Thursday, March 4, 2010

Would Eliminating Federal Earmarks Really Bring Down Federal Spending?

Posted By on Thu, Mar 4, 2010 at 6:08 PM


In The Skinny this week, I talk about Republican Jonathan Paton's vow to not seek earmarks for Southern Arizona. Paton, who is one of four Republicans seeking to unseat Democrat Gabrielle Giffords, argues that the process is corrupt and suggests that Southern Arizona will get more money if he doesn't ask for earmarks because he will be one of many Republicans who will end the tradition of earmarking and then more money will flow to Congressional District 8.

But as the Arizona Republic has reported, one reason that Arizona doesn't get more federal money is because we have representatives such as Sen. John McCain and Rep. Jeff Flake who reject earmarks.

And as the above chart from Citizens Against Government Waste shows, it was after Republicans took control of Congress, in 1994, that earmarking climbed through the roof. It got even worse after the GOP controlled both Congress and the White House. And let's face it: The federal government was running a surplus in 2000, when Democrat Bill Clinton left the White House. Eight years after GOP set the taxing and spending policies, we stood on the edge of another Great Depression.

Paton acknowledges that his party had an "spending addiction." But he believes that the new breed of Republican will bring a fresh fiscal austerity, including the elimination of earmarks.

So follow the formula: Republicans abuse the system, complain that the system is abused, and then promise to eliminate the system altogether.

But here's the real twist: Even if you eliminated the ability for lawmakers to specify earmarks, you might not see much reduction in federal spending, according to this analysis by when Sen. John McCain was complaining about earmarks during his 2008 presidential run:

But contrary to popular belief — this is the first of several bits of information readers may be surprised by — cutting earmarks wouldn't necessarily cut government spending, according to independent budget experts from across the political spectrum. Jeff Patch, a budget fellow at the libertarian Cato Institute (and also a former McCain volunteer) told that "earmarks just direct funds from executive agencies to specific projects or companies." That is, while there are still a few pet projects slipped into legislation in the dark of night that do increase the federal budget, earmarks often simply tell agencies how to spend money that they are already getting. So while earmarks may drive up the cost of government slightly (by, for example, awarding no-bid contracts in a legislator's home district), cutting earmarks alone is "not sufficient for cutting wasteful spending," Patch said. The Brookings Institution's Paul Cullinan, research director of the Budgeting for National Priorities Project, agrees, saying that earmarks "might be an allocation issue" rather than a spending issue. And Scott Lilly, a senior fellow with the liberal Center for American Progress, told us that "there’s no evidence that if you took earmarks out, federal spending would go down."

And (surprise #2) McCain now says that many earmarks aren't really wasteful spending at all. For example, in 2006 the Congressional Research Service counted 75 percent (or $15.7 billion) of the 2006 foreign operations budget as earmarks. That figure includes $4.3 billion in aid to Israel and Egypt. Another $16.1 billion was earmarked for military construction

and veterans affairs, and $9.4 billion more was earmarked for defense spending. That's $41 billion — or more than two-fifths of the amount of earmark spending McCain cites. But McCain has no plans to cut those particular earmarks. Douglas Holtz-Eakin, McCain's chief economic adviser, told that "if you don't have earmarks, a lot of those things would be funded under regular order, if they have merit."

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