The Truth About Waste in Government

By Bernie Horn

Created 10/22/2008 - 9:49am

Summary:

Photo Copyright by EJB. Flickr. John McCain and other conservatives promise to crack down on “earmarks”—federal spending allocated in legislation for a specific project or location. No more bridges to nowhere. That’s great, but it doesn’t add up to much. Want to root out waste in government? Over the past 8 years, you’d do better to look at the Iraq war, subsidies for big corporations, waste and fraud in the Pentagon’s budget, and tax breaks for the rich.

The Politics:

John McCain and other conservatives promise to crack down on “earmarks”—federal spending allocated in legislation for a specific project or location. No more bridges to nowhere. That’s great, but it doesn’t add up to much. Want to root out waste in government? Over the past 8 years, you’d do better to look at the Iraq war, subsidies for big corporations, waste and fraud in the Pentagon’s budget, and tax breaks for the rich.

Fast Facts:

Compared to the total federal budget, earmarks are a drop in the bucket. The McCain campaign concedes that cutting all earmarks would save only $18 billion of a $3 trillion federal budget (not including the $750 billion Wall Street bailout package or another federal stimulus). [Reuters [1], Infoplease [2]] The value of all earmarks combined equals about one-half of one percent of federal spending.

Not all earmarks are wasteful. An earmark is a spending project that is specified by Congress, rather than being left to the discretion of a federal agency or government official. Some earmarks are wasteful, some preposterous, some corrupt—but plenty are not. For example, in the 2008 defense appropriations bill, $240 million was earmarked to fund cancer research. [H.R. 3222 [3]] The 2008 appropriations bill for the Departments of Labor, Health and Human Services, and Education included $282 million in earmarks for schools, hospitals and social programs. [H.R. 3043 [4]] Over $100 million was earmarked in 2008 for state universities. [OMB [5]] Little of this spending is wasteful. Confronted with these and other examples, John McCain says he opposes the process, not the specific appropriations. Which means that his changes would save a lot less than $18 billion.

Republicans are behind the exponential growth of earmarks. In 1994, just before Republicans took control of Congress, there were only 1,300 earmarks enacted, totaling about $7.8 billion. By 2006, the last year of Republican control, there were almost 10,000 earmarks, costing taxpayers $29 billion. After Democrats regained control of Congress in November 2006 the total cost of earmarks was cut by nearly half, to about $17 billion. [Citizens Against Government Waste [6]]

Even Senator McCain has supported earmarks. In 2006, McCain cosponsored a bill earmarking $10 million for the Rehnquist Center at the University of Arizona. In 2003, he wrote and passed an earmark to buy property around the Luke Air Force Base in Arizona. [PolitiFact [7]] Similarly, as mayor of Wasilla, Sarah Palin hired a lobbyist to secure millions of dollars in federal earmarks, and as governor of Alaska she supported the infamous $450 million “bridge to nowhere.” [Los Angeles Times [8]]

The Argument:

Want to save money? Go where the money is. The most wasteful uses of government funds are the Iraq war, corporate subsidies, overruns in the Pentagon budget, and tax breaks for the rich.

So far, the federal government has authorized $656 billion for the Iraq war. The war now costs more than $12 billion every month and $416 million every day. [Congressional Research Service [9]] Ending this war—which has emboldened our enemies, isolated us from our allies, empowered Iran, and distracted us from pursuing bin Laden in Afghanistan—would save more in two months than eliminating all earmarks would.

The federal government wastes nearly $100 billion a year on direct and indirect subsidies to profitable businesses, including corporations engaged in mining, oil and gas drilling, pharmaceutical marketing, selling telecommunications services, and manufacturing military arms. [Kiplinger [10]]

The Pentagon is infamous for being the largest source of waste, fraud and abuse in the federal government. The Pentagon’s books are in such bad shape that none of the services can pass an independent audit. The Pentagon can’t keep track of what it has bought, of whom it has paid, of what it owes or is owed. Year after year, the Government Accountability Office finds the Pentagon guilty of egregious financial mismanagement. [San Francisco Chronicle [11], Boston Globe [12], New York Times [13]]

Bush’s tax cuts wasted hundreds of billions of dollars by giving money to the very richest Americans. Over a 10-year period, the Bush tax cuts transfer almost $1 trillion to the wealthiest 5 percent of Americans, with $715 billion of that going to the wealthiest one percent. [Citizens for Tax Justice [14]] With the slowest economic recovery and the lowest job production rate of any recovery since World War II, the tax breaks didn’t work as planned. If we had invested that money in clean energy and modern infrastructure, we would have generated more jobs and a stronger economy.

Progressive Solutions:

Progressives want government to work. That requires inspiring talented people to come into government. It requires reforming government, cracking down on waste, and eliminating programs that don’t work.

But the government’s problems stem from bad priorities and bad management, not just bad earmarks. No one will defend earmarks—except the communities that benefit from them. But let’s not overlook the forest of waste for a few trees labeled “earmarks.” The real problem with government spending is that hundreds of billions of dollars have been wasted on a misbegotten war, unjustified subsidies, a Pentagon that is simply unmanageable, and tax breaks for the rich. If you want to save taxpayers real money, those are the places to start.

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Links:
[1] http://www.reuters.com/article/politicsNews/idUSTRE49K0BH20081021
[2] http://www.infoplease.com/ipa/A0873746.html
[3] http://dpc.senate.gov/dpc-new.cfm?doc_name=lb-110-1-161
[4] http://www.ourfuture.org/%3Cbr
[5] http://earmarks.omb.gov/2008-appropriations-by-agency/agency_title/bureau_title/[018].[40]_summary.html
[6] http://www.cagw.org/site/PageServer?pagename=reports_pigbook2006
[7] http://www.politifact.com/truth-o-meter/statements/719/
[8] http://www.latimes.com/news/politics/la-na-earmarks3-2008sep03,0,2482434.story
[9] http://www.fas.org/sgp/crs/natsec/RL33110.pdf
[10] http://www.kiplinger.com/businessresource/summary/archive/2007/Slivinski_Corporate_Cato.html
[11] http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2003/05/18/MN251738.DTL
[12] http://www.boston.com/news/nation/washington/articles/2005/07/15/gao_investigator_rips_pentagon_on_iraq_war_finances/
[13] http://www.nytimes.com/2008/04/01/washington/01weapons.html?ref=us
[14] http://www.ctj.org/pdf/gwbdata.pdf