Earmarks…

2009/03/04

When I flipped on the news this morning, there were new rounds of commentaries from the talking heads about earmarks. As I needed any more reason to be cranky before my coffee finished brewing.

Yes, those darn earmarks…they’ve become one of the new Nasty Little Words™ in Washington, and for good reason: they’re convenient targets for those clamoring for Change We Can Believe In™. For those of you who don’t know, these little budgetary items are ones that focus on specific locations (i.e. states or cities), and are usually inserted into larger bills, often being only loosely related (or entirely unrelated) to the provisions of the larger bill.  According to the Congressional Office of Management and Budget (OMB), they officially defined thusly: “funds provided by the Congress for projects or programs where the congressional direction (in bill or report language) circumvents the merit-based or competitive allocation process, or specifies the location or recipient, or otherwise curtails the ability of the Executive Branch to properly manage funds.” [1] During the last presidential election cycle, these little items were brought to the forefront of the responsible government spending debate, and they are obviously being played-up during the debate over the President’s current budget.

Being mostly libertarian-ish (that’s libertarian with a little ‘l’, not the big ‘L’ of the Party – those guys are nuts) in my political leanings, I generally prefer smaller, less intrusive federal government whenever possible, so my opinion on this matter may seem contradictory. So be it. I don’t much care about earmarks, primarily for practical purposes. In an ideal world, such items would never be included in legislative matters; of course, in a truly ideal world, we also wouldn’t need government in general, so I usually disregard such thoughts. [2] In our very real world, earmarks often amount to “greasing the wheels”; deplorable, yes, but it also makes legislative matters run more smoothly. This does not make me cranky nearly to the extent that other budgetary matters do.

Based on official statistics, here is the breakdown of how earmarks for FY2008 compare to the full federal budget:

  • Total earmarks for FY2008:  16,501,833,000 USD [3]
  • Total Federal Budget for FY2008: 2,902,000,000,000 USD [4]
  • Percentage of Federal Budget for earmarks: 0.57% (divide item 1 above by item 2)

This should put the actual impact of these earmarks into their proper perspective. That’s right…our elected officials are making a huge deal out of 0.57% of the budget. Oh sure, FY2009 will be different from FY2008, but it is highly unlikely that the earmark spending will increase by an order of magnitude or three, so why is this such a substantial issue? Its the equivalent of walking into a furniture store to buy a sofa, and walking out with a couple of candleholders, and then being accused of flagrantly wasteful spending. Sure, you probably didn’t need those candleholders, but compared to the cost of the primary item you purchased, its chump-change, at worst.

If we want to have a serious talk about fiscal responsibility, maybe we should focus on some of the bigger items out there. How about Social Security and Medicare? Think its something that will go away? Check out your paystubs from work; if your employer withholds taxes from your check, look at the FICA (Federal Insurance Contributions Act) withholdings. [5] For those of you who don’t know, FICA funds just two (that’s right TWO) Federal programs: Social Security and Medicare. Now, compare that to the Federal income tax withholding. Obviously, the comparison between FICA and the FWH will vary depending on your tax bracket, but based on my most recent employer, the FICA witholding was 48.3% of my Federal withholdings. [6] What does this mean? The budget for FICA makes the overall Federal budget half again as large as it would be otherwise, i.e. Social Security and Medicare account for roughly 30% of the overall Federal budget.

And we’re arguing over 0.57% of the budget. Searching for signs of intelligent life…

Notes:

[1]: From the official OMB website: http://earmarks.omb.gov/

[2]: If you’re one of those closet anarchists (you know who you are), check out Chapter XIII, “Of the natural condition of Mankind, as concerning their Felicity, and Misery” from The Leviathan, by Thomas Hobbes. His conclusion: Man’s existence in the absence of government is “solitary, poor, nasty, brutish, and short.” Much of The Leviathan is devoted to an analysis of Man and his tendancies, and it is well worth reading for its insights into realistic human nature (if you can get past the spelling and grammatical differences, that is).

[3]: From the official OMB website: http://earmarks.omb.gov/2008_appropriations_home.html

[4]: From the US Government Printing Office (GPO) website: http://www.gpoaccess.gov/usbudget/fy08/browse.html

[5]: The withholding may not be listed as FICA; if not, the FICA withholding is the total of the withholdings for Social Security and Medicare.

[6]: These numbers are based on my (roughly) middle-class income level; your mileage may vary.

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One Response to “Earmarks…”

  1. MI Says:

    Seeker312 – Nice post. Minor comment/quibble:

    WRT your footnote 6, a better point of comparison total FICA revenues vs. (say) federal income tax revenues, or simply total federal revenues. This would get around the possibly non-representative nature of your own experience. I suspect IRS, OMB, or CBO ought to have the relevant data.

    FYI, I’ve linked your blog to my own. My only condition for doing so is that you assist in the maintenance of my anonymity (i.e., no mention of my name, relation to you, etc.)


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