Prior to the imbroglio over Nixon the Executive branch had the equivalent of the line item veto. They just never spent the money. It was called Executive (or Presidential) Impoundment. Democrats with Nixon on the ropes got passed the Budget and Impoundment Control Act of 1973 (BICA) passed that forced the executive branch to spend every penny authorized.
In order to understand impoundment, maybe you should put yourself in place of the president. Congress has passed a bill you absolutely hate which, let's say, starts up a new federal program that will cost a billion dollars. You vetoed the bill, but Congress overrode your veto. What is there left to do? Well, remember that creating the program is only half of the story-- any program without funding is no real program at all (Cyndi Lauper was right-- money changes everything!). Since the override vote of your veto, the government is now obliged to create this federal program-- but the money for it has to come out of the U.S. Treasury. The Department of the Treasury, however, is part of the executive branch, and the Secretary of the Treasury (who has to "sign the check" for this new program's budget) is your appointee. You call the Secretary and instruct him or her not to sign the check. This is the definition of "impounding" something-- to seize and hold something under the legitimacy of law which technically belongs to someone or something else. Sneaky, but effective, isn't it???!!!
Historically, there were no effective controls on the president's impoundment power until Congress passed the Budget and Impoundment Control Act of 1973 (BICA). Tired of being held hostage by the chief executive-- particularly Nixon, who was a master of impoundment-- Congress acted to limit the president's ability to exercise this power while simultaneously recognizing it as an important prerogative of the national leader. Under BICA, the president may impound federal funds for up to 45 days after passage of a spending authorization by Congress. During that 45-day "waiting period," the president may appeal to Congress to pass a bill of recission (to rescind or revoke the earlier spending), thus giving him or her an opportunity to make the best case to the legislature as to why he/she thinks the spending is a mistake. If Congress passes a bill of recission, case closed; the spending plan is revoked, and so is-- probably-- the program or agency it funded. If Congress does not pass such a bill, however, and wants to go ahead with the original spending plan, the president is compelled by law to release the funds on day #46. Again, case closed!
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