1. Congressional Earmarks: The Good, The Bad & The Ugly
2. Republicans Set Record For Big Spending on Earmarks
3. Earmarks Help Make Congress Even More Corrupt
Overview
Republicans claim to be fiscal conservatives but they're governing like out-of-control swamp creatures. Not only has the federal budget gone up every year the Republicans have been in control, new data show they will outspend Democrats on so-called “earmarks” this year and will set a new record. It's time for a permanent ban on wasteful pork-barrel earmarks.
As I will discuss below, there have been 232 earmarks in fiscal year 2018, and there are still over two months left to go. That puts us on track to more than double the number of earmarks over the level seen in FY2017. And the cost of this year’s earmarks so far is up 116% over last year. As I have pointed out often over the years, the Republicans can spend with the best of them, and I have not hesitated to criticize them for it. Today’s E-Letter topic is just one more example of that.
Since many Americans are not familiar with how the earmark process works, I’ll briefly explain it below. This topic should be of interest to conservatives and liberals alike.
Congressional Earmarks: The Good, The Bad & The Ugly
Earmarks, also known as pork-barrel spending, are extra money lawmakers tack on to congressional legislation that is near passage for special projects in their districts – usually in order to generate political support back home.
For decades, earmarks were used as deal sweeteners: Lawmakers could cast votes that were unpopular with their political party but could demand additional federal spending for their home district – which would allow them to go home to constituents with funding for a bridge, dam, roads, post office, airport or other popular projects.
The term “earmark” actually comes from the livestock industry where the ears of domestic animals were cut in specific ways so that farmers could distinguish their stock from others grazing on public land. Specifically, the term comes from earmarked hogs where, by analogy, the term “pork-barrel” spending was born.
The practice resulted in some notable scandals, including former California Republican Representative Duke Cunningham and lobbyist Jack Abramoff going to jail for taking earmark-related bribes. And later there was the $223 million earmark for the so-called “Bridge to Nowhere” to connect an 8,000-person Alaskan town to an airport – which fortunately was never built.
Largely as a result of the scandals, earmarks became very unpopular in the 2000s and were banned in 2011, at the behest of Republicans. Yet the ban in 2011 did not mean that earmarks went away; they just weren’t called earmarks anymore; they were most often referred to as “congressionally-directed spending” or “carveouts” for short. Since the Republicans took control of Congress, they are often referred to as earmarks again.
The bottom line is that earmarks are bad for a variety of reasons. They breed corruption; Blacks, Hispanics and other minorities get half as much earmark money as their white counterparts; the money is often spent on wasteful projects; they assist lobbyists in running the show in Washington; and they help ineffective and sometimes corrupt politicians get re-elected term after term.
Republicans to Set Record For Big Spending on Earmarks
Republicans have long defined themselves as the party of fiscal restraint and limited government. But after just two years of complete control of the nation’s capital, the GOP has presided over an explosion in some of the most unfair and swampy practices in congressional history – in this case pork-barrel earmarks.
Citizens Against Government Waste’s (CAGW) 2018 Congressional “Pig Book” exposes 232 earmarks in fiscal year 2018, 42% more than FY2017. The cost of earmarks has exploded to $14.7 billion, a 116% increase from FY2017. The only other time the cost of earmarks has at least doubled was FY1992 to 1993. The CAGW has identified 110,861 earmarks costing $344.5 billion since 1991.
With $14.7 billion in earmarks so far this year, Congress is on course to set a new record for pork-barrel spending by the end of President Trump’s first term.
The explosion in earmarks is accompanied by record expenditures for a significant number of programs and projects, some of which are controversial and/or unnecessary. The $593 million earmark for the continued upgrade of the M1 Abrams tank is a monster increase over the $40 million earmarked in FY2016, and the largest earmark ever for this program.
There is a near-record $13 million for Save America’s Treasures grants, which funds local opera houses, museums, and theaters. Other absurd earmarks included $65 million for Pacific coastal salmon recovery and $663,000 for brown tree snake eradication.
Perhaps the most egregious earmark is the $16.7 million for the East-West Center, added by Senator Brian Schatz (D-Hawaii). It constituted the entire appropriation for the organization after the president’s budget and the House both zeroed it out. The center was created in 1960 over the objections of the State Department. It should be able to stand on its own without taxpayer support 58 years later.
The need for a permanent ban on earmarks is now greater than ever, since the earmark moratorium in 2011 has turned out to be a sham, and the fact that the number of earmarks will set a new record in FY2018.
Earmarks Help Make Congress Even More Corrupt
It is important to remember why the 2011 moratorium was deemed necessary. The movement to ban earmarks gained traction due to the tireless work of members of Congress such as Arizona Senators John McCain and Jeff Flake. “There’s nothing swampier than earmarks,” Flake said.
As McCain explained regarding those making the case for an official return to earmarks, “The problem with all their arguments is: the more powerful you are, the more likely it is you get the earmark in. Therefore, it is a corrupt system.”
In the 111th Congress (2009 to 2011), when the names of members of Congress who obtained earmarks were included in the appropriations bills, 81 House and Senate appropriators – 15% of Congress – had 51% of the earmarks and 61% of the money.
Earmark proponents claim that these expenditures are a key part of the Article I tax and spending power given to Congress. But as Senator Mike Lee (R-Utah) and Representative Jeb Hensarling (R-Texas), co-leaders of the Article I Project, wrote last year of earmarks: “Congress needs to assert its power of the purse, but not in this manner.”
They said earmarking was used by lobbyists and leadership to force “members to vote for bills that their constituents – and sometimes their conscience – opposed.” An official restoration of earmarks “would make our job harder, make Congress weaker and make federal power more centralized, less accountable and more corrupt,” they added.
The 2018 Congressional Pig Book exposes the gaping chasm between Republican promises of fiscal responsibility and the sad reality that they govern like the swamp creatures they so often decry.
Remember, there have already been a record 232 earmarks in FY2018, most of them by Republicans, at a cost so far of $14.7 billion – and we still have over two months to go. Keep in mind also that the 2011 ban on earmarks is still in place – so it is definitely not working as intended. Or maybe it is?
The only way for Republicans to reverse this blatant hypocrisy is to immediately enact an iron-clad, fully enforceable, permanent earmark ban. Will they do it? I wouldn’t hold your breath!
All the best,
Gary D. Halbert
Forecasts & Trends E-Letter is published by Halbert Wealth Management, Inc. Gary D. Halbert is the president and CEO of Halbert Wealth Management, Inc. and is the editor of this publication. Information contained herein is taken from sources believed to be reliable but cannot be guaranteed as to its accuracy. Opinions and recommendations herein generally reflect the judgement of Gary D. Halbert (or another named author) and may change at any time without written notice. Market opinions contained herein are intended as general observations and are not intended as specific investment advice. Readers are urged to check with their investment counselors before making any investment decisions. This electronic newsletter does not constitute an offer of sale of any securities. Gary D. Halbert, Halbert Wealth Management, Inc., and its affiliated companies, its officers, directors and/or employees may or may not have investments in markets or programs mentioned herein. Past results are not necessarily indicative of future results. Reprinting for family or friends is allowed with proper credit. However, republishing (written or electronically) in its entirety or through the use of extensive quotes is prohibited without prior written consent.
© Halbert Wealth Management
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