Are earmarks having a renaissance? Is the new system actually built for transparency and accountability?  And will President Biden’s real FY ’22 budget please step forward? Budget Watchdog AF Host Steve Ellis is joined by TCS Senior Policy Analysts Josh Sewell and Wendy Jordan for an episode that cannot be missed. Welcome to all American Taxpayers seeking common sense. You’ve made it to the right place!

Listen here or scroll down for a transcript.

Steve Ellis:
Welcome to all American taxpayers seeking common sense. You’ve made it to the right place. For over 25 years TCS, that’s Taxpayers for Common Sense, has served as an independent non-partisan budget watchdog based in Washington, DC. We believe in fiscal policy for America that is based on facts. We believe in transparency and accountability, because no matter where you are on the political spectrum, no one wants to see their tax dollars wasted. It’s May 26, and what’s old is new again in Congress when it comes to earmarks. For the first time in a decade, lawmakers again, have the power to request federal dollars to specific projects in their home states and districts. Some call it, “Bringing home the bacon.”

So, what’s new with earmarks this time around? Well, for one, Congress has taken a page out of the Taxpayers for Common Sense playbook. They’ve instituted more transparency with the implementation of publicly accessible databases that catalog exactly what each member is seeking. And, as we’ve proven with our own databases in the past, it is a crucial tool, allowing the scrutiny that identifies trends and potential abuses. But that’s not all of different when earmarks this time around. Joining us to help get you up to speed is TCS Senior Policy Analyst, Josh Sewell. Thanks for jumping in here Josh.

Josh Sewell:
Anything for you, Steve.

Steve Ellis:
That’s what I like to hear. All right, Josh, tell everybody what other guardrails have been erected to keep this new earmark era on the straight and narrow?

Josh Sewell:
Well, first off they aren’t earmarks. They are community project funding requests, at least in the house. So, let’s keep that straight. Now, the Senate websites still refer to them as congressionally directed spending, because earmarks that’s a bad brand.

Steve Ellis:
Got it. Yeah, no. I mean, earmarks became a dirty word. And so, now they start trying to replace one simple term that everybody can understand with convoluted, multi-word descriptions. Good luck with that.

Josh Sewell:
Yeah. Well, whatever you call them, what we have now is a new process where the house and Senate are trying to avoid scandals, or the appearance that lawmakers are using tax dollars for anything other than needed community projects. So, the chair-persons, the chair of the house and the Senate appropriations committees. So, Connecticut representative, Rosa DeLauro and Vermont Senator Patrick Leahy have a new process. And, in that there’s actually more transparency and a limited universe of project requests you can make. So, if you go to the house website, or the house appropriations website, they have a transparency tab, and that’s actually where you can go and find the new rules and some of the disclosures. Senate also has this. Being the Senate, it takes two steps instead of just one, but you can get there too, if you go to under about the committee.

So, for the new earmark process. First of all, it is a limited universe. The Democrats have capped the earmark funds at 1% of the discretionary budget. They’ve limited the accounts eligible for your marks. And each member has a max of 10 requests that they can make across all the appropriations bills. Now, with these requests, they’ve also made them more transparent. So, members have to take some ownership of the requests. So, they have to post a request on their own website. The members must certify that neither they, nor their family members have a financial interest in the project. And, also they can’t go to for-profit entities.

Steve Ellis:
That is a big difference, because certainly where we saw the lion’s share of the funding for earmarks in the past was going to the defense sector and almost all of those, not all, but a lot of them were going to for-profit entities. And so, that’s really cutting out a lot of defense contractors and some lobbyists.

Josh Sewell:
Absolutely. And there’s also one other really important transparency change here is that the government accountability office is now tasked with actually auditing a sample of the earmarks every year and submitting a report to Congress. Basically to make sure that the rules are being followed and to see what’s there.

Steve Ellis:
And podcast listeners, just something to keep in mind too, is that back when they were doing earmarks before, even with some of the transparency measures they were literally just charts in the back of the appropriations documents that we optically scanned to then transfer into Excel documents, had to clean up all the data to figure out who was getting what in these 9,000 earmarks. So now, they’ve actually taken a step of putting it in an Excel document that it’s available to everyone. So, I mean, that is a significant step forward, but it’s still thousands of earmarks that you have to go through. So, speaking of thousands of earmarks, the earmark race is officially underway. What, if anything, do we know exactly how leaders are sifting through the thousands of earmark requests to determine which projects get funded?

Josh Sewell:
We don’t know much. It’s still an opaque process. Again, we do support the transparency. It is helpful to see the universe of requests, but there’s not a lot of pulling back the curtain to see exactly what the leadership or the committee leaders are deciding. Now, there are member days. So, the committees are holding what are known as member days, which allows members of Congress to come down and request different things. It’s not only about earmarks. They can come down and talk about anything for that appropriate committee. So, the house agricultural probes subcommittee has held a member day that I watched. And, there were a number of folks who came down and asked for different things and made their priorities known. And a couple of the members did actually talk about their earmark requests.

Steve Ellis:
So a cattle call? Is that what you’re saying here? A cattle call of lawmakers parading through the appropriations committee, at least virtually?

Josh Sewell:
I would never call a member of Congress a cow.

Steve Ellis:
All right, point taken Josh, point taken. The honorable cow. So, all right. What responsibility falls on groups like us? What responsibility falls on Taxpayers for Common Sense of making sure that this process, this earmark Renaissance, if you would, doesn’t spin out of control?

Josh Sewell:
Well we have to watch it, and we have to dig. We need to do what we used to do in a better way, in many ways. And, it’s not just Taxpayers for Common Sense, it’s anybody who’s interested in making government work a little better. So, first thing is just to watchdog this process. We need to look through the requests… They are available, they’re somewhat enjoyable to read, at times. You can learn about new institutions you didn’t know about, look in to communities you may have never been to. And, it actually is very informative. And so, it’s incumbent upon us to ensure that the rules are being followed. So, “Are those requests on each member’s website? Are they easy or difficult to find?” Because there’s one thing to have transparency and there’s another thing to have transparency. You can say it’s on your site, but if you can’t find it, it ain’t transparency.

And then once the bills are out, that’s where the rubber meets the road. And, that’s where we can do some real evaluation and say, “Is merit or muscle, the determinant of these? And, who gets all 10 of their requests and who gets none?” You can get this analysis once you see what’s there, it’s going to take a lot of watchdogging.

Steve Ellis:
Yeah. One thing I’ve thought about is, is that if you’re limiting them to 10 requests, then just by the sheer numbers there’s 4,350 possible requests. We know many lawmakers are not requesting, particularly among the Republicans. But, when you look at 1% of discretionary spending, that’s about what it was back in fiscal year 2010, the last time we had it. But then, we had more than 9,000 earmarks. So, what we’re possibly going to see is a lot more cash per earmark than we used to see. And then, as you said, you can limit everybody to 10 earmarks, but to paraphrase animal farm, all lawmakers are equal, but some are more equal than others. And so, are some of these the top dogs going to be able to get more funding for their individual earmarks than others?

And, absolutely Josh you’re right. The rubber is going to meet the road when we actually see what gets allocated. Right now, you can ask for whatever you want. Doesn’t mean you’re going to get it. And so, it’s going to be incumbent to see what happens there. So, we’ve been talking really about the appropriations committee and their process, but they’re not the only earmark game in town. What are some of the other committees that are involved in this earmark process and have earmarks?

Josh Sewell:
Well, the big one going on right now is the surface transportation bill, which is the highway bill and mass transit bill, primarily, that’s in house transportations and infrastructure. That committee has already released their bill, and they have an earmark process. And, it’s important to remember that the transportation bill is actually where the Bridge to Nowhere came out. So, the Bridge to Nowhere was a 2005 earmark that was very famous, and Steve can give you hours and hours of commentary on this, because he was actually at TCS when this occurred, I was not. But, it’s pretty much the earmark that put earmarks on the map.

Steve Ellis:
Literally, it’s a bridge–

Josh Sewell:
–to nowhere. So now, the transportation bill earmark process is completely separate from the appropriations process. And that’s important to remember, is that many of these authorizing bills can have earmarks, and in the past did, but they are separated from the appropriations process. And so, they will have separate processes for how to make those requests. Now, what we have seen so far is that in the house transportation bill, about 75% of house members made a request. And, these project requests total $14.8 billion. Now, how those almost 2,500 separate requests pan out. Well, again, we’ll have to see what Chairman DeFazio and ranking member Graves figure out, but there’s also the whole Senate to deal with.

Steve Ellis:
And, here’s where Budget Watchdog AF listeners, my friends, I have to inform you, one of the things to keep in mind is that Taxpayers for Common Sense is who dubbed the Bridge to Nowhere, the Bridge to Nowhere. Before we got on the scene, it was the Gravina Island Access Project, decidedly less sexy name. So, Josh where do we think this will end? I mean, what are the Senate Republicans doing? Their conference is actually on the record for banning earmarks entirely.

Josh Sewell:
So, they are on the record and that’s a position they reaffirmed last month. But not all members are going to follow it. A number of Republican Senators have come out and said, “We’re going to do earmark requests. We don’t care what the conference says.” Including our good friend, Roy blunt of Missouri. And they have explicitly said that they are going to participate. And it’s mainly appropriators, and people like Mr. Blunt, who are retiring. But, others are also undecided. I think, what it comes down to is this is going to be an issue for a long time. Since the earmark moratorium started, you’ve had especially appropriators, but other members wanting to bring them back, trying to come up with a new process. And so, that’s how we got to where we are today.

Now, people are going to dig into this process. People are going to dig into earmarks. Earmarks are a gold mine for people who want to look for corruption, or just something that looks funny, or sounds weird. And so, we’re going to look at it. The press is already digging into it. And so, there’s going to be a lot more oversight from outside of Congress. And hopefully with this new process, more oversight, more restraint, apparently. And hopefully, better projects come out of this process. But I also think it’s really important to remember that, most spending, the drivers of the deficit, the tax code are not directly affected by this process, or even the old earmarking process. So, there’s a lot in that 99% of the budget that ain’t being touched. So, that’s still going to be there and it’s going to be contentious.

Steve Ellis:
Yeah, it reminds me of one of the comments from former appropriations committee chairman David Obey, when he was talking about earmarks on the floor, and he said what he hated about earmarks was that they turned lawmakers into ATM machines for their districts, and that basically there’s no oversight or accountability for the rest of the legislation, they all just pay attention to what they got or didn’t get in their package. And so, we do know that there has to be oversight and accountability and they can’t just get distracted by this shiny object, or they shouldn’t get distracted by this shiny object. And certainly, one of the things that we’ve called for, for years, and thankfully Congress did institute, is this government accountability office, the watchdog arm of Congress actually doing oversight, or looking at some of these earmarks. So every lawmaker knows that there’s could be the one that gets picked by the GAO to look into.

But, we’re going to have to see, this is going to play out over the next couple of years, and I’m sure that everybody’s going to be minding their P’s and Q’s initially, and then we just have to see whether they start slipping or not. Budget Watchdog All Federal listeners, you got a bonus coverage today. We’re going to shift gears here a little bit and segment two, will the real Biden Budget for fiscal year 22, please step forward? As we find ourselves here on the cusp of the Memorial Day weekend, the Biden administration is expected to finally share its full proposed federal budget for fiscal year 2022. If you think this is a little late in the season to be unveiling the president’s full budget request, you’d be right. Joining us now to help get beyond the skinny budget that we’ve already talked about before in a previous podcast is TCS Senior Policy Analyst, Wendy Jordan. Welcome back to the podcast, Wendy.

Wendy Jordan:
Thank you, Steve. It’s good to be back. And you know me, I live to talk about the president’s budget request, and the congressional appropriations process. So, happy to be here.

Steve Ellis:
Great. And we’ll keep Josh along for the ride as well. He’s got some thoughts and opinions. So, by the skin of their teeth, the administration will be able to say they drop their full budget request in May, but not by much. Where does this put Congress in the budget process?

Wendy Jordan:
Well, it puts them late to the party, let me just tell you. The typical sweet spot for appropriations hearings is March. Typically, the budget comes out sometime in February, the administration witnesses start coming up to the appropriations committees and subcommittees in March and testifying. And, that is the natural lead into the markup process, and the orderly process that leads to all 12 appropriations bills being passed prior to October 1st, the beginning of the fiscal year. And Steve, I think you know the answer to this, when’s the last time that happened?

Josh Sewell:
1997.

Wendy Jordan:
Right. As you mentioned earlier, the Biden administration did present a so-called discretionary budget request. Remember Budget Watchdog AF listeners that mandatory spending is a huge, huge portion of the federal budget. So, they gave us the outline of the discretionary budget request last month. And if you want to refresh yourselves on that, we can go to taxpayer.net and read what we wrote about that at the time. There wasn’t much meat on the skinny budget bones, but it did give us a peek into what’s coming up. And, I’m going to talk about the Pentagon request in particular, because that’s what I have to work on. It told us that the discretionary top-line for the Pentagon would be $715 billion. Looking back at the Trump administration’s projections for mandatory spending at the Pentagon in FY-22, they projected 10.6 billion. So, I’m going to consult my crystal ball and say that it looks like the Pentagon top-line will be $725.6 billion, give or take.

Now remember, the Pentagon top-line is not the same as National Security spending, which includes some money from the State Department, some money from the Department of Energy. So, I’m just talking about Pentagon top-line. My crystal ball tells me it’ll be in the neighborhood of $725 billion. The big deal is that in the discretionary budget request statement from OMB, the Office of Management and Budget, they said that the administration would not be requesting any money in OCO, the Overseas Contingency Operations, so-called off budget account, which still added to the deficit. But, supposedly was off budget, which at its height in FY-08 was I think 175 to 180 billion additional dollars for the Pentagon. And, recently it’s been in this 65 to 70 billion range.

So, I feel like I should get one of those bells and run from street to street, like a town crier yelling, “OCO is dead! OCO is dead!” But then, I am reminded of a scene in Monty Python and the Holy Grail, where the guy said “I’m not dead yet.” And, my deepest heart of hearts, I fear that Congress is going to try to do something to re-institute OCO, I hope I’m wrong. But, it was a convenient budgetary safety valve that the Pentagon had, and really… Except for a little tiny bit in State Department nobody else had. But, fingers crossed that common sense, as in textures for common sense will prevail and OCO will actually be dead.

Steve Ellis:
Cheers that you were hearing listeners was us cheering about the OCO being gone. And thanks for the details on the Pentagon budget proposal. What are some of the ideas? Why do we think that this is actually being delayed this much? I mean, we know that obviously there’s been a lot going on is an understatement. But, it does seem like it took a long time to get this in place. Was it because of budget decisions that they were trying to make? Was it because of not having an OMB director? I mean, what do you think, Wendy? I mean, what are some of the reasons that might’ve caused this delay?

Wendy Jordan:
Well, I think that a less than sufficient and fulsome transition period between the two administrations has a lot to do with it. That is a little bit of beating a dead horse there, but it’s a fact, the transition was unlike any other transition. And I think that we are seeing a down stream effect of that. I think also in the Pentagon, again, there was a desire with the senior political appointees and the president, more importantly, to do a scrub of the legacy systems. We’ve read a lot about that. There are a number of, particularly, aircraft programs that the Pentagon has been trying to do away with for a number of years, and congress has been blocking that. And, there was also a review of the nuclear enterprise that was going on, and whether or not to modernize all three legs of the nuclear triad.

Those are all huge drivers of the budget, and huge drivers of not just top-line budget decisions, but not to use an overused phrase, but it’s a trickle down effect that affects all manner of other budgetary decisions within the Pentagon, training, manning, all kinds of things that are affected by whether or not you’re going to retire some legacy systems. So, we are very hopeful Taxpayers for Common Sense that, that has been a real process, that it’s not just a paper drill, that they really are saying, “What’s the strategy? Do we need these systems to meet that strategy?” And, to release a budget that reflects the strategy of the past administration would simply delay a series of decisions that have to be made.

Steve Ellis:
I mean, I think it’s pretty clear to not just listeners, but to everybody that the priorities of a Biden administration are dramatically different than the priorities of a Trump administration. Probably, even a more dramatic shift than we’ve seen in a long time between administrations and what they care about. And, what we’ve always talked about, about budgets is that there are more than just about numbers. They are about priorities and where you choose to invest and where you choose to disinvest. So, I think that’s a very apt point, Wendy. So, looking at the process, and you worked on the hill, isn’t doing the spending bills… We’ve heard that Congress is starting to do hearings and put together their packages. I mean, isn’t doing that for fiscal year 22, the equivalent of getting the cart before the horse. I mean, how do they determine what level to spend?

Wendy Jordan:
Right. Well, again, we’ve had such a bizarrely truncated process, as far as the amount of time that having such a late budget request hit the hill, if you’re going with regular order, the Congress has to have a budget resolution which sets the spending levels for each appropriations subcommittee. That’s the old fashioned way of putting the horse in front of the cart. And, that’s a system that’s been broken down the last few years, but not to get too deep into the budgetary weeds. Congress can simply set the appropriation subcommittee top-lines through another process called deeming, which cuts out the budget resolution from the process. Deeming is a topic for another time, but that is one way you could do it. I think, it is pretty clear that we will have a budget resolution this year. And, the reason I believe that is because to have budget reconciliation, another really nerdy budget issue that a lot of people are talking about these days, you have to have a budget resolution first before you can move to budget reconciliation.

Steve Ellis:
So, before we get to reconciliation. And, what are some of the issues there? I wanted to bring Josh back in, because trust me listeners, it’s going to meet back up, but. So Josh, it’s not like spending hasn’t already been a top priority in 2021. It most certainly has been. You have this $1.5 trillion discretionary spending proposal, but what are some of the things that have been going on, requests and things like that, outside of the regular budget process already that we’ve seen this year?

Josh Sewell:
Well, Congress has clearly been busy this year in spending outside of the budget process. I mean, the first part of this Congress was really overwhelmed by debate on COVID-19 relief. So, you had the American Rescue Plan, which took up a lot of time and energy. And then, almost immediately after that was passed, we moved to president Biden’s proposals for additional infrastructure. So, the American Jobs Plan came out. And then, we had some discussion about the American Families Plan. And now, I saw there was a potential immigration bill, which I believe is called the Coming to America but in Limited Numbers, Under Certain Circumstances Plan. Maybe I made that one last one up, I’m just thinking ahead. But that’s what I would call it.

But in all seriousness, the budget is really important. This process of the president and his administration making a request and then having the hearings, and all the disclosures from the agencies and the members of Congress coming together and looking at those requests is really important because the budget comes with a lot of information. There are reams and reams of data, justifications, how it affects future spending, how it compares to previous budgets. And so, you really need to have all that information to make some good informed decisions about where we need to make investments now and into the future. And also, one thing about any budget request is, it’s guaranteed that something resembling the budget is going to come out. So, at the very least that top-line number of $1.5 trillion in the discretionary, that’s going to be the baseline that they move forward with.

Steve Ellis:
And it is worth noting that just as you said, Josh, I mean, there’s a ton of data that comes along with the budget request that you don’t get for the American Jobs Plan, and you don’t get for the American Relief Plan, or Coming to America starring Eddie Murphy. But now, I want to go back as promised, Wendy, you were about to talk about budget reconciliation. I mean, what is one big reason why they’re definitely going to do a budget resolution so they can get to reconciliation?

Wendy Jordan:
Any budget reconciliation process through the Congress, you must first have a budget resolution. You don’t have that, you can’t do reconciliation. Because what are you reconciling to if you don’t have a resolution? There are a lot of plans that Democrats in the Senate would like to enact, like to bring to fruition, that they’re going to have a hard time unless they can pass them with a bare majority of 51. So, under the Senate rules such as they are now, you need 60 votes to pass most anything. But, one of the things that you can pass with a bare majority is budget reconciliation. So, if you want to do any sweeping enactment of legislation that is the teensiest bit controversial, you need to tag it onto a reconciliation and do it through 51 votes.

Steve Ellis:
Exactly. And we’ve seen this reconciliation, Trojan horse, if you would, to get across the Senate floor with a bare majority used by both parties. We saw it to the modifications to Obamacare Affordable Care Act. We saw it with the 2017 tax cut. We saw it just earlier this year with the American Rescue Plan. And so, I do think, and it’s particularly considering that the Senate parliamentarian that governs the referee of what can be in a reconciliation because it has to deal with spending, or revenue, or the debt ceiling, said that you can have multiple bites at the reconciliation apple. And so, we may see a few times at this as they reconcile their budget resolution.

So, there you have it listeners, the re-introduction of earmarks and a preview of the president’s actual fiscal year 2022 budget proposal. And, what we see happening on the congressional floor going forward this summer and into the fall. Thanks for listening to Budget Watchdog AF, please subscribe and share, and enjoy the Memorial Day holiday. But remember the veterans that made the ultimate sacrifice for our country. Until next time, we’ll remain laser-focused on reading the bills, monitoring the earmarks, and highlighting wasteful programs that poorly spend our money, and shift long-term liabilities to taxpayers.