THE WHITE HOUSE

Office of the Press Secretary

PRESIDENT CLINTON USES LINE-ITEM VETO
ON THE TREASURY AND GENERAL GOVERNMENT
APPROPRIATIONS ACT OF 1998

October 16, 1997

President Clinton used the line-item veto today to cancel one provision of the Treasury and General Government Appropriations Act of 1998.

The President's action will save an estimated $8 million in 1998, and $854 million over five years.

--In addition, the action will keep agencies from having to reallocate an additional $1.3 billion in limited discretionary resources to pay higher retirement benefits.

The provision would require the Office of Personnel Management to hold an open season in 1998, during which time Civil Service Retirement System (CSRS) employees could switch to the Federal Employees Retirement System (FERS).

The provision could apply to over 800,000 Federal civil servants and congressional staff and over 300,000 Postal Service workers, but few were expected to switch plans.

--The 1998 Transportation Appropriations would exclude Members of Congress from this option.

The President canceled the item because.

--It could raise the Federal Government's employee retirement costs by billions of dollars over the long term.

--It would force agencies to use limited discretionary dollars for more employee benefit payments for a small number of employees, diverting them from other priorities.

--It is inconsistent with buyouts and other efforts to encourage people to retire early and separate voluntarily, and could slow Federal downsizing efforts.

--It was neither requested in the President's 1998 budget, nor debated in the House or Senate; rather, it was added at the end of the legislative process in a House-Senate conference committee.