When to cry 'uncle': the line-item veto.

Envision a line-item veto with real fiscal teeth that is not a threat to the traditional balance of powers between the White House and the Congress. Such a veto, created by constitutional amendment and crafted to preserve our historical democratic traditions, can readily be modeled on the benign aspects of receivership practices used to resuscitate troubled businesses.

The mounting fiscal crisis faced by the republic as we close out the century can likely be solved only by serious fiscal restraints. These are not apt to arise within the Congress. By the nature of things, Congress's current political equation results in, de facto, a "beggar-thy-grandchildren" fiscal policy that threatens to drown the economic future of coming generations in unpaid bills.

Congresspersons cannot be expected heroically to resist demands for more submarines, AIDS research, farm subsidies, or Medicare expansions. On the contrary, such legislators can inevitably be expected to collaborate in logrolling through Congress the yearly tidal wave of constituent-gratifying appropriations.

Under the present equation, only the office of president can be expected, if only sporadically, to take a more transcendent view of the nation's welfare. Only the president, as the single office-holder with a nationwide mandate, can be expected to focus as a trustee should, not merely on immediate constituent needs as defined by a wide spectrum of interest groups, but on the nation as a constituent. Only the president will view, at least sometimes, the national good in terms of the longterm welfare of our posterity as a constituency--the as yet unborn generations of our citizenry.

Envision a constitutional amendment that permitted the president to be the nation's fiscal fiduciary during short periods of financial crisis. The special veto power would enable the president to eliminate any item in any new spending measure or any item in any prior enactment. Such a potent fiscal veto would be subject to the usual two-thirds override by congressional vote. Such a veto power--parallel to the notion of emergency powers in usage for hundreds of years in the Roman Republic before Caesar--would be limited in time. The arrival of a defined crisis would trigger the veto power and the end of the crisis, or the end of the current fiscal year, whichever came later, would mark its expiration. "Fiscal crisis" would be defined in the amendment by a simple formula, readily applied. No permanent displacements would occur in the normal balance of powers between Congress and the Executive.

The formula would be easy to compute. Whenever the total of all interest paid on U.S. Government indebtedness of all kinds exceeded a fixed percentage of GDP (say, 3.5 percent), then the president's line-item veto power would kick in. (Currently, according to Department of Commerce data, GDP is running at about $5.7 trillion while interest on the debt is about $200 billion per year, hence 3.5 percent.)

But whose numbers should be trusted in determining GDP and the percentage of interest being paid on the debt? After all, smoke, mirrors, and accounting gamesmanship are commonplace at budget time in D.C. As part of the amendment I would recommend that the Department of Commerce's accounting and reporting practices, as used for the fiscal year ended October 1992, be adopted. If the baseline data are derived from accounting practices used in a fixed, past year, any future manipulation of the data would be minimized. Moreover, if the numbers are generated under the auspices of a cabinet officer, then the Senate will have ample opportunity during confirmation hearings to exact assurances concerning the consistency of the accounting practices to be employed.

In the event that Congress voted to challenge Commerce's reporting, the amendment would also contain a grant of jurisdiction to the Supreme Court to immediately hear and decide the case, determining it on the sole issue of whether the accounting procedures used by Commerce were proper.

Please note that no violence is done to the traditional separation of powers. If Congress does not want the president to enjoy this type of fiscal veto in the first instance, then Congress can demonstrate the discipline needed to avoid it. And in the second instance, any fiscal veto can be reversed by a two-thirds vote of both houses. The Supreme Court continues in its traditional role as referee of the Constitution, and the chief executive receives no permanent enhancement of power that at his will he might do mischief with.

In a fashion, the process envisioned is very like a voluntary national receivership. The president, acting in a fiduciary role, like the receiver of a troubled business enterprise, has extraordinary but short-lived fiscal powers.

It is far better that any future receiver of a besieged American fisc be a self-imposed one, an elected president exercising constitutionally mandated authority, than the designees of some cabal of bankers and other creditors from Tokyo, Bern, and Berlin.