Advertisement
Politics

Why Not a Ban on Tax Earmarks, Too?

The good, the bad and the ugly about the GOP’s temporary, nonbinding and limited earmark ban.

Like almost anything else, earmarks can be good or bad, depending on how they’re used or misused -- and where the judge happens to sit.

The Tea Party push to ban earmarks -- now endorsed by the GOP Senate and House leadership and President Obama -- is a significant step. Earmarks, defined officially as congressionally directed spending, are funds carved out for a specific project and thereby help a given company or community. Earmarks can lead to all sorts of evils, and they’ve become symbolic of what’s wrong with Washington. Eliminating them, at least in the present political climate, is a savvy move that also makes political sense. That’s why so many are jumping on the bandwagon.

Advertisement - Article continues below

But make no mistake, the effect of the so-called ban being pushed this week will be limited at best. For starters, earmarks added up to less than $16 billion of the fiscal 2010 federal budget -- about 1 percent. And the ban adopted by Republicans is nonbinding. Plenty of senior lawmakers (i.e., those who have worked hard to win plum assignments just so they can claim earmarks) are unwilling to sign on. Sen. Richard Lugar (R-IN) is one. He argues that the ban won’t save money and are really just a way of avoiding the tough decisions that are necessary to reduce the deficit. More GOP lawmakers will chafe at the ban if congressional Democrats continue to secure their own earmarks, in some cases gaining a political advantage. While voters dislike earmarks in the abstract, a Pew Research Center poll shows that by a margin of 4-1 they are more likely to vote for a representative who brings home the bacon.

Advertisement - Article continues below
Advertisement
Advertisement - Article continues below

Eschewing earmarks will also upset lobbyists. They contribute big bucks to lawmakers in part so they have a seat at the table to push earmarks that help the companies they represent. They’re not happy with the proposed ban, and if they start withholding contributions, how will lawmakers react? Already, a group of 50 companies and business groups wants an exemption to exclude tariffs from the ban, arguing they’re different because they don’t cost taxpayers money. (Tariffs do, of course, cost consumers money by leading to higher prices for imports.)

Of more interest, at least to me, is that while Republicans are attacking earmarks in spending bills, no one is talking about those that get inserted into tax bills. The breaks that make the tax code so complicated are often the result of provisions designed to help a particular industry or even an individual company. Earmarks by another name -- loopholes comes to mind -- but still earmarks. If lawmakers exempt these, the ban will have a hollow ring.

Advertisement - Article continues below

Then there is the whole constitutional question of whether it’s right for Congress to shun earmarks at all. The Tea Party often claims its most important goal is a return to governance according to the Constitution. But Article I of the document assigns Congress control over the nation’s purse strings. Arguably that includes deciding -- specifically -- how money should be spent. Defenders of earmarks have a point when they insist that eliminating them only empowers the administration to spend appropriated monies however it wants, essentially giving the executive branch a hold on one of those purse strings.

So amidst all the bragging about listening to (some) voters and banning (some) earmarks, keep in mind that it’s far from the kind of action that might actually reduce the role of lobbying and the influence of big campaign contributions and make a dent in the deficit. And it may take the nation further away from -- not closer to -- the intent of the Founding Fathers.

Advertisement
Advertisement

Most Popular

What Trump's Payroll Tax Cut Will Mean for You
Tax Breaks

What Trump's Payroll Tax Cut Will Mean for You

President Trump issued an executive order to suspend the collection of Social Security payroll taxes. How much will it save you?
August 10, 2020
What a Payroll Tax Cut Would Mean for You
Tax Breaks

What a Payroll Tax Cut Would Mean for You

If Congress can't pass another stimulus bill, President Trump says he will initiate a payroll tax cut by executive order. How much would that save you…
August 8, 2020
Drawing Down Retirement Savings in a Pandemic
Coronavirus and Your Money

Drawing Down Retirement Savings in a Pandemic

Tapping the right accounts at the right time matters. Knowing how much a retiree can spend each year without running out of savings in old age is even…
August 7, 2020

Recommended

What Trump's Payroll Tax Cut Will Mean for You
Tax Breaks

What Trump's Payroll Tax Cut Will Mean for You

President Trump issued an executive order to suspend the collection of Social Security payroll taxes. How much will it save you?
August 10, 2020
Tax-Free Weekend Dates, States and Savings for Back-to-School Shopping
Tax Breaks

Tax-Free Weekend Dates, States and Savings for Back-to-School Shopping

Sales tax holidays are a great way to save money on clothes, shoes, backpacks, school supplies, and other back-to-school necessities.
August 4, 2020
Sales Tax Holidays in 2020
Tax Breaks

Sales Tax Holidays in 2020

Sixteen states are having sales tax holidays this year. If you plan your shopping around these tax-free periods, you can save big on back-to-school cl…
August 4, 2020
6 Money-Smart Ways to Spend Your Stimulus Check
Tax Breaks

6 Money-Smart Ways to Spend Your Stimulus Check

If you don't have to use your stimulus check for basic necessities, consider putting the money to work for you. You'll thank yourself later.
July 30, 2020