Sunday, March 8, 2009

Forests, trees, and earmarks

The battle over the Omnibus Appropriations Act, 2009
(H.R. 1105, hereinafter “the Omnibus bill”) is shaping up as a fight against earmarks. Considering that the Omnibus bill has a price tag of $410 billion and the earmarks amount to about $7.7 billion*, this seems a clear case of missing the forest for the trees. It’s true the earmarks make a handy stick with which to beat President Obama as John McCain did when he quoted this pledge by then-candidate Obama:

We need earmark reform and when I'm president, I will go line by line to make sure we're not spending money unwisely.

It’s also true that the earmarks make much more interesting theater than the rest of the bill. How can funding for the humdrum, day-to-day aspects of government compete with earmarks like those for Swine Manure Research, Tattoo Removal, and preserving parts of Historic Tiger Stadium. Whatever the political reality, however, the financial reality is that eliminating all the earmarks would still leave a massive spending bill and I think the size of the bill as a whole is what deserves attention.

Having said that, I must nonetheless confess that I was mesmerized by the list of earmarks and then by the realization that while the word “earmark” was thrown around quite freely I wasn’t entirely sure what it meant. So I decided to poke (heh, heh) around a little and see exactly what earmarks are, whether they are always a bad thing, and - when they are bad - how to most effectively argue against them.

Wikipedia’s definition of “earmark” seems somewhat out of date but the relevant portions read:

The federal Office of Management and Budget defines earmarks as funds provided by Congress for projects or programs where the congressional direction (in bill or report language) circumvents Executive Branch merit-based or competitive allocation processes, or specifies the location or recipient, or otherwise curtails the ability of the Executive Branch to manage critical aspects of the funds allocation process. [snip]

Earmarking differs from the broader appropriations process, defined in the Constitution, in which Congress grants a yearly lump sum of money to a Federal agency. These moneys are allocated by the agency according to its legal authority and internal budgeting process. With an earmark, Congress has given itself the ability to direct a specified amount of money from an agency's budget to be spent on a particular project, without the Members of the Congress having to identify themselves or the project.

Obviously the anonymity aspect of earmarks has long since gone by the board. What’s important here is that instead of the Legislative Branch just handing money to the Executive Branch to spend in accordance with existing laws and procedures, the Legislative Branch gets into the nitty-gritty and directs specific money to go to specific projects. So, for example, instead of the Federal Department of Transportation simply getting $1 million more this year than last to spend as it believes proper and legal, Congress gives the Department $1 million and says, “Spend it on this particular project.”

Since “earmark” is often used interchangeably with “pork-barrel project” or “pork”, I checked Wikipedia’s definition of “pork” also (emphasis mine):

Typically, "pork" involves funding for government programs whose economic or service benefits are concentrated in a particular area but whose costs are spread among all taxpayers. Public works projects, certain national defense spending projects, and agricultural subsidies are the most commonly cited examples. [snip]

Pork-barrel projects, or earmarks, are added to the federal budget by members of the appropriation committees of United States Congress. This allows delivery of federal funds to the local district or State of the appropriation committee member, often accommodating major campaign contributors. To a certain extent, a member of Congress is judged by their ability to deliver funds to their constituents. The Chairman and the ranking member of the U.S. Senate Committee on Appropriations are in a position to deliver significant benefits to their States.

Does this mean earmarks and pork are the same thing? Not necessarily. Consider this discussion from a 2008 NPR show:

BOB GARFIELD: But [earmarking] is, historically and ultimately, a legitimate legislative mechanism, isn't it?

JONATHAN WEISMAN: Absolutely. You know, the Iraq Study Group, that bipartisan group, was earmark. It was created as [LAUGHS] a little, what we would call a pet project by a congressman from Virginia, Republican Frank Wolf. Most research into breast cancer is done through earmarks.

Earmarks are the method by which members of Congress can exact policy. [snip]

Well, let's put it this way. If you didn't do these earmarks you’re probably going to have little to no effect on the federal budget. It’s not that the Congress is piling on additional spending. It’s just carving out the spending that would already be there.

It used to be that a huge pot of money would just go to, say, the Department of Transportation. Then the Department of Transportation would farm that out to State Departments of Transportation or local road authorities and they would decide how to spend the money. It simply would give the bureaucracy more power in deciding how to spend that money.

There’s a balance here to be struck between the prerogative of Congress and the ability of bureaucrats, basically, to set their own their priorities.

As Weisman makes clear, there is a distinction between an earmark and a pork-barrel project. An earmark is a targeted expenditure outside the normal Executive Branch spending guidelines. If it benefits solely (Old Tiger Stadium) or mostly (swine manure) one State, it’s pork. If it benefits the nation as a whole (the Iraq Study Group) or people across the country (breast cancer research), it’s not pork. This is not cut and dried, of course. An earmark that funds breast cancer research can look pretty porcine if all the funds go to one research center in one Congressional district. Conversely, an apparent pork-barrel project may initially benefit only one State but have clear benefits for the entire country. Military bases are the classic example of this: a particular State benefits from the construction and then from the presence of military consumers but the entire country benefits from the military and the bases have to go somewhere. Despite occasional fuzziness, however, I think the distinction between earmarks and pork is useful. Why? Because it tells us we have three different types of spending in the Omnibus bill:

1) What we can call “normal” appropriations which appropriate money for ongoing government operations. Through this, for example, the Federal Department of Transportation is given a certain amount of money which it can spend directly or allocate to State Departments of Transportation as provided in existing laws and guidelines. This type of spending accounts for about 98% of the Omnibus bill.

2) Non-pork earmarks which appropriate money for a specific purpose that can reasonably be claimed to benefit the country as a whole or to benefit people across the country. I have not seen any claims that there are these types of earmarks in the Omnibus bill although there may be.

3) Pork-barrel earmarks which appropriate money for a specific purpose that can not reasonably be claimed to benefit the country as a whole or to benefit people across the country. Instead, pork-barrel earmarks benefit mostly a particular State or Congressional district or a particular interest group whose benefit is not also a benefit nationally. Presumably the entire $7.7 billion worth of Omnibus bill earmarks that so many people are inveighing against consists of these pork-barrel projects.

In terms of whether they should be opposed and if so how, I don’t see any difference between non-pork earmarks and normal appropriations. They are both spending that can be reasonably claimed to benefit the entire nation. If someone wants to oppose instances of these types of spending, there are three obvious arguments he can use: there is no true benefit; the cost outweighs the benefit; or the benefit outweighs the cost but we simply cannot afford it. The first is usually in the eye of the beholder while the second should be calculable but often is not. It is the third argument that is most interesting right now.

One side of this argument holds that given the terrible financial condition of the Federal government, it should be attempting to spend less. The other side - which currently holds sway in Washington - claims that precisely because the financial situation of the country as a whole is so terrible the Federal government should be spending more. Democratic Senator Evan Bayh, with his call for austerity and belt-tightening on the part of the Federal government, is an excellent example of the spend less side; President Obama, with his vast array of spending proposals, personifies the spend more side.

There is, however, a fourth argument that can be made against normal appropriations and non-pork earmarks: Federal spending should be cut, period. This is not the same as Bayh’s argument. In fact, he explicitly says (emphasis mine):

The omnibus increases discretionary spending by 8% over last fiscal year's levels, dwarfing the rate of inflation across a broad swath of issues including agriculture, financial services, foreign relations, energy and water programs, and legislative branch operations. Such increases might be appropriate for a nation flush with cash or unconcerned with fiscal prudence, but America is neither.

In other words, if we could afford it this huge increase in the Federal budget might be fine; it’s only because we can’t afford it that it’s problematic. Similarly Republican Senator Tom Coburn when criticizing the Stimulus Package spoke of the increase in debt and of the need “to lessen the waste, fraud, and abuse, the inefficiency, and to make choices on what is more important.” What he did not do was suggest that perhaps Federal spending was too large even aside from waste, fraud, abuse, and inefficiency. He did not suggest that perhaps there are some functions the Federal government should not be doing.

As everyone surely knows by now, Rahm Emanuel said that a crisis is “an opportunity to do important things that you would otherwise avoid” and the Democrats have taken his words to heart by arguing that economic disaster is the perfect climate for huge spending both through enlarging existing programs and through creating new programs like universal health care and green energy. Perhaps the Republicans - assuming any of them are still in favor of a small Federal government - should also adopt Emanuel’s approach and use the crisis to argue that far from being the time for more Federal spending this is a perfect opportunity to start figuring out what functions - and therefore costs - we don’t need from Washington. In other words, mount an opposition to the massive increase in normal spending that isn’t based on claiming this is not a good time for such expansion but is instead based on insisting there is never a good time for it.

Next up: The wrong way and the right way to oppose pork-barrel earmarks
March 10, 2009: This is now up.


* The price tag for earmarks seems to vary depending on who is adding it up. Democrats are - or were -
estimating $3.8 billion. The Heritage Foundation says nearly $13 billion. My $7.7 billion number came from Taxpayers for Common Sense and is the number I’m seeing most often. Their link discusses why their number differs from the one the Democrats came up with. A lot of that disparity is because:

the Appropriations Committee chooses not to include earmarks from project-based accounts in their totals, despite the fact that they were not requested by the administration. For example, the Corps of Engineers budget is made up of hundreds of projects that add up to the agency total. These numbers are not included in the committee totals or in their reduction predictions. In addition, the committee ascribes many operations and maintenance projects to the President when they were not actually requested as part of the FY09 budget.

They also “found a lot of ‘looks like earmark, talks like an earmark’ provisions in the bill that we tally as ‘undisclosed’ earmarks” and seem to believe there are more to be found.


Sources and reading:

Coburn Corruption and Waste Elimination Amendments - This focuses on provisions Senator Tom Coburn (R, OK) opposes but the pdf links in the “Related Resources” section lets you see all the earmarks in the Omnibus bill.

Jamie Dupree is a blogger at WSB Radio in Atlanta who is happily slicing and dicing the data on earmarks. Skim through his archives but the posts I found particularly interesting were:

Omnibus Earmarks, Part 1 - This is a partial list of earmarks in the Omnibus bill. It’s much of the same data you can find at Coburn’s site but it’s nicely formatted and easily searchable.

More On Omnibus Earmarks - This is a list of solo earmarks.

Even More Omnibus Data - Lists earmarks by Senator

Senatorial Pork Barrel - Talks about how pork comes from both sides of the aisle.

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