HICKS: Earmarks need overhaul, but they aren't entirely bad

January 22, 2011

All taxpayers should welcome the coming debate on federal earmarks. Indiana is ground zero for the discussion because we see principled, but seemingly conflicting, stands by prominent members of our congressional delegation.

Our influential senior senator, Richard Lugar, and 6th District congressman, Mike Pence, disagree on an outright ban on earmarks. This is a rare case in which the differing concerns of both men are right and I hope will lead to remedy of federal spending procedures we all will be happy with.

No one who has dabbled at all in public life has escaped the stain of federal earmarks. As an economist who worked in West Virginia for a number of years, I have substantial bona fides in the earmark process. An egregious example is a small lunch to discuss a project that was attended by your columnist, a current congressman, two university presidents and a state senator. One president (a Jesuit priest) offered grace before our chicken salad, petitioning our creator to spare the health and vitality of the senior senator from West Virginia until this particular project was funded. His prayer was answered—and a new building now bears the senator’s name.

Earmarks suffer a well-deserved reputation for waste and corruption, but that is far from the whole story. Each year, hundreds of thousands of requests for federal funding arrive at the desks of government agencies. Such things as bridges, community centers and research projects fit easily into the design of federal legislation and are regularly funded. Perhaps there are too many of these, but that is a different column.

All earmarks started life as one of these projects, but were rejected for one of two reasons. Either the idea was really bad or it did not fit the funding scheme set up by the legislation and federal bureaucracy.

The really bad projects make the news. New roads that are parallel to uncongested existing roads, bridges to nowhere, jet fighter engines the Air Force doesn’t want, and the list goes on. Sadly, many good projects also end up as earmarks for the very good reason that the federal bureaucracy simply cannot be adaptive enough to write rules allowing for all innovative and broadly beneficial projects (like Ball State University’s geothermal conversion, the likes of which will be routinely funded in two decades).

The earmark process is clearly broken, but what will replace it? One solution is better-written laws that permit more nonpartisan flexibility on funding. Something akin to the peer review of scientific research would be an improvement, but no remedy will be perfect. There’s also a fundamental “balance of powers” issue at play. Our Constitution gives Congress the purse strings—fully outlawing earmarks surrenders too much power to the executive branch.

So, Pence is quite right in heralding federal earmarks as a blot on the tenets of fiscal rectitude and the integrity of Congress. Lugar is also right in protecting the power of Congress by opposing an outright ban on earmarks. A resolution of these concerns is good news for taxpayers.•

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Hicks is director of the Center for Business and Economic Research at Ball State University. His column appears weekly. He can be reached at cber@bsu.edu.

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