Clinton v. City of New York (1998)
Author: Bram

Relevant Facts: The Line Item Veto Act gave the President the right to veto any one part of a bill which landed on his desk, as long as the President provided that his veto was for the good of the country.  Cancellation meant to rescind, or in the case of a direct spending item, a veto rendered the provision as prevented from being implemented.  There was also an expedited procedure if Congress were to vote down the veto.

New York challenged the Act (LIVA), b/c President Clinton (1) canceled a provision in the Balanced Budget Act of 1997 that gave NY preferential treatment under the Medicaid law; as no other state would have received such treatment; and (2) President cancelled a tax provision in the Taxpayer Relief Act of 1997 that allowed owners of certain food refiners and processors to defer paying tax on the gain from the sale of their stock if they sold to eligible farmers' cooperatives.  (Since very few taxpayers could take advantage of this expenditure, it was a limited tax  benefit eligible for cancellation, and some ID farmers challenged this provision as well.)

The federal gov't said NY inappropriately characterized taxes it had collected from Medicaid providers, and unless granted, NY stood to owe as much as $2.6B.

Issue: Under constitutional law, is a President's use of a line-item veto, codified through Congressional legislation, viable as a proper law, when the President has authority to cancel items which gave a state preferential treatment, and also canceled a limited tax benefit?

Holding: No.  If the President wants to try and receive more power in the legislative process, he or she should seek relief through the making of a Constitutional Amendment, as per Article 5.

Court's Rationale/Reasoning: The principal terms of LIVA, in regard to cancellation, are express in the defined terms of one of the sections.  In essence, the President, through his actions in veto particular items on a bill, renders an enumerated power of Congress ineffective, and subsequently cancelled.  Clinton has also amended a bill in his act.  These powers are not defined as per Article 1, Section 7 of the Constitution (unilateral amending and repealing of statutes).  

In an originalist take, the Court goes into why the Constitution is silent as to these issues.  What the Court decided was that the Framers meant that a bill must go through what they called "a single, finely wrought and exhaustively considered, proocedure," (quoting Chadha).  Despite the government's argument that LIVA was just a creative way of reinforcing Presidential creative spending measures, the notion of having a President have the authority to eliminate and amend certain portions of bills after they went through the legislative process no longer becomes a single exhaustive process.  Instead it becomes a process with multiple possibilities, two of which (eliminating and amending) are contrary to any express power in Article I or II.

If the President were to be able to get more power through a LIVA-like statute, it cannot be done so through the legislature, but instead must be done through the constitutional amendment process, as expressed in Art. 5.

Rule: The power to enact statutes must come from "a single, finely wrought and exhaustively considered, procedure."

Important Dicta:  No.

Concurring/Dissenting:  (Justices Scalia, O'Connor and Breyer): These justices mention that the prohibition on executive reduction of congressional dispositions is much more limited than the prohibition on executive augmentation of congressional dispositions, but they do not come from Art. I, section 7.  They come from the doctrine of unconstitutional delegation of legislative authority.

This doctrine states: when authorized Executive reduction or augmentation is allowed to go too far, it usurps the nondelegable function of Congress and violates the separation of powers.  As far as political lawmaking is concerned, there is no difference between what Congressional authorization of a President to cancel line items, or the Congressional authority to augment to them.  The latter has been done since the Founding of the Nation.  Nixon said so (impounding appropriated funds was a constitutional right) back in 1973, even though he was proven wrong 2 years later.

It is the terminology of the bill which this minority has a problem with:  if the bill allowed the President to "decline to spend" any item of spending, it would be constitutional.  But simply "cancelling" any item is technically different, but not really.

Dissenting: (Justices Scalia, O'Connor and Breyer): The same three justices find a minority premise that the majority thinks the President is in effect canceling laws and amending them is unconstitutional is incorrect.  Instead, the minority feels the President is merely executing a power conferred on him by Congress, by which he is allowed to render ineffective certain items on a bill.  Hey, this Court even has that power, as they can decide on the Federal Rules of Civil Procedure as far as which ones are appropriate to be codified.  President also has the authority through the Graham-Rudman-Hollings Act to issue a final order, which has the effect of canceling certain requests for spending.

The Court goes to the Jackson test from the Steel Seizure case and determines the President in this situation, in which it determines the President is acting within his executive power.  President has previously been allowed to repeal acts which were inequitable or unfair, unreasonable or anything else in the public interest.

Thus, LIVA is a novel act, which neither repeals nor amends laws, and thus do not violate any separation of powers found in the Constitution.