Cinn Daz Blog

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A great gift

It’s old news that the Republicans won the US House of Representatives, while the Democrats kept control of the US Senate. The new Republican mantra is to cut, cut, taxes for everyone. And, also reduce the growing national debt by eliminating ‘wasteful’ practices such as Congressional earmarks.

Congressional earmarks are a long time practice, where individual members of Congress insert specific language in bills to fund specific projects in their districts or state. Once the bill is passed by Congress and signed by the President, the ‘earmarked’ project is funded and cannot be altered by the President, Congress or the bureaucrats who implement the passed bill. Common earmarks are for roads, sewer plants, airports and similar infrastructure projects.  Successful Congressional “earmarkers” such as the late Senator Robert Byrd used this process for all sorts of other projects. A USDA fruit experiment station is one example.  The ‘bridge to nowhere’ in Alaska is another commonly used example of why earmarks are bad.

In reality, earmarked projects account for only one percent of the Federal budget. Eliminating them will do little to balance the Federal budget. Only by raising taxes can that goal be achieved.  David Stockman, President Reagan’s budget director, has said as much. Eliminating some or all of the taxes cuts pushed through by the Bush administration is the easiest way to raise taxes. Doing nothing, which is easy for Congress, will allow all of our taxes to go up in January.

However, we are still in a deep recession and stimulating consumer spending is a major goal. Raising taxes will not help. President Obama & the Democrats want to raise taxes only on those earning more than $200,000 a year. A rather comfortable salary in my opinion. Republicans want their super rich friends to also keep their reduced tax rates, which are set to expire. They will probably prevail.

Budget cutting will be the game in the new Congress.  Programs unpopular with Republicans will be attacked. These include NPR, the new health insurance program (which is not yet implemented) , and other long term Republican targets such as social security and medicare.  Military spending, a major part of the Federal budget, will probably not be touched.

Back to earmarks. If Congress passes bills without earmarks, then someone else will get to decide who gets the new roads, etc. It could be done by the Obama administration, or specific projects could be inserted by Congressional committees, or the Congress as a whole.  All the politicking to get specific projects funded will just shift to a different level.  Back room deals & ‘horse trading’ will still go on. You support my road & I will support your sewer plant.

In the end, little will change. However, Republicans will claim credit for eliminating earmarks, while ignoring that the same earmarking actually continues at a different level. It may  be the committee chairmen who do the negotiating, rather than individual congressman. I doubt that congress will grant the Obama administration that power to decide who gets the roads, etc.