Dash for Cash Is On as Earmarks Return to Washington

By Yuval Rosenberg

Dash for Cash Is On as Earmarks Return to Washington

Banned for more than a decade, earmarks have returned to the
halls of Congress, and lawmakers are wasting no time lining up
their requests.

In recent weeks, more than 300 lawmakers have requested nearly
$21 billion for “member-designated projects,” the new term of art
for earmarks, The Washington Post’s Tony Room and Alyssa Fowers

report. Every House Democrat but one has made a
request in at least one of two spending areas, for a combined total
of $14 billion, and about half of Republicans have done so as well,
for a collective total of $7 billion.

A Republican from Louisiana, Rep. Garret Graves, has made the
largest single request, seeking $955 million for
transportation-related projects in his district, which includes
Baton Rouge. Democrat Kim Schrier of Washington has made the second
largest request, seeking $892 million for highways and bridges in
her district east of Seattle.

Both requests were made for possible inclusion in the highway
funding bill, a five-year law that passed in 2015 and was extended
for one year, expiring at the end of September. Total requests for
the transportation bill have come to nearly $15 billion.

Funding requests are also being made for community projects
overseen by the House Appropriations Committee, which has received
potential earmarks worth $6 billion. Breaking the numbers down by
zip code, the Dallas-Fort Worth area has produced the largest
request (see the chart from
Axios below), with most of the funding to be spent
on improvements at the Dallas-Fort Worth Airport.

Trying to clean up their act: Following scandals
involving improper lobbying and the infamous “bridge to nowhere,”
earmarks developed a reputation for corruption and were banned in
2010. But lawmakers have vowed to keep careful control over the
renewed practice, which could make it easier for Congress to pass
bills on time.

“It will make it much less likely we have government shutdowns,”
Rep. Matthew Cartwright (D-PA) told the
Post. “If you have members [who] have a stake in
the spending package, they’re much less likely to pull a sophomore
prank.”

Ethics experts who reviewed the earmark requests told the Post
that they saw nothing obviously problematic.

Still, not everyone is happy to see earmarks make a comeback.
Citizens Against Government Waste, a fiscally conservative watchdog
group, is identifying requests that it claims are wasteful,
including one for $300,000 to build a dog park in the district of
Rep. Linda T. Sánchez (D-CA).

Sánchez defended her request, telling the Post that the
dog park would “significantly benefit a community growing in
population and already suffering from a lack of green space.”
Adding a more general point, Sánchez said, “Local individuals who
pay federal taxes should have a say in where their money is being
spent.”

Democrats Blow Off GOP's Debt Limit Demands: Report

Democrats and Republicans are sparring over whether they’ll spar
over the debt limit this summer.

The debt limit, the statutory ceiling on government borrowing,
is suspended until the end of July and will need to be raised once
it takes effect again. Senate Republicans last month set the stage
for a showdown over the issue by changing nonbinding, internal
party
rules to demand “an equal or greater amount” of
spending cuts in return for any increase in the debt ceiling.

“Historically, the debt ceiling has proven the most effective
lever point for enacting meaningful spending reforms and structural
reforms,” Sen. Ted Cruz (R-TX) told
Politico.

Sen. Lindsey Graham (R-SC), the top Republican on the Senate
Budget Committee, said Thursday that he’ll look to condition any
increase on budget reforms. “This is an opportunity to come up with
some reforms that will structurally change our debt problem,”
Graham
told reporters. “But I want to be responsible
about it. I mean, we're not going to play chicken here.” One
possible reform: Withholding lawmaker pay until a budget resolution
or annual appropriations are passed.

Senate Republicans tell Politico that there likely aren’t 10
votes in their conference in support of a clean debt limit
increase, one that isn’t paired with spending cuts.

Democrats insist they won’t be drawn into such negotiations.
“The last time Republicans held the debt ceiling hostage they
nearly crashed the global economy,” Sen. Ron Wyden (D-OR), chair of
the Senate Finance Committee, told Politico. “This is a page from
the Obama-era economic sabotage playbook, and I’m not going to let
Republicans play games with the economy for their political
benefit.”

Democrats could try to raise the debt ceiling by again using a
maneuver known as budget reconciliation, which would allow them to
pass a bill with only a simple majority instead of 60 votes, or
they could seek to address the debt limit as part of a spending
package or infrastructure bill — but they’d need all their members
to go along.

The bottom line: Another debt ceiling showdown may be
brewing, though Republicans may not want to play with the threat of
a U.S. default. For now, though, it’s still a showdown over whether
there may be a showdown.


Read the full piece at Politico.

White House Makes the Case for Increased Public Investment

Saying that the time has come for a new framework for fiscal
policy, President Biden’s Council of Economic Advisers issued a
policy brief Friday that lays out its argument for the
multi-trillion-dollar investments the administration has proposed
to make in everything from green energy infrastructure to childhood
education.

“For the past four decades, the view that lower taxes, less
spending, and fewer regulations would generate stronger economic
growth has exerted substantial influence on U.S. public policy,”
the paper says. “Over this period, the United States has
underinvested in public goods such as infrastructure and
innovation, and gains from growth have accrued disproportionately
to the top of the income and wealth distribution.”

The tax cuts passed in 2017 reflected those ideas, the White
House economists say, but failed to deliver the promised benefits
of higher growth and income for ordinary workers. “There has been
no evident impact on investment or growth: gross domestic product
grew 2.4 percent in the two years leading up to the law’s passage
and 2.4 percent in the two years following its passage. Instead,
the tax cuts contributed to inequality by delivering
disproportionate gains to the already well off without the promised
wage gains for the middle class.”

As an alternative, the Biden administration is proposing “an
engaged, effective public sector” to help support a more robust
economy that works for the benefit of both businesses and workers.
Greater federal involvement in research and development,
infrastructure, education and health care can produce lasting
benefits for the population as a whole, the economists said.

Looking for long-term funding: While the policy brief
provides an overview of the Biden administration’s approach to
government involvement in the economy, it says little about funding
Biden’s plans. CEA member Jared Bernstein addressed the issue in an
interview Thursday, telling Bloomberg’s Tracy Alloway and Joe
Weisenthal that the White House wants to fully fund its proposed
programs. “It is the president's view that a longer-term or more
permanent proposals should be paid for,” Bernstein said.

While noting that the federal government may have more wiggle
room when it comes to deficit spending than economists thought in
the past — “There's more fiscal space and there's more political
space to wield that fiscal space,” Bernstein said — he emphasized
that dedicated funding is an important factor to consider when
designing new programs. Programs that stick around tend to have
clearly defined sources of revenue, he said.

“[T]he effects of not having funding sources for permanent
programs show up all the time in their disinvestment and their
insufficient upkeep,” Bernstein said. “By contrast, look at
Medicare and Social Security, which have held up relatively well in
that space because they have dedicated funding sources.”


Read the full White House policy brief here and

Bernstein’s comments here.

Editorial of the Day: A Defense of Biden’s
Revenue Plans

The Washington Post’s Editorial Board
writes that President Biden’s proposed tax
increases on corporations and high-income individuals may not have
gone far enough in raising new revenue — but they “did
strike a blow for two important principles: fiscal responsibility
and distributional fairness.”

Republicans have pushed back on Biden’s proposals — a
response the Post calls “as predictable as it is
hypocritical” — but some Democrats have raised objections as well,
and the Post argues that Democrats “must not chip away” at Biden’s
revenue plans:

“Mr. Biden has appropriately declared himself willing to
negotiate, but he and congressional leaders must stand firmly
against special pleading from within their own party, lest his
plans become bogged down or fail altogether. This will be
difficult, given the Democrats’ razor-thin majorities in both
houses, which means tiny handfuls of lawmakers, or individual ones,
can exercise decisive leverage.
“Mr. Biden’s best bet is to articulate broad principles, such
as pay-as-you-go and tax-code equity, and reject any and all ideas
inconsistent with them. … Mr. Biden has already said he is ‘not
willing to not pay for’ his plans, useful pushback against the
temptation among some Democrats to skip the tough politics of taxes
altogether and put the entire spending boost on the national credit
card.”


Read the full editorial at The Washington
Post.

Just in Time for the Weekend: Budget Games and Quizzes

It’s game time. The Committee for a Responsible Federal
Budget this week released a handful of budget-related games and
quizzes. There’s a “budget
personality” assessment that tells you whether you’re,
say, a “big spender,” a “people pleaser” or a “futurist.” Or you
can test
your federal budget IQ (one of your newsletter authors
took the quiz and got 10 out 10 10 questions right. Excuse us for a
second while we brush this dirt off our shoulder.) You can check
out all five games and quizzes here.

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