The issue for this week is tax policy. This issue is needlessly complicated, and accurate analysis, like education policy, requires a series of articles. In Part I, I discussed the crowding out effect which explains the danger of unguarded deficits. Part II will explain the effect of spending on local projects which have no national significance (pork-barrell spending). Part III will focus on some of the taxes that are debated, and where the candidates stand. Finally, Part IV will explain the different alleged effects of these positions.
Politicians tried to assuage the public by passing the Federal Funding Accountability and Transparency Act of 2006. The law talked big, requiring OMB to set up a website to disclose who was recieving federal projects, but did it really do anything?
Citizens Against Government Waste monitors projects it considers pork. They must meet one of the following seven criteria (although many meet more):
Requested by only one chamber of Congress; Not specifically authorized; Not competitively awarded; Not requested by the President; Greatly exceeds the President’s budget request or the previous year’s funding; Not the subject of congressional hearings; or Serves only a local or special interest.
In the last few years here are the number of projects CAGW found to meet these criteria:
Year $ in Billions # of projects
2004 22.9 10,656
2005 27.3 13,997
2006 29 9,963
2007 13.2 2,658
2008 17.2 11,610
In 2008, of those John McCain offered no earmarks and wasted no money. Barack Obama offered 53 earmarks worth $97.4M, ranking 70th in the Senate. Iconoclastically, after the Democrats gained control of Congress they were only able to pass two spending bills which probably explains the lack of earmarks. In 2008 they passed 11 spending bills, giving pork a better chance to appear. Though substantially less money is wasted, it does not appear as though the problem is going away.