Reference no: EM132689522

The Use of Earmarks for Funding

The use of earmarks for the federal funding of projects is a controversial issue. But what, exactly, are earmarks? In broad terms, earmarks refer to the designation of funds for specific purposes. An earmarked tax, for instance is a tax whose revenues must, by law, be spent for specific purposes. For example, a state gasoline tax may be earmarked for highway construction. Similarly, user charges, such as the charges that individuals pay to obtain a fishing license, may be earmarked for specific programs like wildlife conservation programs. While few would argue with the logic of these earmarks, the earmarks that appear in federal legislation tend to inspire more debate.

Every year the U.S. Congress passes appropriations bills. These bills authorize the spending of federal funds on many different types of projects, including highway and bridge construction, environmental initiatives, and scientific research. These bills often contain earmarks requiring that a certain amount of the appropriated money be spent on a very specific purpose. For example, a federal highway bill that grants $500 million dollars for the construction or repair of interstates around the country may include an earmark designating $200 million of that sum for construction of a bridge in a particular town. Although this might make the citizens of that particular town happy, it likely will seem unfair to others. Earmarks allow congressmen to bypass the normal bureaucratic procedures for how funds are allocated and instead legislate their use. In some cases, this may be helpful, reducing bureaucratic inefficiency and ensuring that key programs receive funding. In other cases, the power to use earmarks may be abused, causing funds to be wasted or used for low-priority projects. In this Discussion, you consider the different contexts in which earmarks are used and the value of earmarks in funding public projects.