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Congressional Earmark Ban Changes Business on Capitol Hill

Jul. 5, 2012 - 02:35PM   |  
By KATE BRANNEN   |   Comments
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While the U.S. congressional earmark ban has not eliminated earmarks, it has changed the way business is done on Capitol Hill, moving it into the shadows and making it difficult for watchdog groups and lobbyists to figure out what’s going on.

“I don’t think people realize how much the earmark ban has changed the way things operate on Capitol Hill,” said Michael Herson, president of American Defense International, a Washington defense lobbying firm.

It has increased the power of the committee chairs, made it more difficult for small- and medium-sized businesses to have their needs addressed, and changed the way research and development projects are decided, industry and congressional sources said.

It could also be contributing to the political gridlock on Capitol Hill, as congressional leaders have fewer carrots to persuade members to vote for unpopular legislation.

“Many members are not as interested in bills any more, because they don’t have as much at stake in them,” Herson said.

Winslow Wheeler, a former Senate staffer who’s now at the Project on Government Oversight, said when he worked on Capitol Hill, the chairmen of the Senate Appropriations Committee made it very clear to members that they had to vote for certain bills, or projects in their districts would not get funded.

While this method was effective, Wheeler does not advocate returning to that way of business.

“Members who are well informed and run a serious committee don’t need to stoop to that level,” he said.

Decline in Earmarks

The amount being spent on earmarks has dropped precipitously, but the practice still exists, industry and congressional sources agreed.

Citizens Against Government Waste, a watchdog group that tracks earmark spending, calculates that Congress included $2 billion in defense earmarks in the 2012 spending bills, compared with $10.3 billion in 2010. The group hails the overall decline, but warns that “transparency and accountability have regressed immeasurably.”

For years, members of Congress were able to add money to appropriations bills to fund specific projects in their districts. The congressional add-ons were always offset by budget cuts elsewhere.

In the late 1990s and early 2000s, abuse of the process reached its heyday, with leading politicians doling out hundreds of millions of dollars to pet projects back home.

“After Sept. 11, it got totally out of hand as members exploited the sympathy for defense spending bills as a way to load up ever more pork,” Wheeler said.

Widespread abuse of the system eventually led to a push to reform the way earmarks were distributed and, for a few brief years, a more transparent system was put in place.

“By the time you got to 2010, you had a very formal process with transparency rules,” said Russell Rumbaugh, director of the Stimson Center’s Budgeting for Foreign Affairs and Defense program. He previously served as the defense analyst on the Senate Budget Committee.

The reform included deadlines for industry to submit requests to committee members, a formal adjudication process and published lists of what earmarks had been approved.

By making the system more transparent, congressional members also opened themselves up to more scrutiny from the press and watchdog groups, Herson said.

When Republicans won control of the House and took office in January 2011, they decided to ban earmarks, which in turn did away with the formal channels for processing members’ requests.

Now, rather than earmarks, the defense bills include generic program increases, with varying degrees of guidance on how to spend the new money.

For example, this spring, House appropriators provided more directive language than their counterparts on the House Armed Services Committee about how to spend money added to DoD operations and maintenance accounts, Wheeler said. Including this report language brings more accountability to the process, he said.

Lawmakers also are relying on back channels, such as phone calls and undisclosed letters, to tell the DoD how to spend the money being added, a congressional source said.

“That’s the kind of stuff that they don’t share, and that we don’t see,” Wheeler said.

In the past, everyone had the opportunity to add money for small projects in their districts. Deciding what an earmark is versus a legitimate congressional add-on is now left to the committee chair and his or her staff, Herson said.

With traditional earmarks gone, money is freed up for leading committee members to make bigger funding shifts, a congressional source said.

The new informal system has also made it far more difficult for small- to medium-sized companies to have their needs addressed, while big defense contractors are still able to secure extra funding for the bigger programs, both congressional and industry sources said.

“The whole system hurts as a result, because these days, a lot of the ingenuity is coming out of the smaller companies,” Herson said.

A congressional source agreed, saying, “It’s the little companies that used to get small earmarks that are out of luck in this environment.”

Instead of asking for funding, some smaller businesses are asking for legislation or report language to move the Pentagon or the military services in the direction they want, the congressional source said.

Research and Development

One funding area that is clearly undergoing change as a result of the earmark ban is the Pentagon’s Research, Development, Test and Evaluation, or RDT&E, account.

Todd Harrison, a senior fellow for defense budget studies at the Center for Strategic and Budgetary Assessments, has been tracking congressional funding add-ons and said historically, they have gone to the RDT&E account. From 2001 to 2010, the average percentage increase in RDT&E funding from congressional add-ons was 4.5 percent, according to his analysis.

However, in 2011, when the earmark ban was implemented, RDT&E did not receive a plus-up. Instead, it was cut by 2 percent, he said.

A congressional source confirmed that the earmark ban is a factor in the decline in RDT&E funding.

Rumbaugh said RDT&E has historically been susceptible to earmarks because it’s the kind of money that doesn’t have to be tied to a specific program.

It is difficult to judge where to invest science and technology dollars, he said.

“To some extent, the Defense Department was willing to farm out some of that adjudication to the congressional earmark process,” Rumbaugh said. “One of the big questions to come out of the earmark ban is if you’re no longer deferring these decisions to the earmark process, how is the DoD science and technology community going to allocate funding? I don’t think that’s sorted out yet.”

Earmarks used to be an easy way to track congressional influence, though they represented a very small fraction of the defense budget, Rumbaugh said.

“The focus on earmarks took the focus away from more interesting questions about the relationship between the Pentagon, Congress and industry, which happens at the billion-dollar contract level and is a much more complicated picture,” he said. ”With earmarks gone, does that influence creep into the bigger decisions? That’s going to be interesting to see.”

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