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Tuesday, December 29, 2020

Making a Silk Purse Out of a Pig’s Earmark

The argument for earmarks is as solid as a sieve.

Image credit: Creative Commons CC0 1.0 Universal Public Domain Dedication via wikimedia

According to Roll Call, House Majority Leader Steny H. Hoyer has indicated that Democratic leaders are planning to bring back earmarks to the appropriations process in the upcoming term. This comes less than a decade after a long battle to end their starring role in pork-barrel politics finally succeeded.

Apparently, Congressional Democrats have decided you can make a silk purse out of a pig’s earmark after all, given that all three candidates to chair the House Appropriations Committee are in favor of it. But to take the well-deserved “stink” out of the process and “drain the swamp” of corruption, as House Speaker Nancy Pelosi ironically put it in 2007, they are promising to provide transparency, in particular, revealing each project’s requestor, as had become the case in an earlier but not notably successful attempt at reform, before earmarks were banned altogether.

Unfortunately, the argument for congressional earmarks is as solid as a sieve. Further, revealing the identities of those requesting “congressionally directed spending” will do little to deodorize the process.

Investing in Their States

The main argument justifying congressional earmarks has always been that it allows representatives to “invest in their states,” in Hoyer’s words. However, we must remember that the billions of dollars and thousands of earmarks that had come to be involved were not even compelling enough to survive the regular budget process. They seldom did much to benefit the locality being “invested” in, much less the well-being of all Americans.

To justify the earmarks, politicians have also endlessly recycled the claim that it was important for constituents to “get something back” for the taxes they send to Washington. But that argument, as when it is phrased as investment, is really an argument that the federal government should not be involved at all, a view enshrined in the Constitutional principle of federalism.

That argument implies that all the other things the federal government did “for” Americans was not worth what it cost them as taxpayers. If it was, constituents would be already getting their money’s worth, and would not need to “get something back.” It is also inconsistent with the assertion that pork payoffs are really just the lubricant necessary to accomplish a greater public good.

It is exceedingly difficult to find any earmarks that solved a serious market failure or a pressing need. But there have certainly been a lot of them. For example, highway bill earmarks ballooned from 10 projects in 1982, leading to a veto by President Reagan, to over 6,500 projects and $24 billion in the 2005 highway bill (indicating the very steep slippery slope earmarks invite). But by 1991, a General Accounting Office review had already asserted that “Generally, demonstration projects…were not considered by state and regional transportation officials as critical to their transportation needs,” and were often “not included in regional and state plans.” Further, Robert Puentes wrote that “As far as Washington is concerned, transportation is all about money—how much and who gets it…That is why billions and billions of dollars of additional federal investments…do precious little to ameliorate the transportation problems of the modern metropolis.”

If what the earmarks provided were efficient from the local beneficiaries’ perspectives, they should have been willing to fund them themselves.

These results are far from surprising, because unlike when people spend their own money (and therefore choose only what they value more than the cost), earmarks come almost exclusively from others’ pockets via federal financing. If what the earmarks provided were efficient from the local beneficiaries’ perspectives, they should have been willing to fund them themselves. In cases with unavoidable government involvement, it would be done through the appropriate local government. In other cases, if a project was really efficient for the affected private interests, it could be funded privately. No federal involvement, and hence no federal spending earmarks, would be necessary.

In other words, locals should both decide on and fund such projects, if they know better. They should not decide to send others the bill via federal financing. And if those directly affected are unwilling to pay out of their own pockets, then the money would be better left in their pockets, without an expensive detour inside the beltway. All that expensive trip creates is the fiction that when a fraction of locals’ tax money comes back in the form of projects that they wouldn’t be willing to pay for themselves, they somehow benefit.

Consequently, it is worth remembering that the pork that is brought home has to be extorted from others by those politicians as the price of their assent in exchange for others’ reciprocal extortion of their constituents, that those earmarks were unable to even meet the lard-filled standards of the regular budget process, and that not one cent of their funding came from anyone except taxpayers. It involves an unseemly amount of pork, but harms Americans more than it helps them.

Transparency as a Reform

Requiring that earmark sponsors be identified is the centerpiece of claims that they will not harm Americans, as in the past. Unfortunately, that will not deter much pork nor substantially defang the culture of corruption.

Revealing earmark sponsors might enable others in Congress to pressure the worst abusers to scale back their plunder. But history provides little hope in that regard.

Naming earmark sponsors won’t deter much pork primarily because politicians already trumpet what they “bring home” for constituents. Identifying them as sponsors only repeats what beneficiaries already know. It deters gifts for favored constituents at others’ expense just as much as identifying Santa as the source of Christmas presents deters him. New information is only provided to “outsiders” who are forced to pay. But they cannot vote on that representative anyway, so any “increased accountability” is only to those without electoral influence.

Revealing earmark sponsors might enable others in Congress to pressure the worst abusers to scale back their plunder. But history provides little hope in that regard. Even poster children for outrageous waste are seldom undone by negative publicity. Practically, the only earmarks to face real danger historically are from those who face “punishment” for daring to question others’ egregious pork projects.

Political incentives also ensure abuse will predominate.

Earmarks arise from the political dominance of special interests. Beneficiaries who gain substantially know it and support those who “deliver.” The rest of us, who must pay for them, however, each lose only a little. We are therefore uninformed and uninvolved. Special interests win. Eliminating earmark abuses faces the same problem in reverse. Eliminating an earmark hurts a small, organized group substantially. They oppose it, backed by threats to withdraw support. But since it benefits others only a small amount each, they hardly notice. Consequently, our “public servants” attract substantially more votes by bringing home more of their own pork than by eliminating others’ pork or really reforming the system. As a result, special interests are very effective at defending their hard-stolen gains.

The pork-deterring power of naming earmark sponsors is further undermined by safe seats and seniority. The many “safe” House districts (including those resulting from gerrymandering) are virtually impervious to serious electoral challenge, so a few unhappy voters pose little threat to most incumbents. Those senators in “safe” states are similarly insulated. Further, the greatest abusers in both the House and Senate are those who have risen to the most powerful positions. That means their constituents also have the most largesse to lose if they allow real earmark reform. It also means that most potential congressional reformers have too much future pork at stake, when they get more seniority on important committees, to risk alienating the power brokers skimming the most from the system at the time.

Transparent Harm

Bringing back earmarks enables more pork-barreling, while identifying sponsors does little to restrain it. It produces transparent harm. The transparency provided is window-dressing to enable the reintroduction of harmful mutual extortion of Americans that took so much effort to end. It would increase the extent to which politicians sell out Americans’ general welfare, whose defense is legislators’ central task.

  • Gary M. Galles is a Professor of Economics at Pepperdine University and a member of the Foundation for Economic Education faculty network.

    In addition to his new book, Pathways to Policy Failures (2020), his books include Lines of Liberty (2016), Faulty Premises, Faulty Policies (2014), and Apostle of Peace (2013).