Show Us the Money

Critics of earmarks frequently point to the presumed quid pro quo between earmarks and campaign contributions. They argue that members of Congress pursue earmarks in order to rake in campaign contributions from lobbyists who are scrambling to get earmarks for their clients.

If this is true then one would expect that members of the Appropriations Committees would be raising piles of cash. Membership on Appropriations should be the most valuable--or one of the most valuable--committee assignments a member could achieve from the perspective of campaign contributions.


This American Life is airing a program this week about money and politics. Part of the program focuses on this question: Which committees are most valuable in terms of campaign contributions? Lee Drutman, a Senior Fellow at the Sunlight Foundation (and fellow political scientist), crunched the numbers (covering multiple congresses and going back into the 1990s) for Planet Money.

Is an assignment to Appropriations number 1? No, that honor goes to Ways and Means. OK. Well that makes sense. Targeted tax provisions (tax earmarks) are worth a fortune--millions, even billions--to well-represented and well-financed corporations.

Surely Appropriations is number 2. No, that honor goes to the Financial Services Committee. Hmm. Well, OK. That makes sense, they write legislation that influences the bottom line of the financial services industry, the largest component of the American economy.

Well, you know, Appropriations is number 3, right? Sorry, that honor goes to the Energy and Commerce Committee. Again, this makes sense since the jurisdiction of the committee is the broadest in the House, covering everything from oil and gas to health care. Many, many corporations have legislative interests that fall within the purview of the committee.

Is it surprising that Appropriations is not in the top three; that it falls in the middle of the distribution? Not really. Critics of earmarks have been loud in their denunciations of earmarks, and shrewd in creating the quid pro quo narrative, but they have been (and are) wrong. They have diverted attention from the more important and less visible legislative activities in Congress that are infinitely more costly to American taxpayers.

In the meantime earmark foes have robbed our representatives of the ability to counterbalance the power of the executive branch to spend money by successfully hounding congressional leaders for an earmark moratorium. Furthermore, absent earmarks the legislative process has almost completely stalled. After draining the oil from the engine is anyone surprised when the engine seizes up during the cross-country trip?

With the legislative process stalled, and Congress pressured to pass authorizations and appropriations for infrastructure and water projects, it will become increasingly clear that earmarks are critical for Congress to fulfill its constitutional role.

Jeff Flake: Giant Killer

In 2008 arch-earmark-foe Representative Jeff Flake (R-AZ) initiated a full court press for his assignment to the Appropriations Committee. Supporters circulated an internet petition supporting his request. Despite a spirited fight, Flake was not assigned to the committee. He and his supporters attributed his failure to resistance from earmark defenders.

In the wake of the 2010 election, with the Republicans riding a wave of voter discontent fueled, in part, by disdain for earmarks, and with appropriators on their heels, Flake once again made a run at an appointment to the Appropriations Committee. Making his closing argument for an appointment in an Op-Ed in The Washington Post  Flake argued that earmarks were distracting the Appropriations Committee from its role as guardian of the Treasury:

Those who view earmarking as an expression of the "congressional prerogative" sell Congress short of its preeminent role as the first branch of government. As the defenders of earmarking are fond of saying, earmarks represent less than 2 percent of all federal spending. Precisely! By focusing on a measly 2 percent of spending, we have given up effective oversight on the remaining 98 percent.[1]

Flake argued that the committee, by focusing its efforts on earmarks, fails in the larger effort to closely scrutinize the more costly and more important expenditures. In the same Op-Ed he concluded that,

Without the earmark distraction, Congress can return to the deliberative process of authorization, appropriation and oversight, thus reining in spending abuses of the administration rather than simply piling on with spending abuses of our own.

 In an Appropriations Committee oversight hearing on Wednesday Flake attacked the National Endowment for the Arts for making grants worth a few hundred thousand dollars to a mime company in San Francisco and supporting an accordion festival.[2]

Those who supported Jeff Flake’s holy war on earmarks should be rolling their eyes, but we suspect they are not. Is this what Flake’s rebellion has become? Shifting the focus from a few silly-sounding earmarks to a few silly-sounding federal grants? Is this how Flake intended to wield the potent appropriations oversight power all along?

Or, perhaps Flake intends to go through the federal budget with a very, very, very, very fine-toothed comb.

The other irony here is the claim by earmark foes that expenditures determined through competitive, peer-reviewed, bureaucratic processes are superior to earmarks. The mimes and accordionists were funded using the competitive bureaucratic process boosted by earmark critics, yet they produced silly-sounding expenditures.

The fact is that many specific government expenditures, taken in isolation, sound silly. Case in point: recently the Department of Defense released a request for bids to repair a Koi Fish Pond at Travis Air Force Base in California. That sounds pretty silly to us.[3] And when silly sounding expenditures are brought to their attention, the media takes the bait every time.  But they miss the broader implications. In the debate over earmarks the media consistently reported on the silly-sounding earmarks; but they missed the larger debate about the congressional power of the purse and the ability of members of Congress to adapt broad federal programs to the needs of their states and districts. In this case the argument is not about a few silly-sounding grants, but whether the National Endowment for the Arts should continue to exist and receive funding. That is the argument on which the media should be reporting, and that is a debate that all Americans should have a voice in. 

Let’s be clear about the fiscal stakes.  Mr. Flake is focusing attention on a couple of grants that amount to a few hundred thousand dollars.  The total National Endowment for the Arts budget request for fiscal year 2012 is about $146 million, or less than one third of the amount this country spends on military bands in a year.[4]   Elimination of the entire National Endowment for the Arts would not make a dent in a deficit of $1,480,000,000,000. 

However, focusing the public’s attention on a few well chosen examples of “wasteful” spending will only contribute to creating the false impression that the budgetary imbalance is the result of wasteful spending and that balancing the federal budget can be easily accomplished. The public’s lack of understanding of the composition of the federal budget is well known, and it is easy to convince voters that silly spending is the root of our budgetary problems. 

Instead of focusing attention on the pittance we spend on mimes and accordion festivals, Mr. Flake might consider following Willie Sutton’s advice.  When asked why he robbed banks, Sutton famously replied “because that is where the money is.”  The money in the federal budget is in the Department of Defense, entitlement programs, and the flip side of earmarks, targeted tax breaks (known in Washington as tax expenditures).  If Mr. Flake truly cares about addressing our fiscal imbalance, he would be best to look to these programs instead of continuing to garner media attention by highlighting alleged waste in minuscule programs, the elimination of which will do nothing to solve the problem, but will only serve to promote anti-government feeling among an already cynical American public.  

             

[1] Jeff Flake, “An earmark fight Congress doesn't need,” November 12, 2010. http://www.washingtonpost.com/wp-dyn/content/article/2010/11/11/AR2010111106060.html

[2] Erik Wasson, “GOP blasts NEA grants to 'Frisco mimes, accordion festival” May 11, 2011 http://thehill.com/blogs/on-the-money/appropriations/160491-obama-arts-chief-grilled-at-house-appropriations-

[3] Repair Coy (sic) Fish Pond, Solicitation Number: F3ZT911081A002-PondRepair, Agency: Department of the Air Force, Office: Air Mobility Command, Location: 60th CONS https://www.fbo.gov/index?s=opportunity&mode=form&id=ec7591c232e932e108497c09c1e78b12&tab=core&_cview=1

[4] Walter Pincus. “Defense Department spends $500 million to strike up the bands” The Washington Post. September 6, 2010. http://www.washingtonpost.com/wp-dyn/content/article/2010/09/06/AR2010090603018.html?sid=ST2010090603042

The Paradox of Earmark Reform

Earlier this year House Appropriations Committee Chairman Dbavid Obey (D-WI) announced a ban on earmarks for private for-profit companies in House Appropriations bills.  Like earlier earmark reforms--public disclosure of earmark requests, public posting of earmark requests, and listing earmarks in committee reports, to name a few--the aim of Chairman Obey’s dictum was to increase public confidence in the appropriations process by responding to a demand of Washington-based “watchdog groups.” Over the past several decades these groups have mercilessly attacked the practice of congressional earmarks arguing , without much supporting evidence, that they increase federal spending, are inherently wasteful, and inevitably lead to corruption.

Ink and indignation are predictably hemorrhaging from Washington, DC over the recent revelation that private firms have discovered loopholes in Obey’s ban allowing them to gain access to earmark funds.  Reporters from The New York Times and the Seattle Times cite cases where for-profit companies formed non-profit organizations eligible for earmarked funds, and other cases where for-profit companies have partnered with non-profits or universities that assist their research, allowing the companies to skirt the ban.[1] These strategies have been pilloried by watchdogs and the media as additional examples of the “corruptness” of earmarks, and the basis of repeated demands for further earmark reform or even a complete ban on the practice.

Obey’s ban while well-intentioned was ill-advised.  The Senate Appropriations Committee did not enact a similar ban, which provided an immediate alternative strategy for private companies seeking earmarks; just approach the Senate.  Further, favoring non-profit organizations over for-profit businesses is an arbitrary policy.  The marketplace of good ideas does not observe strict adherence to the for-profit/not for-profit distinction that Obey codified in the reform.  For-profit companies are often developing important products and technologies that are worthy of public support.  One example is the Mine Resistant Ambush Protected vehicle (MRAP) that is widely used in Iraq to protect soldiers from improvised explosive devices.  With only one customer (the Pentagon) the original designers and producers of the MRAP relied on earmark funding (in part) to develop and produce the first vehicles.  With design and production capability in place, when the need for MRAP vehicles in Iraq became obvious large-scale production could quickly ramp up.  In the absence of earmarks it likely would have taken years to design, test, and produce the MRAP vehicle that has saved the lives of thousands of soldiers.

The more fundamental problem with Obey’s ban springs from what we refer to as the “paradox of reform.”  The intention of the reform was to increase public confidence in the earmarking process by responding to one of the many objections of watchdog groups; the result, inevitably, is precisely the opposite. Opponents of earmarks use the imperfect results of the reform to intensify their attacks on congressional appropriations earmarks and their reports, amplified by the media, drive down public trust in the process. This paradox was evident following the first round of earmark reforms.  Rules that required listing earmarks in committee reports provided easy access to earmark data that, when combined with data on campaign contributions from the Federal Election Commission, could form the basis of a contributions-for-earmarks conspiracy, which is not well supported by the data (but disseminated by the groups and dutifully reported by the media).[2]  In this round of reform, for-profit companies skirt an ill-conceived and impossible to enforce reform; the resulting examples of the “failure of the reform” are presented as evidence of the “corruption” that sparked demands for the reform from the group in the first place. Watchdogs, in turn, demand new stricter reforms, supported by predictable public outrage,  with the eventual aim of driving Congress out of the earmarking business altogether (and, by the way, their loud objections do not hurt their fundraising efforts).

In the final analysis the only way to satisfy earmark critics is to ban appropriations earmarks altogether.  This would irreparably upset the Constitutional order envisioned by the framers of the Constitution who granted the power of the purse to the Congress to make government spending more responsive to public demands, and to balance congressional power against presidential power.  In the absence of appropriations earmarks the only recourse available for federal funding of local and national priorities are appeals by citizens to a faceless, non-transparent, and electorally unaccountable federal bureaucracy incapable of appreciating the priorities and concerns of people in communities across the country (except, perhaps, those cities, towns, and organizations with the resources to hire expert grant writers to help them jump through the hoops of the federal grants and contracts process).  Concentrating the power of the purse in the executive branch would further inflate the power of the executive branch and undermine the power of Congress, the people‘s branch.

Most of the cases of earmark abuse that were uncovered (and there are fewer than most of the public would believe) came to light through the legislative process itself; the legislative process has many of the features of a self-regulating system.  Reforms that improve transparency are good; most in Congress and most in the lobbying community supports reforms that improve transparency.  Reforms without a basis in policy, or that are meant to appease watchdog groups are ill-advised at best and, at worst, could erode the unique balance between the public and our political institutions that our founders sought to embody in the Constitution.


[1] Eric Lipton and Ron Nixon, “Companies find ways to bypass ban on earmarks” The New York Times, http://www.nytimes.com/2010/07/05/us/politics/05earmarks.html accessed July 4, 2010; David Heath “Congressman Dicks finds way around earmarks rule” http://seattletimes.nwsource.com/html/localnews/2012294255_dicks07.html
The Seattle Times accessed July 6, 2010.

[2] Scott Frisch and Sean Kelly
“Earmarks and campaign contributions: less than meets the eye.”  http://www.cheesefactoriesonthemoon.blogspot.com accessed July 6, 2010.