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27–752 PDF 2006

S. Hrg. 109–684

EARMARK REFORM: UNDERSTANDING THE

OBLIGATION OF FUNDS TRANSPARENCY ACT

HEARING

BEFORE THE

FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT 

INFORMATION, AND INTERNATIONAL 

SECURITY SUBCOMMITTEE

OF THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

MARCH 16, 2006

Printed for the use of the Committee on Homeland Security 

and Governmental Affairs

(

(II)

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

SUSAN M. COLLINS, Maine, Chairman 

TED STEVENS, Alaska 

GEORGE V. VOINOVICH, Ohio 

NORM COLEMAN, Minnesota 

TOM COBURN, Oklahoma 

LINCOLN D. CHAFEE, Rhode Island 

ROBERT F. BENNETT, Utah 

PETE V. DOMENICI, New Mexico 

JOHN W. WARNER, Virginia 

JOSEPH I. LIEBERMAN, Connecticut 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK DAYTON, Minnesota 

FRANK LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas

MICHAEL D. BOPP, Staff Director and Chief Counsel 

JOYCE A. RECHTSCHAFFEN, Minority Staff Director and Chief Counsel 

TRINA DRIESSNACK TYRER, Chief Clerk 

FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT INFORMATION, AND 

INTERNATIONAL SECURITY SUBCOMMITTEE 

TOM COBURN, Oklahoma, Chairman 

TED STEVENS, Alaska 

GEORGE V. VOINOVICH, Ohio 

LINCOLN D. CHAFEE, Rhode Island 

ROBERT F. BENNETT, Utah 

PETE V. DOMENICI, New Mexico 

JOHN W. WARNER, Virginia 

THOMAS CARPER, Delaware 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

MARK DAYTON, Minnesota 

FRANK LAUTENBERG, New Jersey

KATY FRENCH, Staff Director 

SHEILA MURPHY, Minority Staff Director 

JOHN KILVINGTON, Minority Deputy Staff Director 

LIZ SCRANTON, Chief Clerk 

(III)

C O N T E N T S 

Opening statements: Page 

Senator Coburn ................................................................................................. 1

Senator Carper ................................................................................................. 4

WITNESSES 

THURSDAY, MARCH 16, 2006

Hon. Jeff Flake, a Representative in Congress from the State of Arizona ......... 6

Hon. John McCain, a U.S. Senator from the State of Arizona ............................ 10

Thomas A. Schatz, President, Citizens Against Government Waste .................. 14

Steve Ellis, Vice President of Programs, Taxpayers for Common Sense Action 16

Scott Lilly, Senior Fellow, Center for American Progress .................................... 18

ALPHABETICAL LIST OF WITNESSES

Ellis, Steve: 

Testimony .......................................................................................................... 16

Prepared statement .......................................................................................... 51

Flake, Hon. Jeff: 

Testimony .......................................................................................................... 6

Prepared statement .......................................................................................... 39

Lilly, Scott: 

Testimony .......................................................................................................... 18

Prepared statement .......................................................................................... 57

McCain, Hon. John: 

Testimony .......................................................................................................... 10

Prepared statement .......................................................................................... 41

Schatz, Thomas A.: 

Testimony .......................................................................................................... 14

Prepared statement .......................................................................................... 43

APPENDIX 

Charts submitted for the Record from Senator Coburn ....................................... 27

(1)

EARMARK REFORM: UNDERSTANDING THE 

OBLIGATION OF FUNDS TRANSPARENCY ACT 

THURSDAY, MARCH 16, 2006

U.S. SENATE,

SUBCOMMITTEE ON FEDERAL FINANCIAL MANAGEMENT,

GOVERNMENT INFORMATION, AND INTERNATIONAL SECURITY, 

OF THE COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, 

Washington, DC. 

The Subcommittee met, pursuant to notice, at 9:32 a.m., in room 

SD–342, Dirksen Senate Office Building, Hon. Tom Coburn, Chairman of the Subcommittee, presiding. 

Present: Senators Coburn and Carper. 

OPENING STATEMENT OF SENATOR COBURN 

Senator COBURN. The Subcommittee will come to order. 

Good morning. We have convened this hearing to look at the 

need for earmark reform and legislation that would be an important step toward achieving such reform. 

Pork politics is not an ancient practice that can’t be reformed. 

Pork, as we know it today, didn’t exist 20 years ago. In 1987, President Ronald Reagan vetoed a spending bill because it contained 

121 earmarks. Disturbingly, the number of earmarks has skyrocketed over the past decade—from 4,126 in 1994 to 15,887 in 

2005—according to the Congressional Research Service. 

Last year, the number of earmarks dropped to 12,852, but the total cost of the earmarks rose by $16 billion last year to a total 

of $64 billion, not including the highway bill, the earmarks that are 

contained in the highway bill. And those are truly authorized earmarks in the highway bill. 

America’s greatness was built on sacrifice and service, not the 

politically-expedient politics of pork. There is no lost Article of the 

Constitution or missing Federalist Paper that gives Members of 

Congress a blank check to fund any project they desire. 

Indeed, Thomas Jefferson wrote James Madison in 1796 that allowing Congress to spend Federal money for local road projects 

would ‘‘be a source of eternal scramble among the members [for] 

who can get the most money wasted in their State, and they will 

always get most who are meanest.’’

Jefferson’s prophetic warning has been borne out by the reality 

that there exists an indisputable linear relationship between the 

runaway spending of the last 10 years and a markedly increased 

earmarks, as you can see from the other chart. 

2

The truth is earmarks are a gateway drug on the road to spending addiction. One day, an otherwise frugal member votes for pork, 

the next day, he or she votes for a bloated spending bill or an entitlement expansion. After all a ‘‘no’’ vote might cut off access to earmarks. 

Congressional leaders and appropriators use earmarks as a leverage to get members to vote their way—often for monstrous 

spending bills that a member otherwise might oppose. In other 

words, earmarks help grease the skids for bigger government—not 

necessarily more efficient government, not necessarily better government. 

The task of selecting a share of the 15,000 annual pork projects 

has become an all-consuming endeavor for most congressional offices. Gathering earmark requests, meeting with lobbyists, working 

to secure a coveted seat on the Appropriations Committee leaves 

little time for the traditional duties of overseeing government and 

reforming outdated programs. 

And we see the consequences of this neglect: In recent years, layers of government waste have gone virtually ignored, and bloated 

agencies have failed to deliver basic services, but their budgets are 

just increased each year as if on auto-pilot. Congress has failed 

miserably in its oversight responsibility. 

For example, last year the Department of Education told the 

Washington Times that it was facing ‘‘a significant challenge to 

process and monitor all of these earmarks.’’ This was in reference 

to 1,175 congressionally mandated projects in small print taking up 

40 pages of the 663-page omnibus spending bill. 

The next chart shows a comparison between earmarks and entitlement savings. 

Some congressional critics of earmark reform make the excuse 

that getting rid of earmarks isn’t the solution to reigning in runaway spending, controlling entitlements is. But as we saw with the 

recent budget reconciliation bill, Congress was barely able to trim 

even a relatively tiny amount of entitlement spending. 

While earmarks cost $64 billion last year, entitlement savings 

from budget reconciliation was only $4.8 billion. And its estimated 

savings over 5 years was just $38.8 billion. 

If Congress is unable to eliminate the most unjustifiable spending—which earmarks usually are—then how could it possibly make 

tougher choices on politically charged entitlement programs like 

Medicare and Social Security? Given current and future national 

debt realities, we cannot afford to spend money on these individual 

pet projects. 

Even if the individual projects had merit—and many do, and I 

am sure that most of them have good-hearted and honest constituencies in their support—those merits for a small parochial interest 

have to be weighed against the broader risks of the out-of-control 

growth of earmarking and the long-term financial health of the 

United States. 

Earmarking can lead to outright corruption, as seen in the recent 

guilty plea of former Representative Duke Cunningham for bribery 

over an earmark of money for his district. Reducing or eliminating 

earmarks would help reduce the power of lobbyists, who often raise 

3

campaign money for Members of Congress if they slip an earmark 

into a bill that benefits a lobbyist’s client. 

Next you will see posters of two lobbyists’ Web sites with some 

pretty revealing quotes. 

The Web sites of these top lobbying outfits make no bones about 

their ability to serve up pork for their clients. All of the sites stress 

the firms’ cozy relationship with members and their staff and highlight their employees’ previous government experience as a signal 

to potential clients that they are networked into the pork game. 

Many sites outright brag about the amount of earmarks they 

have secured for clients. The two examples that you might see—

and this is just two of many. First is a blown-up poster of a lobbying firm’s Web site with quotes of interest pulled out for viewers 

to read. 

The quote states, ‘‘Each year, our attorneys secure hundreds of 

millions of dollars in Federal funds for a wide range of clients. We 

have successfully designed and implemented strategies to win Federal funds for hundreds of new programs, to keep controversial programs funded, to increase funding for client priority programs, and, 

when called for, to initiate for programs not requested in the budget. 

‘‘Many of our attorneys are veterans of congressional committee 

staffs or Federal offices and, thus, know the budget process from 

both sides, giving them a depth of perspective on the process that 

greatly benefits our clients.’’

The second lobbying firm’s Web site, ‘‘Collectively, our Federal 

practice group possess an intricate knowledge of the 13 annual 

Federal funding bills and the methods for obtaining identified appropriations from a variety of accounts. We have a strong relationship with numerous key members and staff in both House and 

Senate and a knowledge of precisely how, where, and when to intervene to achieve desired results. 

‘‘Although success is never guaranteed, the fees that our clients 

pay in pursuit of legislative appropriations are almost always 

greatly exceeded by the amount of funding they receive. For fiscal 

year 2004, this group obtained $334 million for our appropriation 

clients.’’

While there is nothing inherently wrong with lobbying per se,

earmarking in particular develops an unhealthy relationship between members, their staff, and the lobbyists seeking favors. According to the Wall Street Journal, the number of companies hired 

to pursue earmarks has doubled since 2000. According to the Center for Public Integrity, the commonly lobbied issue is budget and 

appropriation—6,800 companies as of 2005. 

The willingness of those in power to abuse the appropriation 

process through earmarking has led to an explosive growth in the 

lobbying industry and encouraged the excesses illustrated by the 

Cunningham and Jack Abramoff scandals. 

Abramoff has described the appropriation committees and, by extension, the appropriation process, as an ‘‘earmark favor factory’’ in 

which influence and votes are bought and sold. I believe Senator 

McCain’s legislation—which I proudly co-sponsored—and its companion in the House, sponsored by Congressman Jeff Flake, is an 

4

important first step in a process that should ultimately lead to the 

shutdown of this process. 

This legislation would require that earmarks be placed in the 

text of legislation rather than the committee reports that accompany bills. Under current practice, committee report language directs Federal agencies to spend money on particular earmarks—

and the agencies have learned that congressional appropriators will 

retaliate if their language is ignored, even if it’s in the national interest to ignore it. 

Next is a recent Congressional Research Service report that 

shows that 96 percent of the 12,852 appropriation earmarks in 

FY2006 were hidden within the report language. That means the 

language was slipped in behind closed doors, at the last minute, or 

in the middle of the night. Everyone knows that the conference reports become public almost immediately before they have to be 

voted on, which makes it almost impossible for members to know 

what they’re voting on or for. 

Earmarks need transparency and time for debate to make sure 

each item is considered on its own merits and in light of the competing priorities that this country faces. Tucking earmarks into a 

conference report prevents taxpayers from the benefit of debate and 

disclosure about how their money is being spent. Requiring earmark projects to be a part of actual legislation would also make it 

easier for legislators to challenge them by offering amendments to 

change or strike them. 

Transparency and debate will also reduce the value of earmarks 

as an instrument for party discipline by leadership in appropriators. And, shining light on these pet projects will help ethics compliance by curbing the incentive for members to take campaign donations from special interests. 

Ideally, forcing lawmakers to defend projects will expose them to 

ridicule and, eventually, the practice of earmarking—and the outof-control spending it leads to—will slow. 

The truth is Congress will never take meaningful steps to tackle 

our enormous fiscal challenges as long as it indulges with impunity 

in a practice that creates a culture of complacency. 

They say every cloud has a silver lining. I believe that the various lobbying and earmark-related scandals, both real and imagined, have opened a unique window of opportunity to enact reforms 

now that may not ever come again. If Congress fails to pass meaningful reforms that attack this climate of corruption at its source, 

the public will, and should, take reform into its own hands in November. 

I want to thank our witnesses for being here today, and I look 

forward to our dialogue. 

Senator Carper. 

OPENING STATEMENT OF SENATOR CARPER 

Senator CARPER. Thanks, Mr. Chairman. 

It is good to be with you, and I want to welcome Congressman 

Flake. I don’t think I have ever met you before. And so, just very 

nice to have a chance to meet you. 

I am going to listen to your testimony, and then I am going to 

have to slip out. 

5

Today, we hold this hearing as the Senate debates the budget for 

the debt ceiling. We are going to be asked to vote, probably later 

today, to raise the debt ceiling by about three quarters of a trillion 

dollars. 

And that will mark, I think, the fourth time we have been asked 

to raise the debt ceiling in the last 5 years. And we have gone from 

a time when we had balanced budgets—literally, surpluses as far 

as the eye could see—to a time when we have deficits for as far 

as the eye can see. 

And as baby boomers, my generation, are moving toward retirement, the situation doesn’t look brighter. In fact, it looks bleaker. 

As a result, I think we have to look in every corner of where we 

spend money or how we bring money into this Federal Government 

of ours to make sure that we are doing all we can do to reverse 

our slide into fiscal insanity and to get back on the right track. 

There are a lot of things that we can be doing. We have talked, 

in fact, we have had hearings about some of those. One of them is 

just to collect the monies that are owed to the U.S. Treasury. IRS 

reported to us just weeks ago that about $290 billion in tax revenues that were owed to the Federal Government last year were not 

collected—$290 billion. 

We have had a series of hearings on improper payments. And it 

turns out that the Federal Government makes a lot of payments, 

mostly overpayments, for things that we ought not to be doing, and 

it is about $50 billion. It is real money. 

We know that some of the folks who benefit from entitlement 

programs, frankly, make enough money that they probably should 

be means tested and that we can go to, not to balance the budget 

on the backs of folks who depend on entitlement programs, but 

there is money that can be saved, particularly from those that are 

more affluent and who are eligible for entitlement programs. 

We get to the issue of earmarks, and it reminds me a little bit 

of what we used to have in our State. Maybe you have it in Oklahoma or Arizona as well, but we had something called a grant in 

aid package that would come through the legislature every year. 

We would pass an operating budget. We would pass a capital 

budget. And the legislature itself would put together a grant in aid 

package. And the grant in aid package would allow each of the legislators to pick their favorite good cause—and they were good 

causes. I mean, Boy Scouts, Girl Scouts, boys and girls clubs. Any 

number of nonprofits doing the Lord’s work in a whole lot of 

ways—and it was beginning to take more and more of the budget. 

And one of the things that we did in our State, and I think they 

probably have done in other States, is to say it is not inherently 

bad to have a grant in aid package, but to limit it to some percentage of the overall spending so that it just doesn’t continue to grow. 

When I look at the charts that we see this morning, the thing 

that concerns me is not so much that we do have earmarks, but 

that the trend is going in the wrong direction. It especially is going 

in the wrong direction now as the budget deficit gets larger and 

larger. 

The last thing I would say. The thing that troubles me most 

about earmarks is the idea that if you pass a House bill, it doesn’t 

have a provision in it. The Senate passes an appropriations bill, it 

6

1The prepared statement of Mr. Flake appears in the Appendix on page 39. 

doesn’t have a provision in it. And when a bill comes out of conference and there is a provision in it that wasn’t in either bill going 

in, that is not good. 

And that, in terms of reforms and things to change, I think, will 

get at least my support for cleaning that up and I suspect the support of a lot of us. 

Congressman Flake, welcome. Glad to see you, and look forward 

to your testimony. 

Senator COBURN. Congressman Flake, thank you for being here. 

Congressman Jeff Flake presently is serving his third term in Congress, represents the 6th Congressional District of Arizona. He 

serves on the House Committees on the Judiciary, the Committee 

on International Relations, and the Committee on Resources. 

Congressman Flake, your entire testimony will be made a part 

of the record, and you are recognized. 

TESTIMONY OF HON. JEFF FLAKE,1 A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF ARIZONA 

Mr. FLAKE. Thank you. I appreciate the opportunity to be here, 

and I want to commend you, Senator Coburn, for your lead on earmark reform and for all you have done in this area and for co-sponsoring the legislation that we have in the House. 

And Senator Carper, thank you for what you are doing, and your 

recognition as far as conference reports and what is going on there 

with earmarks being airdropped in at the last minute truly is a 

growing problem. And it is something that is addressed by this legislation. 

I think it is appropriate that you are having this hearing today. 

I am not sure what deadlines the Senate has, but the biggest deadline in Congress on the House side is today. It is the deadline for 

submission of earmark requests before the Appropriations Committee. 

You have a lot of staffers from district offices in Washington this 

week that wouldn’t be otherwise. You have lobbyists on the Hill in 

droves that wouldn’t be otherwise. After today, this is kind of like 

April 15 for accountants. When today is gone, many lobbyists’ work 

is done for the year. There will be a run on the airport tonight for 

the Bahamas, I think. This is what this process has become. 

My office, we don’t do any earmarks, but still we get lobbyists 

hoping that we will change our mind, apparently, because we got 

this year several request forms already filled out for us. Typically, 

the practice is these request forms from the Appropriations Committee come to the member offices. The members will simply turn 

them over to lobbyists, who will fill them out, give them back to 

the members, sign them, and turn them in. 

And we received several filled out. Just all that was needed was 

my signature to make earmark requests. I would submit that when 

that is what the process has become, we have a problem, a huge 

problem. 

Senator Coburn outlined the trend that we are on in terms of 

earmarks. It is not a pretty picture. It is exploding. Depending on 

how you define an earmark—it is anywhere from $4,000 to $15,000 

7

or $2,000 to $14,000—in any event, any way you look at it, it has 

exploded and under our watch as Republicans. And I think it is 

nothing to be proud of. 

You mentioned the CRS study that was just released, indicating 

that 96 percent of earmarks are in conference reports or committee 

reports. They aren’t contained in the actual legislation. What that 

means is that individual members simply have no access to challenge those earmarks. 

We talk a lot about giving the President line-item veto authority. 

I think that he ought to have it. I would be more pleased if we had 

it. And we have given it up. When we legislate by report rather 

than actual legislation, we have given up our ability to challenge 

individual spending items. 

I have pointed out before that had any of us suspected that Duke Cunningham had been bribed to get any of the $90 million in earmark that he allegedly got for his clients, we couldn’t have stopped 

very many of them, if any, because they were contained in conference and committee reports that we simply don’t have access to. 

That is a problem, and that is something that we have got to stop. 

H.R. 1642 and the companion bill in the Senate, as you mentioned, Senator Coburn, simply say that if you want an earmark, 

you have got to put it in a bill. And members ought to have access 

to that bill on the House floor. 

But when it comes to conference reports, conference reports by 

definition are unamendable when they get back to the floor. So 

there has to be a process, a point of order protection, something 

that prevents earmarks from being the term that is used is 

‘‘airdopped in’’ at the last minute. 

And I am afraid that if we shut down the process at the committee level and make sure that earmarks have to be in the bills 

there, then the trend will be—and we don’t shut down the conference report process, then all earmarks will simply shift to a later 

stage, and there will be even more incentive to move them where 

they cannot be accessed at all. 

There is some discussion about even if we don’t allow the earmarks into bills, that we have access through limitation amendments on the reports. But if we do that, then we will have to tighten up the rules in the House because, as it stands, the House can 

waive rules, and does, requiring that committee reports even be 

there on the floor when the legislation is voted on. And unless we 

tighten that process, all we will have is reports being approved 

after the bill has already passed. 

You mentioned earmarks as the gateway drug to spending addiction. That is the best description that I can think of. People will 

point out, well, it is only a small percentage of the budget. But 

what we have seen over the past couple of years with the spending 

increases that we have seen, it has coincided with the number of 

earmarks. 

Typically, if you have an earmark in a bill, you can’t vote against 

that bill, or you might lose your earmarks in the conference committee. That is the game that is played in the House. And so, you 

have members supporting bloated appropriation bills that they 

wouldn’t support otherwise. And so, it simply balloons spending everywhere. The earmarks are more important than the sum of their 

8

parts in terms of dollar value because they simply leverage higher 

spending everywhere else. 

We had a discussion the other day in the House as to whether 

or not there is a constitutional right to earmark, and it was a fascinating discussion. Members will point out Article 1, Section 9, 

Clause 7, saying that it is the Congress’s power to appropriate. 

Certainly it is. 

But we ought to point out that James Madison in 1817 vetoed 

the first appropriation bill with earmarks. Didn’t feel it was proper 

to do so. It has been debated since then. The Supreme Court has 

ruled a couple of times and has simply said that Congress makes 

the determination. 

So Congress can say that earmarking is proper, but if you accept 

the notion that it is OK for Congress to have an earmark for an 

indoor rainforest in Iowa, then it begs a question, what kind of 

funding would be unconstitutional? Where does it stop? Where does 

parochialism end in this sense? 

So this legislation is important in that it brings not only transparency, but just as important, it brings accountability. You not 

only have to have names associated with earmarks and shine more 

light, there has to be an ability for members to be able to stand 

up and challenge. 

It is interesting that some of those who will claim a constitutional right to an earmark will go further and claim that they 

should have a right to have an earmark without that funding even 

being scrutinized by other Members of Congress because they know 

their district better than anyone, and they should have a right to 

actually decide what funding goes there. 

I think that is dangerous territory for anybody to be in, and for 

those who pretend to believe in limited government, it is simply inconsistent with that philosophy. But with that, I have the statement in the record, and I will be glad to answer any questions you 

might have. 

And thank you again for the invitation to come here. 

Senator COBURN. Let me ask you a couple of questions. Hopefully, Senator McCain will arrive. 

What you often hear from Members of Congress is that if we 

don’t earmark, then there is an uncontrolled bureaucracy that will 

spend the money any way they want. First of all, what is your response to that? And second, is there any truth to it? And is there 

a constitutional solution to that if, in fact, it is true? 

Mr. FLAKE. Well, we have a process in Congress, a carefully designed process of authorization, appropriation, and oversight. And 

the problem with earmarks is they circumvent that process. 

For those who say that we need to be able to tell the Federal 

agencies that they are not spending in a way that we outlined or 

that is proper, we kind of lose all credibility. 

For example, in this past year’s defense bill, when we criticize 

the Department of Defense for not spending sufficient funds on 

body armor. Yet we earmark more than $1 million for a museum 

in New York in the defense bill. What kind of credibility do we 

have, as Members of Congress, when we stipulate that kind of 

spending? 

9

So it has really taken away our ability to have proper oversight 

because we simply can’t pass the laugh test when we criticize Federal agencies for profligate spending or for not following the dictates of the Congress because here we are saying you have to spend 

money. Here is our spending instructions on the Punxsutawney 

weather museum in Pennsylvania or the Cowgirl Hall of Fame. It 

is simply we have a process of oversight, and earmarks simply circumvent that. 

Senator COBURN. So the fact is the Congress has not done its 

oversight? 

Mr. FLAKE. You bet. No doubt. We simply aren’t doing oversight, 

and I think it is largely because it is embarrassing, once we get 

into it, to actually confront the same Federal agencies that we have 

stipulated should spend money on 800 projects of questionable 

value and then to try to tell them that they are not spending 

money properly. 

And for those who say we are simply spending money that is authorized or appropriated anyway, and we are simply deciding 

where it is spent, we are earmarking accounts that we never 

dreamed of earmarking in years past. There are certain agencies—

the FAA, for example, that has designated accounts for maintaining runways or towers. When we earmark accounts like that, then 

the next year, those agencies have to come back and maintain 

those runways, those facilities. Yet the accounts they have to do 

that are gone. And so, they will have to come back and ask us to 

backfill those accounts. And so, it simply leads to higher spending 

everywhere else. 

With regard to transportation, the transportation bill is an authorization bill, but it acts like an appropriation bill. And the trend 

has been to actually spend less money on highways and roads and 

methods that actually promote mobility or pollution abatement because typical Members of Congress will say I want a long list of 

earmarks that I can claim credit for. And so, they will have a 

transportation museum or a beautification of this street or a bike 

path here. So they can have a long list, and it typically drains 

money away from the infrastructure that the gas tax was intended 

to fund. 

Senator COBURN. In your oath of office, when you take an oath 

of office as a congressman for the United States of America, is 

there anything in there that says your obligation is to bring the 

most back for your State? Is there anything in that oath that would 

imply that? 

Mr. FLAKE. Nothing that I have discovered. And I can tell you 

a lot of my colleagues are tired of this process. They simply are 

tired of being an errand boy for the local mayor, tired of having so 

much staff time spent on securing these earmarks. And so, it is a 

problem. 

One reporter approached me the other day and mentioned that 

he had just read Mo Udall’s old book, ‘‘How To Be A Congressman.’’ 

Mo Udall came here in a special election, famous Arizonan, and he 

didn’t get any introduction or instruction on what to do. So he 

wrote a book on what a Member of Congress is supposed to do. 

That reporter pointed out that nowhere in the book were earmarks mentioned at all. This is a recent phenomena. You pointed 

10

1The prepared statement of Senator McCain appears in the Appendix on page 41. 

2The charts referred to appear on pages 29 and 34 respectively in the Appendix. 

that out. There have been earmarks in years past, but it is typically just in the Appropriations Committee, just an appropriator 

here or there, and they tended to be a little more judicious with 

it. 

In fact, in our discussion the other day, when we were discussing 

earmarks in the policy committee of the House, one member mentioned, ‘‘Well, let us get a little institutional perspective. How did 

earmarks work in the 1980s?’’

And they asked one of the members that was there in the 1980s. 

This member said, ‘‘Well, I can’t tell you. We didn’t get any then. 

It was different. I only discovered a few years ago that I could do 

this, but it is wonderful.’’

And so, it is a recent phenomenon, and it has simply become out 

of control in the last couple of years. 

Senator COBURN. One last question for you, Congressman Flake. 

Can Arizona, as a State, be viable and healthy if the United States 

is on a financial tailspin? 

Mr. FLAKE. No. And the notion that you are a Member of Congress, it is your job to bring home the bacon because that is in the 

best interest of your district simply doesn’t square with reality. 

If we continue with this process and continue out-of-control 

spending that is really fostered with these earmarks, every district, 

every State is worse off. And that is why we have to change the 

process. 

Senator COBURN. Thank you. Senator McCain, welcome. 

TESTIMONY OF HON. JOHN McCAIN,1 A U.S. SENATOR FROM 

THE STATE OF ARIZONA 

Senator MCCAIN. Thank you very much, Mr. Chairman. 

And could I just add on to Congressman Flake’s comment and his 

personal example? 

I believe that Congressman Flake has shown enormous courage, 

and a friend of his and mine decided to challenge him in a primary 

because he didn’t bring home the bacon, because he didn’t have 

enough ‘‘earmarks.’’ And I am happy to tell you that Congressman 

Flake won overwhelmingly, and that was probably the key issue 

associated with that primary, wouldn’t you say? 

Mr. FLAKE. Let me just say I had a good example to follow here. 

Senator MCCAIN. But Mr. Chairman, if there is such a thing as 

preaching to the choir, it is testifying before you today—or maybe 

preaching to the preacher. 

I want to thank you for everything you have done. I think that 

every American home should see these two charts.2 And I know 

that we are doing our best to get them around. 

One of the issues that I did want to discuss is this placement in 

the conference report of earmarks. This is an insidious and evergrowing practice that is really unconscionable because, according to 

law, conference reports don’t have the force of law. But as soon as 

the bill is passed, the various agencies get a phone call and say, 

hey, it is in the conference report, and you better treat it as law. 

In fact, I think a couple of times it has been written into the bill 

11

that the provisions of the conference report will have the force of 

law. 

Mr. Chairman, you and I don’t have the ability to remove those 

from the conference report when we are in debate on the floor and 

when we discuss the provisions of a bill. We can go after the earmarks in the bill itself, but we can’t the conference report. So we 

have to ban it. And I really believe that the time is right now for 

it. 

I was down in Memphis last weekend with a group of the party 

faithful from all over the country, but mainly from the South, and 

it was obvious to me from my remarks to them—but more importantly, from their remarks to me—that they know this has got to 

stop. That we are mortgaging our children’s futures. 

And I think that we have our base energized. They support us. 

I think the majority of the American people support us, no matter 

what their party affiliation is. And this is a time to act, and we will 

be able to do it, I believe, when we take up the lobbying reform. 

And Mr. Chairman, I was thinking last night in anticipation of 

appearing before you today, if, for some reason, this reform bill 

does not proceed, then, Mr. Chairman, I think you and I and our 

other colleagues have just got to start slapping it on as amendments on bills. 

We can’t let another appropriations cycle go by. The appropriators are already beginning to shape their bills. We cannot let another cycle go by with the kind of activity such as is described on 

that chart. 

So, Mr. Chairman, I would appreciate it if you would allow my 

complete statement to be made part of the record, and I know you 

have to proceed. But committee reports and manager statements do 

not have statutory force. They cannot. And departments and agencies are not legally bound by their declarations, as we stated in a 

letter to the President of the United States just last week. 

I thank you, Mr. Chairman, for all you do, and I appreciate you 

for the courage you continue to display and the leadership you continue to give those of us who are interested in fiscal responsibility. 

And I am very pleased and proud of my colleague from the State 

of Arizona. It is a little tougher environment over there in the 

House, as you know, and he shows a great deal of courage. 

Senator COBURN. Thank you, Senator McCain. Your entire statement will be made a part of the record. 

Senator MCCAIN. Sometimes my entire record is made part of my 

statement. [Laughter.] 

Senator COBURN. Yes, well, it comes with you. That is for sure. 

I want to thank you for coming here and thank you for what you 

have done. There is no question you have been a leader on this 

issue in the Senate for years. 

I want to ask a couple of questions. When a House bill comes to 

the Senate floor today, an appropriation bill, and we are considering it, do we have any knowledge of the earmarks from the 

House? 

Senator MCCAIN. I don’t think so, unless we have had an opportunity to see the bill. 

Senator COBURN. But the record is not a part of what we are voting on. Is that correct? 

12

Senator MCCAIN. That is correct, sir. 

Senator COBURN. So the senators in the Senate chamber are voting on, they can have access on a delayed basis and oftentimes untimely basis to the report language in the Senate. But that does 

not include the report language from the House, does it? 

Senator MCCAIN. No, sir. 

Senator COBURN. So, in essence, the Senate, every time they vote 

on an appropriation bill, has no knowledge of the earmarks from 

the House on the bill that they are voting on. Is that correct? 

Senator MCCAIN. Yes, sir. 

Senator COBURN. And so we don’t know what we are voting on 

on appropriation bills, based on what the earmarks are that are 

coming from the House? 

Senator MCCAIN. That is exactly correct. And even if we did, 

sometimes, as you know—not sometimes, but all too frequently—

the bill is completed in the middle of the night the night before we 

are supposed to go into recess. By unanimous consent, it is 

brought. It appears on our desk, and then we vote. 

And everybody wants to leave to go into recess. So, therefore, any 

bad guys that want to examine the bill or make changes or amendments are under enormous pressure not to do so. And we have not 

only seen this with individual appropriations bills, but unfortunately, quite frequently, with omnibus bills—omnibus stacking 

them all together. 

And then we are shocked, shocked and surprised weeks and 

months later when we find out that provisions were put in which 

we find incredibly bad. 

Senator COBURN. What do you think——

Senator MCCAIN. Do you want to say something, Jeff? Go ahead. 

Mr. FLAKE. I just want to point out, the House—and I am not 

sure what the Senate rules are—but the House actually has some 

pretty good rules to prohibit this kind of airdropping of earmarks 

into a conference report, but we waive them routinely. We waive 

all points of order lying against a bill. 

Otherwise, anyone could stand up and say there is non-germane—in this case meaning spending that wasn’t authorized by either the Senate or the House—in the bill. But we waive those 

rules. And that is what this legislation is all about, an effort to say 

we simply will enforce our own rules that we have. And I don’t 

think that is too much to ask. 

Senator COBURN. What is the likelihood of this legislation to pass 

in the House? 

Mr. FLAKE. Well, today, we will find out what is part of the earmark reform proposal that will be in the lobbying reform. And the 

last check, as of last night and this morning, is that we aren’t dealing sufficiently with the conference report angle. 

There is some movement on if not putting all language, earmark 

language in the bills during the committee process or the appropriation process, at least allowing members access through limitation amendments to the committee reports. 

But the problem with that is as along as there is an out with the 

conference report, that is where the earmarks will go. If members 

fear that their earmarks may be seen or singled out in that procVerDate 0ct 09 2002 09:50 Nov 21, 2006 Jkt 027752 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 C:\DOCS\27752.TXT SAFFAIRS PsN: PAT
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ess, they will simply airdrop them into the conference report at the 

end of the process, and we aren’t moving yet to close that down. 

Senator COBURN. Senator McCain, do you have any experience or 

knowledge with the fact of what would happen if an agency didn’t 

follow conference report language in terms of the expenditure of 

money? 

Senator MCCAIN. Then there are implicit threats of cuts in travel, administrative costs, etc., and other threats to cut programs 

that are of high priority to the people in those bureaucracies. I 

know it happens. It is not done in writing. 

Senator COBURN. So, basically, you have——

Senator MCCAIN. You have the powerful committee chair people, 

members of the committee that are responsible for the funding of 

an agency saying treat these provisions as law. And if you don’t, 

then there will be repercussions. 

And I know that happens, and I doubt if we could find a single 

member of those agencies who would come over and testify before 

you that it is true. But they certainly have told me that many 

times. 

Senator COBURN. So, basically, you pass a report language that 

does not have the force of the law, that most of the time is not 

available to the members of either body when they have to vote on 

it, and then you have leverage applied, coercion applied. Is the answer does the President have to spend this money? 

Senator MCCAIN. No, sir. Jeff, did you want to answer? 

Mr. FLAKE. Just on the agencies, it is even more pernicious than 

that. I have actually been contacted by somebody from a Federal 

agency who said that they will sometimes get calls from the Appropriations Committee, from staff after a bill has passed and saying, 

‘‘We forgot to include this earmark. Can you fund it as if it were 

included?’’

And I joked at the time that this is what our oversight has come 

to. ‘‘We made an oversight. We forgot to put this in. Can you fund 

it anyway?’’

But as Senator McCain said, they simply can’t afford not to fund 

those requests, or they are punished in the next year. 

Senator COBURN. Yes. And a great example of that is we had a 

USAID program that went to California, which cost a whole lot 

more money had it been done somewhere else. And the head of 

USAID was actually threatened with his job because of his complaint about that earmark. So there is not only behind-the-scenes 

coercion, there is also threats that are made in public. 

Senator MCCAIN. And I would like to bring up another unpleasant episode, Mr. Chairman. Somehow one Member of Congress, an 

appropriator, with a crooked lobbyist, all by themselves, were able 

to channel hundreds of millions of dollars to one ‘‘defense contractor’’ for the most nebulous and wasteful and criminal projects. 

And obviously, I am referring to former Congressman Cunningham. 

Is the system so broken, is there so little oversight, Mr. Chairman, that one member and one lobbyist can divert hundreds of millions of dollars of taxpayers’ dollars that are supposed to be for the 

men and women in the military to a corrupt enterprise? 

14

1The prepared statement of Mr. Schatz appears in the Appendix on page 43. 

I think everybody was so alarmed at what Congressman 

Cunningham did. I think we should be alarmed that he was able 

to. 

Senator COBURN. Yes. So we discussed before you arrived the 

lack of oversight and the oversight responsibility of Congress and 

that part and parcel of the earmark process is lack of that oversight. 

Well, I want to thank both of you. We appreciate you coming. 

And Senator McCain and Congressman Flake, thank you so much 

for your service to the country. 

Senator MCCAIN. Thank you, Mr. Chairman. 

Senator COBURN. Our next panel has Steve Ellis, vice president 

for programs for Taxpayers for Common Sense; Tom Schatz, president of the Council for Citizens Against Government Waste; and 

Scott Lilly, senior fellow at the Center for American Progress and 

somebody who has extensive experience inside the appropriation 

process. 

I want to welcome each of you. Your entire testimony will be 

made a part of the record, and you are each recognized for 5 minutes. 

Mr. Schatz. 

TESTIMONY OF THOMAS A. SCHATZ,1 PRESIDENT, CITIZENS 

AGAINST GOVERNMENT WASTE 

Mr. SCHATZ. Thank you very much, Mr. Chairman. 

And as I mentioned to you very briefly earlier, we have been 

waiting 16 years for someone to come up with a proposal and a serious one to reform the earmark process. 

Senator COBURN. Let me interrupt you for a minute. 

Mr. SCHATZ. Yes. 

Senator COBURN. You can see how important this hearing is to 

the rest of the Members of the Senate. 

Mr. SCHATZ. I was going to mention that. 

Senator COBURN. There is no one else here. There is no one else 

in attendance because this is not deemed to be a problem. 

Mr. SCHATZ. I think they are also probably off trying to figure 

out what earmarks they want to add into these bills, given certainly what Congressman Flake mentioned, that this is a deadline 

in the House, and the appropriations process is moving forward in 

the Senate. 

And that is one of the points that we have made in our testimony, that this is not a large amount of dollars, although $64 billion is. And our definition of pork barrel spending, which we have 

been using since 1991, which was developed in conjunction with 

the Congressional Porkbusters Coalition, is a little bit more narrow 

than the overall earmark number. But whatever you want to call 

it, it is a problem. There is no question about it. 

And the witnesses prior to this have described it well, as have 

you. And being aware of that, I think the question is what do we 

do about it? 

I think there will be some very public repercussions if nothing 

is done because this process has been and is really symbolic of the 

15

larger problems here in the U.S. Congress. These are low-priority 

projects that take up a lot of time, leaving little time and effort and 

oversight to see what we have done with our money and also to 

look at these larger problems, like Social Security and Medicare. 

So the very least that we should be doing is what is contained 

in S. 1495, the Obligation of Funds Transparency Act, which tells 

the agencies you can spend money only if it is the committee report. 

And to address one of your questions, when did this start? In 

1988, the Office of Management and Budget issued a report identifying unauthorized projects in the appropriations bills. That was 

the first and last time they ever did that because the following 

year, the Appropriations Committee started talking about, as the 

Senator and the Congressman mentioned, cutting off certain funds 

to OMB. 

We, in turn, took that idea and turned it into the first Congressional Pig Book in 1991, and we have been issuing them ever since. 

And we have identified more than 66,000 projects, costing $212 billion over that period of time. 

And as the government has grown, so has the number of earmarks and the pork and the waste, which points to, obviously, the 

need to reduce the size and scope of government, and it would certainly help to start with these low-priority projects. 

Taxpayers have probably heard about the $50 million indoor 

rainforest. They may not have heard about $3 million provided to 

the First Tee Program in Florida or $273,000 to combat Goth culture in Blue Springs, Missouri, which turned out to be such a ridiculous project that they returned $132,000, saying maybe this isn’t 

such a big deal. 

But originally, they claimed that these kids were running around 

town, and they were going to blow up the school like they had done 

at Columbine, and we needed to do something about it. And Congressman Graves apparently believed this and added this money 

in. And then it was given back. 

But since the vast majority of projects are added in committee 

reports and in conference reports, that is really where the focus of 

any legislation should be. We have seen some proposals to allow 

points of order to be presented against items added in conference 

reports. That is certainly helpful. 

But I think there needs to be a very comprehensive look because, 

as both of your first witnesses said—Congressman Flake and Senator McCain—this is our chance. These scandals have brought 

forth the interest, at least with the public, if not your colleagues 

here today, on this issue to an extent that it has never been done 

before. 

We have been issuing the Congressional Pig Book—and Senator 

McCain and Congressman Flake have come along, and we hope you 

will join us as well this year—and we get a few days of publicity 

and some conversation and some possible reforms. But the result 

of what has happened, where the digitization of DOD manuals can 

turn into a bribe has really indicated things have gone too far. 

So we have been talking about this for a long time, and people 

say, well, is it really that big a deal? It is because of what it symVerDate 0ct 09 2002 09:50 Nov 21, 2006 Jkt 027752 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 C:\DOCS\27752.TXT SAFFAIRS PsN: PAT
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1The prepared statement of Mr. Ellis appears in the Appendix on page 51. 

bolizes and what it has become over the period of time and also, 

of course, the explosion in this type of spending. 

In fact, we really refer to the whole process as a form of legalized 

bribery, where we have taken this money from the taxpayers, kind 

of washes through the Appropriations Committee. As Congressman 

Flake pointed out, when you have the lobbyists filling out these 

forms and handing them back to the members just as if it is going 

to happen, nobody is thinking about the fact that this is the taxpayers’ money. 

I don’t think anyone who was asked to individually contribute their share for that $50 million indoor rainforest in Iowa would be 

very happy about it. But when they hear members go back home 

and talk about these projects, it sounds like it is the most wonderful thing in the world. 

And in terms of the priorities of the agencies, the National Park Service has a $9 billion maintenance backlog. And one of the things 

we will put into our Congressional Pig Book this year is the information that the National Park Service has a program called ‘‘Save 

America’s Treasures.’’ They asked for $15 million, a competitive 

program. They got the $15 million. The appropriators added $16.2 million above that and earmarked 

every single dollar. So they thought the program was important 

enough to more than double the amount of money, but they started 

making those decisions. 

So that is just one small example of what is wrong with what has 

been going on. And we really appreciate your leadership on this 

issue, and we will be ready to help you get this legislation moving 

forward. 

Senator COBURN. Mr. Ellis. 

TESTIMONY OF STEVE ELLIS,1 VICE PRESIDENT OF 

PROGRAMS, TAXPAYERS FOR COMMON SENSE ACTION 

Mr. ELLIS. Thank you very much, Mr. Chairman. 

Good morning, and I am Steve Ellis, Vice President of Programs 

at Taxpayers for Common Sense Action, a national nonpartisan 

budget watchdog. 

And you know, I noticed when you mentioned that the Senate 

hasn’t recognized they have a problem. As anybody who has done 

any 12-step program recognizes, that is the first step towards curing your addiction to spending is to recognize that you have a problem. 

I think some of the efforts that we have seen today or at least 

some of the comments from leadership has been that there is a political problem rather than actually a substantive problem. Taxpayers for Common Sense Action definitely believes there is a problem and strongly believes in making earmarks and the legislative 

process, particularly the appropriations process, fully transparent 

and more accountable. 

By denying funding for pork provisions that are not in the actual 

law, S. 1495, the Obligations of Funds Transparency Act, helps 

force the earmarks out of the shadows and into the light of public 

debate. 

17

As everyone on this panel is painfully aware, and you, Mr. Chairman, and the previous panel, earmarking has exploded in recent 

years. But as noted, at least a bit by Mr. Schatz, is that earmarks, 

to me anyway, I guess, are a little like pornography. 

Maybe in more ways than one, but more going off of the late Supreme Court jurist’s Potter Stewart’s observation that he couldn’t 

define pornography, but that he knew it when he saw it. Well, earmarks are hard to define, but we all know it when we see it. 

As your chart showed, in constant 2005 dollars, the CRS found 4,126 earmarks in fiscal year 1994 worth $29.6 billion. That increased by fiscal year 2005 to 15,877 earmarks worth $47.4 billion. 

That represents a 285 percent increase in the number of earmarks 

since fiscal year 1994 and a 60 percent increase in the cost of those 

earmarks. 

TCS’s own analysis of the earmarks in fiscal year 2005 found 15,584 earmarks worth $32.7 billion. In the fiscal year 2006 defense appropriations bill, TCS found 2,837 earmarks worth $11.2 

billion. That is up from 62 earmarks worth $8.9 billion in 1980 and 

a dozen earmarks worth $5.6 billion in the 1970 defense appropriations bill. 

The average 1970 earmark was worth $466 million compared to the average 2006 earmark at $3.9 million. You could argue that 

those dozen half billion dollar 1970 earmarks may have represented the legitimate policy differences between the Legislative 

and Executive Branches. But it is clear that at $3.9 million, the 

2006 earmarks were an effort to steer defense dollars back home 

for pork barrel spending and political favors. Last year’s highway bill had a record $24 billion in earmarks, including the infamous ‘‘bridges to nowhere,’’ which were part of a 

billion dollars obtained for Alaska by Transportation Infrastructure 

Committee Chairman Don Young. 

When Congress finally passed the Foreign Sales Corporation/

Extraterritorial Income (FSC/ETI) bill, what was supposed to be a 

fix for a $5 billion trade distorting subsidy became a $140 billion 

Frankenstein’s monster larded up with tax provisions to benefit 

bow and arrow manufacturers, professional sports teams owners, 

fish and tackle box manufacturers, and shopping mall developers. 

The U.S. Army Corps of Engineers, their budget is built project 

by project. So it is virtually all earmarks. The President zeroed out 

532 of the fiscal year 2006 earmarked projects in his latest budget. 

The Army inspector general remarked that for the Corps, ‘‘The 

budget process was deemed a first half irrelevancy. The measure 

of effectiveness was the amount of funds actually appropriated by 

Congress.’’

The American Association for the Advancement of Science had 

noted recently that, ‘‘Although earmarked funding has been increased steadily over the past several decades, by all accounts, the 

dramatic explosions in R&D earmarks in 2005 and 2006 coincide 

with the flattening and even declining R&D budgets,’’ meaning 

that earmarks cut into competitive programs instead of adding to 

them. In fiscal year 2005, there were $1.5 billion in R&D earmarks. 

By fiscal year 2006, $2.4 billion. 

Simply limiting the number of earmarks is not going to work. 

The first step is to make the budgeting process transparent. Every 

18

1The prepared statement of Mr. Lilly appears in the Appendix on page 57. 

earmark request should be made public in real time. Additionally, 

each successful earmark should be accompanied by amplifying information and the name of the requesting Members of Congress. 

Next, earmarks can be defined as legislative provisions that 

specify certain discrete projects or entities to receive Federal funding. These provisions could appear in appropriations, authorizations, and revenue bills. Additionally—and this differs from S. 

1495—all entities should be included—private, non-Federal, and 

Federal. To leave out Federal entities entirely would leave many 

earmarks, such as those for defense or for the Corps of Engineers, 

untouched. 

Finally, there has to be some teeth. S. 1495 has teeth. If it is not 

in the bill, it doesn’t get funded. But just because an earmark is 

in the law, it isn’t necessarily worthwhile, which is some of what 

Representative Flake was mentioning. 

We also need to have effective tools to highlight and remove egregious earmarks. The consequences of earmarking are clear. Duke 

Cunningham’s schemes to profit off the backs of taxpayers counted 

on earmarks. Jack Abramoff called appropriations bills ‘‘favor factories,’’ as you mentioned. 

Earmarks are the direct result of a corrupt process that encourages lawmakers to scrutinize and fight over the minutiae, to spend 

their time not legislating and conducting oversight, but pulling 

money into million dollar chunks back to their home districts. 

Taxpayers for Common Sense Action stands ready to work with 

you and others to enact real reform. S. 1495 could be a hammer 

in our toolbox working to build a responsible Federal budget. 

Thank you very much for inviting me to testify today. 

Senator COBURN. Thank you, Mr. Ellis. 

Mr. Lilly, I want to thank you especially for being here. Your 

knowledge, institutional knowledge and background is very important to this debate. 

Thank you. 

TESTIMONY OF SCOTT LILLY,1 SENIOR FELLOW, CENTER FOR 

AMERICAN PROGRESS 

Mr. LILLY. Thank you. The idea that a legislature should control 

purse strings really goes back to 1215, when the British nobility 

told King John that if he was going to spend money, they were 

going to be in on the decisionmaking. 

When the Founding Fathers met in Philadelphia to put the Constitution together, they spent months over the structure of the government. But one provision, probably the most profound provision 

in the document with respect to the model of government we had, 

was adopted without any debate at all. 

That is Article 1, Section 9, Clause 7, which Representative 

Flake mentioned earlier. ‘‘No money shall be drawn from the 

Treasury, but in consequence of appropriation made by law.’’

There was virtually universal support among the Founding Fathers for a Congress that had really dominant power over spending. But what this hearing is about, and I think this a very imporVerDate 0ct 09 2002 09:50 Nov 21, 2006 Jkt 027752 PO 00000 Frm 00022 Fmt 6633 Sfmt 6633 C:\DOCS\27752.TXT SAFFAIRS PsN: PAT
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tant hearing, is what do we do when Congress uses that power foolishly? 

Earmarking is essentially the practice of taking discretion that 

is normally exercised by program administrators and directing it 

through the legislative process. That is done in many instances for 

good and sufficient policy reasons, and that is what makes this argument so difficult. 

But in more recent years, the amount of earmarking, as these 

charts show, has virtually exploded, and the motivation behind the 

earmarks, the nature of the earmarks has become more parochial 

and more political, rather than based on legitimate policy differences between the two branches of government. 

I think that the perception that this practice has a major impact 

on public expenditures or the debt is probably wrong. I think there 

is some impact, but I don’t think that is why we should be opposed 

to it. 

I think the idea that most earmarks—and I think you mentioned 

this in your opening statement—are ridiculous and wasteful is also 

wrong. Most members work very hard, most Senators work very 

hard at picking the things that they think will benefit their communities the most. 

But I do think the practice is out of control, and I think it is diminishing the integrity and the effectiveness of the Congress and 

the entire Federal Government. 

Earmarks are distributed in a highly unfair manner, and I mentioned in my written testimony that Bakersfield, California, got 

over $700 million in transportation earmarks, far more than nearby Los Angeles, which clearly has far greater transportation difficulties. 

While most earmarks are reasonably good, in my opinion, the 

ones that are bad are really bad, and some of my favorite candidates for the ‘‘earmark hall of shame’’ have been mentioned by 

the other witnesses this morning. 

More troubling to me is something else that has been mentioned, 

and that is that earmarks are corrupting the legislative process. 

People are being divided from their constituents by offers or 

threats regarding earmarks and often on unrelated policy questions. Not just more or less spending—and I would say there are 

also instances where earmarks are used to persuade members to 

vote for less spending than they would otherwise—but also on tax 

policy and trade policy, on a wide range of other things. 

And I think while conservatives and liberals may disagree on 

what the policy ought to be, there is room for both sides to agree 

that they ought to be made based on the conscience of the member 

and his relationship with his constituents, not on what the leadership offers in terms of earmarks. 

But the worst thing about earmarks, in my opinion, is that they 

have eaten the legislative process. People are so consumed by the 

practice, and the more earmarks you have, the more communities, 

the more foundations you have coming to Washington asking for 

earmarks. And the more time that staff and senators and Members 

of Congress have to spend talking to people about these, the more 

time they spend with the committee staff, and the more time the 

20

staff that should be doing oversight is wrapped up and dealing 

with this burden of earmarks. 

As I mentioned in my written testimony, one subcommittee got 

nearly 15,000 requests for earmarks, which would, if you put each 

request on a single page, be a 10-foot high stack of paper. So just 

the work that it takes to handle that is enormous. 

I think that we have an opportunity to do something now that 

we haven’t had in a long time, and I think this hearing is a step 

in the right direction. I would say I am much less sanguine about 

the legislation that is being promoted. I know it is well intended. 

One provision in the legislation, which requires separate votes on 

conference reports on ungermane amendments, I think is good, but 

it doesn’t get at the problem of earmarks. 

I would ask why, when one of the major issues that we are raising here about earmarks, we don’t do anything about the earmark 

in the highway bill, which this legislation does not do. It does not 

do anything about the earmarks that are showing up in mandatory 

spending bills or in tax bills, all of which should be included in any 

sensible approach to this. 

Furthermore, I think the Appropriations Committee can walk 

right away from this language because it is not difficult to put 

these things in bill language. It is not difficult to put them in bill 

language in a conference report. So they can be put into the bill, 

brought back to the floor, and you have no more choice than you 

do now. 

I would also point out that any appropriation bill that is reported 

out, which has earmarks in the report, that report is available to 

members on both sides of the Capitol at the time that the bill is 

reported. The earmarks that are in there are there, and any member can reduce the account which is earmarked by the amount that 

he wishes based on the quality of the earmarks that are in there. 

If he finds five offending earmarks, he can offer an amendment 

to strike the amount that those earmarks would take out of that 

account on the floor, and it would be, I think——

Senator COBURN. But not on a conference report? 

Mr. LILLY. On a conference report, you have got a big problem. 

I don’t know how you get around that problem, but you don’t solve 

it with this bill because you can put the bill earmarks into the bill 

language of the conference report. 

Senator COBURN. Well, let me stop you there for a minute and 

ask some questions. First of all, here is the theoretical problem, 

which becomes a very practical problem, when they come out of 

conference. The report language is printed. At the same time the 

bill is put on the floor, it goes online, but the report language is 

280 pages long, and you are going to move the bill today. 

So no staff, outside of appropriations staff, ever gets a chance to 

judiciously study what is in the report language. And as you said, 

they are very crafty writers. We had report language this last year 

in the defense appropriation bill on FMAP for Alaska that never 

mentioned Alaska once. 

But to the benefit of Alaska, but to the detriment of 13 other 

States, Alaska got $120 million more for their FMAP program, 

when other States were suffering just as well. And Alaska was 

21

never mentioned. It wasn’t even discovered in terms of the crafty 

writing. So the point is, time is of the essence on report language. 

I want to ask you a couple of other things. 

Mr. LILLY. Could I respond to that? 

Senator COBURN. Yes, sir. 

Mr. LILLY. I worked with several members on the House side 

who have introduced legislation that has over, I think, 120 co-sponsors now. And one of the provisions in that legislation is that conference reports, as well as bills, have to lay over, and printed copies 

have to be available for 2 days before a vote can be taken on it, 

and that can be waived only by unanimous consent, every single 

member. Even a two-thirds vote would not accelerate that. 

Senator COBURN. That is in some of the legislation that is coming 

through the Senate as well. 

Mr. LILLY. And I think that is the only protection that you have. 

Now the provision that is in this bill which blocks non-germane 

legislation from going in, and I think it would do a great deal of 

good, for instance, with the drug liability language that was 

airdropped into the defense appropriation bill. What that would do 

would be to go back to what we did for over 100 years in the House 

and Senate, and that is there is a prohibition against House conferees adopting legislative language in a conference report. 

And so, the way they get the conference back is to bring it back 

in technical disagreement, and then the rules require a separate 

vote on each such provision. And we used to do that all the time. 

That basically stopped in 1998, and I think that is a terrible blow 

to the process, and not good for the Appropriations Committee or 

the authorizing committees to let that happen. And the Flake bill 

would correct that. 

Whether there is some mechanism by which you could have separate votes on earmarks that show up in a conference, I am not 

sure. That is uncharted territory. But the best thing would be to 

reduce the number and volume of them. 

Senator COBURN. Right. One other question. I took you right, but 

my staff didn’t take you right. I recognize that most earmarks have 

value, but they are just not in the priority for what our Nation is 

when we are spending $630 billion more than we take in every 

year. 

Mr. LILLY. Well, I think we earmark—I don’t agree with the CRS 

numbers or some of the others. But I would say truly district-oriented earmarking is probably 2 percent of discretionary spending. 

The problem is that we are so focused on that 2 percent that we 

almost have a deal with the White House that they control the 

other 98 percent. That is what the real problem with this is, 

and——

Senator COBURN. Well, the other problem is, is if you ask for an 

earmark, and then the bill comes out that is horrendous in terms 

of its spending and you don’t vote for it, not only does that earmark 

come out, you don’t get one the next cycle. 

So, in fact, it is a corrupt process, whereby members are forced 

to vote for things they would never vote for because of one small 

parochial interest that is in the political best interest in the short 

term of that Member of Congress, but is in the politically disinterest of this country and its future. 

22

And that is what is so undeniably wrong with this process is the 

process is used to grow the government in a way that is not in the 

best interest of the country over the long term. That is the problem 

with it. 

Mr. LILLY. I agree. 

Senator COBURN. If we were in surplus, I wouldn’t have any 

problem with that. I would love to compete with a lot of the bureaucrats rather than have oversight. But we are not in surplus. 

What we are is stealing every day the future from our kids. 

One other statement you made, and then I will let our other 

panel members comment. You said there were earmarks that sometimes are used for less spending. Could you give me an example of 

an earmark that is placed in a bill that would incentivize less 

spending? 

I have never seen one. I served in the House for 6 years, and I 

have been here a year and a half, and I have never seen one. 

Mr. LILLY. We had a funny situation on the Labor HS bill in the 

House last November. That bill came back. Senator Specter said 

that there is so little in for top priority programs we can’t afford 

to do earmarks. 

Came back to the House a bill that was probably a good deal better than the one that left the House comfortably. Came back and 

was defeated on the House floor. And I think there was widespread 

speculation that people would not have voted for it without earmarks, but they would if they had earmarks. 

And the intention this year is to put earmarks in it because they 

know it is going to be a really bad bill and the only way they can 

get the votes to cut Head Start, to cut a lot of these programs is 

to give members something on the side. 

Senator COBURN. The 302(b) numbers on Labor/HHS has declined in the House this year? 

Mr. LILLY. Yes. It will be lower. 

Senator COBURN. They have a lower number than last year after 

the 1.5 percent? 

Mr. LILLY. Well, the budget resolution hasn’t been passed, 

but——

Senator COBURN. Well, it doesn’t matter what that is because the 

appropriators determine the separate 302(b) numbers anyhow. 

Mr. LILLY. Well, they can’t do the 302 until they get the budget 

number, but I think the expectation is that there are going to be 

cuts across the board. If they stay within the President’s budget, 

which I think they will, then——

Senator COBURN. I think it is interesting for the public, the public doesn’t realize that when a budget is passed and you have a 

total discretionary spending number, that the process under which 

that goes is really a rather fluid process, is it not, in terms of appropriations? 

In other words, you can kind of play the game with the numbers 

to move, depending on which bill you move first and which one you 

want to get out there and how you leverage that in terms of getting 

the votes to pass bills? 

Mr. LILLY. Well, the big game that was played last year was in 

the defense side, and this two-step process we have now where we 

fund the government in one set of bills and then the Iraq war in 

23

another creates a lot of opportunity for mischief. And both sides 

took money out of defense, knowing that they would replace that 

money in the supplemental. One reason we have a $92 billion supplemental was that money 

was taken out of defense in the 2006 bills. So, yes, there is a lot 

of movement that goes on. 

Senator COBURN. Mr. Schatz, Mr. Ellis, any comments? 

Mr. SCHATZ. Well, I think Mr. Lilly has made some very good 

points about how it all works, and I think it is instructive for people to understand that there are a lot of games played here that 

would get people in trouble. 

The Enron trial is going on right now, and I wonder how many 

Members of Congress would be in that same type of situation for 

the kinds of accounting gimmicks that we use here in Washington. 

We seem to add days to fiscal years to move money from one place 

to another. I recall one of your colleagues once tried to make Lake 

Champlain the sixth Great Lake in order to get certain funds. 

So it takes a lot of work to watch how these funds are being 

spent. The more exposure, the more opportunity to eliminate these 

projects, the better off we are. And certainly, the member-directed 

local projects are the ones that really have the least merit or have 

less merit than others. 

Some members talk about wanting to have this discretion. They 

would like to be able to direct funds back home. Why have grant 

programs? If you don’t like the way money is being distributed, 

change the formula. Don’t go around and say, well, we would like 

to add $16 million to the Save America’s Treasures Program at the 

National Park Service, go to your local theater or museum or whatever it might be and ask them to apply and compete with the rest 

of the world. 

Senator COBURN. You raise a great point. The other problem 

with earmarks, which nobody ever talks about, is when something 

is earmarked, the normal process of oversight and evaluation of 

that money doesn’t take place, most generally. 

So if money goes through a grant process, there is an IG that 

looks at it. There is an evaluation of the grant process, in other 

words, internally. When it is earmarked, there is no oversight. 

And I will give you a great example. A million dollars, or 

$500,000 went to a small school system in Oklahoma for computers. They ended up paying $1,000 a month for this small school 

system just for maintenance on the computers. They have nothing, 

essentially nothing left in terms of computers or maintenance, and 

the money is gone. And there is no accountability except through 

the grant process. 

Now the grant process is going to come back and look at how 

that money was spent. And of course, the appropriate things were 

done. Had I earmarked that money and the same thing happened, 

there would have been no oversight on it. So that is the other thing 

that the American public doesn’t understand is that when something is earmarked, very rarely does it ever get looked at again in 

terms of how the money is spent. 

Mr. SCHATZ. If I could add one example, and it is in my statement, and I will try to summarize. The First Tee Program, St. Augustine, Florida, which is a nonprofit organization created to teach 

24

young people how to play golf, a few years ago got $1 million for 

a character education program. And certainly any sport can teach 

you character if it is done the right way. 

And there is, in fact, a character education program at the Department of Education, and you and I might agree it is probably 

not something we should do anyway, but it is there. All the money 

goes to State and local education agencies. The largest amount is 

about $500,000. They apply. They are evaluated. They may or may 

not get the money the following year, but there is a group of people 

that are watching how the money is being spent. 

Since the First Tee Program would never qualify—and by the 

way, this is an organization that is supported by the PGA, the 

LPGA, major manufacturers of golf equipment—they even run ads 

on the major golf tournaments. So they have got plenty of money 

if they wanted to save a million dollars for character education, 

they could get it somewhere else. 

There is no way to evaluate how that program is working at that 

entity because it doesn’t qualify. So that is just one example of, I 

am sure, many that we have identified over our 66,000 projects 

since 1991 that simply subvert the whole process of spending 

money. 

Senator COBURN. Thank you. Mr. Ellis. 

Mr. ELLIS. Yes, sir. I think that one of the things that you have 

hit on and I think is incredibly important that is going on here is 

that how much time actually that the earmarking process absorbs. 

I mean, it takes away from the oversight function, but it also just 

absorbs a tremendous amount of staff time and members’ time. 

And I have here this is just one member’s earmark requests from 

last fiscal year that they had submitted to the House. And you figure this times—this is only a sophomore member. So I imagine as 

you get a little more senior you would have even more. But this 

times 535 requests, you have a huge stack of earmark requests 

that end up going to the Appropriations Committee. The Appropriations Committee goes through all of that. Not every single one 

gets funded. They make decisions on that. There are replies back. 

The staff obviously had to develop all of this. 

I mean, there is a huge amount of energy that is directed toward 

what is admittedly a small part of the Federal budget, but it means 

that we are not spending nearly as much energy on the rest of the 

Federal budget and dealing with all of those other issues. And to 

some extent, I firmly believe that the growth in earmarks is almost 

because it is a ‘‘keep up with the Joneses’’ type of thing. It is that 

they do it because they can. 

A couple of years ago when we had an omnibus, we did a listing 

of a wide variety of earmarks across the country. One of the earmarks that we listed was A–Plus for Abstinence, a group in Pennsylvania—laudable group, you know? And we just put together the 

whole listing. As you said, some of these earmarks are for otherwise laudable programs. 

And the executive director called me to complain that they were 

on this list. But her complaint was not so much that we had listed 

them, but she had never even asked for an earmark. She had never 

even asked for this money. A Member of Congress had visited her 

25

program and had thought that this was a good program and just 

added it there. 

She wasn’t sure if she wanted to take the money because she 

didn’t know if she wanted the Federal Government involved in her 

program. And so, it is just a case of where the member is just trying to shovel the cash out because they can. 

Senator COBURN. Well, we have a vote on, and I have got about 

8 minutes left on it. 

I want to say, first, thank you for coming. Thank you for the 

work. Mr. Lilly, I am tremendously appreciative of you participating in this panel. 

I have asked my staff to try to make an appointment with you, 

Mr. Lilly. I have met with these guys before, but I have never sat 

down—and your experience is something that I would like to just 

kind of spend some more time asking you questions and learning 

some of what you know to try to address this issue. 

Mr. LILLY. I would be glad to. 

Senator COBURN. I thank each of you for attending. 

The hearing is adjourned. 

[Whereupon, at 10:47 a.m., the Subcommittee was adjourned.] 

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