Wednesday, March 18, 2009

Earmarks and pork

[from JohnS]
A few days ago, I listened to Neil Cavuto, Fox News, rant at a Congresswoman about earmarks in the budget submitted by Congress. When she could squeeze a word in, she tried to explain that earmarks endorsed by her were justified. She had no opportunity to argue her point. Cavuto simply talked over her implying she was trying to justify the unjustifiable.

My curiosity was aroused. What are earmarks? What is pork? Are earmarks and pork the same? Are they justifiable?

Wikipedia encyclopedia gave me the best definitions I could find of both earmarks and pork as follows:

Despite the lack of a consensus definition, the one used most widely was developed by the Congressional Research Service, the public policy research arm of the U.S. Congress:
"Provisions associated with legislation (appropriations or general legislation) that specify certain congressional spending priorities or in revenue bills that apply to a very limited number of individuals or entities. Earmarks may appear in either the legislative text or report language (committee reports accompanying reported bills and joint explanatory statement accompanying a conference report)."[2]
In the United States legislative appropriations process, Congress is required, by the limits specified under Article I, Section 9 of the United States Constitution, to pass legislation directing all appropriations of money drawn from the U.S. Treasury. This provides Congress with the power to earmark funds it appropriates to be spent on specific named projects. The earmarking process has become a regular part of the process of allocating funds within the Federal government.

Pork or Pork barrel
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.
Citizens Against Government Waste outlines seven criteria by which spending can be classified as "pork":
1. Requested by only one chamber of Congress;
2. Not specifically authorized;
3. Not competitively awarded;
4. Not requested by the President;
5. Greatly exceeds the President’s budget request or the previous year’s funding;
6. Not the subject of congressional hearings;
7. Serves only a local or special interest

Reading these definitions, my conclusions are that earmarks are appropriately authorized by congress in the legislative process. Pork, on the other hand is inserted into legislation without being appropriately authorized by Congress.

I think we can agree that pork is a misuse of the legislative process. Is it illegal? Not being a constitutional lawyer, I don’t know, but I think it is. I would like to see it tested before the Supreme Court. Apparently, both the legislative and executive branches intend to keep sneaking pork to into legislation.

What about earmarks? We can probably agree that they are a permitted part of the legislative process, however, are they an appropriate part of the process? I’m not sure. In a bill to improve our road and bridge infrastructure, earmarking certain sections of road or certain bridges would be appropriate if there was a justifiable necessity to expedite these repairs. On the other hand, in a defense bill earmarking a project in favor of one of two equally qualified contractors wouldn’t seem appropriate even though one might argue that there was a justifiable reason such as the preferred contractor was located in a depressed area where the project would have benefits broader than just the project. This would worry me. There is too much opportunity for favoritism however, my concerns are immaterial earmarks are a part of the system, providing a necessary function.

Is it appropriate to return some of the tax money to a congressional district through earmarks? I think so as the Congresswoman was trying to explain to Neil Cavuto. A representative is just that, she represents her constituents. She should receive a fair proportion of the funds returned to the states and congressional districts and be allowed to specify where this money will be spent through earmarks.

Bottom Line, as Ira would say.

Earmarks are an authorized and appropriate part of the legislative process. Pork, on the other hand is a misuse of the legislative process, is probably illegal and corrupts the system.


Ira Glickstein said...

According to Wikipedia: "Earmark is a term that dates to the 16th century, originally referring to cuts or marks in the ears of cattle, pigs and sheep made to show ownership, age and/or gender.

In other words, an earmark was a tag on a farm animal's ear that originally proclaimed "that's my pig!" The meaning remains the same when a Senator or Congressman tags a bill with an "earmark" that exempts a particular expenditure from the normal competitive selection process. A federal agency is supposed to do due diligence and determine the relative value of projects and justify expenditures before making awards. An earmark moves a pet project to the front of the line, bypassing ordinary processes. (Question: If it is justified why not let it go through the competitive justification process? Answer: It is NOT justified, it is pork!)

Of course, not all earmarks are "pork" - for example, the ones that benefit my locality and help my pet causes and directly reward big contributors by giving contracts to their companies in my town are well-considered legislation (yeah, RIGHT! :^)

Is there a difference between an earmark and pork? YES! An earmark benefits me and my friends. Pork benefits you and your friends.

We often use the direct Anglo-Saxon word for a farm animal (Pig, Cattle, Sheep, ...) and the more refined French word for the meat from that animal (pork, beef, mutton, ...). I guess you could say "earmark" is French for "Pig".

Ira Glickstein

JohnS said...

Earmarks as defined in my postings are a legitimate part of the legislative process whether we like it not. They are not pork. While they can be misused they perform a legitimate function and I contend a necessary function.

Ira Glickstein said...

I agree John that earmarks are a legal way for a Congressman or Senator to put something he or she thinks will benefit their constituency at the head of the line for federal funds.

However, during the recent presidential campaign, McCain made a big deal about his never having put any earmarks over his long senate terms and Obama having put many during his shorter senate service. Also, President Obama pledged to reduce or eliminate earmarks and he called the current bill "imperfect" because it was laden with earmarks.

If some specific project is fully justified, and would be funded using the normal federal process for competitive evaluation against other projects, why does it need an earmark? Why does the legislation have to specify a particular locality to get it or even a specific contractor?

It is clear to me that "earmark" is French for "Pig" (and just because it is legal does not make it right).

Ira Glickstein

Anonymous said...

Having been directly invoved with legislative budgeting with congress I can safetly say that there is pork and then there is PORK. I had a scientist who was directly employed by my agency to justify a project for a congressman from Ohio. There was absolutely no need for the project, but our agency was forced to add the $1.5 million legislation to our budget.


joel said...

I completely agree with Ira. Bringing home the bacon is one of the methods used by incumbents to permanently lock into their positions. They use federal taxpayer money to reward local contractors who contribute to their campaigns. They also use federal funds to coerce people at the state level to support ill-conceived projects for fear of losing already appropriated federal funds. They weaken our science and technology base by short circuiting the peer review process. Earmarked science projects are not critiqued by the appropriate agency in the normal way. They are obtained by lobbying a senator or representative who inserts the project in a bill as his or her privilege.
When President Obama excuses earmarks by saying that some of them are worthwhile, he purposely diverts attention from the fact that the primary purpose of pork is job security for incumbent congressmen. If a project is worthwhile, it can successfully compete in the usual review process.
I'm guilty of participating years ago in lobbying Senator Dan Inouye (D-Hawaii) for an earmark. We had a very weak energy project that needed a boost. It would not have stood the scientific scrutiny that peer review in the Department of Energy. The only reason we failed to get funding that year was that it was Senator Joe Biden's "turn" to have a big energy project. With repect- Joel

Ira Glickstein said...

Thanks Joel for confirming, from the "inside" with your experience with lobbying Sen. Inouye for an earmark for a weak energy project, that earmarks are a way to get a pet project to the head of the line and bypass normal science-based critique.

Will our "representatives" give up on earmarks? The current bill with over 8000 earmarks (40% Republican and 60% Democratic) gives the clear answer: "Hell NO!" Of course, in this environment, any representative who does not fight for earmarks that benefit his or her district and contributor interest groups, is not doing their job.

This evening my wife and I attended the IBM Retirees Club here in The Villages where a presentation was given promoting the "Fair Tax". I favor it strongly but I have strong doubts our "representatives" will ever pass it for the simple reason it cuts government out of the role of granting special favors to particular industries and interests.

Many politicos are honest when they say they are going to Washington to "do good", but, after a while, they "go with the flow" and end up "doing well".

Ira Glickstein

joel said...

I don't favor the Fair Tax. For one thing, it's not fair. The fairest tax is a use tax like our tax on water usage. All other taxes should be measured against that kind of gold standard. Approximations are acceptable if one is to be pragmatic. For example, it's too inconvenient to measure our road use, so we tax gasoline as a rough approximation to our "road consumption." Still, the principle of more use, more tax is there. Our present code is an effort to find a difficult compromises between approximate usage of resources, encouragement of government-favored behaviors and charity toward have-nots. Being a compromise, it makes many people unhappy at what appears to be unfairness.
The Fair Tax has the same fault and will be increasingly complex as we try to remedy perceived inequities. It already contains kick-backs to the poor, because in its very principle it is biased toward those who accumulate large fortunes rather than spend.

Most of all, what bothers me is how I see a similar system used in Europe. European government dither the tax rate to subsidize consumption they don't like in favor of consumption they like. If cars aren't selling well, they lower the rate from 28% to 18% that year. Even if legislation calls for equal rates for all purchases, that can easily be changed by those who would control what we buy. I hate handing central planners even more power than they already have grabbed.
This reminds me of a true story. Joanna and I attended an international boondoggle in Stockholm. Out walking one sunny evening, we noticed the predominance of three year old children. It was amazing. I stopped a stranger and asked what was going on. The answer was, "That was the year the government paid a bonus for births." Incredible. I don't want to see us become that kind of planned society. With respect- joel

Ira Glickstein said...

As usual Joel we agree more than we disagree. I hate it when governments dither the tax rate to favor things they claim are beneficial to the public (but are more likely to benefit their constituents and big contributors than the general public).

In theory, the Fair Tax will be a single rate for all new products and services at the point of sale to the end user customer, rich or poor, and regardless of the social value (or not) of the given item. By hitting consumers directly and very visibly, it will make them keenly aware of the real cost of wasteful government.

As you point out, the Fair Tax includes a "revenue-neutral prebate" that gives all holders of valid social-security cards a check each month to cover the Fair Tax on their purchases up to the poverty level. This has the effect of subsidizing those below that level at the expense of those above.

For those of us above the poverty level the Fair Tax is good approximation to a "use-based tax" because the rich do tend to spend much more than the middle class. With the current tax code, the rich use high-paid accountants and lobbyist loopholes to exempt much of their income. Also, the IRS imposes a burden of some $500 Billion on the US economy in enforcing and complying and avoiding income taxes. The Fair Tax does away with ALL Federal Taxes ... in theory.

In practice, I agree the Fair Tax will probably never see the light of day. Even if it does pass, I can see the newspaper headlines: "Is it fair to tax milk for babies that they need to live at the exact same rate as cigars for the wealthy?"

Ira Glickstein

Ira Glickstein said...

Thanks "Softballs" for your comment dated 23 March and I appologize for not seeing and approving it earlier. Please contact me if you'd like to be an authorized Author and be able to have your postings come up right away without any action on my part.

I wish you were free to identify that Ohio congressman and the project that cost us taxpayers $1.5 million and that you say was absolutely not needed.

How quaint that a mere $1.5 million seems insignificant today. As Sen. Dirksen famously said, "A billion here and a billion there and after a while it amounts to real money!"

Ira Glickstein