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The Line Item Veto Act of 1996 enacted a line-item veto for the Federal Government of the United States, but its effect was brief due to judicial review.

The bill was signed into law by President Bill Clinton on April 9, 1996 and was immediately challenged in the United States District Court for the District of Columbia by a group of six senators, first among whom was Senator Robert Byrd (D-WV), where it was declared unconstitutional by District Judge Harry Jackson, a Reagan appointee, on April 10, 1997. The case was subsequently remanded by the Supreme Court of the United States with instructions to dismiss on the grounds that the senators had not suffered sufficient injury to press charges under Article III of the United States Constitution (i.e., the senators lacked standing). The case, Raines v. Byrd, 521 U.S. 811 (1997), was handed down on June 26, 1997, and did not include a judgement on the constitutional grounds of the law.

It was used against one provision of the Balanced Budget Act of 1997 and two provisions of the Taxpayer Relief Act of 1997 before being challenged again in two separate cases; one by the City of New York, two hospital associations, one hospital, and two health care unions; the other by a farmers' cooperative from Idaho and an individual member of the cooperative. Senators Byrd, Moynihan, Levin, and Hatfield again opposed the law, this time through Amicus curiæ briefs. United States District Court Judge Thomas Hogan combined the cases and declared the law unconstitutional on February 12, 1998. This ruling was subsequently affirmed on June 25, 1998 by a 6-3 decision of the Supreme Court of the United States in the case Clinton v. City of New York. Justices Breyer, Scalia, and O'Connor dissented.

Here is the way the line item veto worked:

• Congress passed a piece of spending/tax legislation.
• The President signed the bill, as a whole, but then lined out the specific items he opposed.
• The President returned the lined-out items to Congress, which by a simple majority either approved or disapproved.
• If it disapproved, Congress sent a "bill of disapproval" containing the items back to the President.
• The President could then veto the disapproval bill; it then required a two-thirds majority in Congress to override his veto.

• Byrd, Robert (2004). Losing America. New York: W.W. Norton & Company. ISBN 0-393-32701-9. 
• Clinton v. City of New York. Supreme Court Collection. Retrieved on July 04, 2005.
• Byrd v. Raines. The CPA Journal. Retrieved on July 04, 2005.
• Byrd v. Raines. The National Center for Public Policy Research. Retrieved on July 04, 2005.
• SHIELDS & GIGOT, April 10, 1997. Online NewsHour. Retrieved on July 04, 2005.