Cameron: Veto bargaining

Cameron. 2001. Veto bargaining.

Major Point:

Cameron has two major points: (1) The veto enables presidents to influence legislative outcomes; and (2) Divided government does not make governing impossible, it simply encourages more inter-branch bargaining.

Cameron begins with an empirical analysis of all 434 vetoes issued by U.S. presidents between the beginning of the Truman administration in 1945 and the end of the Bush administration in 1992. In his analysis he focuses particular attention on how veto rates are affected by unified or divided government as well as the relative importance of a piece of legislation. Cameron finds that vetoes on both major and minor legislation are rare under unified government. However, when government is divided and the legislation under consideration is important he finds that: (1) vetoes are not rare events -- his results show that the veto rate on "landmark" legislation under divided government is 20%; (2) vetoes are often part of veto chains -- a sequential bargaining process between Congress and the president; and (3) presidents routinely and successfully use vetoes to extract policy concessions from Congress --he finds that in 80% of re-passed bills Congress made some sort of concession.

Place in Literature:

• Builds upon Neustadt's (1960) idea of presidential reputation as critical to bargaining power.
• Agrees partly with Mayhew's (1991) claim that divided government does not decrease legislative productivity, but argues that divided government does influence the nature of those laws that are passed. More veto bargaining happens.
• Embraces a preference driven approach to explaining outcomes of the U.S. lawmaking process (ala Krehbiel 1998)
• Like all previous models, this is an explicitly unidimensional model (p 87).

Three Models of Veto Bargaining

The three models in brief

• Model 1 is the lit's Romer-Rosenthal model that Cameron seeks to replace
• Models 2 and 3 are his replacements, which have three players: The floor median, the president, and the override pivot (i.e. the ideal point of the person who must approve a veto override)
• Model 2 is used when the floor median is closer to the override pivot than to the president. In model 2, the floor will design a bill that it knows will be vetoed but hopes to override the veto (by winning over the override pivot but not the president). The focus here is not on the president, but on the override pivot. However, Congress is uncertain about the specific location of the override pivot; in each period, Nature randomly selects a new override pivot from the range of possible pivot points. As such, Congress selects a bill within the range of potential pivot points and keeps passing it (unamended) until the override pivot approves.
• Model 3 is used when the president's ideal point is closer to the floor median than the override pivot is. Congress will try to pass something acceptable to the president. This may involve a long chain of bargaining. In contrast to Model 2, Congress amends the bill in each round of play; in model 2, failure to override was simply poor luck (Nature picked a more extreme override pivot that round), so amendment was unnecessary. But in model 3, a veto reveals information about the president's true ideal point, so Congress modifies its proposal accordingly.

The three models in more detail

1. The basic Romer-Rosenthal model of take-it-or-leave-it bargaining (as applied by Kiewiet and McCubbins) - In this game, it is assumed that both Congress and the president have complete information. Congress moves first and has two options: pass version one of a bill or pass a modified version. The president has the next move and can either veto or accept the passed bill. In this game neither overriding nor re-passing are possible. The solution is that Congress anticipates the president's actions and passes a bill just good enough that he will sign (i.e., Congress will pick from the win set the best possible bill from its perspective). However, if the ideal points of Congress and the president are on opposite sides of the status quo point, Congress will not pass any bill. Despite the obvious simplicity of the game, it suggests that the power to veto can shape the content of legislation even if vetoes are never used.
2. Override model � This game allows for two rounds of play and a veto override. Additionally it allows for incomplete information. The president and Congress are somewhat uncertain about the location of the veto override player (Nature randomly selects an override pivot from a range of potential override pivots; Nature makes a new selection at the beginning of each round). In this game, Congress begins by passing a bill; the president can veto or accept it; and the veto player can sustain or override the veto. If the veto is sustained, and if bargaining does not break down (which Cameron incorporates as a known probabilityl), the game repeats itself once. For simplicity's sake, Cameron assumes that Congress wants a dramatic leftward change in the status quo policy, while the president desires only moderate changes � but still towards the left. Cameron also assumes that the ideal point of any potential override player is much closer to that of the congressional majority than it is to the location of the president' most preferred policy. (This is only one potential situation, but it is the only interesting one as far as this model is concerned.) The model predicts that Congress will set out to move the status quo as close to their ideal point as possible by attempting to construct a veto-proof bill (i.e., a bill that the override player will prefer to the existing policy). If the president vetoes (which Cameron assumes will happen, given the assumed arrangement of preferences), the vote to override should be close, but due to the uncertainty about the location of the veto pivot, an override is not guaranteed. If the veto is sustained, the model predicts that Congress will pass the same bill again without amendments (if bargaining within Congress doesn't break down) and try to override again; Congress will not make concessions to the president, since its goal is to override the president.
   • Overall, this model shows that both the uncertainty concerning the location of the override player and the possibility that bargaining within Congress will break down in the second round of play advantages the president in a conflict with a hostile Congress.
   • Note that in both this model and the next, Cameron incorporates the "probability of breakdown" after a veto into the model. This is the probability that the bill never gets revisited after a veto. In chapter 5, Cameron argues that this probability merely reflects the significance of the bill. For minor (parochial) bills, a veto is likely a death knell (i.e. high probability of breakdown). For major legislation, however, everybody wants to get something done, so the probability of breakdown is much lower.
3. Sequential Veto Bargaining (SVB) - This game (like the override model) incorporates uncertainty, but in this model the uncertainty concerns the location of the president's ideal point. For Cameron, the inclusion of incomplete knowledge about presidential preferences is generally the same as including some sort of measure of a president's reputation (ala Neustadt 1960; see note below). This game is similar to the override game: there are still two rounds of bargaining, with a possibility of the breakdown of bargaining after the initial veto. However, in SVB the president's true type (preference) is fixed throughout the game whereas the identity of the override player in the previous game varied from the first to the second round. Thus, whatever Congress learns about the president in the first round can and will be used in the second round. Finally, in this game, Cameron examines only the situation in which the president's ideal point is closer to that of the congressional majority than is the ideal point of the override player. (Otherwise, Congress would play the game in Model 2).
   • In the first round, Congress begins with a notion of the range of possible presidential preferences and so bases the content of its initial bill on its expectations about what the president might accept. Thus, Congress is likely to pass a tough bill, but one with a reasonable chance of enactment. If the president is accommodating (i.e. his preferred set includes Congress's ideal point), he will accept the bill rather than risk breakdown or a return to the status quo. However, if the president vetoes, Congress will see the president as "tough" and the content of the second bill will incorporate policy concessions.
   • This model shows that the veto power enables presidents to extract policy concessions from Congress and that some types of presidents are willing to strategically veto a bill even if they prefer it to the status quo (p 112-3).
   • A note on Neustadt: Neustadt identified three sources of presidential power: formal powers (e.g. vetoes), reputation, and public popularity. Scholars largely ignored reputation, as it was too hard to quantify. However, economic game theory has recently evolved to where it can account for incomplete information (e.g. about the president's reputation) and for a Bayesian solution concept (in which we learn about the president over time). Thus, the purpose of this SVB model is to formalize Neustadt's claims that presidents gain more from bargaining if they are seen as having the "skill and will" to use the full array of their bargaining tools--including the veto. And how does the president demonstrate the will to veto? Just as I feign that I'm willing to spend less than I really am when I go to a car dealer, the president feigns that he is more satisfied with the status quo than he really is--perhaps by vetoing something that everybody expects him to sign--in order to get a better offer from Congress. Thus, certain types of president ("type" refers to the alignment of his preferences relative to Congress) will strategically veto.

Application of the Models: Legislative Productivity and Divided Government

(Main point: Congress is more productive under unified government than under divided government.)

Next Cameron employs his models to investigate in greater detail the relationship between divided government and legislative productivity. Here he predicts that divided government will mean slightly fewer significant legislative enactments. According to Cameron, because the ideal points of the important players are more distant from one another under divided (as opposed to unified) government, there are far fewer status quo policies that can be moved when control of government is split between the parties. To test this theory, Cameron constructs a regression with the number of landmark legislative enactments in a given session of Congress as his dependent variable (it should be noted that he controls for the "bulge" in enactments that occurred in the late 1960s and early 1970s). His regression results indicate that Congress produces about three fewer landmark bills per session during periods of divided government. However, he notes that even during periods of divided government, Congress and the president still enact landmark pieces of legislation in considerable (though slightly reduced) numbers.

For Cameron, during periods of divided government, a few items are taken off the legislative table that would have found a place under unified government. Those that remain tend to be shaped by haggling between the branches, but are still often successfully resolved. He shows that breakdowns in bargaining are rare for important bills. Finally, Cameron claims that veto bargaining (haggling between the branches) tends to move policy toward the center of the political spectrum � which in America is increasingly occupied by voters, but has generally been abandoned by the parties.

Role of Veto Threats

In ch 7, Cameron considers the role of veto threats. He is basically just confirming empirically the model of threats in Matthews (1989).