A Constitutional Right to Waste Money

Not surprisingly, Director Daniels' effort to publicly expose and ridicule bizarrely wasteful spending (in contrast to merely wasteful spending) irritated many in Congress who felt he was interfering with important congressional prerogatives. Indeed, as House Appropriations Committee Chairman C. W. (Bill) Young (R-FL) was quick to point out in a February 6, 2002, letter to Director Daniels, "The power of the purse resides solely with Congress. Unless the Constitution is amended, Congress will continue to exercise its discretion over federal funds for purposes we deem appropriate."

For better or worse, Chairman Young has it exactly right. Just as the First Amendment to the Constitution protects the rights even of a fool to speak his mind no matter how peculiar his thoughts might seem, Title I, Section 9, Clause 7 of the Constitution states that "No money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law," thereby granting Congress the right to spend the federal government's money (even for ludicrous projects). The Constitution adds no caveat that the money should be spent wisely on useful things in the national interest.

In short, Congress has a right, protected by the Constitution, to fund such pet projects as:

• Therapeutic Horseback Riding in Apple Valley, California ($150,000);
• The recovery of Preble's Meadow Jumping Mouse ($500,000); and
• Washington State's dolphin replacement (replace them with what?) project ($4 million).

Chairman Young went on to make the larger and more practical point that more is at stake in this issue than constitutional authority: "All wisdom on the allocation of federal funding does not reside in the Executive branch. Members know the needs of their districts better than civil servants working in Washington, D.C." Chairman Young conjures up images of dedicated elected officials responding to the broad concerns of constituents--implying that:

• There was a huge ground swell of public sentiment from the people of Missouri for a million-dollar program to see whether public transit buses and trains could run on soybeans;
• Texans really did want $300,000 to pull the weeds out of the Navidad and Lavaca Rivers; and
• Hawaiians, native Alaskans, and the Bay Staters of Massachusetts wanted $5 million to facilitate cultural exchanges that would allow them to reflect among themselves on the common roots of their 19th century whaling heritage.⁶

Earmarks Are Bought and Sold

On these points, Chairman Young is clearly exaggerating the extent to which genuine democratic forces are at work, as well as the federal bureaucracy's role in deciding how taxpayers' money should be spent. As the evidence reveals--notwithstanding congressional insistence on how well Members know their constituents' needs--these pork-barrel earmarks are bought and sold like cans of beans, bales of cotton, or cords of wood, and the desires of the populace really have very little to do with who gets what. Moreover, most of the specific targets of discretionary domestic spending programs are ultimately determined not by federal departments and bureaucrats, but by governors, mayors, and state agencies, who are arguably as close, if not closer, to the people and local priorities than congressional staff or well-paid Washington lobbyists.

A memo from Jonathan A. Mantay, County Manager of Bay County, Florida, to the county's Board of Commissioners gives some insight into how the Washington marketplace for congressional earmarks typically works.⁷ In the memo, Mantay acknowledges the success of the Arlington, Virginia, lobbying firm of Alcalde and Fay in securing federal earmarks for the county--specifically, $8.25 million for Highway 98, $2.4 million for the Intelligent Transportation Closed Loop System, and $600,000 for two additional projects.

Acknowledging that "the Board has enjoyed a very productive relationship with the firm," the memo goes on to provide a new list of prospective earmarks, eight of them totaling $13.1 million, that will be pursued by Alcalde and Fay. Included on the list is a $4 million request to relocate the Bay County Fairgrounds--an amount of money that would cover the annual salaries of 80 new agents for the Federal Bureau of Investigation and an even larger number of badly needed U.S. Immigration and Naturalization Service agents.⁸

Although the memo does not include any specific information on how much Alcalde and Fay's services will cost the good citizens of Bay County, published minutes from recent board meetings in two California counties give an indication of the amount charged for the firm's representation. On March 28, 2000, the Marin County Board of Supervisors authorized the board's president to pay Alcalde and Fay $6,000 per month for federal representation for the year;⁹ and on December 4, 2001, the Contra Costa County Board of Supervisors agreed to pay Alcalde and Fay $100,000 plus expenses for its representational services throughout the 2002 and 2003 fiscal years.¹⁰

Alcalde and Fay, of course, is just one of dozens of Washington lobbying firms that sell access to earmarks. Sagamore Associates, for example, cites earmark acquisition as one of its chief lines of business. Its Web site notes that "Shepherding appropriations requests through Congress is a high priority for many clients. More than half our firm's work is comprised of this activity, and our track record is strong."¹¹ Sagamore's 2001 lobbying report to the U.S. Senate lists 81 clients, many of them universities and local communities seeking "appropriations" assistance.¹²

Another Washington, D.C., lobbying firm, The Carmen Group, Inc., includes several successful earmark case studies in its Web site pitch to prospective clients. Among them are $860,000 obtained for a historically black college (as well as a visit to the campus it arranged for a Bush Administration official) and $269 million in future funding for a light rail system in another community.¹³

Although, in his letter to Director Daniels, Chairman Young defends such earmarked funding as providing "important services for people," this review of the lucrative white-collar trafficking in pork suggests that these "important services" may not be readily recognized either by the typical Member of Congress or by his or her staff. Otherwise, communities throughout the country would not have to incur $6,000-per-month retainers to bring their needs to a Member's attention. The fact that the supervisors of Bay County, Florida, chose to communicate their desires through Alcalde and Fay rather than their own Congressman (who does not sit on the House Appropriations Committee) suggests that the retainer-earning lobbyists may carry more weight than a congressional colleague.

Congress Knows Best?

In his letter to Director Daniels justifying his penchant for earmarks, Chairman Young also notes that "Members know the needs of their districts better than civil servants working in Washington, D.C." This observation is of particular irrelevance as it relates to the operation of a number of federal programs that the chairman, his staff, and a prosperous band of Washington lobbyists micromanage by way of thousands of location- and project-specific earmarks. Many programs, including the Department of Housing and Urban Development's $4 billion Community Development Block Grant (CDBG) program and the Department of Transportation's federal highway program, are structured so that their chief function is to channel federal tax dollars to governors, mayors, and county supervisors who, in turn, spend the money on local priorities of their own determination, albeit in accordance with broad federal goals.

Recent appropriations decisions regarding HUD's CDBG program illustrate how the objective of decentralization can be distorted by Congress. The block grant program was created in the 1970s to help spur community economic revitalization and to improve a community's stock of housing for lower-income families. It provides financial grants directly to communities in accordance with a formula based on population, housing needs, and the number of low-income families in the community.

Theoretically, mayors and county supervisors can spend this money on local housing and revitalization priorities of their determination, subject to federal program rules and objectives. However, in spite of a mayor's presumably superior knowledge of the needs of his or her community, this year's Senate HUD appropriation bill reveals a reluctance to trust the locals' ability to prioritize their housing and economic revitalization needs and includes 256 separate earmarks for specific projects. Such earmarks include:

• $200,000 for the restoration of the Iao Theater in Wailuku Town, Hawaii;
• $100,000 for the Alabama Quail Trail;
• $750,000 for wildlife rehabilitation in Quechee, Vermont; and
• $250,000 for infrastructure upgrades to the Lesbian and Gay Community Services Center in New York.¹⁴

In some cases, the earmarking of federal spending has become so extensive that governors and mayors have very little discretion over funds that originally were supposed to be provided as formula grants to be spent at their discretion. One case in point involves transportation funds allotted to Pennsylvania during the 1990s when a member of its congressional delegation, former Representative Bud Shuster, chaired the powerful House Transportation Committee. Although Representative Shuster was instrumental in directing substantial highway funding to the Commonwealth, in fact, much of that money ended up in his rural district. As the Pennsylvania Department of Transportation ruefully noted in one of its annual performance audits:

Although the planning process established under ISTEA [the Intermodal Surface Transportation Efficiency Act of 1991] appears sound, the process can be undermined when Congress targets specific highway projects for federal funding. The local planning organizations and the Department [Pennsylvania Department of Transportation] are then put in the position of either giving the project a high priority on their transportation plans, which means that the monies are not available for other potentially more worthy projects, or rejecting the project....

The practice of Congress earmarking funds for specific purposes can significantly impact the Commonwealth's ability to fund the projects of greatest need. For example, approximately 27.5 percent ($1.32 billion of $4.8 billion) of the total funding projected to be available for the highway and bridge component of the 1997-2000 Statewide Transportation Improvement Program is for specific projects earmarked by Congress. When only the funding available for major highway construction projects is considered, the percentage applied to earmarked projects rises to 84 percent ($1.32 billion of $1.57 billion). Most (70 percent) of this $1.32 billion is for projects in central Pennsylvania. Rather than turn down these projects and risk losing the associated federal funding, the Department accepts the earmarked projects. The earmarking by Congress of funding for specific major construction projects therefore severely limits the ability of the Department and the State Transportation Commission to allocate funds to other projects that may be of higher priority.¹⁵

Similarly (and thanks to the seniority of Senator Robert Byrd), West Virginia motorists this year will see a portion of their federal fuel tax revenues diverted from pothole repair to fund such "vital" objectives as:

• The Washington Heritage Trail Map/Guide ($87,160);
• Promoting "Treasures Within the Mountains" Part II ($19,000);
• The Cranberry Mountain Nature Center ($99,000);
• The Little Kanawaha brochure ($8,000); and
• The Fayette Station Road Interpretation ($150,128)--which, presumably, will leverage and help "interpret" the $3.5 million being spent on Fayette Station Road improvements.¹⁶

Taxpayers Fund Incumbents' Election Campaigns

Although the congressional appropriations process offers Americans a gold mine of humor, behind these ludicrous examples lies the darker side of the waste and abuse of financial privileges that result from congressional vanity. Notwithstanding Members' efforts to cloak themselves in the power of great constitutional principle, the exercise is really all about electoral insecurity and efforts to buy friendship and public affection with the hard-earned dollars of American taxpayers.

In reporting on Director Daniels' efforts to encourage Members of Congress to adopt some measure of fiscal responsibility, Roll Call quotes House Appropriations Committee Staff Director Jim Dyer's declaration that "It is unrealistic for OMB to ask members to stop trying to win projects for their districts and help themselves get re-elected."¹⁷ So there we have it: an acknowledgement that the principles of campaign finance reform will not extend to the $15 billion of earmarks paid for with money coerced from American taxpayers as involuntary campaign contributions, available only to incumbents.

Ronald D. Utt, Ph.D., is Herbert and Joyce Morgan Senior Research Fellow in, and Christopher B. Summers is a Research Assistant in, the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.