American Governors Tell Us How to Reform the Budget

Article excerpt

A survey of 188 current and former state chief executives provides significant suggestions for reducing the Federal deficit.

A survey of 118 U.S. governors and former governors--including Jimmy Carter, Ronald Reagan, Michael Dukakis, and Bill Clinton--reveals a strong consensus that both a line-item veto for the president and a balanced-budget amendment to the Constitution would be effective methods of reducing the massive Federal budget deficit. A majority of the governors also say that Congress has too much power over the budget process and the president too little.

America's governors and former governors have a unique perspective on budget reform issues. Most of them have had practical experience with the line-item veto and balanced-budget requirements in their states. The fact that most governors have found those budget tools useful in restraining deficits and unnecessary government spending suggests that they may be worth instituting on the Federal level.

With the deficit continuing to skyrocket, budget reform again is on the legislative agenda of Congress. A balanced-budget amendment narrowly was defeated in the House in 1992 and will be debated again in 1993. The line-item veto--which would allow a president to veto specific programs or projects within a spending bill without having to veto the entire bill--has been endorsed by Pres. Clinton. Both measures command very high public support. Polls consistently reveal that three of four Americans support a balanced-budget amendment to the Constitution. About two-thirds of Americans approve of a line-item veto.

Those and other fiscal reforms under consideration in Congress are budget tools that already are in place in the states. Except for Vermont, every state has some form of balanced-budget requirement--although they vary widely in stringency. Forty-three governors have line-item veto authority. Many states also have constitutional or statutory spending- and tax-limitation provisions.

Yet, there has been very little attention devoted to the critical issue of how those measures actually have worked in the states. Although several studies have found that the line-item veto and the balanced-budget requirement have had a disciplining effect on state spending and borrowing, those findings have not prompted Congress to act.

One way to determine whether budget reforms work is to consult America's governors. They are the one group that has the hands-on experience in working with many of the deficit-reduction ideas that are under consideration in Washington. They can bring a special perspective to the issue. Some governors, such as Tommy Thompson of Wisconsin, have relied heavily on the line-item veto to cut expenditures and balance the budget. Generally speaking, however, governors have not been consulted by Federal policymakers.

To add their voices to the debate, the Cato Institute surveyed the nation's current and former governors on budget reform. Of 274 current and former governors contacted, 118 completed all or part of the survey, for a response rate of 43%. Sixty-seven of the respondents are Republicans, 50 Democrats, and one an Independent. Nineteen of the respondents are current governors. The governors were sent a one-page, five-question survey and asked to write a more detailed response to explain their answers. Roughly half did so. The following are the questions and a summary of the responses:

"Was/is the line-item veto a useful tool to you as governor in balancing the state budget?" Sixty-nine percent of the governors said the line-item veto was a "very useful tool"; 23%, a "somewhat useful tool"; and seven percent, "not useful." Republicans were only slightly more likely than Democrats to believe that the line-item veto was useful. Ninety-one percent of Democratic governors said the line-item veto was "very useful" or "somewhat useful."

"Do you think that a line-item veto for the president would help restrain Federal spending? …