September 14, 2006

Earmark Reform Is on a Bridge to Nowhere

The Republican Congress has a problem. It needs to explain to the American people how the GOP, which advocates smaller government and controls the White House and both chambers of Congress, increased federal spending and the federal deficit massively over the past six years. Their solution: Blame the budget process. Surely the rules that govern how Congress appropriates money are causing funds to be sent to strange places for no apparent reason, like the $320 million for the "bridge to nowhere" that was to be built to connect a small Alaskan town of fewer than 9,000 to an island with a population of fewer than 50. That particular embarrassment, resulting from an earmark inserted into the transportation bill last year, was one of the incidents that sparked a wider call for changes in the budget process.

One such budget process initiative is "earmark" reform. There isn’t exact agreement of what an earmark is, but most people think of it as an expenditure slipped into a bill by a lawmaker to direct spending to a particular entity or to a particular project, rather than leaving control of funds in the hands of the President and executive branch bureaucrats. This usually means bringing federal spending to the lawmaker’s district. It is true that earmarks have run amok since Newt Gingrich and his crew stormed into the Capitol 12 years ago. The number of earmarks has increased from 4,100 in 1994 to 14,200 in 2004.

But earmark reform, as well as other budget process initiatives, is dying and its mainly due to the Achilles heel of the conservative movement: their addiction to tax breaks. Congress cannot agree on commonsense measures that would treat tax breaks targeted towards special interests just like all the other goodies that are dished out to special interests. There is no logical reason to distinguish between a targeted tax break for say, widget manufacturers that will cost $100 million a year from a direct subsidy to widget manufactures at the same cost. Both cost the American taxpayers the same amount of money. If the federal government cuts someone’s taxes by $100 million a year, that’s $100 million a year that must be picked up somehow (in higher taxes or cuts in services) by everyone else, just as if that $100 million was given out as a direct spending subsidy.

So it would be rational for lawmakers to include targeted tax breaks in their definition of "earmarks." They would then be subject to the same process changes, which at very least should include publicly listing the names of the Representatives or Senators who requested the particular items to be inserted. But anything that resembles a speed bump along the way to cutting more taxes is more than the Republican leaders can stomach. They proposed that a tax break be considered an earmark only if it benefits just one person or entity. Language to this effect was included in the lobbying reform legislation (which is currently stalled in a conference committee) and in a proposal to change the House rules regarding earmarks.

Even some Republicans find this language ridiculous, particularly the members of the House Appropriation Committees which do all the spending. Mind you, this isn’t necessary out of principle on their part. They’re essentially just mad because they have to bear the pain of budget process reform while the House Ways and Means Committee, which writes the tax break bills, does not. But the standard advocated by the appropriators is also laughably weak. They would include in their definition of an earmark any targeted tax break that benefits fewer than a hundred people or entities. So a program that benefits 5,000 poor children in Oregon would be an earmark that requires greater transparency but a tax break targeted at the hundred richest Oregonians would not be.

Earmark reform is only one of the budget process reform initiatives being swallowed up in this controversy over whether to treat tax expenditures like direct spending. The House passed a bill giving the President a watered down version of a line-item veto after much debate over the issue (and after settling on the preposterous one-beneficiary standard). After the Senate passed a bill last week to create a public database tracking federal spending, Senator Lautenberg (D-NJ) suggested expanding the database to include targeted tax breaks — and it will be interesting to see how GOP Senators respond.

Earmarks should be brought under control because they facilitate the sort of corruption (i.e. Duke Cunningham and Jack Abramoff) that cause Americans to lose faith in their government. But we shouldn’t for one second buy the idea that any budget process reforms will cure the Republicans’ addiction to deficit-spending. According to the Center on Budget and Policy Priorities, half of the federal deficits are caused by the tax cuts enacted under President Bush and a third are due to security and military spending (which undoubtedly includes some earmarks but has grown more because Iraq and the war on terrorism).

We’d be foolish to believe the budget process reform initiatives advocated by the GOP will reduce the deficit or that they’ll even reduce earmarks for that matter. To give one example of how toothless these proposals can be, the House rules change being debated would only apply to earmarks on bills reported out of committee. Earmarks in a floor amendment, like the one funding the controversial Alaskan bridge, would not be affected. So after all this sound and fury, the reform we’re discussing wouldn’t even prevent the very abuse that started the debate. Now that’s a debate that’s on a bridge to nowhere.


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