Saturday, April 3, 2010

With the recent passage of health care legislation and amendments to strip out the special benefits certain states got, such as the “Cornhusker Kickback,” it’s easy to forget that they make sausage in Washington just like they do at the deli: with pork. While the senator from Nebraska won’t be putting his state’s medical bill on the federal tab, several of the on-the-fence Democrats who ultimately voted for health care reform submitted requests for hundreds of millions of dollars’ worth of earmarks. These end runs around the formal budgeting process are no different from deals in the Senate that outraged the nation; they’re just smaller. More to the point, some of my recent research suggests that the primary reason members of Congress want earmarks is to help get themselves re-elected.

Earmarks are projects whose funding is specifically requested by a legislator (or a small group of them). According to Citizens Against Government Waste, these projects tend not to be in the president’s budget. When the projects don’t add new line items to the budget, they greatly overfund executive-agency requests. Earmarks are often not competitively bid, and they are rarely the subject to congressional hearings.

That is, in one way or another, they violate all the processes put in place by Congress to ensure that taxpayer dollars are well-spent. And while there certainly are boondoggles requested by government agencies that do go through hearings, the fact that earmarks don’t get such treatment means that many more of them - such as the famed “Bridge to Nowhere” in Alaska that served a mere 50-person fishing village - fail to meet even a lax cost-benefit standard.

If earmarks are so wasteful, why do we have them? Because there’s at least one constituency that always benefits from earmarks: members of Congress.

In my own research, I’ve looked at individual members’ earmarked spending. I find that for every $50 increase (per constituent) in an incumbent U.S. House member’s own earmarks, the member receives about 5 percentage points more of the vote share on Election Day. Of course, with modern congressional districts comprising 600,000 to 700,000 people, that’s a bill of approximately $30 million. That voters vote more for legislators who bring home the bacon is unsurprising, but teasing out the reason is difficult. It could be that legislators’ constituents, having identified local needs, are just rewarding Congress members for doing a good job on the district’s behalf.

There are at least two reasons this argument is suspect. First, it is rare that a project benefits all of a district’s constituents. It’s more often that the benefits of government largesse fall on a lucky few. Second, even if an entire district benefits, either the benefits of the program exceed the costs or they don’t. If the benefits exceed the costs at a local level, why does Congress need to step in? Can’t the local government take care of it? And if the benefits don’t exceed the costs, we’re back to Congress funding boondoggles to get members re-elected.

Another possibility is that Congressmen use earmarks to get campaign contributions. In this case, it’s not that earmarks win votes, but that earmarks buy the contributions that help legislators persuade the public. An individual or company political action committee can give a couple thousand dollars in legal contributions to a candidate. While that’s a lot of money - and people have every right to express their views - it’s pretty clear that the value of the earmarks is a lot higher. So earmark recipients have a lot more to gain and thus have what economists call a higher “willingness to pay” than what election law allows.

Unsurprisingly, there are Congress members who are willing to accept. That’s how Randall “Duke” Cunningham got into trouble. He didn’t just get legal contributions from the defense contractors who benefited from his earmarks. He also received substantial bribes, and now he’s serving a few terms in a different federal institution: the federal penitentiary in Tucson, Ariz.

In the end, it doesn’t really matter whether members of Congress get votes because their constituents or their contributors are happy with their pork. Earmarks serve to direct resources from projects that both the executive and the legislative branches of our government scrutinized to those that neither body has considered carefully. Earmarks concentrate the benefits of projects on a precious few and disperse the costs across us all. Indeed, when one considers that the only true benefit of earmarks accrues to the 535 people in Congress, it’s hard to see why American taxpayers should keep funding the bacon our representatives keep bringing home - for themselves.

Thomas Stratmann is a scholar at the Mercatus Center and a faculty member at the Department of Economics at George Mason University.

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