Wednesday, March 11, 2009

Earmarks

Beyond knowing that John McCain hates them, and that the Republicans don't like them when the Democrats are in charge, the following CNN Money article goes into detail into what the hell earmarks actually are.

I suggest reading the article, but here are the highlights:

... Republicans, who have sought unsuccessfully to amend the $410 billion fiscal year 2009 omnibus spending bill passed by the Senate on Tuesday night. That bill is estimated to have $7.7 billion worth of earmarks requested by lawmakers -- or about 2% of the total bill.



In any given year, earmarks requested by members of the majority party typically account for 60% of earmarks, with the remaining 40% coming from members of the minority party.



Typically, when Congress appropriates federal funding to government agencies, it's up to the agencies to decide how that money gets doled out to projects in states, cities and counties, and those decisions are made through an application-and-review process.

...

Most typically, an earmark is defined as a slice of the money allocated to an agency that a lawmaker or the president has requested be set aside for a specific project.

So earmarks aren't additional spending -- they're a portion of the total amount lawmakers have agreed to spend for a given year.

"If earmarks go, the amount of money stays the same. It's more about who decides how the money will be spent," said Charles Konigsberg, a former assistant budget director in the Clinton administration and now chief budget counsel at deficit watchdog group the Concord Coalition.



While there have always been earmarks, their number grew exponentially between 1995 and 2006. That's partly because lawmakers began to use earmarks as a way to help incumbents who risked losing re-election, Ellis said. And part of it was a feedback loop: as earmarks grew, so did the ranks of lobbyists to secure them.

"More earmarks begat more lobbyists begat more earmarks," Ellis said.

Today, earmarks can number several thousand a year. But in the end, their total dollar amount typically represents less than 1% of the federal budget.

"People think big chunks of the federal budget are being shoved into earmarks, and it's just not the case," Konigsberg said.



"Some are worthwhile projects, but they're the product of a bad system," Ellis said.

It's a system based on "political muscle rather than merit," he said. Translation: Senior members of the House and Senate Appropriations Committees typically get the most earmarks.

Is there a better way?

Ellis believes Congress should set up an objective, merit-based earmark system that establishes a list of priorities. Transportation projects, for example, could be required to meet criteria that reflect national priorities such as improving traffic density, commuter safety or energy efficiency.

"Right now, no one can tell me why one project gets money and another doesn't," Ellis said.



Some experts say the biggest problem with earmarks is that their status as budget-bad-boy is overblown, detracting from the real trouble with federal spending.

As astonishing as the government's debt levels may be in the short-run because of the financial crisis -- well over a $1 trillion deficit this year alone -- the long-run picture is much uglier because of the pressures entitlement programs will place on the federal budget.

Left unchanged, federal spending on Medicare and Medicaid alone, which now accounts for roughly 5% of GDP, is projected to grow to more than 6% in 2019 and to 12% by 2050, according to the Congressional Budget Office. And that doesn't include the growing cost of Social Security and other government spending.

"The impact of earmarks has been overemphasized; they're a red herring," Konigsberg said. "So much attention is paid to them and so little attention is paid to our long-term fiscal condition."

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