It's a national sport each year to delve into the labyrinthine federal budget and extract the howlers known as pork -- money appropriated for legislators' pet projects and slid into bills in the dead of night.
Luckily for those of us who have enough trouble reading fine print as it is, the Heritage Foundation and Citizens Against Government Waste are two of the many groups that comb the budgets to ferret out such apparent federal priorities as spending $270,000 to combat "goth culture" in affluent Blue Springs, Missouri, $50,000 for a tattoo removal program in San Luis Obispo, Calif., or $1.5 million for a statue of the Roman god Vulcan in Birmingham, Ala.
But what's the beef with pork, anyway? Isn't it just a way to spread the money around? If our messy but vibrant government occasionally tosses out $200,000 for a bilingual audio tour of the Fort Worth Cowgirl Museum in Rep. Kay Granger's (R-Texas) district, isn't that the price for mostly getting it right? If I'm a sparsely populated or economically less-powerful state, isn't pork my defense against a nation run by California, Texas, Florida, and New York?
Folks, isn't this democracy?
No hearing for earmarks
To find an answer, I spoke with Heritage Foundation federal budget analyst Brian Riedl, who writes frequently about the issue and spearheads a team that combs federal budget details. We are talking reams of paper written in the arcane language that only legislators love. Whether or not you agree politically with the conservative think tank Heritage Foundation, it's hard to argue with Riedl's common sense viewpoint. Riedl walked me through the pork-barrel process.
Pork is spent via earmarks -- specific appropriations that direct federal agencies to spend funds in a certain way. Earmarks find their way into law -- or quasi-law -- in a few common ways.
They may be one of 2,000 earmarks offered in a "technical" amendment by a committee chairman. And you guessed it -- technical means there's certainly no need to waste time debating it. Or earmarks may appear in a bill when a conference committee irons out differences between the Senate and House on a bill that's already passed. Too late for anything public on that.
The quasi-legal way is to insert earmarks into the conference report, which is not technically law and therefore doesn't bind the federal agency. But gee, let's say you are that agency. Do you respond to this hint, or ignore it, begging for congressional hearings over some matter and perhaps more negative attention to your budget next year?
Earmarks for sale
The problem is that there is an entire industry built up around selling earmarks. If you are a local government, you hire a K Street lobbying firm (I hope they are all still on K, because they could have all moved and I'd still be saying "K") for $10,000 to several hundred thousand. They go to your member of Congress, who then goes to the committee chairman -- you get the idea. According Riedl, more often than not, the process is successful.
This means that if you want government money, all you have to do is pay for it. No discussion of the merits, or whether it's a better expenditure of your money than any other. You pay a lobbyist and it happens, more or less.
And happen it does. According to Heritage, the 2003 budget passed in January -- three months late after the government's fiscal year began Oct. 1 -- contained $22 billion in 9,000 earmarks. Riedl estimates that's about triple what it was four or five years before.
Earmarks mean more spending
More earmarks mean upward pressure on budgets, too. When Congress directs an agency to spend under a program through which it might otherwise solicit competitive bids or award under merit criteria, it reduces the amount of money available to other more efficient or deserving recipients.
According to Riedl, the Army Corps of Engineers is earmarked for projects going out 10 to 15 years. If the Corps is required by other law to perform certain projects, it must go back to Congress for more money -- either special appropriations or the next budget. That's upward budget pressure, and how convenient for Congress: The agency looks like it can't manage its money -- not that Congress isn't appropriating in the light of day.
Congressional incumbents view earmarks as a reelection tool. If they can make a mayor or other local official happy back home, it means more support in the next election.
But does it bring us more efficient government?
Longtime inhabitants of the Capitol such as Senator Robert Byrd (D-W. Va.) view pork barrel earmarks positively, saying that members know what their constituents need. Whatever. Some assert that it's Congress's constitutional right to determine how money is spent and certainly better than leaving it to the executive bureaucracy.
Operating in the dark
This is absurd. Congress passes laws creating programs and directs agencies to write regulations implementing them. Congress funds those programs. For Congress to circumvent the process by earmarking money is a perversion of the process. And whatever one thinks about agency grant or bid processes, they are a heckuva lot more open than any of the ways earmarks are born.
The question is not who should spend, but how it should be done. Congress has the power of the purse, but it must be exercised openly. I understand as an adult that many deals must be done to get a bill passed -- one member promises support for x in exchange for y, and so on -- it's how the world turns. But earmarks are at the very least a sign of the corrupt campaign finance system, and at most a corruption of democracy.
The rebuttable presumption is that these earmarks look, act, sound and smell like pork. If they are not, why not put them through the real legislative and executive process in the light of day to answer a few of the natural questions I've added?
- $250,000 for wine research at the University of California, Davis (The industry has no R&D cash?)
- $50,000 to study shiitake mushrooms in Booneville, Ark. (Ditto?)
- $750,000 for the Baseball Hall of Fame
- $180,000 for renovations to the Mercado Shopping Center in Guadalupe, Ariz.
- $631,000 for research into alternative salmon projects, Alaska (C'mon, Senator Stevens (R-Alaska!)
- $280,000 for asparagus technology and production in Washington
- $202,500 for the National Cherry Festival in Michigan (Can't the cherry industry handle this?)
- $1 million for the automated nursery project in Mississippi
- $270,000 for the Garth Fagan Dance Studio in Rochester, N.Y., for construction of a new theater (And, folks, I'm from Rochester; but shouldn't the local Kodak, Xerox, and Bausch & Lomb people and large law firms be contributing to the bulk of this? -- and if they are, well?)
- $7 million for exchanges with Historic Whaling and Trading Partners (Huh?)
Each one of these undoubtedly has a human story more complex than a label. And I buy the theory that our Constitution sets up a system in which we nakedly allocated preferences (hats off to my former law professor Cass Sunstein for the terms and idea). There are winners and losers for every dollar spent, whether it's for defense, spying, the environment, or the arts. It's just that these earmarks flout a very simple principle: We have a right to a government that spends money in the most efficient, cost-effective way. If the story is a good one, let's see it. Earmarks close the closet door.
You can find out what pork went where in the 2003 budget through the Citizens Against Government Waste online searchable Pig Book. Look for lots to Alaska, home of Senate Appropriations Committee Chairman Ted Stevens (R-AK). Don't like what you see? Let your House Representative or your Senator know exactly what you think. And you can share you beefs about pork on our Political Asylum discussion board.
Finally, an important...
Stock note
Some of you caught the news yesterday that Barry Diller's e-commerce conglomerate USA Interactive
Have a most Foolish week!
Curious about how asset allocation can help you plan financially? Perfect your portfolio in our upcoming online seminar with fave Foolish writers Robert Brokamp, Mathew Emmert, Tom Jacobs, and Jeff Fischer (20% off until May 16th!).
Tom Jacobs (TMF Tom9) would like an earmark for a travel junket but can't afford a lobbyist. He owns shares of LendingTree and other stocks you can find in his profile. Motley Fool writers are investors writing for investors .
