If it is necessary to pass an appropriation bill to meet deficiencies, the Nebraska legislature must pass such a bill by a two-thirds vote of all members elected.10

When New York adopted an executive budget in 1927, it prohibited the legislature from altering an appropriation bill submitted by the governor "except to strike out or reduce items therein, but it may add thereto items of appropriation provided that such additions are stated separately and distinctly from the original items of the bill and refer each to a single object or purpose." 11

These ingredients of a strong executive budget were included in many of the reform proposals that led to the Budget and Accounting Act of 1921, which placed upon the President the responsibility for submitting a comprehensive budget plan. As a way of constraining congressional action, reformers urged that Congress be prohibited from appropriating money unless requested by the head of a department or approved by a two-thirds vote in both Houses. This idea was heavily influenced by the British model of a responsible executive budget. All such proposals were rejected by Congress. The Budget and Accounting Act calls for an "executive budget" only in the sense that the President is responsible for the estimates he submits. It is a "legislative budget" thereafter. Members of Congress may alter the President's budget as they choose, up or down, by simple majority vote. 12 The status of the President's budget as merely a set of recommendations was clearly established by the legislative history:

It will doubtless be claimed by some that this is an Executive budget and that the duty of making appropriations is a legislative rather than Executive prerogative. The plan outlined does provide for an Executive initiation of the budget, but the President's responsibility ends when he has prepared the budget and transmitted it to Congress. To that extent, and to that extent alone, does the plan provide for an Executive budget, but the proposed law does not change in the slightest degree the duty of Congress to make the minutest examination of the budget and to adopt the budget only to the extent that it is found to be economical. If the estimates contained in the President's budget are too large, it will be the duty of Congress to reduce them. If in the opinion of Congress the estimates of expenditures are not sufficient, it will be within the power of Congress to increase them. The bill does not in the slightest degree give the Executive any greater power than he now has over the consideration of appropriations by Congress. 13

It was anticipated that Congress would consider individual appropriations and pass them at one time in a single measure. 14 The adoption of a single appropriation bill would have paralleled the efforts by state governments to produce a general appropriation bill to permit systematic, comprehensive action. However, Congress chose to act on separate bills reported one at a time from the Appropriations Subcommittees.

10 Id. at Art. III, § 22.

11 People v. Tremaine, 252 N.Y. 27, 47-48 (1929); New York constitution, Art. VII, § 4.

12 For background on reformers' efforts to constrain Congress, see Louis Fisher, Constitutional Conflicts between Congress and the President 232-33 (1985).

13 H. Rept. No. 14, 67 Cong., 1st Sess. 6-7 (1921).

14 H. Rept. No. 373, 66th Cong., 1st Sess. 10 (1919); 58 Cong. Rec. 7126 (1919); 59 Cong. Rec. 8102-21 (1920).

THE STRUCTURE OF FEDERAL AND STATE APPROPRIATION BILLS The purpose of the item veto and the structure of appropriations

The 1985 Economic Report of the President endorsed the item veto even though the report concluded that the item veto would not substantially reduce total federal spending.

The experience of the States indicates that per capita spending is somewhat higher in States where the Governor has the authority for a line-item veto, even when corrected for the major conditions that affect the distribution of spending among States. In addition, less than one-half of the Federal budget would be subject to a line-item veto, and most of that would be for defense. 15

According to the Economic Report of the President, the purpose of the item veto is instead:

to change the composition of Federal expenditures-for activities preferred by the Congress to activities preferred by the President. A Member of Congress is elected from a specific district or State-the President is elected by the Nation. As a consequence, a Member of Congress has stronger preferences for activities that benefit his or her regional constituency, and the President has stronger preferences for activities that benefit the Nation. The expected result of granting approval for a lineitem veto would be an increase in the relative expenditures with national benefits and a reduction in the relative expenditures for pork barrel projects. That should be a sufficient basis for early approval of presidential authority for a line-item veto.16 The item veto, however, would not allow the President to eliminate most individual projects. Congress traditionally appropriates lump sums to be used for broadly conceived purposes. Detailed allocations specifying particular projects and activities are typically found in administration estimates and congressional committee reports; the allocations are usually not included in the appropriation bill itself. Because the individual projects are not specified in appropriation bills, the President could not veto the items he calls pork barrel projects. The remainder of this chapter illustrates the difference in the degree of itemization between federal and state appropriation measures and the difference it makes for the effective exercise of the item veto.

The composition of Federal and State spending

This chapter focuses on the degree of itemization in annual federal and state appropriation bills. Not all federal spending flows from annual appropriation measures, however. In fact, as the President noted, more than half of federal spending consists of entitlements and other mandatory spending that would not be subject to an item veto. This observation has been made before. Nonetheless, we will digress briefly to examine the composition of federal and state spending and the difference it makes for the item veto. Different levels of government have different responsibilities. The federal government finances the nation's defense and the conduct of foreign affairs, disburses Social Security checks, and funds space research and technology. State and local governments pay the lion's share of the costs of education and highways. The table below illustrates these differences:

15 Economic Report of the President and Annual Report of the Council of the Economic Advisers 94-97 (1985) 16 Id. at 96.

TABLE 1.—EXPENDITURES BY FUNCTION AND BY LEVEL OF GOVERNMENT

Source: Based on information in U.S. Bureau of the Census, Statistical Abstract of the United States, 1986, table number 444, and OMB, Historical Tables, Budget of the U.S. Government, Fiscal Year 1987.

Because of the special responsibilities of the federal government, including its transfers to state and local governments, and because of recent budget decisions, the largest share of the federal budget consists of entitlements and other mandatory spending. In 1970, mandatory spending and net interest equalled 8.5 percent of GNP; in 1983, it was 15.2 percent of GNP. The table below, based on Congressional Budget Office data, shows that most of the money the federal government will spend until 1991 will be devoted to mandatories and net interest. In 1985, more than 5% of total federal outlays ($569 billion of $946 billion) were spent on mandatory and net interest. In 1991, CBO projects that more than 12 ($764 billion of $1246 billion) will be devoted to mandatories and net interest.

TABLE 2.-CONGRESSIONAL BUDGET OFFICE BASELINE OUTLAY PROJECTIONS FOR MAJOR SPENDING CATEGORIES [By fiscal year]

TABLE 2.-CONGRESSIONAL BUDGET OFFICE BASELINE OUTLAY PROJECTIONS FOR MAJOR SPENDING CATEGORIES-Continued

Source: Congressional Budget Office, Reducing the Deficit: Spending and Revenue Options (March 1986).

The list below shows the twenty largest federal entitlement and other mandatory spending programs and their cost in fiscal year 1985:

Entitlements were enacted to provide security and a measure of financial certainty to the recipients, most of whom are elderly, retired, sick, or veterans. Retirement programs are intended to allow people to plan their lives with the reasonable expectations that when they become eligible, they can depend upon the benefits. Annual appropriation bills would not provide the measure of certainty that is owed beneficiaries of contributing pension programs. Other entitlements were also intended to provide security for recipients. State and local governments make commitments-employ staff, construct buildings, contract for services-based on the expectation that grants will be forthcoming; these governments would not be able to plan for and administer essential programs without the degree of financial certainty provided by entitlements.

10.3

9.3

7.9

5.5

4.6

3.9

3.7

3.6

2.8

2.3

Whatever the justification for financing programs as entitlements, the item veto would be of no use in eliminating or reducing these items. Acts creating entitlements establish legal obligations upon the federal government. Regardless of the amount budgeted, the government must make payments to all individuals or governments meeting the eligibility requirements. Even those entitlements funded in annual appropriation acts could not be eliminated or reduced except by changing substantive law. Neither striking nor changing the appropriated amount would remove the legal obligation to make payments.

Interest on the public debt is also a form of mandatory spending. There is a permanent, indefinite appropriation established in existing law (31 U.S.C. 1305, 3123) that provides such sums as may be necessary. Recent budget policies doubled the share devoted to net interest. Net interest was 7 percent of the federal budget in 1970. In 1985, net interest ate up 14 percent of total federal spending. Net interest would not be subject to the item veto.

The bar graphs below show the composition of federal spending, divided into four broad components-entitlements, net interest, national defense, and nondefense discretionary-and expressed as a percentage of GNP.