This past spring I wrote about Washington, DC’s gridlock and the role legislative tools like ‘earmarks’ can play to undo the stoppage. Congress, in a laudable effort to make government more transparent did away with earmarks some time ago arguing, among other things, that eliminating earmarked special projects creates a cost savings.
My retort was and is succinct. Bunk! This spring I wrote the money supposedly saved by eliminating earmarks is “folded back into” agencies’ budgets creating no cost savings.
One reader kindly pointed out that he and perhaps others were unfamiliar with “folding money back into a budget” and additional explanation is warranted. I agree.
To understand “folding money back into a budget” and why eliminating earmarks saves no money whatsoever, it helps to understand how a federal budget is “baked” at all.
There are three main ingredients. First, you need a revenue projection. How much money will the federal government have to spend in a fiscal-year? Of course that figure, like most topics in Washington, DC, is debatable. Depending on how you interpret countless (pun intended) facts, figures, expenditures, contract commitments, unspent funds, over spent accounts, tax cuts, sequestration factors, etc. etc. etc. you arrive at infinite possibilities. For now, let’s agree that creating a revenue projection is as much an art as it is a science and is a topic for a different day.
Second, you need the President’s priorities. The Office of Management and Budget (OMB), a division of the White House, prepares the priorities by communicating with every federal agency to understand their priorities. Through another separate process (another topic for another different day) OMB synthesizes the claimed needs creating the President’s official budget request (Note, it is only a request.) presented to Congress, by law, by the first Monday in February.
Third, to bake a budget correctly, you need a Congressional Budget Resolution. That said, there have been more than a few years in recent past when there was no budget resolution or it’s passed long after the money is doled out. I guess in such years you sprinkle it on top; decoration.
A Resolution is different from legislation, but still runs through the traditional legislative process with a few more rules and requirements. And, you guessed it, discussing the details is better left to a different day! The gist is simple enough. It is an agreed to budget, developed by the House and Senate Budget Committees, considering as much of the President’s requested budget as possible. The House and Senate vote on the compromised budget and presto! The dough (yes, pun intended) is made!
And you thought your mom’s apple turnover took time.
The Budget Resolution delineates how much money each of the 13 Congressional appropriation subcommittees receives. In DC-Speak, the allotments are called “Section 302(b) allocations.” Think of the allocations as the 13 apple turnovers you’re about to bake from that bill ball of Budget Resolution.
The appropriation subcommittees each have jurisdiction over certain federal agencies, ultimately accounting (pun intended) for all, i.e. The Senate and House Transportation, Housing and Urban Development appropriations subcommittees are tasked with passing a law that tells those agencies what they will have to spend and what they will spend it on.
Earmarks (Remember the earmarks?) were always accounted for at the discretion of each appropriations subcommittee. They would decide what percentage of their 302(b) allocation to reserve for earmarked projects. There were “education earmarks,” “transportation earmarks,” “energy earmarks;” you get the picture. Regardless of the type of earmark lobbied, drafted, and included in an appropriations bill no earmarkable dollars were distributed outside of their committees’ jurisdictions. In other words, the House Defense Appropriations Subcommittee could not draft an earmark using the Transportation Subcommittee’s money.
That’s important because when earmarks were disallowed, each appropriations subcommittee was forced to FOLD THEIR OTHERWISE DESIGNATED EARMARK MONIES BACK INTO THEIR 302b ALLOCATION intended for the greater good of the (fill in the blank) federal agencies.
The agencies get their piece of the pie (or apple turnover) no matter what. However, instead of Congress being able to tell the agencies how to spend a small percentage of the dough, the agencies decide how to spend all of it. There is no political influence. There is no grassroots influence. There is no community influence or input.
Simply put, your Member of Congress has less, if any say, about how tax dollars are spent in your Congressional District or State because the small amount of discretionary earmarked funding is folded back into the agencies’ budgets.
by Aaron Grau
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If you have questions please contact Michelle Vezzani at MVezzani@cohenlaw.com or the public affairs professional with whom you work.