Senate leaders invoked cloture on the defense authorization bill Tuesday afternoon, setting up a showdown Wednesday on whether earmarks in the bill should be in the legislative text or in a committee report attached to the bill.

This battle is an arcane fight over legislative procedure, but it has consequences for how the Senate handles earmarks in the future. This is the first major challenge to an executive order issued by President Bush in January, which allows executive agencies to ignore earmarks in report language. Earmarks included in report language cannot be amended or challenged on the Senate floor and are not included in the bill when presented to the president for his signature.

Committee reports currently do not have the force of law, but legislators use implicit and explicit threats to executive agencies that ensure most, if not all, projects are funded according to their guidelines. Earmark defenders note that this allows agencies to reprogram funds for projects of greater urgency or to divert money from failed projects (although that rarely happens).

Sen. Carl Levin (D-Mich.) circumvented the executive order by inserting a provision in the bill (Section 1002) that incorporates the report language into the bill by reference — essentially giving the earmarks the force of law even though they’re absent from the statutory language.

Majority Leader Harry Reid (D-Nev.) used a parliamentary procedure called “filling the tree” to limit the amendments offered in order to thwart an amendment by Sen. Jim DeMint (R-S.C.) to strike the section of the bill that incorporates the earmarks. DeMint’s staff is hopeful he can offer the amendment Wednesday on the Senate floor.

Earmark critics like DeMint, Sen. Tom Coburn (R-Okla.) and Russ Feingold (D-Wis.) charge that this end run foils earmark transparency because earmarks included in the report language rather than the bill text are not subject to debate, amendment or other Senate points of order.

Advocacy group Citizens Against Government Waste blasted Levin in a release today:

This provision continues a practice of using committee reports to hide earmarks and make them difficult to eliminate by offering amendments to authorization and appropriations bills.  It certainly does not qualify as “reform” of the earmarking process.  It would prevent open debate and votes on earmarks and reduce transparency and accountability.  The “incorporation” language sets a precedent for other fiscal year 2009 legislation.  If it is not removed from the bill, it would demonstrate that the Democratic leadership of Congress has no intent of ever getting earmarks under control.

Sen. John Warner (R-Va.) also tried to offer an amendment that would shift the earmark language to the bill’s text, rather than the committee report. In a stunning display of hubris, Levin has told staffers that the Government Printing Office does not have the software to incorporate the earmark tables into the bill, according to Senate Republican staffers. Levin also told CongressDailyPM today ($) that adding the earmarks to the bill would take too long and would prevent the bill from sailing through Congress:

Levin said today that the process of adding the tables to the printed bill would take four days and could ultimately jeopardize efforts to quickly reach a conference agreement with the House and pass a final bill by the end of the month.

Cutting and pasting takes four days?

Last week, the White House issued a veto threat to the bill if the provision remains intact. The White House also expressed concerns about several other sections in the bill.

The legislation is S. 3001, the National Defense Authorization Act for Fiscal Year 2009. The earmarks in the bill total $5.9 billion. If Levin gets his way, it will set a terrible precedent for future authorization and appropriations bills. If that happens, defense funding will likely continue to be doled out based on seniority, geography of important members and lobbying clout instead of a merit-based test of what’s best for national priorities.

Senate Showdown on Earmarks is a post from Cato @ Liberty - Cato Institute Blog

Robert Bluey of the Heritage Foundation beat me to the punch by detailing the differences between McCain-Palin and Obama-Biden on earmarks.

Bluey makes an important point: even unquestioned reformers like Jim DeMint (R-SC) only recently found earmark religion. Better late than never. Especially in a state like Alaska, which is basically a welfare state where corruption is the status quo, Sarah Palin has built an impressive record of reform. Important questions remain to be answered about her stances on tax and budget policy, but compared to Obama and Biden, there’s no question the appropriations cardinals would be sweating bullets under a McCain-Palin administration.

McCain-Palin vs. Obama-Biden on Earmarks is a post from Cato @ Liberty - Cato Institute Blog

Is there a libertarian position on what sort of experience a vice president needs? Libertarians have offered mixed reactions to the Sarah Palin pick. David Boaz would have preferred South Carolina Gov. Mark Sanford.

Compared to Sen. Joe Biden, a 36-veteran of the Senate, Palin is a breath of fresh Alaskan air. But conservatives and libertarians should remember the lesson of George W. Bush and never relent in their pressure to make sure a potential McCain-Palin administration does more than talk about cleaning up Washington and reducing the size of government.

The Obama campaign likely will turn to surrogates to make the inexperience argument against Palin because any direct shot from Obama is likely to backfire. Obama’s national experience amounts to four years in the U.S. Senate, most of which he spent not legislating but running for president.

Palin’s tenure as Alaska governor equals, if not exceeds, Obama in experience. Palin, 44, has spent 12 years in elected office: 10 years as a city councilor and mayor and nearly two as governor. Obama, 47, has also spent 12 years in office: eight years as a state senator and close to four as a U.S. senator.

“Today, John McCain put the former mayor of a town of 9,000 with zero foreign policy experience a heartbeat away from the presidency,” an Obama spokesman sniffed. They soon backpedaled on that line of attack, perhaps realizing Obama might alienate small-town voters who realize their mayors are often tested with tough decisions and budgets, rather than up-or-down votes.

Comparing her experience to Biden borders on ridiculous. Since when do libertarians find encouragement in government, much less someone who has spent 36 years in Washington funding programs like Amtrak and prosecuting the drug war?

On foreign policy, it’s not trivial to note that Obama seeks the presidency while Palin seeks the number two slot. Even if McCain died in office, Palin would retain McCain’s foreign policy team and have at least some experience as vice president.

As McCain’s operatives are sure to stress in the coming weeks, it’s pretty ironic for Obama to bash Palin on foreign policy experience when, in July, he visited Iraq for the first time since announcing his presidential bid — after repeated criticism from McCain — and has not held a single hearing on Afghanistan in his Senate subcommittee (again, letting Biden carry his foreign policy water). He also visited Afghanistan for the first time in July. Palin has visited Kuwait once in her role as commander of the Alaska National Guard.

Libertarians still have grave concerns about McCain’s foreign policy, but I think the Iraq war has lost salience as an issue, especially since the U.S. and Iraqi governments have basically agreed to withdraw troops by 2011, and most voters are focusing on the economy.

Finally, some have suggested that Palin was tapped simply because she was a woman. No doubt that played a role in her selection, but what matters is Palin’s reform record and standing as the antithesis of a Beltway insider. I predict attacks that Palin was only selected because of her gender will be as successful as complaints that Obama won because of his race.

Obama vs. Palin on Experience is a post from Cato @ Liberty - Cato Institute Blog

Alaska Gov. Sarah Palin has a mixed record on taxes and spending. She’s clearly erred on a few fiscal decisions during her tenure as mayor of Wasilla and as governor. Palin seems to operate from a small government mindset, which makes her few heresies on economic issues puzzling.

Palin has come under fire for supporting the “Bridge to Nowhere” in Ketchikan before she was against it. Aides said the cost of the bridge soared from $223 million to almost $400 million, prompting her to consider alternatives.

“She made the final decision to kill a very bad project, so she deserves credit for that. But she didn’t do it as an ideological opponent of earmarks. She did it as someone who had to balance the books,” Keith Ashdown, an investigator with Taxpayers for Common Sense told The Washington Post.

At best, Palin has been a convert on earmarks (and perhaps not a full convert). As governor of Alaska, she has requested 31 earmarks worth $197.8 million for next year, according to indicted Alaska Sen. Ted Stevens’ website, the Los Angeles Times reported. As mayor of Wasilla, Palin regularly traveled to Washington to request earmarks. The city obtained funding for several projects, including a bus depot ($600,000) and a water and sewer project ($1.5 million), according to Taxpayers for Common Sense.

As Wasilla mayor, Palin has a decidedly mixed record on taxes and spending. She slashed her salary and cut property taxes by 40 percent because of booming sales tax revenue from new stores.

But Palin also increased the budget by spending on roads and sewers, left the town nearly $20 million in debt and raised the city sales tax by half a percent (she said the money was needed to support construction of an indoor ice rink and sports complex and a police dispatch center).

As governor, Palin slashed more than 10 percent of the state’s budget in 2007 (Question: Besides his checkbook, has Barack Obama ever balanced — much less cut — a budget?). She vetoed $268 million in state projects and imposed objective criteria on the projects.

One of her signature accomplishments as governor was a $1.5 billion tax increase on oil production, infuriating oil companies, according to The New York Times. She accused oil companies of bribing legislators to keep taxes low and, soon after, passed a $1,200 “energy rebate” to each Alaskan from the state’s budget surplus.

As Chris Edwards noted, Palin has a spotty record on tax issues, mentioning the windfall profits tax on oil companies and noting she’s offered only minor tax breaks.

Libertarians should be cautiously optimistic about Palin. She has shown a dogged willingness to go to war with the worst elements of the Republican Party, but her missteps on some tax and spending issues means that libertarians should aggressively pressure a McCain-Palin administration to toe the small government line.

Gov. Sarah Palin’s Record on Taxes and Spending is a post from Cato @ Liberty - Cato Institute Blog

Sen. John McCain shocked the chattering class by picking Alaska Gov. Sarah Palin to share the GOP ticket. Commentators on the left and right offered predictable talking points about the selection, depending on their ideology.

But the libertarian reaction has been mixed, for good reason. Palin has an encouraging record on reform, but she must own up to a few notable blemishes on spending and tax issues. On balance, though, libertarians have much to admire about Palin’s tendency toward small government, especially compared to Sens. Barack Obama and Joe Biden, who rarely encountered a government program or tax hike they didn’t like.

Palin has branded herself a crusader against corruption in the GOP establishment in Alaska. In 2006, Palin crushed corrupt GOP governor Frank Murkowski 51 to 19 percent in a three-way primary. One of her first acts as governor was to sell the state jet on eBay for $2.7 million. She also made waves by passing ethics reform legislation.

“In her short time in state office, she has repeatedly thwarted [Sen. Ted] Stevens’s and [Rep. Don] Young’s interests and, at times, challenged their candidates — including their children,” The Washington Post noted.

In 2004, she joined a Democratic representative in filing an ethics complaint against Republican Attorney General Gregg Renkes over a trade deal. Renkes resigned.

As a Murkowski-appointee to the Alaska’s Oil and Gas Conservation Commission, Palin went after fellow commissioner Randy Ruedrich, also chairman of the state GOP, charging him with doing political business on state time. That investigation led to his resignation and a $12,000 fine. Quick: name one member of Chicago’s Democratic machine that Barack Obama took down along his rapid ascent to the U.S. Senate.

Palin also endorsed Lt. Gov. Sean Parnell to challenge Young, who is under investigation for secretly steering a $10 million earmark to a campaign contributor in Florida, in this year’s GOP primary (Young leads by about 150 votes, with thousands of ballots yet to be counted).

Parnell visited Young’s D.C. office in October 2006. Parnell said Young erupted with a ten-minute tirade about Palin, calling her a “crystal figure” and said he was “going to crush her,” according to a New Republic story.

The main chink in Palin’s reform armor lies in the so-called Troopergate scandal, which is being investigated by the Alaska legislature. While this dings Palin’s ethical image a bit, it could also garner her sympathy from the independent women she’s trying to court.

Palin says she told the public safety commissioner that state trooper Mike Wooten, her sister’s ex-husband, was abusive and committed other violations. The commissioner, Walt Monegan, says Palin never told him outright to fire the trooper, but that her aides pressured him.

Palin said Wooten made a phone call threatening her father, saying, “I will kill him. He’ll eat a [expletive] lead bullet, I’ll shoot him,” if her father got an attorney to help [her sister],” according to newspaper accounts.

Wooten was reprimanded for violating nearly a dozen laws and departmental policies since December 2001. Perhaps most strangely, he’s accused of Tasering Palin’s nephew.

In contrast, Obama’s record as a state senator in Illinois hardly represents reform. He spent eight years cozying up to the Chicago machine and failed to challenge status quo politics there.

Emil Jones, president of the Illinois senate and Gov. Rod Blagojevich’s enforcer, was Obama’s mentor. Obama often points to an ethics bill he “sponsored” in 1998 to bolster his reform and bipartisan credentials. The ethics bill allows Jones to retire next year and convert $578,000 (the amount he had in his account in 1998 minus income taxes) to his personal bank account. That’s not change you can believe in, it’s change Jones can bank on.

Obama’s bill barred fundraising on state property and blocked lobbyists from giving gifts to legislators. It did not, however, end the pay-to-play system of patronage championed by another Obama associate — Tony Rezko. Don’t blame Obama, though. He didn’t actually write the law, as reported by author David Freddoso:

“[Obama] was not the one to propose the ethics bill in the Illinois senate. He was not even a cosponsor until the day it passed. Five months after the ethics bill was introduced, and more than one month after it reached the senate, Obama was invited by Emil Jones to become its chief Democratic cosponsor. As David Mendell writes in Obama: From Promise to Power, former Rep. Abner Mikva convinced Jones to let Obama handle the legislation. Sen. Dick Klemm (D.) was removed as chief cosponsor and replaced by Obama on May 22, 1998 — the very day the bill passed.”

Obama has had a mixed record of reform in the U.S. Senate. He declined to seek earmarks this year. In past years, he has released his earmark requests. He worked on the Democrats’ ethics legislation in 2007, which required disclosure of earmark sponsors but balked at further reforms; earmark requests are still secret. Despite Obama’s lofty talk about bipartisanship, he and McCain furiously clashed on ethics reform, and Obama was used by Senate leaders as a hatchet man to hammer Republicans on corruption.

Sorry about the length of these posts, but considering Palin’s unknown status I figured it was warranted. Also, as a matter of full disclosure, I volunteered for the McCain campaign during the GOP primary.

Palin vs. Obama on Reform and Ethics is a post from Cato @ Liberty - Cato Institute Blog

The wildly popular, bipartisan farm bill is cruising toward becoming law this week after the likely road bump of President Bush’s veto pen. It passed the House and Senate by veto-proof margins last week. Congressional enthusiasm for the farm bill helps to explain the 18 percent approval rating of Congress in a recent Gallup poll.

Taxpayers aren’t likely to be impressed by a $500 million giveaway for a timber company and other wasteful earmarks in the bill. The official list of earmarks total $934.5 million (not including the $500 million timber tax break or six earmarks authorized without specific funding levels). The earmarks were air-dropped into the bill’s conference report, after legislators spent years — and held countless hearings — crafting it.

Fourteen senators (nine Democrats and five Republicans) and one House Democrat inserted 26 earmarks, according to the conference report. Three earmarks appear to be multi-member earmarks. [Here’s the PDF of the earmarks.]

The earmarks represent only one-third of one percent of the bill’s expected cost ($289 billion). Legislators will soon issue laudatory press releases patting themselves on the back for rewarding their districts and deflecting criticism by pointing out the “low” cost of earmarks. That’s not the point. The sneaky way the earmarks were inserted and the inefficiency of the federal government doling out money for local projects (also an affront to federalism) helps explain why the public has lost faith in Congress.

Earmark critics also point to several provisions in the farm bill not disclosed as earmarks. The Associated Press briefly described these giveaways to favored companies and industries.

Perhaps most egregious is a vague provision inserted by Baucus which would authorize $500 million in tax-credit bonds to purchase 400,000 acres of land (mostly in Montana). Although not mentioned in the bill, there’s only one company that would qualify for this stealth earmark: the Plum Creek Timber Co., which is the largest private landowner in the United States.

Plum Creek’s in-house lobbying operation spent $1.1 million on lobbying from 2005 to 2007, according to Congressional lobbying records rounded to the nearest $20,000. The company spent $140,000 in the first quarter of 2008, the most recent period records are available.

Plum Creek also hired the lobbying firm Nutter & Harris to lobby Congress for the provision and other issues from 2006 to 2008. Firm principal Robert L. Harris, a former Senate staffer, handled the Plum Creek account. Plum Creek paid the firm $300,000 ($120,000 in 2006 and 2007 and $60,000 in the first quarter of 2008).

In the 2006 cycle, Baucus received $9,000 from Plum Creek’s PAC (the Plum Creek Timber Good Government Fund), run by Robert Jirsa, the company’s in-house lobbyist. The PAC gave Baucus $1,000 in the 2004 cycle and $5,000 in the 2002 cycle. It has doled out $511,266 since 1998 to parties and candidates, according to the Center for Responsive Politics. The PAC favored Republican federal candidates until they lost the majority in 2006. Their 2008 cycle donations favor Democrats (60 percent to 40 percent).

All told, that’s roughly a $2 million investment over nearly ten years ($1.4 million in lobbying and $500,000 in PAC contributions) for a windfall tax break of $500 million.

House Republican Leader John Boehner criticized the earmarks in the farm bill, but his warning proved insufficient to stop most Republicans from voting for the bloated bill. It’s a victory for bipartisan, logrolling politics as usual. It’s a defeat for conservative Republicans who tried to convince leadership and rank-and-file members to take a stand on the farm bill as part of an effort to return to conservative fiscal principles after years of out-of-control spending and earmark scandals.

To read previous posts on the farm bill by Sallie James, Cato’s expert on the topic, click here.

Last Minute Farm Bill Earmarks is a post from Cato @ Liberty - Cato Institute Blog

Appropriations lobbyists have weathered a rough few years of media scrutiny, and a series of earmarking outrages has put pressure on Congress to pass minor reforms. Luckily there may be fewer vehicles for earmarks this year as Congress will probably pass only one or two appropriations bills for Fiscal Year 2009 and leave the budget mess for a new president to sort out.

Congressional appropriators have well-rehearsed defenses of the earmarking process, and an anonymous appropriations lobbyist has joined the fray to strike back at earmark critics. I obtained a copy of a six-page document defending the earmark system called “Fairness of Congressional Earmarking Report,” which is circulating around Capitol Hill.

Earmark enthusiasts argue that the Congressional system of doling out money to local governments, businesses and special interest groups is better than giving “faceless bureaucrats” the ability to allocate federal funds. The anonymous white paper expands on this argument and tries to make the case that earmarking is a much fairer process than letting federal agencies allocate the money.

The author of the paper is a member of an exclusive clique of former appropriations staffers called the 302(b) Group, according to Washington Post lobbying columnist Jeffrey Birnbaum.

Whether earmarks are useful depends on one’s perspective. To appropriations lobbyists and groups that have difficulty obtaining federal funding through merit-based, competitive grants, earmarks are a welcome bonanza. To taxpayers and advocates of spending restraint, transparent government and federalism, they’re woefully inefficient and pit parochial interests against the national interest.

Let’s look at the debate from the perspective of an appropriations lobbyist, to whom all federal spending is good federal spending:

The most democratic way to distribute these federal dollars is to spread funding across to numerous, meritorious local government projects rather than to concentrate resources to a select few.

Ah, democracy. The implication is that if someone is against earmarking, they must be some sort of dictator-loving democracy hater. The Chronicle of Higher Education published an investigative piece in March showing that the top recipient of educational earmarks for research in FY 2008 was Mississippi State University (Number two? The University of Mississippi). The Bulldogs are not known for a world-class research program, but they happen to have influential representatives and senators on the appropriations committees to steer funds their way. Never mind that educational earmarks receive little to no scrutiny to determine merit by scientists or that millions of dollars winds up at universities with no graduate or research programs in the research areas for which they receive funds. That’s earmark “democracy” in action.

The paper also analyzes the appropriations process during FY 2006 (when Congress used earmarks) and FY 2007 (when Congress did not use earmarks because the appropriations process fell apart and Congress fell back on a series of continuing resolutions that just increased spending across the board).

Generally speaking, federal agencies awarded substantially fewer grants when compared to when Congress earmarked these funds. A few local governments did better; the vast majority did not.

There’s a debate over whether earmarks increase overall spending or if they only divert it. Assuming that overall spending doesn’t change in a given year, earmarks just redirect spending to narrow interests; removing earmarks does not decrease spending. However, the paper seems to argue spending was reduced without considering the money was likely spent on other priorities.

In the bizarro lobbying world, the federal government spending less money on special interest projects is automatically a bad thing. To taxpayers, the notion that the government isn’t indiscriminately spending money because a representative or senator inserts an earmark in an appropriations bill is usually a good thing.

Communities across the nationwide are faced with increased traffic congestion and transportation needs. These local governments must address broken sidewalks, antiquated infrastructure, congested roads, and inadequate bicycle and pedestrian trails.

Setting aside this excerpt’s grammar issues, it’s comically ludicrous to suggest that the federal government needs to bail out local governments so that they can fix broken sidewalks and bike trails. Local governments are more accountable to residents’ spending wants and needs. It’s also more efficient to tax local and state residents to provide local and state infrastructure and services instead of routing the money through the maze of federal bureaucracy.

Reasonable people can disagree about the solution to the earmark problem. An effective argument for appropriators is that until the system is reformed, it’s their duty to get as much money for their district as possible — even if it’s wasteful and inefficient. This anonymous paper, though, is a silly defense of the system. It’s understandable why the author wants to remain anonymous.

Anonymous Earmark Manifesto is a post from Cato @ Liberty - Cato Institute Blog