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Ärende: Press Release (0606271) for Tue, 2006 Jun 27
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President Discusses Line-Item Veto
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For Immediate Release
Office of the Press Secretary
June 27, 2006

President Discusses Line-Item Veto
JW Marriott Hotel
Washington, D.C.

President's Remarks view

˙˙˙˙˙ Fact Sheet: The Legislative Line-Item Veto: Constitutional,
Effective, and Bipartisan

10:58 A.M. EDT

THE PRESIDENT: Thank you very much. Thanks for letting me come by to say a
few words. Larry, thanks for the introduction. I do want to congratulate
the Manhattan Institute for being a think tank for new ideas and better
ways for our nation to handle some of the problems we face. I appreciate
your thoughts, I appreciate your works. For those of you who support the
Manhattan Institute, I thank you for supporting them. For those of you who
serve on the Board of Trustees, thanks for helping. And thanks for inviting
me here today.

I want to talk about our economy. I want to talk about ways that we can --
the executive branch can work with the Congress to convince the American
people we're being wise about how we spend our money. One of the things I
want to assure you is that I believe that this country ought not to fear
the future. I believe we ought to put good policy in place to shape the
future. And by that I mean we shouldn't fear global competition. We
shouldn't fear a world that is more interacted. We should resist
temptations to protect ourselves from trade policies around the world. We
should resist the temptation to isolate ourselves. We have too much to
offer for the stability and peace and welfare of the world than to shirk
our duties and to not accept an international community.

I know some in our country are fearful about our capacities to compete. I'm
not. I believe that we can put policies in place that will make sure we
remain the most entrepreneurial country in the world, that we're capable of
competing in the world. And one way to do so is to keep pro-growth economic
policies in place and be wise about how we spend the people's money. And
that's what I want to talk about.

I do want to thank my Director of Office of Management and Budget, Rob
Portman, who has joined us today. He has done a spectacular job as the
person partially responsible for tearing down trade barriers and to making
sure our nation was treated fairly in the trade arena when he was head of
USTR. And now I've asked him to come over and manage OMB. It's a powerful
position. The person who knows how the money is being spent is generally
the person who's got a lot of influence in government. So I put a good
friend in there to make sure we're able to work with the Congress to bring
some fiscal austerity to the budget.

I want to thank Senator Thad Cochran, who is the Chairman of the Senate
Appropriations Committee. It's awfully generous of the Senator to be here
today. He's a good fellow and a fine United States Senator, and we're proud
to have him in our midst.

I want to thank Senator Judd Gregg, who's the Chairman of the Senate Budget
Committee. I've known Judd a long time. I've had to -- when I was running
for president I was asked to debate my opponent a couple of times, and one
of the things you do prior to debating your opponent is you have somebody
serve as the opponent, and that happened to be Judd Gregg in both
elections. (Laughter.) And I had to kind of reconcile myself with the fact
that he whipped me in -- every time we debated. (Laughter.) He's a good man
who's just introduced some interesting ideas on to the floor of the United
States Senate about how to deal with some of the fiscal problems and
financial problems this nation faces.

I'm proud to be here with John McCain -- speaking about debates --
(laughter) -- we had a few. But one thing we agree upon is that this
country needs to have a line-item veto. And I'm proud the Senator is here
and I appreciate you coming. (Applause.) I might add, one of the many
things we agree upon.

I'm proud to be here with Congressman Paul Ryan, who's the House bill
sponsor of the line-item veto, as well as Congressman Mark Udall. Thank you
both for being here. Congratulations on getting that bill out of the United
States House of Representatives. I'm also honored that Congressman Mike
Castle, Congresswoman Marilyn Musgrave, and Congressman Henry Cuellar from
the great state of Texas, has joined us. Thank you all for coming.
(Applause.)

For those of you who are working the halls of Congress to get a line-item
veto out, thanks for doing what you're doing. One of the reasons I've come
to give you a speech on the line-item veto is to encourage you to continue
working hard with members of both political parties to get the job done.

We're growing. This economy of ours is strong. And that's good news. It's
amazing where we've come from, if you really think about it. We've been
through a recession; we've been through a stock market correction; we've
been through corporate scandals; we've been through an attack on our
country; we've been through two major operations to defend the United
States of America; and we've been through amazing natural disasters and
high energy prices. And yet, we're growing. We're the envy of the
industrialized world. The growth in the last year was 3.5 percent; it was
5.3 percent in the first quarter of this year. That's good news. It means
the entrepreneurial spirit is strong, that people are investing and people
are making wise decisions with their money. And as a result of the growing
economy, the national unemployment rate is 4.6 percent. That's low. That
means your fellow citizens are going to work. That means people are having
a chance to put food on the table. And that's a positive indication of how
strong our economy is.

We're a productive nation. Productivity is on the increase. That's a result
of investments that are being made in the private sector. A productive
economy is one that will yield higher wages for the American people. The
more productive you are, the more likely it is your wages will go up, which
means a higher standard of living for the American people. And I want to
thank the Manhattan Institute's support for pro-growth economic policies,
policies that really send a clear signal that we are still the land of
dreamers and doers and risk-takers.

The cornerstone of our policy has been to keep taxes low, see. We believe,
and you believe, that the more money a person has in their pocket, the more
likely it is this economy is going to grow. We trust people to make the
right decisions on how to spend, save, and invest. That's certainly not
necessary -- necessarily the common policy here in Washington. There's some
good and decent folks who think they can spend your money better than you
can. I just don't agree with them. And one of the reasons why this economy
is strong is because we cut the taxes on everybody who pays taxes in the
United States. If you have a child, you got extra money. If you're married,
we did something about the marriage penalty. It doesn't make any sense, by
the way, to penalize marriage. Society ought to be encouraging marriage.

If you're an investor, you got tax relief because we cut the taxes on the
dividends and capital gains. If you're a small business, it's likely that
you pay taxes at the individual income tax rate because you're more likely
than not to be a sole proprietorship or a Sub-chapter S corporation.
Seventy percent of new jobs in America are created by small business, and
it made sense to let our small business entrepreneurs keep more of their
own money to save and invest and expand their businesses. The tax relief we
passed is working, and the Congress needs to make the tax relief we passed
permanent. (Applause.)

One of the benefits of keeping taxes low and growing your economy is that
you end up with more tax revenues in the federal treasury. I know that
seems counterintuitive to some people. You'll hear people say, let's
balance the budget by raising taxes. By the way, that's not the way
Washington works. They'll raise your taxes and figure out new ways to spend
your money.

It turns out that when you encourage economic vitality and growth, the
treasury benefits from it. In 2005, tax revenues grew by almost $274
billion, or 15 percent. That's the largest increase in 24 years. The
economy is continuing to grow, and tax revenues are growing with it. So far
this year, tax revenues are more than 11 percent higher than they were at
the same point last year, which is significantly better than projected.
These increased tax revenues are part of how we intend to cut the deficit
in half by 2009. In other words, Rob Portman will be giving a report to the
nation on how we're doing on the tax revenues -- I think you're going to
find that pro-growth economic policies mean that more revenues are coming
into the Treasury than anticipated, which makes it easier to deal with a
current account budget deficit.

But there's a second part of the equation to dealing with the current
account budget deficit and that is how we spend your money. Now, I'm going
to talk about discretionary spending in a minute, but I just want you to
understand that a significant problem we face is in our mandatory programs.
And I know you know that. Those would be programs called Medicare and
Social Security and Medicaid.

As you might recall, I addressed that issue last year, focusing on Social
Security reform. I'm not through talking about the issue. I spent some time
today in the Oval Office with the United States senators, and they're not
through talking about the issue either. It's important for this country --
(applause) -- I know it's hard politically to address these issues.
Sometimes it just seems easier for people to say, we'll deal with it later
on. Now is the time for the Congress and the President to work together to
reform Medicare and reform Social Security so we can leave behind a solvent
balance sheet for our next generation of Americans. (Applause.)

If we can't get it done this year, I'm going to try next year. And if we
can't get it done next year, I'm going to try the year after that, because
it is the right thing to do. It's just so easy to say, let somebody else
deal with it. Now is the time to solve the problems of Medicare and Social
Security, and I want your help. I need the Manhattan Institute to continue
to agitate for change and reform. You've got a big voice. You got creative
thinkers, and if you don't mind, I'd like to put this on your agenda, and
let you know the White House and members of the Senate and the House are
anxious to deal with this issue and get it done once and for all.

In the meantime, we've got to do everything we can to control the spending
that Congress votes on and approves every year. That's called discretionary
spending. My administration is doing its part on discretionary spending.
Every year since I took office, we've reduced the growth of discretionary
spending that is not related to the military or homeland security. And the
reason why we haven't reduced the growth on spending for the military is
because so long as we've got troops in harm's way, they're going to have
whatever it takes to win the war on terror. (Applause.)

We will not short-change the people who wear the uniform of the United
States military. As the Commander-in-Chief of this fine group of men and
women, I have got to be able to look in the eyes of their loved ones and
say, one, the mission is worth it; and two, this government and the people
of the United States support your loved ones with all we got. And that's
exactly how I'm going to continue to conduct this war on terror.
(Applause.)

But apart from defending our country, the last two budgets have cut
non-security discretionary spending -- have cut the non-security
discretionary spending. And that's not easy. It's not easy to do that, but
the Congress delivered, at least on last year's appropriations bills. And
they're working on this year's appropriations bills. Our view is,
taxpayers' dollars should be spent wisely or not at all. One of Rob
Portman's jobs is to analyze programs that are working, or not working.
Look, every program sounds good, I know. But we're focusing on the results
of the programs, are they achieving the objectives that we expect.

One of the first tests of this year on whether or not the administration
can work with the Congress on fiscal restraint was on a supplemental
spending bill. That's a bill that was passed to provide emergency spending
for our troops overseas, and for citizens that had been hit by Katrina, and
to prepare for the dangers of a pandemic flu. I felt those were important
priorities that needed to be a part of the supplemental bill, and so we
sent that bill up.

Obviously, there was some noise coming out of the Congress at first; people
had different opinions. And that's a good thing about democracy -- you'll
find there's all kinds of different opinions here in Washington, D.C.
People had different views about what ought to be in that bill. Part of my
job is to help bring some fiscal discipline to Washington. So I said that
if the Congress exceeded a limit that I thought was wise, I would veto the
bill. Congress acted responsibly. And it was hard work, and I applause
Senator Cochran for his hard work on this measure. He brought the House
together with the Senate, and they took out $15 billion in spending that
had been added to the bill. It came under the spending limit I had set. And
it's a good example of fiscal restraint set by the Congress. I appreciate
so very much your leadership on that issue, Mr. Chairman. Thanks for
working with us.

I believe another crucial test for the Congress is to whether or not the
Congress will pass a line-item veto. And that's what I want to talk to you
about today. A line-item veto would be a vital tool that a President could
use to target spending that lawmakers tack on to the large spending bills.
That's called earmarking, and that's become quite a controversial subject
here in Washington, D.C.

I happen to believe that a lot of times earmarking results in unnecessary
spending. See, part of the job of the President and the leaders in the
Congress is to set priorities with the people's money. If you don't set
priorities, the tendency is to overspend. And sometimes -- a lot of times,
the earmark doesn't fit into the priorities that have been sent through the
budgetary process. A lot of times earmarks are inserted into bills at the
last minute, which leaves no time, or little time, for debate. Part of the
process -- a good process is one in which members are able to debate
whether or not spending meets a priority, whether it makes sense. Earmark
sponsors are often not required to provide their colleagues with a reasoned
justification for proposed spending. And not surprisingly, the process
often results in spending that would not have survived had it not been
subject -- subjected to closer scrutiny. Part of a good legislative process
is for members to take a good look at whether or not a spending request
meets a priority or not.

And the process has changed. According to the Congressional Research
Service, the number of earmarks has increased from about 3,000 to 13,000
over the last decade. In other words, this process is taking place more and
more often. I don't think that's healthy for the process. Matter of fact, I
think it's circumventing the process. Now, that's up -- obviously, up for
the legislature to determine whether I'm right or not. The President
proposes, and the legislative body disposes, and I'm proposing a way to
help deal with this problem. And that way is to pass a line-item veto.

Now, here's why it's necessary. First of all, part of the problem with the
line-item veto is that it's oftentimes deemed to be unconstitutional. As a
matter of fact, I know there are people in this room that helped pass the
line-item veto in 1996. President Clinton was the President then, and the
Congress -- in my judgment -- wisely gave him the line-item veto. And yet,
shortly thereafter, when he started using the line-item veto, the Supreme
Court struck it down because they concluded that it unconstitutionally
permitted the President to unilaterally change a law passed by the
Congress. In other words, the bill didn't pass constitutional muster.

And so we dealt with this issue. We figured out that, obviously, any
line-item veto would again be challenged to our highest court. And so we
proposed the following type of legislation: When the President sees an
earmark or spending provision that is wasteful or unnecessary, he can send
it back to the Congress. And Congress is then required to hold a prompt up
or down vote on whether to retain the targeted spending. In other words,
the Congress is still in the process.

The line-item veto submitted would meet the Court's constitutional
requirements. And that's important. Members of Congress need to know that
we've thought carefully about this, and we've worked with them to make sure
that that which is passed is constitutional.

The other thing the line-item veto needs to do is it will shine the light
of day on spending items that get passed in the dark of the night, and that
will have -- in my judgment -- a healthy -- it will send a healthy signal
to the people that we're going to be wise about how we spend their money.

The bill I submitted will be an effective tool for restraining government
spending because it will address a central dilemma created by unwarranted
earmarks. And here's the dilemma: When members of Congress are faced with
an important bill that includes wasteful spending in the bill, they have
two bad options: On the one hand, they can vote against the whole bill,
including the worthwhile spending, or they can vote for the whole bill,
including the wasteful spending. When such a bill comes to the President it
creates a dilemma. I've negotiated year after year on a top-line budget
number. And Congress has met that top-line budget number, which means it's
very difficult for the President, then, to veto the appropriations bills
that have met the top-line budget number because the next year's budget
negotiations will be meaningless. You can imagine members of the United
States House or Senate walking into the President's office and saying, wait
a minute, we met your number last year, and you vetoed the bill, so forget
negotiations.

I want to be a part of the budgetary process. It's an important part of the
President's working with Congress, and I'm not going to deal myself out of
the budgetary process. So my point is, they can meet the size of the pie,
but I may not like some of the slices of the pie. And therefore, what do we
do about it? And one way to deal with it is the line-item veto. The
President could approve the spending that is necessary, could red-line
spending that is not, and then let the Congress decide whether or not the
President is right. It's a fair process; I believe it's a necessary
process.

Many members in Congress, I know, want to do the right thing. And so one of
the interesting things about the line-item veto is it will help deal with
that dilemma I described, either all or nothing when it comes to voting for
appropriations bills. You know, sometimes a member of Congress gets a
special project for the district, and they go back and tout the project.
Then you have members who don't agree with earmarking, and they don't have
any special project to tout to the district. And yet, the people in their
district are voting for the special project for the other person's
district. And I think the line-item veto -- I know the line-item veto would
help resolve this dilemma.

You see, if there's an opportunity for the President to red-line certain
programs and hold them up to the light of day, it will probably mean
members of Congress are less likely to propose the earmarks in the first
place. Rather than being able to move a special project into the bill
without hearing, this -- the President would have the opportunity to say,
wait a minute, this doesn't make much sense, it doesn't seem to fit into
the priorities; this special project, this unusual study -- (laughter) --
or this particular project, this doesn't make sense.

I believe that part of a budgetary reform program is the line-item veto,
the opportunity to put the light on such programs. And that will help
members resolve the dilemma of either voting for an important bill with bad
items in it, or being a part of trying to put bad items in it in order to
justify their existence in the Congress.

The good thing about the line-item veto, it has bipartisan support. We've
got a Democrat member from the United States Congress who supported that
bill strongly. Governors have had the line-item veto. I met with Senator
Ben Nelson earlier this morning in the Oval Office -- he talked about what
an effective tool it was to have the line-item. Did you have it, Engler,
when you were governor? Engler had it. It's an important part of relating
with the legislative process. And by the way, these aren't just Republican
governors with the line-item veto, they're Democrat and Republican
governors who are using that line-item veto effectively.

The line-item veto has bipartisan support in the Congress. Thirty-five
Democrats joined more than 200 Republicans in the House to get the bill
passed. That's a good sign. I was disappointed, frankly, though, that more
Democrats didn't vote for the bill, especially those who are calling for
fiscal discipline in Washington, D.C. I mean, you can't call for fiscal
discipline on the one hand, and then not pass a tool to enhance fiscal
discipline on the other hand. You can't have it both ways, it seems like to
me.

Now the Senate is going to take up the measure. And again, I want to thank
the Senators who are here for strategizing on how we can get the bill
moving. Senator Frist is committed to getting the bill moving. Senator
McCain is one of the important co-sponsors, as is Senator John Kerry. I
remember campaigning against him in 2004, and I remember him talking about
the line-item veto, and I appreciate the fact that he's living up to the
political promises he made. It's a good sign, and I applaud Senator Kerry
for taking the lead on the line-item veto. And I hope members of his party
listen to his justifications for that important piece of legislation.

What's really interesting is, we've had senators on record for the
line-item veto. After all, the Senate passed a line-item veto in 1996. And
for those senators who passed the line-item veto in 1996, I hope they still
consider it an important vote in 2006. Ten years hasn't made that big a
difference. It was good enough 10 years ago, it's good enough today, for
those who voted for the line-item veto. (Applause.)

Oh, I know this town is full of all kinds of politics, but we ought to set
politics aside. We need to set politics aside when it comes to reforming
Social Security and Medicare, and we need to set politics aside so that the
President can work with the Congress to bring fiscal discipline to our
budgets. That's what the taxpayers expect from those of us who are honored
to serve.

So that's my opinion on the line-item veto. I hope you can feel -- tell I
feel strongly about it. I think it makes sense, no matter who the President
may be. I think it makes sense for a Republican President to have a
line-item veto, and I think it makes sense for a Democrat President to have
a line-item veto. And I urge the United States Senate to pass this
important legislation so we can reconcile whatever differences there are
between the House and the Senate version, and show the people that we are
serious about being responsible with their money.

Thanks for letting me come by and say hello. (Applause.)

END 11:26 A.M. EDT

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