Posts tagged ‘earmark’

How Did Denny Hastert Even Have $3.5 Million for Payoffs?

Like Harry Reid, Denny Hastert entered Congress as barely middle class and left it a multi-millionaire (Senators make $174,000 a year -- good money but not enough, I would think, to have $3.5 million tucked away to hand out as cash).

Here is an example:

It wasn’t long after that the Sunlight Foundation reported on just how much Hastert thought himself qualified to steer earmarks back home. The foundation found that Hastert had used a secret trust to join with others and invest in farm land near the proposed route of a new road called the Prairie Parkway. He then helped secure a $207 million earmark for the road. The land, approximately 138 acres, was bought for about $2.1 million in 2004 and later sold for almost $5 million, or a profit of 140 percent. Local land records and congressional disclosure forms never identified Hastert as the co-owner of any of the land in the trust. Hastert turned a $1.3 million investment (his portion of the land holdings) into a $1.8 million profit in less than two years.

Assessing the Marginal Price for a Congressional Vote

Via the Sunlight Foundation:

A day after Rep. Bart Stupak, D-Mich., and ten other House members compromised on their pro-life position to deliver the necessary yes-votes to pass health care reform, the "Stupak 11" released their fiscal year 2011 earmark requests, which total more than $4.7 billion--an average of $429 million worth of earmark requests for each lawmaker.

The eleven members were the focus of high level pressure by House Speaker Nancy Pelosi and other top Democrats because they threatened to vote against the health care reform bill, which passed the House on Sunday, March 21, by a seven vote margin. Granting earmark requests are one of the ways leadership can encourage members to vote their way.

When it was announced the other day that three little-used airports in Stupak's district were given about 3/4 of a million dollars on the day before the health care vote, Stupak made it clear that he would never sell his vote for so little.  "It is absurd to think I would change my vote for a tow truck and a fence to keep deer from walking onto the runway of an airport in my district," Stupak said in a statement.  So it should not be surprising that he is asking for more.

Update:  The Sunlight Foundation has partially backed off on this story

Really, Really, Really Bad Idea

Just what we need, the government choosing winners and losers in media like they do earmark recipients.  Since government ownership of GM was politicized in Congress before the ink on the court agreements was dry, I wonder how fast Congress will find a way to use a government media bailout to punish the critical and reward sycophants.

A top Democratic lawmaker predicted on Wednesday that the government will be involved in shaping the future for struggling U.S. media organizations.House Energy and Commerce Committee Chairman Henry Waxman, saying quality journalism was essential to U.S. democracy, said eventually government would have to help resolve the problems caused by a failing business model.

Waxman, other U.S. lawmakers and regulators are looking into various options to help a newspaper industry hurt by the shift in advertising revenues to online platforms.

Waxman continues:

"Eventually government is going to have to be responsible to help and resolve these issues,"

Why?  You mean like when the US government stepped up in the 19th century to bail out pamphleteers and failing broadsheet publishers when the market moved to new media?  Or when it moved to bail out network television under assault from new cable channels?  Remember that?  Neither do I.

Next steps:

At the Federal Communications Commission, officials are embarking on a quadrennial review of the state of U.S. media. The study, which is mandated by Congress, seeks to determine whether current rules should be changed to allow for a more vibrant media industry serving a diverse audience.

We have that.  Its called the Internet.  It emerged entirely free of government action (save some funding of some original infrastructure).  Go away.

Saw This Coming

Yours Truly, on July 16, 2009:

It is totally clear to me that Obama and Pelosi will spend any amount of money to pass their key legislative initiatives.  In the case of Waxman-Markey, the marginal price per vote turned out to be about $3.5 billion.  But they didn't even blink at paying this.  That is why I fear that some horrible form of health care "reform" may actually pass.  If it does, the marginal cost per vote may be higher, but I don't think our leaders care.

Barbara Hollingsworth, 11/4:

The Heritage Foundation's Dennis Smith says that a "manager's amendment" to Pelosi's controversial 1,900 "“page health care bill includes new provisions that will allow back-door payoffs to specific members of Congress, such as more favorable Medicare reimbursements to particular doctors or hospitals and lower taxes on medical device manufacturers in certain congressional districts.

One such earmark - which Smith says "suddenly appeared" after the Energy and Commerce Committee had already completed its work - creates a new $6 billion Medicaid slush fund for nursing homes to be doled out by Health and Human Services Secretary Kathleen Sebelius, with no input from the states, ordinary rulemaking or administrative review.

This is nothing but a blatant attempt to buy off wavering Blue Dog Democrats. Just when you thought this bloated behemoth couldn't get any worse, it does.

Great Report on Earmarks

The Seattle Times has done a ton of work on earmarks, and has a report here.  Nothing here will be much of a surprise for earmark critics.  This was probably my favorite bit:

Last year, Congress promised to shed light on the secretive process. But the lists of earmarks are still buried in obscure documents that are difficult to find and search. Until Congress put them online a couple of weeks ago, the House disclosure letters, linking lawmakers to companies, were thick volumes of paper kept in a cabinet in the offices of the House Appropriations Committee.

When a reporter for the Congressional Quarterly pointed out how difficult it remains to pull all the information together, Rep. John Murtha, D-Pa., chairman of the committee that drafts the defense bill, had a quick answer: "Tough shit."

Murtha, for those who don't know, consistently leads the earmarking numbers, and came in #1 among Congressmen in reaping campaign donations from earmark recipients, bringing in over $1.6 million.  They have a database here where you can look up your Congressman (mine, John Shadegg, was one of the few with zero).  My sense is that this database is only from the military appropriation and that there are many more earmarks hidden out there in other bills, but it is a good start.  (hat tip Hit and Run)

The new, but not surprising, information for me was how Congress easily sidesteps the new disclosure rules.

After months of investigating the $459 billion 2008 defense bill, The Times found:

  • The hidden $3.5 billion included 155 earmarks, among them the most costly in the bill. Congress disclosed 2,043 earmarks worth $5 billion.
  • The House broke the new rules at least 110 times by failing to disclose who was getting earmarks, making it difficult for the public to judge whether the money is being spent wisely.
  • In at least 175 cases, senators did not list themselves in Senate records as earmark sponsors, appearing more fiscally responsible. But they told a different story to constituents back home in news releases, claiming credit for the earmarks and any new jobs.

The Times includes several irritating but entertaining stories of rent-seeking.  Take Cyberlux, for example.  What do you do when your company has sunk $50 million into a new product, has a $18 million a year burn rate, and only has $300,000 is revenues for the first six months of the year?  Why, you call your Congressman and generate revenues via earmarks, with a quick thank you in the form of company-sponsored fundraising for said representative.

And this certainly is a feel-good story for those rooting for the government to re-engineer the American auto industry:

Latrobe Specialty Steel of Latrobe, 40 miles east of Pittsburgh, makes specialty steel for aircraft parts.
In 2006, its parent company, Timken, spent $2.9 million lobbying Congress on various issues and persuaded lawmakers to ban the Defense Department from buying any products using foreign-made specialty steel. As the sole U.S. producer of certain kinds of specialty steel, Latrobe saw its orders climb. Timken then sold Latrobe to a group of investors in a $250 million deal.

But the buy-American restrictions for specialty steel caused serious problems for the Air Force, creating a 17-month lag in getting spare parts for aircraft used in the wars in Iraq and Afghanistan.

In May 2007, Latrobe said it needed to expand but complained of high electric bills and publicly threatened to build a new plant in Virginia or West Virginia instead. Pennsylvania offered grants and tax credits to the company worth $1.2 million.

In Congress, lawmakers were quietly lining up a much sweeter package.

In the defense bill passed in December, someone had inserted language that ultimately directed $18.4 million for "domestic expansion of essential vacuum induction melting furnace capacity and vacuum arc remelting furnace capacity."

"Latrobe Specialty Steel is the only domestic producer of that steel," Army Lt. Gen. William Mortensen said at a hearing.

A month after the bill passed, Latrobe began a $62 million expansion in its home state.

No one in Congress has admitted sponsoring the Latrobe earmark.

One congressman's fingerprints, however, weren't so easy to conceal. Latrobe sits in the congressional district of Rep. John Murtha, a Democrat who chairs the subcommittee that drafts the defense bill and wields the most power over defense earmarks.

Latrobe's officials have given $5,000 to Murtha's re-election fund in the past two years.

Also, Murtha had talked about giving taxpayer dollars to Latrobe. "We're trying to get together to see how we can work out an increased capacity for that particular company," Murtha said at a subcommittee hearing in April 2007. "I've talked to that producer. And what I'd like to see is them put some money in, us put some money in, and reduce the time it takes to get those spare parts out."...

The company would not comment on any discussions it had with Murtha. A spokeswoman defended getting the grant, saying it had been competitively bid. Even so, she acknowledged that Latrobe is the sole U.S. producer of certain specialty steels, a requirement for getting the money.

This Is What You Like To See: AZ Last in Pork-Barrel Cash

Arizona can be a weird place, politically.  Sometimes it can be among the most libertarian, part of the Goldwater legacy, and sometimes it can be absurdly statist, for example in the huge popular support our individual-rights-abusing Sheriff Arpaio enjoys.  But this is certainly good to see:

Arizona has some powerful lawmakers in Washington, including Republican presidential candidate John McCain.

But when it comes to pork-barrel spending, otherwise known as earmarks, the state isn't very powerful. In fact, it ranks last.

That's mostly because three of the state's 10 lawmakers in Washington,
McCain and House Republicans Jeff Flake and John Shadegg, refuse to ask
for any federal money
for local projects. Another Arizona Republican, Sen. Jon Kyl, strictly
limits his earmark requests. They all say the earmark process wastes
taxpayer money and desperately needs reform. But other Arizona
lawmakers counter that their colleagues' stance hurts the state.

rizona, one of the fastest growing states in the nation, will receive
$18.70 per capita in federal earmarks this fiscal year. By comparison,
Alaska, with roughly a 10th of Arizona's population, is set to receive
$506.34 per capita, the highest in the nation, according to Taxpayers for Common Sense, a watchdog group that tracks earmarks.

Alaska receives about three times as much as Arizona in actual dollars,
$346 million to $119 million. That means Arizona gets less money for
water projects, bridge repairs, road construction and rural clinics.

Good for us.  While I have my problems with McCain, Shadegg and Flake are two of my favorite people in Congress. 

The article, since it comes from the Republic, of course fails to really explain the issues well.  It tries to get the reader confused into thinking that zero earmarks means zero government spending in the state:

"When you have reformers and purists, you end up not getting a
reasonable share of money coming out, which hurts the state," said
James Thurber, director of the Center for Congressional and
Presidential Studies at American University. "When you're holier than
thou, you don't get much of the money."

This is, of course, silly.  Having no earmarks merely means that the huge amounts of money the Feds spend are doled out by existing statute and by the bureaucracy, rather than the whim of individual Congress persons trying to pay back favors to large donors.

update:  see the bad half of AZ here.

Earmark Reform

President Bush today, among other proposals, advocated earmark reform in a WSJ Op-Ed piece.  Great, though I would have thought his adult supervision on this issue with the Republican Congress last year would have been more effective.  Also, I would like to turn his attention to a novel Constitutional device called a "veto" that he already has at his command to handle pork-laden bills.

Like Finding Out Kennedy Was Killed By Lee Harvey Oswold

Holy foregone conclusions, Batman.  It turns out the secret hold on the earmark transparency bill was finally traced to two senators:  Ted Stevens and Robert Byrd.  Knock me over with a feather.

Double Secret Probation

Why even bother to filibuster when you can put legislation on secret hold.  While this story is highly ironic, I suppose the Senator involved has to at least be credited with consistency in his/her opposition to transparency for putting a "secret hold" on a bill to increase the public's visibility of the earmark process:

Yet most Senators clearly have no desire to shine a light on their
spending practices, and at least one -- perhaps more -- has placed a
"secret" hold on the legislation. Normally the architects of these
holds are exposed within a few legislative days, but with Congress on
recess the masked spender has so far evaded capture and public scrutiny.

Porkbusters, a grassroots outfit that fights government waste, found
this untransparent move to stymie government transparency a bit rich,
and last week launched a campaign to unveil the blocker's identity. It
has asked its members to call on their Senators to disavow the hold,
and the responses are trickling in. The group, which is tracking the
results on its Web site (www.porkbusters.org), still has the pictures
of 91 Senators under its "Suspect" list. The nine Senators who have
denied placing the hold are now listed as "In the Clear"; they are
Senator Coburn, Barack Obama, Mary Landrieu, David Vitter, John McCain,
Ron Wyden, Richard Shelby, Jim Inhofe and Jeff Sessions.

If Congress insists on spending like there's no tomorrow, at least
the Members could let the voters see what they're spending it on by
passing Senator Coburn's reform. Will the real secret Senator please
stand up?

Anatomy of an Earmark

I was fooling around with a great web page run by the Sunlight Foundation linking earmarks from a recent Health and Human Services bill to Google maps.  Here are some of the earmarks in the Phoenix area:

  1. $ 400,000 -- Midwestern University for a rural postgraduate educational program at Sierra Vista Regional Medical Center
  2. $ 150,000 -- St. Joseph's Hospital for facilities and equipment for its mobile maternity outreach program
  3. $ 750,000 -- Translational Genomics Research Institute for facilities and equipment
  4. $ 250,000 --  Arizona State University Institute of Civil Rights, for dropout prevention and other education projects
  5. $ 125,000 --  Mesa Community College for nursing recertification curriculum
  6. $ 175,000 --  Mesa Community College for the Enfermeras En Escalera program
  7. $ 200,000 -- Marc Center for job training for adults with disabilities
  8. $ 500,000 -- Scottsdale Healthcare for an electronic medical records system
  9. $ 100,000 -- Arizona Dental Foundation to provide dental services to low-income residents of Arizona

Note that this is just from one narrowly focused bill and for one single metropolitan area.  For this one post, I will not be a libertarian and wonder why the government is spending money on some of this crap.  Instead, for one post, I will be a good little technocrat and assume that the government should be doing all these things and criticize the process.

If I were a technocrat, I would argue that Congress already funds an ENORMOUS beauracracy to route federal money to theoretically the most productive spots.  I mean, that's the whole technocratic argument for all this government spending, isn't it?  That the government run by experts in the field can top-down allocate resources better than some bottom up market process?

Ideally, in any budgeting process, you look at your goals for a pool of money - say to cure breast cancer or to provide worker retraining, and you rank projects and allocations against this goal.  I believe this to be an impossible task for a variety of reasons, some of which are described here.  But even if you buy into this theory of technocratic fascism, you STILL have to be appalled by these earmarks.  Because each and every one are an override of any kind of prioritization and thoughtfullness that might exist in the budgeting process.

Take #9.  So the government has a goal of providing dental services to low-income people.  Fine.  Then shouldn't it take its dental services budget and allocate it on the best cost per patient served basis?  Does the Arizona Dental Foundation fit into this picture?  I bet no one in Congress knows.  In fact, I bet it DOESN'T fit this efficient allocation of funds criteria, because otherwise someone in Congress wouldn't have overrrided the funding process to push $100,000 their way in an earmark.  And even if this is a non-profit, shouldn't this kind of thing be bid on -- say ask for proposals of who can do the most with $100,000?

Some of these others are pretty obscure, and say something in and of themselves about the reach of the federal government these days.  But take #3.  Is the Translational Genomics Research Institute the best place to spend 3/4 million to get the most bang for our health research dollars?  No one probably knows, but what I can tell you is that it is the darling of our local political establishment (just read its history, all about political namedropping, new facilities, and whoring for taxpayer funds without mention of any actual research).  It has political figures such as our current governor on the board, so you might be able to guess how they got their earmark.

Or look at #8.  Scottsdale Healthcare is a private company, though a not-for-profit.  It is a large provider of private, paid medical services in our area.  It, out of all of its competitors in town, both non-profits and for-profits, was chosen by Congress to get its medical records system upgraded by the US taxpayers, why?

Challenging Every Earmark

Senator Coburn, now with John McCain in partnership, are going to challenge every single earmark in the Senate:

In short, Senators McCain and Coburn announced their
commitment to challenge each and every earmark on the floor of the
Senate. In addition to challenging each and every pork project,
Senators Coburn and McCain will also oppose the inclusion in conference
reports of any earmarks that did not pass either the House or Senate.

As
stated in the letter, the practice of inserting earmarks into
conference reports at the last minute "stifles debate and empowers
well-heeled lobbyists at the expense of those who cannot afford access
to power. Decisions about how taxpayer dollars are spent should not be
made in the dark, behind closed doors."

Good.  And with McCain's backing, it may work.  I say this because, for a variety of reasons, McCain has somehow become the "instant moral authority" of the Senate, bringing instant legitimacy and media attention to any issue he jumps on.  I am not sure, for example, that the egregious Campaign Finance Reform Act would have passed without his imprimatur.

Apparently, the defense de jour by pork-loving Senators is to make the claim that "well, earmarks are trivial compared to non-discretionary spending so let's focus on those larger buckets of cost." 

A couple of thoughts.  First, if the Senate can't control spending on bridges serving 50 people, they are never going to do it on Social Security.  Second, this is very disingenuous, since Congress has had years to address these other issues, and all they have done is increase (via the disastrous drug benefit) the costs of these programmed expenses rather than reduce them.  They gave up mid-stream, for example, on doing anything with Social Security.  Third, now is the time to strike while public attention is focused on these practices.  In particular, the current lobbying scandals put special focus on earmarking, since discretionary spending is order of magnitudes more susceptible to political corruption than are the programmed expenses.

The New Huey Long

Rep. Don Young (R-AK) is vying to become the new Huey Long.  As head of the House transportation and infrastructure committee, he is in prime position to bring home massive, unnecessary infrastructure projects to his district.  Huey Long, former emperor governor of Louisiana, is justly famous for acquiring funds to build some spectacularly unnecessary bridges over the Mississippi above and below New Orleans.

Representative Young seems to be headed for the same achievement.

If Rep. Young succeeds, tiny Ketchikan, Alaska, a town with less than 8,000 residents (about 13,000 if the entire county is included) will receive hundreds of millions of federal dollars to build a bridge to Gravina Island
(population: 50). This bridge will be nearly as long as the Golden
Gate Bridge and taller than the Brooklyn Bridge.

The Gravina
Bridge would replace a 7-minute ferry ride from Ketchikan to Ketchikan  Airport on Gravina Island. Project proponents tell the public that the bridge is a transportation necessity, though the ferry system adequately handles passenger traffic between the islands, including traffic to and from the airport.1  Some herald the project as the savior of Ketchikan because it will open up land on Pennock Island to residential development, despite the fact that Ketchikan's population has been shrinking.

Taxpayers for Common Sense have a great article here on how the whole earmark thing works.  Here is just a taste:

By the time
this is over, Congress will have packed this with a record level of transportation pork. The political formula was simple: $14 million was the minimum for every district. Anybody who sits on the Transportation and Infrastructure Committee can expect $40-60 million, and House
and committee leadership will get $90 million or more.

If you look at it on a per capita basis,  the highest per capita earmark spending is ... in the home state of the committee chairman, Young (gee, what a weird coincidence):

In total dollars,
California is the biggest winner so far with nearly $1.4 billion in earmarks. Delaware receives the smallest share, with only $12
million. On a per capita basis, however, Alaska wins going away.
Based on the $722 million in earmarks for Alaska in the bill's current
version, $1,151 would be shipped north for every man, woman, and child in the state. Rep. Young's isn't done yet, however, and before this bill is law, Alaska's share of earmarks will likely increase
even more. Alaska did nearly as well last year; during the failed
attempt to pass a transportation bill, Rep. Young secured nearly
$600 million for Alaska, including $375 million for two bridge projects, Gravina Access project in Ketchikan and the Knik Arm Crossing in Anchorage.

Update: Via the Club for Growth, comes this related story of the $1.5 million bus stop in Anchorage.

Tom Wilson is faced with a problem many city administrators would envy: How to
spend $1.5 million on a bus stop.

Wilson, Anchorage's director of public transportation, has all that money for
a new and improved bus stop outside the Anchorage Museum of History and Art
thanks to Republican Sen. Ted Stevens (news,
bio,
voting
record
) "” fondly referred to by Alaskans as "Uncle Ted" for his prodigious
ability to secure federal dollars for his home state....

The bus stop there now is a simple steel-and-glass, three-sided enclosure.
Wilson wants better lighting and seating. He also likes the idea of heated
sidewalks that would remain free of snow and ice. And he thinks electronic signs
would be nice....

"We have a senator that gave us that money and I certainly won't want to
appear ungrateful," he said. At the same time, he does not want the public to
think the city is wasting the money. So "if it only takes us $500,000 to do it,
that's what we will spend."

That is still five to 50 times the typical cost of bus stop improvements in
Anchorage.

Jeff Flake Finds More Pork

Arizona has a history of producing some fairly libertarian politicians, and our Congressman Jeff Flake fits that mold.  Via the Club for Growth, Flake points out some more egregious pork:

Washington, D.C. - Arizona Congressman Jeff Flake, who represents the state's Sixth District, today highlighted another pork project contained in the massive omnibus spending bill that Congress passed late last year.  This week's egregious earmark: $1.5 million for a demonstration project to transport naturally chilled water from Lake Ontario to Lake Onondaga.