Why did the Supreme Court rule the line item veto unconstitutional?

Answer 1

Congress didn't declare the line item veto unconstitutional; they approved the legislation, which the President then signed into law.

the US Supreme Court found the The Line Item Veto Act of 1996 unconstitutional after several groups challenged the legislation. Using the line-item veto, President Clinton unintentionally created tax disputes that penalized health care companies serving Medicaid clients after he struck items from the Balanced Budget Act of 1997 and the Taxpayer Relief Act of 1997.

According to the Supreme Court, the line item veto is unconstitutional because it violates the Presentment and Bicameral Clauses of the Constitution (Article I, Section 7, Clauses 2 and 3) that vests Congress with "all legislative powers." Also, the "Non-delegation Doctrine" holds that one branch can't transfer its constitutional powers to another branch or entity.

As Justice Kennedy pointed out in the concurring opinion of Clinton v. New York City, (1998), the case that stripped the President of this authority, the line item veto is subject to abuses that unfairly punish or reward certain groups, based on the President's unilateral decision.