Bush asks Congress for 'line-item veto' power

WASHINGTON, Mar 6 (Reuters) Seeking to show he is serious about curbing spending, President George W Bush asked Congress today to yield some of its power of the purse by allowing him to propose canceling specific budget items.

The line-item veto Bush hopes for faces hurdles because an earlier version of it which Congress passed under former President Bill Clinton was rejected by the Supreme Court as unconstitutional.

But Bush said the 1998 court decision ''should not be the end of the story'' and said the legislation would be crafted in a way to satisfy the court's concerns.

''By passing this version of the line-item veto, the administration will work with the Congress to reduce wasteful spending, reduce the budget deficit and ensure that taxpayer dollars are spent wisely,'' Bush said.

In striking down the Clinton-era line-item veto by a vote of 6-3, the Supreme Court said Congress was not authorized under the Constitution to hand the president that power.

But White House spokesman Scott McClellan said that the Bush proposal would differ from the line-item veto passed in 1996, which allowed the president to pencil out specific spending items only after a bill was passed by Congress.

Under the Bush proposal, the president would identify areas in a piece of spending legislation that he considered wasteful and then send the package back to Congress for an up or down vote. Congress would have 10 days to decide whether to accept or reject the package.

Announcing the line-item veto proposal at a swearing-in ceremony for Ed Lazear, his new chairman of the White House Council of Economic Advisers, Bush said it would allow him to take aim at ''special-interest spending'' and earmarks.

The lobbying scandal involving Jack Abramoff and the conviction of former California Republican Rep. Randy ''Duke'' Cunningham on bribery charges have put a spotlight on budget earmarks -- spending on pet projects that lawmakers often add to bills to please constituents in their home states.

Bush, who has never vetoed any bill, has been criticized by many conservatives for the surge in federal expenditures on his watch.

'BRIDGE TO NOWHERE' One example of an earmark that critics often cite was a bridge proposal in Alaska ridiculed as the ''Bridge to Nowhere'' because it would have served a very small population.

The bridge was part of 287 billion dollars transportation bill that many conservatives had urged Bush to veto. Bush signed the transportation bill and hailed it as a job-creating measure.

Spending on the Alaska bridge was later canceled, but the state received the money anyway as part of its general transportation funds.

Republicans worry the record deficits could hurt them in this year's midterm election in which Democrats are seeking to regain control of both houses of Congress.

The Bush administration has forecast a fiscal 2007 budget deficit of 9 billion, an all-time high.

REUTERS CH HT2320