Earmark Reform

In his March 16, 2009 column “More Earmarks – Less Government” Ron Paul explains how earmarks increase transparency by assigning funds (that would otherwise be spent by secretive bureaucrats) to a specific and fully accountable purpose:

If a congressman does not submit funding requests for his district the money is simply spent elsewhere. To eliminate all earmarks would be to further consolidate power in the already dominant executive branch and not save a penny. Furthermore, designating how money is spent provides a level of transparency and accountability over taxpayer dollars that we don’t have with general funds. I argue that all spending should be decided by Congress so that we at least know where the money goes. This has been a major problem with TARP funding. The public and Congress are now trying to find out where all that money went. More…

On March 10, 2009, Ron Paul spoke on the House floor about the true nature of earmarks and how all spending should be “earmarked”, i.e. we should know how our money is being spent:

Transcript

Ron Paul: Thank you, Madame Speaker. I would like to address the subject of earmarks today. I think there is a lot of misunderstanding here among the members about exactly what it means to vote against an earmark. It’s very popular today to condemn earmarks and even hold up legislation because of this.

The truth is that if you removed all the earmarks from the budget you would remove 1% of the budget. So there’s not a lot of savings. But, even if you voted against all the earmarks, actually, you don’t even save the 1% because you don’t save any money. What is done is those earmarks are removed and some of them are very wasteful and unnecessary, but that money then goes to the executive branch.

So, in many ways what we are doing here in the Congress is reneging on our responsibilities. Because it is the responsibility of the Congress to earmark. That’s our job. We’re supposed to tell the people how we’re spending the money. Not to just deliver it in the lump sum to the executive branch and let them deal with it. And then it’s dealt with behind the scenes. Actually, if you voted against all the earmarks there would be less transparency. Earmarks really allow transparency and we know exactly where the money is being spent.

You know, the big issue is the spending. If you don’t like the spending, vote against the bill. But the principle of earmarking is something that we have to think about because we’re just further undermining the responsibilities that we have here in the Congress. And if we want to get things under control it won’t be because we vote against an earmark and make a big deal of attacking earmarks because it doesn’t address the subject.

In reality what we need are more earmarks. Just think of the 350 billion dollars that we recently appropriated and gave to the Treasury Department. Now everybody is running around and saying, “We don’t know where the money went, we just gave it to them in a lump sum”. We should have earmarked everything. It should have been designated where the money is going. So instead of too many earmarks we don’t have enough earmarks. Transparency is the only way we can get to the bottom of this and if you make everything earmarked it would be much better.

The definition of an earmark is very, very confusing. If you would vote to support the embassy in Baghdad which came up to nearly a billion dollars, that’s not called an earmark. But if you have an earmark for a highway or a building here in the United States, that is called an earmark. But if you vote for a weapons system, it would support and help a district and that’s not considered an earmark. When people are yelling and screaming about getting rid of earmarks, they’re not talking about getting rid of weapons systems or building buildings and bridges and highways in foreign countries. They only talk about [earmarks] when it is designated that certain money will be spent a certain way in this country.

And, ultimately, where we really need some supervision and some earmarks are the trillions of dollars spent by the Federal Reserve. They get to create their money out of thin air and spend it. They have no responsibility to tell us anything. Under the law they are excluded from telling us where and what they do. So we neglect telling the Treasury how to spend TARP money and then we complain about how they do it.

But just think literally: the Treasury is miniscule compared to what the Federal Reserve does. The Treasury gets hundreds of billions, which is huge, of course, and then we neglect to talk about the Federal Reserve where they are creating money out of thin air and supporting all their friends and taking care of certain banks and certain corporations. And this, to me, has to be addressed.

I’ve introduced a bill, and it’s called H.R. 1207, and this bill would remove the restriction on us to find out what the Federal Reserve is doing. Today, the Federal Reserve under the law is not required to tell us anything. So, all my bill does is remove this restriction and say, “Look, the Federal Reserve, you have a lot of power, you have too much power, you’re spending a lot of, you’re taking care of people that we have no idea what you’re doing, we in the Congress have a responsibility to know exactly what you are doing”.

This bill, H.R. 1207 will allow us, for once-and-for-all, to have some supervision of the Federal Reserve. They’re exempt from telling us anything and they have stiffed us already. There have been lawsuits filed over the Freedom of Information Act. Believe me, there’re not going to work because the law protects the Federal Reserve. The Constitution doesn’t protect the Federal Reserve, the Constitution protects the people and allows them to know exactly what is going on. We should enforce the Constitution. We should not enforce these laws that protect a secret bank that gets to create this money out of thin air.

So the sooner we in the Congress wake up to our responsibilities, understand what earmarks are all about, and understand why we need a lot more earmarks, then we will come to our senses. We might then have a more sensible monetary and banking system instead of the system that has brought us to this calamity. So the sooner we realize that, I think it will be better for the taxpayer.

On April 10, 2008, Ron Paul gave the following speech before Congress:

Ron Paul: Madame Speaker, abuses of the earmark process by members of both parties demonstrate the need for reform. However earmarks are hardly the most serious problem facing this country. In fact, many, if not most of the problems with earmarks can be fixed by taking simple steps to bring greater transparency to the appropriations process. While I support reforms designed to shine greater sunlight on the process by which members seek earmarks, I fear that some of my colleagues have forgotten that the abuses of the earmarking process are a symptom of the problems with Washington, not the cause. The root of the problem is an out-of-control federal budget. I am also concerned that some reforms proposed by critics of earmarking undermine the separation of powers by eroding the constitutional role Congress plays in determining how federal funds are spent.

Contrary to popular belief, adding earmarks to a bill does not increase federal spending by even one penny. Spending levels for the appropriation bills are set before Congress adds a single earmark to a bill. The question of whether or not the way the money is spent is determined by earmarks or by another means does not effect the total amount of spending.

Since reforming, limiting, or even eliminating earmarks does nothing to reduce federal spending, I have regarded the battle over earmarks as a distraction from the real issue– the need to reduce the size of government. Recently, opponents of earmarks have embraced an approach to earmark reform that undermines the constitutional separation of powers by encouraging the president to issue an executive order authorizing federal agencies to disregard congressional earmarks placed in committee reports.

Since the president’s executive order would not reduce federal spending, the practical result of such an executive order would be to transfer power over the determination of how federal funds are spent from Congress to unelected federal bureaucrats. Since most earmarks are generated by requests from our constituents, including local elected officials, such as mayors, this executive order has the practical effect of limiting taxpayers’ ability to influence the ways the federal government spends tax dollars.

Madame Speaker, the drafters of the Constitution gave Congress the powers of the purse because the drafters feared that allowing the branch of government charged with executing the laws to also write the federal budget would concentrate too much power in one branch of government. The founders correctly viewed the separation of law-making and law-enforcement powers as a vital safeguard of liberty. Whenever the president blatantly disregards orders from Congress as to how federal funds should be spent, he is undermining the constitutional separation of powers.

Congress has already all but ceded its authority to declare war to the executive branch. Now we are giving away our power of the purse. Madame Speaker, the logical conclusion of the arguments that it is somehow illegitimate for members of Congress to control the distribution of federal funds in their district is that Congress should only meet one week a year to appropriate a lump sum to be given to the president for him to allocate to the federal government as he sees fit.

Madame Speaker, all members should support efforts to bring greater transparency to the earmarking process. However, we must not allow earmarking reform to distract us from what should be our main priority–restricting federal spending by returning the government to its constitutional limitations. I also urge my colleagues not to allow the current hysteria over earmarks to justify further erosion of our constitutional authority to control the federal budget.