President Trump used his recent State of the Union address to make a case for a substantial investment in infrastructure. One word he wisely did not use was “earmark.” Earmarks are special projects members of Congress slip into spending bills that are often allocated on the basis of politics rather than merit.
In his speech the president said, “Tonight, I am calling on the Congress to produce a bill that generates at least $1.5 trillion for the new infrastructure investment we need. Every Federal dollar should be leveraged by partnering with State and local governments and, where appropriate, tapping into private sector investment – to permanently fix the infrastructure deficit.”
Reviving earmarks would be like opening a bar tab for a bunch of recovering alcoholics. Earmarks are not the solution. In fact, they’re the problem. In no other area of the budget is this more obvious than transportation.
Between 1994 and 2006 the number of congressional earmarks quadrupled from 4,000 to 16,000. Alarmed by the rapid growth of earmarks, then Senator Tom Coburn asked the Department of Transportation to assess the impact of earmarks on transportation projects across the nation. Not surprisingly, the impact was not positive.
In 2007, the DOT Inspector General found that earmarks diverted funding from higher priority projects to lower priority projects. This practice helped create the nation’s backlog of structurally deficient bridges, which now exceeds 60,000.
The report noted the following (emphasis added):
High Priority Projects. Did earmarks reduce funding for the states’ core transportation programs? Yes. Are many low priority earmarked projects being funded over higher priority projects? Yes. Are some earmark projects being funded that would otherwise be ineligible? Yes.
In other words, earmarks effectively cut funding for high priority projects and acted as a roadblock to economic growth.
Observers often forget that Coburn’s amendment to stop the Bridge to Nowhere in Alaska in 2005 wasn’t an amendment to cut spending per se but to redirect spending from a low priority project (the Bridge to Nowhere) to a higher priority project – a bridge in Louisiana that had been damaged by Hurricane Katrina. Coburn’s aim wasn’t to merely rail against spending but to expose the corruption of priorities in Congress. Senators were livid about being called out in this way, which explains Ted Steven’s volcanic “No!” speech when asked if thought it was appropriate for members of Congress to choose between earmarks in different states. Many senators viewed this the horror of hard choices.
History proved Coburn right about the harm of earmarks.
The 2007 DOT IG study was followed by a 2010 study from Harvard Business School that showed earmarks hurt rather than help local economic development, even in areas represented by prolific porkers. The study again confirmed common sense: members of Congress don’t allocate scarce resources as efficiently as the free enterprise system. Consumer choice does more to drive innovation than political ego.
Joshua Coval, one of the study’s authors, said, “It was an enormous surprise, at least to us, to learn that the average firm in the chairman’s state did not benefit at all from the unanticipated increase in spending.”
The size and scope of President Trump’s infrastructure plan will, and should, be debated vigorously. One fact that history has made clear is that earmarks helped create the problem the problem the president is now eager to solve.