McCain's Fantasy War on Earmarks
The Washington Post
May 12, 2008

Portland, OR, May 12, 2008.

"I can eliminate $100 billion of wasteful and earmark spending immediately--35 billion in big spending bills in the last two years, and another 65 billion that has already been made a permanent part of the budget."
    --John McCain, NPR All Things Considered, April 23, 2008.

John McCain boasts that he can save $100 billion a year "immediately" by eliminating the so-called earmarks that legislators attach to spending bills to finance pet projects, usually in their home state. But he has refused to say exactly which projects he would cut, and his estimates of the amount of money that is being spent on earmarks have been challenged by independent experts.

The Facts

The Arizona senator is promising to balance the budget by the end of his first term, while simultaneously extending the George W. Bush tax cuts, introducing billions of dollars of new tax cuts of his own, and remaining in Iraq as long as is necessary to stabilize that country. Asked how this miracle will be accomplished, McCain told George Stephanopoulos of ABC News This Week on April 20 that he could come up with $100 billion "tomorrow" by vetoing pork-barrel spending bills.

Here's $100 billion right here for you, George. Two years in a row, the last two years, the president of the United States has signed into law two big spending, pork barrel-laden bills with $35 billion (in earmarks). In the years before that, $65 billion. You do away with those, there's $100 billion right before you look at any agency.

Pouff! $100 billion in taxpayer money! Saved! Just like that! With a flick of the presidential veto pen!

There are a number of problems with this magical budgetary balancing act. First of all, the suspiciously round $100 billion figure is largely a figment of the McCain campaign's imagination. I have not been able to find a single independent budget expert to vouch for it. McCain's economics adviser, Doug Holtz-Eakin, will not say how the campaign arrived at the figure, other than that it is an extrapolation from various studies, including a 2006 study by the Congressional Research Service available here.

The CRS study breaks down earmarks by different government departments, without giving a global figure. According to Scott Lilly, a former Democratic appropriations staffer now with the Center for American Progress Action Fund, the CRS study identifies a total of $52 billion in earmarks for a single year. However, much of this money is tied to items such as foreign aid to countries like Israel, Egypt, and Jordan, that McCain says he will not touch.

By most definitions of the term, the amount of money spent on earmarks is much lower than the CRS study. The Office for Management and the Budget came up with a figure for $16.9 billion in the 2008 appropriation bills. Taxpayers for Commonsense, an independent watchdog group that focuses on wasteful spending, identified $18.3 billion worth of earmarks in the 2008 bills, a 23 per cent cut from a record $23.6 billion set in 2005.

How much of this $18.3 billion could be eliminated is a "difficult question that we have not yet figured out," said Taxpayers for Commonsense vice-president Steve Ellis. The figure includes such items as $4 billion for the U.S. Army Corps of Engineers, which could not be eliminated without halting hundreds of construction projects around the country. Another big chunk goes to military construction, including housing for servicemen and their families, which McCain has also promised not to touch.

Bruce Riedl, a budget analyst with the Heritage Foundation, says it might be possible to eliminate roughly half the expenditure on earmarks every year, i.e. around $9 billion, using the Taxpayers for Commonsense figures. He identified $5 billion in Community Development Block Grant funds, most of which goes to local governments, as a prime target for cuts. Even if earmarks were eliminated altogether, many other expenditures would have to be shifted to other parts of the budget.

Like other analysts, Riedl was mystified by McCain's argument that previous year's earmarks automatically become a "permanent part of the budget." "I don't understand how they come up with that," he told me.

Excluding those programs McCain has promised to preserve, the draconian slashing of earmark expenditures might save around $10 billion a year. But that is still a long way from the $100 billion in savings that McCain says that he can identify "immediately."

The McCain camp now says that the senator never meant to suggest that his proposed $100 billion in savings would all come from earmarks. Holtz-Eakin told me that McCain had simply promised to cut overall spending by around $100 billion. Some of these savings will come from earmarks, some from other parts of the budget. He declined to identify which specific projects would be cut.

Asked whether McCain had misspoke or whether he had been misunderstood in his focus on eliminating earmarks, Holtz-Eakin replied: "a bit of both."

The Pinocchio Test

McCain's talk about eliminating $100 billion a year in earmarks is largely fantasy. His advisers are now promoting a more realistic plan of eliminating $100 billion in overall spending. But it is difficult to take even that promise very seriously given the fact that the senator refuses to identify exactly which projects he will be cut. To use a phrase coined by George H.W. Bush, this is "voodoo economics," based more on wishful thinking than on hard data or carefully considered policy proposals.

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