In general, there is no single, accepted, and specific definition of the term earmark for thecongressional appropriations process, nor is there a standard practice for earmarks. (1) However, for fundingprovided by Energy and Water Development (E&W) Appropriations laws to the Department ofEnergy (DOE), this report defines an earmark as "funds set aside within an account for individualprojects, locations, or institutions." In the FY2006 E&W appropriation law, earmarks were labeledas "congressionally directed projects" (2) and most often appeared in the joint explanatory statement of theconference report. (3) Accordingly, DOE budget request documents usually refer to earmarks as "congressionally directedactivities" and often report on them in separate account lines under the functional energy area towhich the earmarks are applied. (4) There is a general debate in Congress over earmarks, in which a key concern is thetransparency of earmark activities in the deliberative process. Critics of the current earmarkingprocess argue that it is not the subject of open debate and that the number of earmarks has grownrapidly. A "dear colleague letter" that seeks to change the process says, We believe the process of earmarking undermines theconfidence of the American public in Congress because the practice is not open, fair, or competitiveand tends to reward the politically well-connected. (5) Opponents further contend, as noted in the letter above, that it is wrong to take an earmark provisionthat survives neither the House or the Senate version of a bill and, nevertheless, have it inserted intoa conference report. This, they say, "stifles debate" and unfairly empowers well-financed lobbyists. Supporters of earmarking generally agree on the need for more transparency, but theycounter-argue that earmarks are not inherently wrong, nor should they be forbidden by rules ofcongressional process. At a February 2006 hearing on the subject, one proponent said, [The Constitution] placed the responsibility for makingspending decisions, not in the Executive Branch, but in the Congress.... Congress has always had thefinal say on that issue. Some would say that the earmarking process has been abused in recent yearsand I would agree, especially in cases where earmarks are inserted into Conference Reports that havenot been scrutinized by either body. (6) In general, proponents agree that some modification of the process may be needed, but otherwisecontend that earmarking is legitimate under the Constitution and is justified because elected officialsare better able to make decisions about funding for local needs than program managers in theexecutive branch. (7) In a review of the FY2006 DOE budget, the American Academy for the Advancement ofScience (AAAS) examined earmarks for DOE energy research and development (R&D) programsand found that ... earmarks eat up whatever increases there are for mostenergy programs and cut deeply into core R&D programs. Energy R&D earmarks total $266 millionin 2006, more than double the previous record from last year, and make up one out of every fiveR&D dollars. But they are especially concentrated in some areas, including biomass R&D wherethey make up more than 50% of total program funds, hydrogen (27%), and wind energy (33%), ratiosfar higher than in previous years. As a result, there will be enormous cuts to competitively awardedR&D grants in those areas. (8) Table 1 , below, shows the funding trends for earmarks under programs in DOE's Office ofEnergy Efficiency and Renewable Energy (EERE) and DOE's Office of Electricity Delivery andEnergy Reliability (OE). These trends are illustrated in Figure 1 , at the end of this report. The tableshows that EERE funding earmarks have more than tripled, from $46.0 million in FY2003 to $159.0million in FY2006. Table 1: Earmark Funding Trends for EERE andOE ($ millions) Sources: DOE Budget Requests FY2005, FY2006, and FY2007 and H. Rept. 109-275 . For FY2006, Table 3 (below) shows a $30.7 million increase in renewable energy R&Dearmarks, including increases of $16.4 million for Biomass & Biorefinery, $8.3 million for WindEnergy, and $4.1 million for Solar Energy. Of the $42.5 million increase for energy efficiency R&Dearmarks, nearly half ($20.3 million) was for Vehicle Technologies. Also, Table 3 shows a $28.8million increase for Electricity R&D earmarks under the Office of Electricity (OE). In early February 2006, the National Renewable Energy Laboratory (NREL) issued a pressrelease stating that FY2006 earmarks for EERE programs had left it with a $28 million gap in itsoperating funds, forcing NREL to cut 32 staff positions in hydrogen, biomass, and basic researchprograms. (9) The FY2007DOE Budget Request shows that the EERE share of NREL's budget was reduced from $182.5million in FY2005 to $161.6 million in FY2006, a $21 million (or 13%) reduction. (10) However, in late February 2006, DOE announced that an additional $5 million had been sentto NREL to immediately restore all 32 positions. DOE transferred the funding from other accountsand announced that it was working with Congress to restore funds to those accounts through severalmeans, including the "deobligation of funds provided to several congressionally directed projects in2001 and 2002 that have failed to make progress." DOE further noted, "Should Congress fully fundthe President's FY2007 request, unencumbered by earmarks, NREL should be able to maintain avibrant and stable workforce in the future." (11) In the State of the Union Speech given in January 2006, President Bush announced the launchof the American Competitiveness Initiative (ACI), which would increase support for R&D andtechnological innovation, including certain energy initiatives, (12) to help stimulate economicgrowth. The Administration's ACI document expresses concern about the potential for earmarks toimpede the proposed initiatives. Consistent with the previously noted definition, it defines earmarksas "the assignment of science funding through the legislative process for use by a specificorganization or project." It says, ... the practice signals to potential researchers that thereare acceptable alternatives to creating quality research proposals for merit-based consideration,including the use of political influence or appeals to parochial interests. The rapidly growing levelof legislatively directed funds undermines America's research productivity. (13) ACI contends that this type of funding is "rarely the most effective use of taxpayer funds." On the other hand, some proponents argue that R&D earmarks help spread the researchmoney to states and institutions that would receive less research funding through other means. Also,some supporters of earmarking contend that earmarks provide a means for funding unique projectsthat would not be recognized by the conventional peer-review system. (14) A key component of ACI, the Advanced Energy Initiative (AEI), proposes new initiatives forseveral energy technologies. (15) In particular, it embraces key initiatives (16) for hydrogen,biomass/biorefinery, and solar energy (17) that are reflected in the FY2007 DOE budget request as majorfunding increases for corresponding host programs under the Office of Energy Efficiency andRenewable Energy (EERE). (18) Table 2 shows the FY2006 funding earmarks for the Hydrogen, Biomass/Biorefinery, andSolar Energy programs at EERE. It also shows the proposed FY2007 funding increases for AEI'shydrogen, biomass/biorefinery, and solar energy initiatives under those programs. The table showsthat the FY2006 earmarks are nearly equal to the proposed increases for the hydrogen andbiomass/biorefinery initiatives; for the solar energy program, however, the total earmark is muchsmaller than the proposed AEI increase. Table 2. Earmark Funding Compared with AEIProposals ($ millions) Sources: DOE Budget Requests FY2005, FY2006, and FY2007 and H.Rept. 109-275 . Do the EERE earmarks seriously weaken R&D programs, as some opponentscontend, or do they merely provide a more equitable, although perhaps more decentralized,distribution of R&D funding, as some proponents argue? If renewable energy earmarks under EERE continue at the same or higherlevels in FY2007, would they lead to new cuts in staff positions at NREL? If Congress were to approve the Administration's requested increases for theAEI renewable energy initiatives, would earmarks continued at the same or higher levels act to diluteor otherwise erase some of the technological stimulation that the AEI aims to generate for itshydrogen, biomass/biorefinery, and solar energy goals? Table 3. DOE EERE and OE Earmarks,FY2005-FY2006 ($ millions, current) Sources: DOE, FY2007 Budget Request , vol. 3; H.Rept. 109-275 , pp. 143-145; and personalcommunication with Mr. Randy Steer, DOE/EERE, Feb. 23, 2006. Figure 1. DOE Earmark Funding for Renewable, Energy Efficiency, and Electricity

Summary:
Appropriations earmarks for the Department of Energy's (DOE's) Energy Efficiency andRenewable Energy (EERE) programs have tripled from FY2003 to FY2006. According to theExecutive Office of the President and the private American Association for the Advancement ofScience (AAAS), this affects the conduct of programs and may delay the achievement of goals. Further, the Administration has proposed new funding for hydrogen, biomass/biorefinery, and solarenergy initiatives proposed under the American Competitiveness Initiative/Advanced EnergyInitiative (AEI). The report discusses the potential impact of congressional earmarks on EERE research anddevelopment (R&D) programs and, in particular, whether continued high levels of earmarks couldlead to new cuts in staff and dilute the desired impact of the AEI initiatives under EERE, shouldCongress decide to fund them. The congressional debate over earmarks centers on the transparency of the process, with afocus on earmarks not initially approved in either chamber that appear in a bill's conference report. Opponents contend that the earmarking process is not open, fair, or competitive. Proponents say itis a legitimate practice and is justified by policymakers' knowledge of local needs, as it spreadsresearch money to deserving states and institutions. The appropriation figures cited as "earmarks" in this report are those labeled by DOE budgetrequests as "congressionally directed activities" and, for FY2006, appear to be completely consistentwith figures in the FY2006 Energy and Water Development (E&W) conference report that arelabeled as "congressionally directed projects." In this regard, the earmark figures in this reportappear consistent with the definition of a congressional appropriations earmark as "funds set asidewithin an account for individual projects, locations, or institutions." This report will be updated as events warrant.