In 2006, Republican earmark scandals helped Democrats re-capture control of the House of Representatives.  Speaker Nancy Pelosi promised to address the “culture of corruption” by introducing earmark reforms on Congress’ opening day. How have those reforms turned out?

Progress is hard to identify, with the House’s just-passed (with no Republican votes) omnibus spending bill including over 5,000 earmarks worth almost $4 billion, and the military spending bill expected to add more than that.  And all that is offered as justification are recycled invalid arguments.

A major justification is that earmarked projects stimulate the economy.  For example, Rep. Sam Farr (D-Carmel) defended $800,000 for the Monterey Bay Sanctuary Scenic Trail as stimulating tourism.  Beyond the question of whether it will actually boost local tourism, increases would come at the expense of tourism elsewhere, with little net effect on the economy.  Stimulation of some areas at the expense of others does not stimulate the economy as a whole.

The economic stimulus misrepresentation is compounded with others.  Earmark backers claim they increase jobs.  Government spending does create jobs where it is spent, but those same resources, spent elsewhere, would have created other jobs. The government has not created jobs—it has only moved them. The resources taken from others to finance the spending destroy jobs elsewhere. Similarly, claims of government spending generating multiplier effects ignore that the resources taken from others will have multiplied negative effects as well.  And jobs and income are double-counted as if both were benefits, even though jobs are actually the burdens that must be done to earn the incomes.

Earmarks are defended as allowing localities a voice in spending priorities.  But if projects’ benefits are local, that argument does not support federal earmarks funded by others--it implies that they should be both locally planned and locally paid for.  If worthwhile, residents would be willing to finance them from their own pockets.  They would not require forcing others to pay. 

Another earmark defense is that they are “a way to show constituents that they are getting something for their taxes.”  But if projects locals would not pay for themselves are the best politicians can show in return for their taxes, it doesn’t demonstrate federal benevolence; it proves people don’t get their money’s worth from Washington.

Politicians also justify earmarks as a “small” part of spending bills or as smaller than some previous abuses.  But routinely wasting billions of taxpayer dollars is not a small failing from those pledged to be our representatives.  And if earmarks are justifiable, there is no reason to argue they are small; that defense is only necessary when they are not.

Earmarks are also defended because, despite some waste, “they do a lot of good.”   Unfortunately, that is not the relevant standard, because the social cost of a dollar of government spending is far greater than a dollar. Taxes create a wedge between buyers’ valuations of goods and services and what sellers retain, eliminating many jointly productive activities. For example, a 30% income tax rate would eliminate arrangements worth $100 to a buyer, but costing more than the $70 the seller would keep after taxes.  Substantial wealth creation disappears, creating a huge additional cost of government spending.  So the relevant standard for earmarks is not that they do some good or even that they are as worthwhile as individuals’ spending choices; they must be substantially more beneficial.  Earmarks that are shielded from effective voter scrutiny and cannot meet even the heavily marbled criteria of the regular budget process fail that test. 

With earmarks, politicians exchange the power to extort others for allowing others to extort their constituents in turn--special interest largesse that sells out Americans’ general welfare, whose defense is legislators’ central task.  Their persistence and the flimsy excuses offered reveals just how seriously Democrats have taken their promises to eliminate the culture of corruption they represent.