Putting An End To Earmarks (&Ornaments): Changing Federal & State Fiscal Practice to Really Achieve Transparency, Accountability & Decisions Based On Merit

BY: LINDA STAMATO

“The future demands that we operate in a different way than we have in the past, so let there be no doubt: this piece of legislation must mark an end to the old way of doing business and the beginning of a new era of responsibility and accountability that the American people have every right to expect and demand.”

—President Barack Obama, to reporters, March 11, 2009, prior to signing the $410 billion omnibus spending bill, as reported in the New York Times, “An Earmarked Bill, and Limits for the Next One,” March 12, 2009.

“It is anything but business as usual. The Legislature senses that the public is just fed up with the behavior that’s been just common place in the Legislature—the abuses, the corruption, the wasteful spending. People have had it, and I think the Legislature really kind of gets it. If they don’t, they better.”

[State Senator Barbara Buono (D-Middlesex), the first woman to head the New Jersey Senate’s Budget and Appropriations Committee, in April, 2008, on Christmas tree ornaments, in the Star Ledger, April 30, 2008.]

Now that the latest omnibus spending bill, replete with earmarks, has passed the House and Senate and has been signed by the president, attention to those mandated inserts to agency budgets wanes. But, this is just the time to focus earnestly on pork practice.

Despite promises from both parties to change their diet and the move toward more transparency and greater accountability, earmarking holds firm. Though its defenders may try to shift its meaning by giving it new names like “Congressionally directed spending” and to posture about their intimate knowledge of their local districts, the fact of the matter is that they want to pick their winners—who just happen to be in their districts—and they want little interference with the practice. That sentiment clearly crosses party lines and the appetite for pork intensifies regardless of who is in control of Congress or the State Legislature.

Accordingly, the purpose of this essay is to place the practice in context, to provide insight into its dark side, and to make the case for appropriate, defensible, and accountable financing for all budgetary appropriations. When the governing principles are seniority and geography, not merit, priorities are distorted and the public loses. Reforming the system must be about governing and building public trust. Business as usual on the political and legislative fronts doesn’t cut it anymore.

Earmarking in practice

As a teacher of public policy, an observer of politics, and a citizen of New Jersey, it is painful to watch budget crises unfold. To me, the solutions to getting the state’s and the nation’s financing done seems obvious: Without discussion, members of Congress and state legislators produce a spending list of add-ons and inserts that circumvent the budget development process while reducing items in the proposed budget that have already been subjected to the scrutiny of its members during budget hearings. These items include those submitted by agencies and institutions that were created by the Executive Branch, Congress, and the State Legislature to do the peoples’ business.

This last minute attachment of gifts of public money to local projects is unsound public policy. Regardless of whether some of the projects are worthy, the process is not. Earmarking circumvents the legitimate and transparent processes for determining funding decisions and, no matter what the spin, it substitutes political pull for merit.

The federal picture

The $410 billion omnibus spending bill signed by the president in early March is packed with lard: 9,286 earmarks costing $12.8 billion, according to Taxpayers for Common Sense. Interestingly, this kind of earmarking reflects a degree of non-partisanship. After all, it’s not just Democrats taking advantage, 40% of the pork is sponsored by Republicans.

There’s even something funny among all these pork projects: $1.8 million to conduct research in Iowa on swine odor and manure management! Add to this the programs to control Mormon crickets in Utah, the rodents in Hawaii, and cormorants in Michigan, Mississippi, New York and Vermont.

Congress, evidently, cannot seem to control its yen for pork despite the catastrophic fiscal situation facing the nation. Indeed, in the current bill, there are pork projects requested by lawmakers who have died, by others who have retired, and still others who have been indicted for corruption.

The 160 earmarks for New Jersey, linked to our two U.S. senators and various congressmen, amount to some $250 million dollars. Menendez is responsible for $159.8; Lautenberg for $158.8; and high on the congressional list are Holt (D), at $67.9, and Frelinghuysen (R), at $64.8. Lowest on the totem pole are Andrews (D), at $2.2 and Ferguson, (R), at $1.6 who have not yet to earned ample ‘porking’ rights.

Among the earmarks are funds for select hospitals. Why these, and not others? The hospitals are in the districts of the sponsoring lawmakers, that’s all. The earmarks don’t reflect an analysis of hospital needs for the state as a whole and they don’t come from any kind of request from the Department of Health and Human Services. Other hospitals, perhaps more in need, may gain nothing at all. Also curious are the technology funds for a variety of emergency management and security projects. In light of recent disclosures we now know that vast sums in Homeland Security Funds have not been spent. Here is what can happen when there is no coordination in setting spending priorities. Existing funds go unused but new requests are inserted into a new bill. In this bill there are also agricultural support efforts, land acquisition, and funds for cleaning up brown field sites. Defensible? Perhaps, but why do they not originate in the budget recommended by the Department of Agriculture or the Environmental Protection Agency? Indeed, these measures might be firmly supported by federal agencies if they reflected agency priorities.

The point is that there is no process for weighing law-makers’ earmarks, no coordination with agency programs, no means of assessing their effectiveness and no accountability for the funds they provide. .

Appropriations bills from earlier years suggest that, despite stated intentions, there has been no honest attempt in Congress to rein in the spending for quite some time. In August, 2007, for example, after a commitment to reduce earmarks had been made, Democrats in the House of Representatives larded spending bills with more than 10,000 earmarks, which added up to $10 billion. Only 6,000 of the projects which cost around $5 billion made in into the spending bills passed that summer. Added along the way were earmarks like military construction projects that were outside of those requested by the Department of Defense.

In the Senate, the picture was not much better. The earmark total at that time was also about $5 billion, but billions more followed in successive spending bills.

While new rules required representatives and senators to identify themselves and attest that they derived no personal financial reward, it was—and is still—open season. However defensible some individual projects might have proven to be, the fact is that earmarks were made because of the influence the sponsor brought to bear. There were 2,200 items designating more than one billion dollars for specific hospitals and clinics, schools and colleges, museums and service agencies all directly related to the fact that their sponsors serve on the Senate and House Appropriations Committees or hold leadership positions that allow them to exercise this kind of influence.

Is this the way to establish federal spending priorities?

Consider, moreover, some specific travesties: John P. Murtha (D-Pennsylvania) came in at $186,000,000, outdistancing ‘reformer’ Nancy Pelosi (D-California) at $77 million. And, not to be outdone, were senior Republican senators Thad Cochran of Mississippi, Ted—bridge to nowhere—Stevens, and Democrat Robert Byrd of West Virginia. All of these senators play with huge numbers. Even they, however, ranked behind Republican Representatives C.W. Bill Young of Florida, at $142 million, and Jerry Lewis of California, at $120 million.

If this was the reform that was promised in the prior year’s election, I fail to see it. Where is this transparency? Where is the accountability?

Much the same followed the next year. It was pork all the way. In September, 2008, with $700 billion on the taxpayers’ table for the rescue of Wall Street, you might have expected to find no earmarks in the federal omnibus appropriations bill that awaited George Bush’s signature. How much feeding at the taxpayers’ trough could we manage after all? More it seems. As some members of Congress deliberated in one room on the particulars of the bailout, others went on the usual pork spree which comprised$6.6 billion divided among 2,300 projects to be financed out of the nation’s piggy bank.

Even with the election only weeks away, and despite the catastrophic fiscal situation facing the nation, Congress could not control its taste for pork. Earlier Rep. Henry Waxman (D-California) joined several House Republicans in a promise not to request any earmarks in appropriations bills that year. That was in February. One month later, a one-year moratorium on earmarks “while the process is evaluated” was proposed. Though both actions were pushed for more accountability, they both went largely unheeded. Congress pressed for pork. And, despite the opposition of 12 Senators, the spending bill passed.
Even Ted Stevens (R-Alaska) managed to show up for the vote, interrupting his trial on charges of receiving gifts and services without disclosing them and filing false statements at least seven times—he blamed his wife—to secure more earmarks than any of his colleagues. The consequent 39 items ran up a total of $238.5 million. Stevens had been in the Senate for 40 years, so he may have felt entitled. His conviction means he won’t be returning.

Early 2008 saw the invention of new rationales for pork. In earmarks, according to the chief porker in the House, John P. Murtha, Washington passed only a tiny fraction of “what the administration wants to bail out those rich guys in New York.” His other colleagues indicated that earmarks were a way of tossing a few bones to Main Street before the Treasury pours hundreds of billions of dollars onto Wall Street.

In the first round, the nation’s rescue was held hostage for pork in the form of The Emergency Economic Stabilization Act. Many publicly disdained a repetition in the following year. Initially, members of the House who had voted against the $700 billion dollar bailout/rescue/investment bill called it a ‘sell out to the greedy, to the rich, to the banks or a bill that doesn’t provide sufficient relief to homeowners facing foreclosure, and so on. Of course, once pork had been added by the Senate, the same dissidents would turn around and vote for it. The Senate bill, loaded with lard, passed unchanged in the House by a vote of 263 to 171.

If the bill was bad, how could pork make it better? Indeed, it was not that the bill actually contained elements to which members of Congress objected but that some of them were engaging in a holding action, that is, they were holding out to ensure that their own pig got into the bill.

Here is what the nation got for its trouble, a bill that allowed: plaintiffs in the 1989 Exxon Valdez oil spill to average out their punitive-damage awards, easing their tax liabilities; tax breaks to movie and television-production companies; and exemptions from excise tax for certain wooden arrows designed for use by children. It allowed for a seven-year cost recovery period for motor sports racing track facilities; extended a rebate against excise taxes charged on rum imported for Puerto Rico and the Virgin Islands; and it reestablished and extended the lucrative tax credit for companies doing research and experimentation in the United States. Extended tax credits for research were given to companies such as Microsoft, Boeing, United Technologies, EDS, and Harley-Davidson. The two-year extension’s cost was $19 billion.

Further, the bill allowed residents of states that don’t pay income tax to deduct, from their federal taxes, sales tax paid over the course of the year. Texas, Nevada, Florida, Washington and Wyoming benefit, at a cost, to the rest of us at about $3.3 billion.

This happened while responsible and respected people, despite their serious policy differences, were demanding action on a measure deemed essential to the nation’s welfare. It happened while experts were talking about avoiding a depression, salvaging a collapsing economy, and avoiding significant damage to “Main Street.”It was therefore hard for some to grasp the idea that members of the nation’s Congress would hold the nation hostage, to allow the stock market to implode and for credit to vanish, while it fiddled and waited for its final meal—its pork—to be served up.

In the end, bi-partisan action from the Senate and the House, instead of illustrating legislative action at its best, illustrated instead how low we’ve sunk. Pork proved to be king.

Objections to pork are repeatedly raised, both the practice on the federal level and, of course, pork New Jersey style, Christmas tree trimming. Taxpayers for Common Sense, one of the most consistent and thorough critics and monitors of the practice, acknowledges the difficulty of eliminating it. And since the latest omnibus spending bill arrived, the hopes of those who believed the president would not allow the pork have been dashed. Indeed, there is considerable skepticism about the likelihood of Obama’s new rules regarding earmarks. These new rules are, essentially, variations on the same themes offered before: there should be less earmarks, more transparency, some open bidding for profit-making entities, and review by executive agencies where appropriate.

The state picture

There seems to be no limit to the voracious appetite for pork in New Jersey. In recent months, an exhibition of how it’s been prepared and served in the past surfaced during the trial of former State Senator Wayne Bryant (D-Camden) reminding us of how adept some legislators are in their efforts to bypass transparent appropriations processes in order to provide bacon to those they favor.

A legislative aide revealed just how monies in The Property Tax Assistance and Community Development Grants Program, a program intended to give tax assistance to towns, was actually allocated. During the McGreevey and Codey administrations, Senate and House Democrats directed millions in taxpayer dollars through “grants” to pet projects, providing no oversight and asking for no accountability. In response to a constitutional challenge, the program was ended by Jon Corzine when he became governor in 2006. However, a promised review, if it’s been done, has not been released for public consumption.
U.S. Attorney Christopher Christie began conducting his own review as part of his sweeping, ongoing inquiry into pork and patronage.

New Jersey learned that the slush fund amounted to $100,000,000 for Democratic lawmakers to dispense over the course of two budget years, 2005 and 2006. Quite a few, who might otherwise be counted to be on the side of “transparency,” were implicated. First up is Senator Richard Codey (D-Essex) who, for example, had exclusive control over $12 million in 2005. That’s what State Treasurer David Rousseau testified to during the hearings. He also said that Wayne Bryant and Bernard Kenny, Jr. (D-Hudson), chair of the appropriations committee and majority leader respectively, each controlled $4,000,000 from the fund. The remaining $20,000,000 was dispensed by Assembly members. Their pet projects were subject to little scrutiny as folks in Treasury believed they had “very little” discretion.

Codey, Kenny and Bryant, according to Rousseau, had free rein in selecting recipients for the shares of the fund they had been allocated. The unedited list of grants was forwarded from the Treasury to the Legislature’s Joint Budget Oversight Committee, which, at the time, had Bryant and Kenny among the three senators on the joint committee.

It got worse. In further testimony, James Davy, Human Services commissioner at the time, testified that he needed the chairman of the Senate Budget and Appropriations Committee to be his ally in order to garner support to improve the state’s failing child welfare system and so he agreed to provide $2.3 million–out of the child welfare funds—to support an institute that Bryant insisted receive funding. He also insisted that, against departmental rules, permission be granted to the Institute to carry over —$600,000 in funds from a previous year.

Thus the interests and needs of children were held hostage for pork which agency heads were intimidated to secure.
State Senator Barbara Buono (D-Middlesex) has been trying especially hard to end the trimming of the Christmas (budget) tree. The budget crises of the last two years, by creating the atmosphere of emergency and heightened scrutiny, have provided just such an opening for change. One critical solution, simply put, is to end, once and for all, the gifts that lawmakers insert into the budget on an annual basis. Largely behind closed doors, legislators produce a spending list that circumvents the budget development process while reducing items in the proposed budget that have been subjected to the scrutiny of its members during budget hearings.

Governor Corzine’s first budget allowed the diversion of one quarter of the sales tax increase to fund legislators’ pet projects—some $350,000,000. Ornaments, for example, included one for the Wood-Ridge Brownfield Project. If the expenditure was defensible, why didn’t it appear in the DEP budget? Similarly, other ornaments provided for certain arts projects. As it was in the prior situation, the New Jersey State Council on the Arts made no determination.

New Jersey was promised better the next time around. However, the “new day” produced a lower allocation, just over $100,000,000, give or take. Unsound public policy continued to hold sway. It was just cheaper. Though New Jersey had a more transparent process, that is, decisions were made earlier and sponsors were publicly identified, the policy was, and is, still wrong. Monies for ornaments come from the same pot that all appropriations come from. When we reduce that pot for pork, we have less to meet public needs.

Economic trouble has put “tree trimming” and its various iterations on a back burner, for now. It must be allowed to burn out. No amount of economic prosperity should bring it back.
Both political parties engage in this process when in control and each criticizes the other for it when they are in the minority. Both can unite to stop it. If we are serious about tax reform and getting our fiscal house in order we need not only to look at the way we raise money but also at the way we spend it. Pork is wasteful and it makes a mockery of conflict of interest rules, not to mention that it violates the public trust and, in some cases, the state’s laws. There is no way to reform this practice; it is malignant at its core.

Twisting transparency

Earmark sponsors once tried to hide their association with their pork. But as demands for transparency and accountability increased, and reforms were made, Congress saw a new way of looking at earmark sponsorship: they could take pride in their actions. This ‘spin on the process’ continues to produce spirited defenses of earmarks. They have become proof of political strength and ability to help selected constituents.

This isn’t the idea Louis Brandeis had in mind, in 1913, when he said that “Sunlight is said to be the best of disinfectants.” Implemented wrongly, the light may harm the very interests it is supposed to serve.

Representative Rahm Emanuel (D-Illinois), for example, became a spirited defender of earmarks even going so far as to post his requests—those he got as well as those denied him—on his website as an indication of his transparency in an effort, evidently, to let folks in his district know that he tried hard, and succeeded well, in bringing home the bacon. He is now Obama’s chief of staff.

Despite efforts to bring greater transparency and accountability by imposing reductions in the number of projects and the dollars to pay for them, emphasizing merit here and the idea of a moratorium, the impact on the practice is barely discernible.
Consider, for example, how the aforementioned moratorium is working. Taxpayers for Common Sense reports that pork is up 3.4 % from last year. So, despite efforts to embarrass prime sponsors by delaying and exposing their efforts to public scrutiny, being in the spotlight seems only to have encouraged them.

Campaigns and Earmarks

The feeding frenzy in the House of Representatives, in late 2007, demonstrated how Democratic earmarks led to various kinds of corruption. For example, in the military appropriations bill that received approval in the House, $1.8 billion, of $3 billion total, contained earmarks for 580 private companies. These were inclusions for projects that would otherwise NOT be in the military’s appropriation request and had not been requested by the Pentagon.

They are there because lobbyists paid members of Congress to put them there in a process dubbed by Representative Jeff Flake (R-Arizona) as “circular fund-raising.” A counter to circular fundraising, Taxpayers for Common Sense has produced a list of the earmarks alongside the funds paid by lobbyists to each sponsor’s political campaign fund.

One of the more egregious featured Concurrent Technologies Corporation, a Johnston, Pennsylvania-based collective which is run by major contributors to the campaign of John P. Murtha, has received $226 million in earmarks since 2004. In this appropriation, CTC received $8 million. Contributions to Mr. Murtha’s campaign from CTC’s lobbying arm which, until 2006 employed Murtha’s brother, alongside contributions from other firms which benefitted from earmarks, came to about $437,000. About $110,000 was counted just before the earmark request deadline in March of 2005.

Earmarks for CTC also included one in the amount of $1.5 million courtesy of Congressman C.W. Young (R-Florida) in whose district CTC maintains an office. With his total request of $117 million, Mr. Young closed in on Murtha’s $166 million. Mr. Murtha and Mr. Young were at that time, the ranking Republican and the chair, respectively, on the defense appropriations subcommittee. Mr. Young makes calls to the Pentagon to be sure the projects he injects are legitimate, remarking to the Times, “I want to make sure we are not putting money into something the Pentagon does not feel they need.” It is reasonable to suppose that if the Pentagon knows of a legitimate project, it should appear in the Pentagon’s budget.
Because Congress passes on Pentagon appropriations Pentagon officials are less likely to challenge the earmarks that lawmakers want. The relationships between companies and their earmarking enablers do not get much worse than that between Mr. Murtha and the various entities he serves. Mr. Murtha recruits and sustains companies to his district with the promise and delivery of earmarks that permit these companies to gain a foothold in defense contracting.

The fall-out from pork-linked campaign funds is finally generating outrage in important political quarters. “Customized appropriations,” the name given to earmarks by the New York Times editorial board (“Political Animal Behavior 101” 3/20/09), may have reached a critical plateau when the spotlight turned on the PMA Group, the lobbying organization that made large donations to defense appropriators in the House. PMA has closed its doors following an FBI raid provoked by charges that the company violated election law.Some PMA Group lobbyists are former staffers in the appropriations subcommittee led by none other than John Murtha and the head of PMA is a former Murtha aide. In 2008, three lawmakers, including Murtha, provided $100,000,000 in defense spending earmarks to clients of the PMA Group.

Representative Jeff Flake has been the leading voice expressing outrage. He has asked for an ethics inquiry into campaign funds and earmarking and, as a result of PMA Group and Murtha’s extended family of beneficiaries, Flake has been able to garner support for his efforts. Peter Visclosky, a democrat from Indiana and a member of the appropriations committee, returned PMA’s $271,000 contribution and endorsed Flake’s quest. The investigation, if undertaken, will seek to know how the Group’s clout worked. The editorial board of the Times has suggests:
Of course, everyone on the Hill already knows the answer. But the best hope of ending this cynical influence trading is for the taxpayers to hear the full and shameful truth.

Earmarks for military projects and purposes that have not been requested by the Pentagon should not be considered bacon to be brought home to the district! The solid connection between military contractors, lobbyists and earmarks appears to have been uncovered for what it is: unconscionable, and, potentially, criminal.

Circumventing legitimate processes for determining funding decisions and substituting political pull for merit is not only indefensible, it is clearly corrupting. Ending earmarks would eliminate earmark-motivated campaign contributions. If “donors” know they’re out, they may try other routes. The hope is that these may prove to be less noxious, pervasive, costly and corrupting than earmarks and ornaments.

Lobbying: credibility, cost and corruption

Allowing circumventions of the budget process leads to conflicts of interest and to the misallocation of public money. Such circumventions also create an atmosphere wherein institutions and organizations are forced to invest in lobbying and “public relations,” thus diverting funds from their budgets when they could be more productively spent on the costs associated with their missions or purposes.

The trading that goes on in the Congress and state legislatures leads to carrots and sticks that buy votes for other measures and may also lack majority support because they fail to be meretricious.

Congressman Jeff Flake understands the logic of earmarks and, until recently, he has often been alone in standing up against them. “Look at the 2005 Highway Bill,” he says. “This was a $286 billion bill that we knew we couldn’t afford, with a record-setting 6,300 earmarks. But when the time came to vote, there were only eight of us who voted against it — probably the same eight who had nothing in it.”

Back then, Republicans were running the show. But in some ways, being in the minority has its own privileges. Taxpayers for Common Sense reports that although Democrats account for about 60% of the earmarks in the recently-passed omnibus, six of its top 10 Senate earmarkers, led by Mississippi’s Thad Cochran, are Republican. With $471 million for his state at stake, how likely was it that Sen. Cochran would hold the line against the earmark-laden omnibus bill the way he did against the earmark-free stimulus package?

As it became abundantly clear in the aforementioned Bryant trial, this problem is no different at the state level. The Bryant trial was important because it provided insight into how offending practices can persist for so long. The answer is that the culture of corruption in New Jersey politics is especially pervasive. When the defense in Bryant’s trial wrapped up, it presented three witnesses to show that there was nothing unusual about the actions that the prosecutors contended were fraudulent—and for which Bryant was convicted. Indeed, it is indicative of a larger cultural problem when the corrupt practices of others can be cited in order to strengthen the defense of one’s own rectitude. To argue that the breach of public trust is forgivable simply because others prevalently commit the same or a similar breach is the fuel that drives some cynics to repeat: ‘Only in New Jersey!’

The solution lies in transparency and the reliance on peer review and merit for funding decisions, instead of on the “influence” and the “standing” of legislators and congressmen on key committees—particularly budget, appropriations and defense.

We have a broken budget process, with major decisions being made in back-room deals. The situation is not, as the earmark mavens would have it, a simple case of ‘local officials exercising their constitutional authority to shape the government’s spending priorities.’ To the contrary, in this process there is no vetting, review, or analysis. Instead, noncompetitive grants circumvent the merit-review process which federal agencies use to ensure that federal grants flow to worthy, high-quality projects.

Twisted Spending Priorities and Anti-Competitive Effects
When President Bush signed the omnibus appropriations bill in late December, 2007, he indicated that he did so despite his “concerns” about projects in it that didn’t arrive “through a merit-based process” and, thus, “provide a vehicle for wasteful government spending.” Indeed, the bill contained 9,800 such earmarks that added up to more than 10 billion dollars.
Contrasting the nation’s needs with Congressional spending priorities that year, particularly with respect to the nation’s infrastructure, one can only find them wanting. Rather than spend funds to restore or replace bridges, 74,000 bridges had been rated as “structurally deficient,” Congress saw fit to pay instead for items such as the First Ladies’ Library in Canton, Ohio, and a high speed ferry to a remote area of Alaska.
But to add insult to injury, consider how the money for pork became available in the first place: Congress cut funds from projects that invest in meeting the nation’s present and future needs, ranging from health care and education to alternative energy sources.

A look at just one area of science and the impact is as clear as it is lamentable. In the budget first proposed by President Bush in February, and in later versions approved by the Senate and House as well, the Office of Science at the Energy Department was slated for a healthy budget increase of more than 18 percent as part of a promise to double financing for research for the physical sciences over the next decade. Those promised increases gave way to earmarked priorities.

The Fermi National Accelerator Laboratory which is the nation’s premier center for probing the mysteries of the universe had to lay off more than 10 percent of its employees as a result of the budget cuts mandated by Congress that year, and, as a result, Fermilab’s collaboration in an international project to design and build a linear collider stopped. The nation’s required contribution of $160 million to ITER, a test fusion reactor that is intended to lead to commercial energy production by emulating the process that powers the sun was not made. Other critical science projects were put in limbo.

Scientists and others attributed the cuts to earmarks. The American Physical Society, for example, issued a statement indicating that it “notes with some dismay that had Congress applied the same discipline to earmarking as it did last year, the damage to the science and technology enterprise could have been avoided.”

Namesake Spending

Noted above, the earmark for a library and museum honoring first ladies, providing the sum of $130,000, was requested by Representative Ralph Regula (R-Ohio). His wife, Mary A. Regula founded the library and his daughter, Martha, is its director.
Also included in the bill was the Charles B. Rangel Center for Public Service at the City College of New York. Well, why not? He is the chairman of the House Ways and Means Committee. The two million that makes this center possible also includes an office for Mr. Rangel and a library for his papers and memorabilia. The center also takes as its mission the preparation of “individuals for careers in public service.”

The New York Times did a great service by looking into this particular earmark, and, it produced some quotable observations: “Mr. Rangel should be ashamed of using tax dollars to build “a monument to himself.” So says Representative John Campbell (R-California). Mr. Rangel, though, wasn’t bothered at all by his colleague’s criticism; not at all. Indeed, Rangel said he would have a problem if Mr. Campbell did what he had done “[…] because I don’t think that you’ve been around long enough to inspire a building like this.”

In this vein, four senators have won an earmark to provide $1 million for the Daschle Center for Public Service and Representative Democracy. Tom Harkin (D-Iowa), in the midst of a campaign himself, he secured $5 million for “Harkin school grants” and $1.5 million for “Harkin wellness grants.”
In the current omnibus bill, there is an earmark, sponsored by six senators, to finance the planning and design of a building for the Edward M. Kennedy Institute for the United States Senate. Its purpose is to conduct research on the Senate, offer exhibits at the University of Massachusetts at Boston, and construct a replica of the Senate. If such a project would appropriately bestow public recognition on Mr. Kennedy for all of his efforts, these six senators might have considered asking the public for their blessing.

Somewhat similar, a nonprofit foundation is currently trying to raise $300 million for a huge complex on 25 acres at SMU to build the George W. Bush Presidential Center. Will earmarks be sought for this endeavor as well?

Anti-competitive effects

Earmarks significantly reduce competition for awards. And, in some respects, earmarking has a deleterious effect on agency decision-making as well. If an agency expects funding from an earmark that will be inserted into a spending bill, there is no reason to budget for that purpose. If, based on past evidence, an agency can predict given earmarks, then, already anticipating them, there is no competition for the best projects determined on a merit basis. The decision has already been made–a non-competitive direct grant award to the recipient selected by the earmarking lawmaker.

The recent omnibus bill bears close scrutiny in this regard. It shows, for example, that an earmark was given to a private energy company, Catalyst Renewables, a company that had failed to win a $30 million grant from the government last year. So, this year New York lawmakers gave Catalyst a $500,000 earmark, an award that appears to be a consolation prize. PPG Industries, a manufacturing conglomerate headquartered in Pittsburgh received nearly $1.2 million to develop windows that double as solar panels. Lawmakers promoted this as a one-of-a kind initiative even though the company has many competitors. One of their competitors, a group at MIT, Covalent Solar, stepped forward to say it would eagerly bid for federal money if given the chance. No proposals, however, had been sought.

A look at the anti-competitive impact of earmarks, particularly in higher education, tells a compelling story. Mark R. Hamilton, president of the University of Alaska, a former U.S. Army Major General who has headed that system since 1998, gave an interview to the Chronicle of Higher Education, “Just Say ‘No’ to Earmarks,” in which he provides important perspective. He discusses his dramatic efforts to reduce the number of earmarks the Alaska system receives. Eleven years after he arrived on the scene, the system has 8 earmarks, costing less than $10,000,000 and, he is looking to reduce that to 6, at a cost of about $8,000,000. A stark contrast with the picture when he arrived: 80 earmarks, at a cost to the public of $90,000,000.

Mr. Hamilton’s opinion is that dependence can be disastrous. When the chairs of the appropriations committee move on or out, as it was in Oregon and Washington for Senators Hatfield and Jackson, and, more recently, of course, for Stevens, in Alaska, the institutions in their states are left with far less revenue, often with expenses that are no longer sustainable. Indeed, of the many remaining and unsustainable projects may not have been wanted in the first place. With the precipitous decline of earmarks comes heightened budget vulnerability.

More than the need for consistent, predictable levels of support, however, is the desire to improve the competitive quality of academic research. Hamilton says that earmarks remove the competitive edge, or, as he puts it: “Kept scientists have dull swords.” If an earmark comes by an outside request, with no competitive effort inside to earn it, the science is unlikely to be the best.

Without competition, moreover, the cutting edge of science and inquiry generally can become lackluster. But, more to the point, targeted earmarks that do not attempt to build on the genuine strengths that faculty have, and that a region’s economy might benefit from, create missed opportunities. This is too high a price to pay to satisfy a given lawmaker’s fancy (or, for that matter, to generate funds for the next political campaign.) Without competition, good ideas may simply not rise to the top and federal agencies cannot ensure that federal grants flow to worthy, high-quality projects.

The positive impact on agencies, if earmarks are not permitted, could prove to be substantial. Agencies would put research fund requests for federally targeted priorities in their budgets and provide for competitive merit-based processes to make determinations which will, in turn, generate a better stream of funds to research lead to better results all around.

There is another noxious aspect to earmarking in higher education. Grants to academic institutions that are meant to add a luster of legitimacy to an earmark a lawmaker wants to make to create, often enough, a place for skullduggery. The Washington Post, for example, reported on March 17, 2009 that it had obtained documents showing that Representative Murtha had close ties to the now-closed-and-under-investigation PMA Group and a research firm, the Electro-Optics Center which Murtha had created a decade ago at the Pennsylvania State University. The Penn State Center has collected close to $250,000,000 in federal funding through Murtha and the lobbyist firm. A significant portion of the funds went to companies that were among Murtha’s campaign supporters.

Moreover, The Post reported, that a PMA lobbyist and a close associate of Murtha’s helped make many key decisions about what research and which contractors would get the federal money flowing to the university center. The center’s director, Karl Harris, worked with the lobbyist to prepare funding wish lists, which were described in some of the records as “requests for Mr. Murtha to carry.” The requests, according to the records, were sent to the congressman’s staff. The lists detailed how much and where in the budget money should be added for projects desired by the center and the contractors.

The university receives a percentage of the center’s research funds for administration a process that the university’s head of defense-related research said is a routine arrangement for academic institutions.

In the current omnibus bill there is $91.2 million for 331 earmarks in the Department of Education’s Fund for the Improvement of Postsecondary Education, or Fipse, a program meant to finance innovations on campuses. Even though Fipse runs a well-regarded, competitively-awarded grants program, the earmarked funds consume most of its total budget of $133.7 million. In this way, genuine opportunities for improvements–the purpose of the Fund’s creation–are lost.

To all this, and more, we have Representative Jeb Hensarling (R-Texas) who says that “Among House Republicans, there is a strong sentiment that the earmark process is broken, though people differ on what repairs are needed.” The problem, Mr. Hensarling says is that “Earmarks …are a huge part of the culture of spending.”

Financing the future

While there are honest efforts to reform earmarks—limiting the number and timelines, for example, and opening up some competition for them—there really is no way to make them work constructively. The potential for corruption is simply too great. The distortion of priorities is rampant. The absence of competition undercuts quality and influence substitutes for merit. A limited process allows the bad instances of lobbying and influence-peddling as well as legitimate efforts to secure earmarks as a means of gaining support for a worthwhile project. Earmarking, as an approach to federal spending practice is fundamentally unsound.

To change the culture of pork, we need to end earmarks and ornaments and return to a total reliance on federal and state agencies as the places from which to request budget funds, to make spending decisions, and to ensure transparency and accountability. Legitimate local needs, after all, can be met in state and federal agency processes that are merit-based.
The role of Congress and the State Legislature is to provide responsible and rigorous oversight. It is not to set aside portions of agency budgets for its members’ pet projects.

At the same time, however, improvements to budget processes, both federal and state, may well be in order. If there are insufficient opportunities for “local needs” to be weighed and vetted, and hearings leave something to be desired, then committees of Congress and the Legislature, not to mention federal and state agencies, should seek better, creative and competitive, ways to have “local needs” considered. If these “needs” are subject to merit-based reviews, if they respond to agency priorities, and if they are competitively evaluated, the chance for mischief lessens considerably.

The critical point here is that, if change is in order, it is in the public process—formal budget development and review—not in improving end runs around that process through the exercise of influence. Earmarking has earned no legitimate place in budget determinations.

We’ve heard it over and over again in crisis there is opportunity. As President Obama casts himself as a crusader willing to do battle with special interests to expand health care, curb pollution, and improve education, he must not ignore the opportunity to change politics as usual. For the nation, high on his check list must be ridding us of pork. In a internet streamed radio address in March, President Obama made a declaration of these priorities saying: “I didn’t come here to do the same thing we’ve been doing or to take small steps forward. I came to provide the sweeping change that this country demanded when it went to the polls in November. That is the change this budget starts to make, and that is the change I’ll be fighting for in the weeks ahead.”

Members of Congress who aren’t prepared to go with the program and who keep adding earmarks to spending bills also need to be reminded of what this change is all about.

Finding a constituency for honesty in politics is hard to do especially since earmarking seems so ‘beneficial’ in the short run. And if both parties do it, neither can afford to take the moral high ground.

Our best chance, then, is to be reminded over and over that earmarking is ultimately corrosive, wasteful, and destructive practice.

But, let’s not fool ourselves about the prospects. Consider the events of March 12, reported that day by Peter Baker and David Herszenhorn in “An Earmarked Bill, and Limits for the Next One”:

In the morning, President Obama stepped before cameras to call on Congress to impose new rules curbing pet spending projects. In the afternoon, he signed a $410 billion package jammed with pet spending projects, although this time, there were no cameras to record the moment. On Capitol Hill, House Democratic leaders smiled as they watched Mr. Obama on television. Just a half-hour earlier, marking their own turf, they had pre-empted him by putting in place essentially the very rules he was now calling on them to adopt. It was a day when rhetoric met reality and politicians on both ends of Pennsylvania Avenue scrambled to get on the safe side of a volatile issue, while still advancing favorite projects.

And so it goes, new rules producing little change in practice. Promises made and broken and back-scratching made comfortable. No end of tweaking can improve a practice that, at its core, is contemptible and corrupt.

Those who asked President Obama to veto the legislation had a good point, he could have done this and adhered to his campaign promise which was that he would go through the budget “line by line” and cut pork. Unlike the governor of NJ, the president of the U.S. does not have line-item veto power. He needs to get it. Senators McCain (R-Arizona) and Russ Feingold, (D-Wisconsin) have teamed up to propose line-tem veto legislation to let the president remove earmarks from spending bills. It’s a means to an end and it must happen. Citizens and watch-dog groups have to gear up for this fight and stick with it. Members of Congress, including our own State’s delegation, needs to be held accountable for their actions on this bill.

Earmarking must end. A presidential line item veto will advance the coming of that day.

On the state front, the imploding economy and the significant fiscal challenges facing New Jersey should prompt our elected officials, legislative and executive, to do what they and others before them have failed to do. End tree trimming, period. Not just for now. Corruption plagues our state’s politics. We need to change the culture that supports it, the ‘rules’ that allow it, and, if necessary, the people who encourage and thrive on it.

After all, “a crisis is a terrible thing to waste,” an observation made famous by Paul Romer, a notable Stanford economist. We have one; let’s seize the opportunity it presents in our state and nation to end the practice that fails any standard test of responsible fiscal and democratic policy.