What to do about Congressional Earmarks

We’ve known, at least since December, that congressional earmarks are coming back, and the latest news reiterates that they will return in some fashion. Earmarks are congressionally directed spending — legislative language in an appropriations bill that directs spending for a particular purpose, such as building a bridge or pushing funding to a specific corporation or non-profit. Here’s how we think Congress should address their return.

A brief history of the earmark ban
The political parties put in place an earmark moratorium in the early 2010s — after first imposing a series of provisions to impose more transparency around earmarks — because the practice became politically unpalatable. Earmarks were inextricably connected to a great amount of corruption and received a lot of blame for wasteful spending. For example, former Rep. Duke Cunningham (who was just pardoned by Trump) literally had a menu for bribes (here it is!) to get an earmark placed; former Speaker Hastert (who was ultimately convicted for structuring relating to serial child abuse) was connected to using an earmark for personal enrichment; and there was that whole Jack Abramoff scandal, which involved (among other things) scamming Native American tribes regarding the creation of new tribal land. In essence, you could open the federal pocketbook to direct tens of millions of dollars — for good or for ill. 

Advocates for earmarks rightly argued that the earmark ban shifted decision-making about how to spend funds to the Executive branch, where Congress provided a pool of money to be spent and the nitty-gritty details were (in theory) out of their hands. This disempowered Congress to make some of these decisions directly. It resulted in more powerful members of Congress extracting promises from Executive branch officials on how money would be spent and forcing less powerful members of Congress to beg the Executive branch to spend funds in their district (through lettermarks and phonemarks). Of course, it was still possible to direct federal spending by defining the parameters in which funds could be spent so it could only have one recipient, and nothing stopped tax writing committees from giving targeted tax breaks (which they do by the billions!)

Advocates for earmarks also argue that earmarks make it easier to move legislation. It becomes possible for senior appropriators or leadership to provide members of Congress with something for their districts in legislation, giving them a further incentive to vote for the bill. Of course, it also creates an incentive for members to threaten to withhold their vote for a bill unless they receive an earmark, so the benefits for moving legislation could be a wash. It does create perverse incentives to vote for a bad bill because it contains something for the district. 

Earmarks — the kind we are talking about restoring — were 1% of federal spending, which is both a lot of money and just a little. Earmarks also were not evenly distributed. Citizens Against Government Waste reported that in the 111th Congress “when the names of members of Congress who obtained earmarks were included in the appropriations bills, 81 House and Senate appropriators, or 15 percent of Congress, had 51 percent of the earmarks and 61 percent of the money.” 

How to bring back earmarks?
As you can tell, I am ambivalent about the return of earmarks. I have real concerns that granting earmarks empowers leadership to entice and cajole members in a way that is inappropriate and disproportionately benefits only a handful of members. I can see the benefits to letting Congress make these decisions and not grant that power to the Executive branch. Regardless, it’s obvious that they are coming back. I engaged with Congress the last time it imposed transparency requirements on Congress, and those recommendations inform my thinking now.

How to divy it up
As I mentioned above, earmarks were about 1% of discretionary spending. Discretionary spending is about $1.4 trillion, so let’s cap earmarks at 1%, or $14 billion. I’d divide $14 billion in half for each chamber: so $7 billion for the Senate and $7 billion for the House. That would result in $16 million per congressional district and $70 million per senator. 

Members of the House and/or Senate should be allowed to pool their money with other members for projects. They should be able to decline to spend the money in a fiscal year and it would then accrue in the district/state “account” to be spent later. If a member turns over, his/her successor has whatever money has not been allocated. Appropriators are responsible for making sure it’s not spent for inappropriate or corrupt purposes (like on family members or political supporters), but otherwise they should respect the views of the representative.

The upside of this approach is that money is available to all members. The downside is that the money cannot be used as a political cudgel by leadership to move legislation. (I suspect that withholding earmark money unless a member votes for a bill is likely to be increasingly ineffective — for example, look at how funding for COVID relief for states and localities is playing out.) 

Eligibility
Under a proposal from the Select Committee on the Modernization of Congress, local communities can apply for a grant through a public database, and once the approps process is finalized, the funds would be subject to oversight and rescinded if it was deemed abuse took place. Providing this resource for rank-and-file Members could give them more reasons to support spending legislation overall — (but I doubt it).

According to Punchbowl news, the proposal under consideration would prohibit Members from requesting earmarks for which they have financial ties, and they will not be allowed for for-profit institutions. “Earmarks will be limited to state and local governments and nonprofits that carry out quasi-government functions. There will be limits on how much of each spending bill can be allocated toward earmarks.” 

I’m going to need to think more about eligibility. Having a quid-pro-quo for political donations or political activity in return for earmarks is almost inevitable. Also, allowing funds for non-profit institutions may be insufficiently restrictive, as many non-profits are just alter egos of for-profit institutions or wealthy donors.

Implementation
It is important to have proper accountability mechanisms in place, which many of us old-timers spent a lot of time thinking about before earmarks were banned. 

In my opinion, there should be a central database that contemporaneously identifies significant amounts of information relating to each and every earmark. This information should be searchable and downloadable and maintained as structured data. It should include:

  • Every member of Congress (with their bioguide ID)
  • Every earmark they request (with a unique ID)
  • The names of all other Members of Congress who have requested that earmark (with their bioguide IDs) 
  • The plain-language explanation of why that earmark was requested
  • The details of who each earmark benefits (the recipient (with their TIN), who is on their board, how much it is for, where it is located, category of work, type of recipient, etc.)
  • Who requested it (with info about the entity, their TIN, their location, etc.)
  • Whether it was granted
  • Whether it or something similar was requested or granted in prior years
  • Which subcommittee(s) are responsible for approving the earmark (with the committee ID)
  • A follow-up report on how the money was spent, when it was disbursed, etc., along the lines of that mandated under the DATA Act.

In addition, we need to see who is lobbying for earmarks. Lobbying firms and lobbyists should be required to identify on their Lobbying Disclosure Forms when they lobby for an earmark, who they lobby, what they request, and that data should be tied to the Member data. The definition of a lobbyist should be expanded to include those who provide strategic advice, as many former members often help make the connections to current members with respect to a particular legislative request.

This whole process should be overseen by an oversight body (like GAO or the House IG) that has a responsibility to investigate influence and an obligation to regularly and publicly report on those findings.

Finally, the data should be designed to mesh with other reporting requirements mandated by the FEC, the SEC, FARA, and so on, so that it becomes possible to see the entire ecosystem around lobbying for earmarks.

This won’t cure the fundamental concerns with earmarks, but it should make their use more palatable — or at least less corrupt. Additional value would come from transparency around tax-earmarking, which is the flip side of this process.