Earmarks have long been a favorite bogeyman here in D.C. – as examples of wasteful government spending and back-door deal making. The recent election results have only increased the scrutiny they receive. Promising not to seek earmarks is one way for members to earn anti-establishment bona fides, and many newcomers in particular are demanding an end to the practice. While reforming earmarks can be beneficial as a symbolic measure showing voters that Congress is serious about being more transparent and responsible, by itself it will not lower the federal budget deficit. Earmark reform will be most effective if it initiates broader reforms that improve the dysfunctional budget and appropriations process and facilitate the move to fiscal sustainability.
Banning earmarks will have no impact on getting our deficits and debt under control. The total amount earmarked in a given year is generally no more than 1 percent of the entire federal budget. But perhaps more importantly, from a budget point of view, reducing earmarks does not reduce spending. Funds spared from earmarking wouldn’t simply remain in the federal treasury; they are already part of the annual pot of money that is slated to be spent, and certainly would be spent elsewhere if there were no such thing as earmarks.
There are many more important steps reformers could take if they are serious about getting our fiscal house back in shape. The Peterson-Pew Commission on Budget Reform has spent the past two years studying ways that budget process reforms could lead to a more sustainable level of debt. Its new report, Getting Back in the Black, offers detailed recommendations to enhance federal budgeting.
Lawmakers eager to attack the deficit have plenty of other rich targets. Tax expenditures cost about $1 trillion a year in hidden spending, and by 2020 we project spending nearly 12 percent of GDP (almost $3 trillion) on heath care and Social Security combined. We offer ideas for tackling those issues here. For an idea of the magnitude of the problem we face in improving the fiscal outlook, take a spin through our budget simulator, where we challenge you to stabilize the federal debt at 60 percent of GDP by 2018 (you can even choose to cut earmarks).
Earmark reform is a good start, but stopping at earmarks alone is like providing treatment solely for an ear infection when the whole body is afflicted. Earmarks should be considered in the larger context of overhauling the budget process.