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Wednesday, June 28, 2006
What Economists Think About Line-Item Veto
Former Chair of Council of Economic Advisors for George W. Bush Greg Mankiw writes about the line-item veto. In wondering about what economists think of the line-item veto, he quotes two papers published in the August, 1998 Journal of Public Economics:
The paper examines the claim that gubernatorial line item veto power reduces state spending. Analysis of a rich set of state budget data indicates that long run budgets are not altered by an item veto....These results suggest that state budgets have not been importantly altered as a result of the existence of the line item veto and shed doubt on the use of the line item veto to reduce federal government spending.
and
...Using data from 1865 to 1994, I show that these measures are most likely proposed by fiscal conservatives who fear the loss of power in the future; in order to protect their interests for those periods when they will be in the minority, they implement institutions such as the item veto which will limit future, liberal legislatures.
then surmises:
The bottom line: The line-item veto is a tactic of conservatives running scared in a vain attempt to control the growth of government.
Posted by Craig Jennings
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