Judge Restores Provision Stricken by Line-Item Veto

A judge approved a negotiated settlement Tuesday that strikes down President Clinton’s use of the line-item veto to restrict federal workers’ choices of pension plans.

In a brief hearing, U.S. District Judge Thomas Hogan adopted an agreement between the Justice Department and the National Treasury Employees Union that invalidated the veto and restores federal employees’ ability to switch pension systems later this year.

Gregory O’Duden, attorney for the union, argued that Clinton exceeded his authority when he used the veto to strike the pension provision last October from the 1998 Treasury spending bill.

It’s unclear how the case will affect two pending lawsuits challenging other uses of the line-item veto. The lawsuits concern vetoes of one item that would have given New York City special authority to raise Medicaid funds by taxing hospitals and another that would have let farmers defer capital-gains taxes when they sell processing facilities to cooperatives.

A hearing on the New York case is scheduled next week.

White House spokesman Barry Toiv said the administration accepted the court’s decision “in terms of this particular use of the line-item veto” but defended its use in other cases.

The court’s order didn’t address constitutional challenges to the line-item veto. Sen. Daniel Patrick Moynihan (D-N.Y.) and others claim that the line-item veto improperly gives the executive branch excessive power over the federal budget. That issue is expected to be raised in the other lawsuits.

Justice Department attorney Neil H. Koslowe said that in reaching the agreement, the Treasury workers union didn’t dispute that the president had the power to eliminate spending in the budget. But this case was different since it affected employees’ contributions to the pension funds, which the Treasury workers argued exceeded his authority.

The veto targeted a provision that allowed workers to switch from the Civil Service Retirement System to the newer Federal Employees Retirement System. The White House has said the veto would have saved taxpayers $251 million over 10 years.

The 1996 line-item veto law authorizes the president to cut specific items in a spending bill without rejecting the entire bill. Clinton, the first president to exercise such power, has cast 82 vetoes, saving $1.9 billion over the next five years.