Taking A Scalpel to the Deficit

By Jacob V. Lamar Jr

At a pep rally celebrating his seventh anniversary in the White House last week, Ronald Reagan seemed determined to end his presidency with a flourish. "As they say in show biz," he urged his aides and appointees, "let's bring them to their feet with our closing act." But the State of the Union address that the President prepared to deliver this week was less a stirring aria than a medley of his greatest hits. It includes a ringing anthem to the Reagan revolution: the tax cuts -- including a call for new reduction in the rate on capital gains -- the five-year economic boom, the resurgence of patriotism. Then the President also planned an ode to the Nicaraguan "freedom fighters." And of course there was a section of budget-deficit blues, a put- the-blame-on-Congress thumper ending with that ancient standard: the call for a line-item veto.

While Reagan has been delivering that last hoary number for the better part of a decade, the tune did not originate with him. Ever since Ulysses S. Grant in 1876, Presidents have asked Congress for the power to reject individual appropriations without wiping out an agency's entire budget. Reagan has argued that a line-item veto would allow him to rein in the big spenders on Capitol Hill and bring down the deficit. Says a White House aide: "What we're talking about is changing a pattern of behavior that has existed for a long time."

+ Congress refuses to go along, since the reform would strip power from the Legislative Branch and hand it to the Executive. But recent events have conspired to give the idea some weight. The Oct. 19 stock-market crash shocked Washington into the realization that the U.S. economy will not be able to endure continuing federal deficits of $170 billion or more. Then Government's budget "summiteers," after much agonizing, produced a puny two-year, $76 billion deficit reduction package. Just before Christmas, Congress presented the President with a $603.9 billion spending bill for fiscal year 1988. The 2,100-page law was packed with pork-barrel goodies to please lawmakers' constituents.

In his State of the Union address, Reagan planned to bring up several examples of those excesses, totaling $4.4 billion, culled from an 80-page list compiled by researchers in the White House Office of Management and Budget. Among the candidates: a $300,000 grant for grackle control in the Rio Grande Valley; $240,000 for a study of the damage done to macadamia nuts by rats; $1.4 million for a catfish farm in Stuttgart, Ark.; and -- in a special dig at the legislators -- $500,000 to bring leaders of emerging democracies to the U.S. to study the workings of Congress. Not even Reagan has the chutzpah to mention one particularly large chunk of pork: $25 million for an unnecessary new airport near Fort Worth, the hometown of House Speaker Jim Wright. After all, Wright will be sitting just behind the President.

On Capitol Hill, Reagan's case for the line-item veto suddenly seems a little more convincing. "I used to think the line-item veto was the stupidest idea in the world," says Stephen Bell, former staff director of the Senate Budget Committee. "I was wrong." Republican Senator Bob Packwood of Oregon thinks Congress will eventually be forced to pass the reform. "We're going to be ridiculed into doing it," he says. "I've come to the conclusion that we are not going to be capable of governing ourselves." In discussing the veto, Senator Ted Kennedy recently said something he has probably never said before and may never say again: "President Reagan is right, and the Congress is wrong."

But while a line-item veto might help diminish budget pork, it would have only a negligible impact on the deficit. Huge chunks of the budget -- Social Security, Medicare and other entitlement programs, which total more than $325 billion -- are granted automatically and do not require annual % reauthorization. Other spending measures, such as agricultural support programs ($26 billion), are politically sacrosanct. And while some Democrats might be ready to chop away at the $298 billion in defense spending, substantial Pentagon cuts would be unlikely under any Republican Administration. Thus, spending that is truly discretionary (read politically negotiable) amounts to less than 15% of the $1 trillion federal budget. Even if the President could manage to veto $150 billion of spending from those areas, the savings would barely equal the interest on the national debt.

Some observers think the line-item veto would actually lead to an increase in Government spending. Norman Ornstein, a congressional scholar at the American Enterprise Institute, points out that in 1985 Reagan asked for 100 MX missiles, but Congress gave him only 50. If Reagan had had the line-item veto, says Ornstein, he could have used it to squeeze lawmakers, threatening to eradicate programs in their districts if they did not support the vastly more expensive MX. In Ornstein's opinion, Presidents, not legislators, are traditionally inclined to budgetary extravagance. "They have to make their mark in a relatively short time," he says. "Thus, they have to spend money."

Aside from Ted Kennedy, most congressional Democrats consider Reagan's fiscal pieties gross hypocrisy. "His has been the biggest spending Administration in history," fumes House Budget Chairman William Gray of Pennsylvania. "And every year he returns to the tired old rhetoric that a line-item veto is the magic wand that would bring down Government spending."

Despite its post-budget bill voguishness, the line-item veto will not become a reality anytime soon. "It is something that neither this President nor any other President should have," says Senate Majority Leader Robert Byrd. "It is a quack nostrum." As House Majority Leader Thomas Foley of Washington has suggested, the deficit crisis is essentially a matter of willpower. The White House, the Congress and the American public must decide together to make the sacrifices necessary to reduce the deficit. Until that time, ideas like the line-item veto will remain irrelevant oldies.

With reporting by Hays Gorey and Barrett Seaman/Washington