interview programs yesterday.
Emanuel, on the CBS News program "Face the Nation," said: "I think the American people will see from his use of the line-item veto that 'business as usual' is over in Washington."
Congressional officials have said the likely candidates on the White House's list are a change in the Medicaid program that the administration considers flawed policy and a provision worth an estimated $84 million over five years that would allow the deferral of taxes for the sale of a food-processing plant to farmers' cooperatives.
Whatever provision Clinton rejects could be overridden, like any other vetoed measure, by a two-thirds' vote in the House and Senate. But the selection of the line-item veto target has been particularly sensitive because any veto, if sustained, would almost certainly face an immediate legal challenge on whether the line-item veto unconstitutionally shifts power over spending and taxes from the Congress to the president.
Rubin and Emanuel declined to say which items the president had decided to strike from the budget and tax laws, but acknowledged that he would cut from both.
Presidents have long sought the line-item veto, an authority held by many governors, so they can delete specific parts of spending bills without vetoing the entire legislation.
The law was passed last year by Republicans who had made the line-item veto a plank in the "Contract with America," the 1994 campaign agenda, despite misgivings over giving such authority to a Democratic president. Congressional Democrats had insisted that the veto authority apply to narrowly focused tax breaks as well as spending.
The Supreme Court in June dismissed a challenge to the law, holding that the members of Congress who had challenged the president's new power did not have standing to sue.
When Clinton signed the bill authorizing the line-item veto in April 1996, he said it would allow presidents to fight "special interest boondoggles, tax loopholes and pure pork."
But the administration's tortuous deliberations in the past week have shown that one person's boondoggle may be another's jobs program. And since each of these measures is pushed by a particular member of Congress, there is the political calculation of whom the president is willing to annoy.
In choosing a tax break to veto, Clinton is limited under the law to tax breaks that affect 100 or fewer taxpayers. The Congressional Joint Committee on Taxation identified 79 such provisions in the 280-page tax bill. Some had the support of Congress and the president, such as the one granting tax breaks to software companies to encourage exports.
The administration had agreed to others as part of the balanced-budget negotiations, and Clinton said that to preserve the spirit of bipartisanship, he would not touch those provisions. Rubin repeated that pledge yesterday on the ABC News program "This Week."
Still others have powerful sponsors whom the president might not want to offend. A new tax deduction for the business expenses of county employees was sponsored by Sen. Trent Lott of Mississippi, the majority leader, with sheriffs in his state in mind, congressional officials said.
And a break on estate taxes for Sammons Enterprises of Dallas has been supported by Sen. Tom Daschle of South Dakota, the minority leader, a crucial Clinton ally.
Even the tax provision involving the food-processing plant has not turned out to be an open-and-shut case, administration officials said. Critics have called it a giveaway for Harold Simmons, a Texas multimillionaire who is a major donor to the Republicans.
Valhi, a company in which Simmons is the major stockholder, was involved in the sale of a profitable beet sugar refinery to Snake River Sugar Co., a farmers' cooperative.
But administration officials said a representative of Simmons had told the White House that the tax break would not actually benefit Valhi under the sale. Farmers cooperatives have been lobbying for the provision, saying it would help them improve their profit margins and stay competitive.
Some administration officials have argued for Clinton to use his line-item veto on the spending side of the budget because they believe that this would make the best legal case. The administration could defend such a veto as an extension of the president's power of impoundment, which allows him to freeze money appropriated by Congress.
Congressional officials say the administration has been examining Medicaid provisions enacted in the budget law. The provisions include one that would increase the federal reimbursement of Medicaid costs to the state of Alaska.
Clinton, who had a line-item veto as governor of Arkansas, has said he expects to use the power sparingly. He said that in Arkansas, he had found that "once I used it a few times, I didn't need to use it very much anymore" because lawmakers were deterred from slipping unjustifiable items into bills.
Pub Date: 8/11/97
