A Washington Post investigation identified dozens of examples of federal policymakers directing federal dollars to projects that benefited their property or an immediate family member. Members of Congress have been enriching themselves at taxpayer expense? In other news, the sun rose this morning.
By design, ethics rules governing Congress are intended to preserve the freedom of members to direct federal spending in their districts, a process known as earmarking. Such spending has long been cloaked in secrecy and only in recent years has been subjected to more transparency. Although Congress has imposed numerous conflict-of-interest rules on federal agencies and private businesses, the rules it has set for itself are far more permissive.
Lawmakers are required to certify that they do not have a financial stake in the actions they take. In the cases The Post examined, not one lawmaker mentioned that he or she owned property that was near the earmarked project or had a relative who was employed by the company or institution that received the earmark. The reason: Nothing in congressional rules requires them to do so, and the rules do not address proximity.
With the fox guarding the henhouse, the most one can hope to accomplish is to limit the carnage. Many pundits, politicians, and policy wonks argue that a permanent ban on earmarks would be an effective limit. Unfortunately, that's just wishful thinking as earmarks are merely a symptom of the real problem: Congress can spend other peoples' money on virtually anything it wants.
In Harrison Township, Mich., Rep. Candice S. Miller's home is on the banks of the Clinton River, about 900 feet downstream of the Bridgeview Bridge. The Republican lawmaker said when she learned local officials were going to replace the aging bridge, she decided to make sure the new one had a bike lane.
A member of the House Transportation Committee, Miller in 2006 was able to secure a $486,000 earmark that helped add a 14-foot-wide bike lane to the new bridge. That lane is a critical link in the many miles of bike paths that Miller has championed over the years. When the bridge had its grand reopening in 2009, Miller walked over from her home.
As a taxpayer, it disgusts me that Rep. Miller steered federal dollars to a project in her district that she personally benefited from. But would I be any better off had the money for a bike path in Harrison Township, Michigan come from a grant awarded by the Department of Transportation?
If Harrison Township wanted a bike path, then it should have been paid for with taxes collected by the appropriate unit of local government. Better yet, a private group could have raised the funds. Either way, I don't see how it's possible to argue that the U.S. Constitution gives Congress the authority to spend taxpayer money on such activities. Invoking the General Welfare Clause doesn't pass the laugh test as the bike path obviously doesn't benefit the rest of the country. The Commerce Clause? Please.
For more on why the federal government should stop subsidizing activities that are properly the domain of the state and local government, see this Cato essay on fiscal federalism.
Much of this spending has gone to local pork projects or allowed state and local governments to avoid the realities of budgeting – spend federal counterterrorism dollars on normal law enforcement requirements while spending the local tax base on unsustainable pensions for public employees. For a tally of this excess, check out the Price of Peril, an interactive map showing homeland security spending by state, courtesy of the Center for Investigative Reporting.
All of this spending isn't without cost to our civil liberties. The recipients of the money have to show something, hence the rise of fusion centers across the nation and the scaremongering reports they produce. There simply aren't enough terrorists to go around.
Two of the people featured in the Frontline report, Mike German of the ACLU (and former FBI agent) and Harvey Eisenberg, Chief, National Security Section, Office of United States Attorney, District of Maryland, squared off at a Cato Institute event in 2009. Check it out here. Pay special attention to Eisenberg's remarks at 53:35, where he misstates the threshold for starting a domestic counterterrorism investigation under the Attorney General Guidelines.
Mike German corrects him – the 2008 guidelines loosened the standard such that agents don't even need a reasonable suspicion of criminal activity to investigate someone. Eisenberg responds that he requires it for all of his investigations. That's admirable, if true, but a bit unnerving that the policy change is news to him.
Nationwide, welfare cases grew by 11 percent from the start of the recession through March, according to the Department of Health and Human Services. In contrast, the number of families getting food stamps jumped by 50 percent and the number getting unemployment benefits more than doubled. Medicaid grew by more than 13 percent from late 2007 to late 2009, according to the Kaiser Family Foundation.
As I've noted before, TANF's tighter work and eligibility requirements have made it a less desirable option for those seeking government assistance. Over the past decade, inflation-adjusted spending on all federal anti-poverty programs has increased by 89 percent. Only TANF saw a decrease in spending.
When TANF replaced the federal government's open-ended entitlement in 1996, it allowed the states great leeway to set benefits. California, which offers more generous benefits than other states, has seen its TANF rolls increase by almost 25 percent since the recession started. In contrast, Michigan and Rhode Island, which have seen a respective 2 percent increase and 10 percent decrease in their welfare rolls, offer less generous TANF benefits.
The variation in TANF enrollment among the states points to the desirability of handing off all responsibility for anti-poverty programs to the states. The beauty of fiscal federalism is that it enables states to pursue policies that better reflect local preferences, while constraining governments because of interstate competition. Federal policymakers should get out of the anti-poverty business as the Constitution intended.
President Obama is proposing giving the states another $50 billion. However, this would amount to another bailout for state and local government employees and their unions. The president claims that more deficit spending is necessary to sustain the nascent economic recovery. But the only thing the money would sustain is the excessive wages and benefits government employees enjoy at the expense of the private sector.
According to the Bureau of Labor Statistics, the average state and local government employee receives 45 percent more in total compensation per hour worked than the average private-sector employee. Perhaps we should cut generous government wages and benefits rather than putting the federal government further into debt?
Total compensation for state and local workers is more than $1.1 trillion a years. So loosely speaking we could simply cut compensation by less than five percent for state and local governments to save the $50 billion they are in need of.
Of more fundamental concern is the continued relegation of the states to being administrative outposts of the federal government. The employment of firefighters, teachers, and police officers is an issue for the states to be concerned with. However, so long as the federal government continues to overstep its constitutional bounds, the states will have little incentive to tackle issues like excessive employee compensation. State and local policymakers can avoid the hassle of taking on the government employee unions by cashing Uncle Sam's checks instead.
It's not a coincidence that the states find themselves in a fiscal bind. The increasing dependency on the federal government has contributed to the states' dereliction of duty when it comes to keeping their fiscal houses in order. As this essay argues, reviving fiscal federalism is critical to getting governments at all levels in the United States to clean up their fiscal messes.