Record deficit spending in Washington has many faces: Defense, Medicare, Social Security. But none has received more criticism in recent months than the infamous and notorious earmark. Conjuring up images of “Bridges to Nowhere” or “Teapot Museums”, earmarks, or Congressionally Directed Funding, have become the poster child for irresponsible, out of control, big government spending. But is the earmarking practice by Congressional representatives really pushing our country to the brink of bankruptcy? That is what many critics would have the public believe. By playing on the public’s disgust with overspending and sensationalizing it with examples of wasteful projects that abuse the system, earmarks have been turned into a proverbial whipping boy for all forms of government spending.

Sources of criticism are not limited to the media or political newcomers trying to make a name by misdirecting supporters from the true causes of our spending crisis. President Obama has recently come out in strong opposition to the earmarking process. During the State of the Union speech, he called for a ban of all earmarks and has threatened to veto any bill that contains them.

Senator Daniel Inouye (HI), Chairman of the Senate Appropriations Committee, issued a statement on February 1 announcing the Committee will place a moratorium on earmarks for the current session of Congress. Yet he does not concede and end the war on earmarks, later committing to revisiting the issue once “the consequences of the decision are fully understood”. I think that what Senator Inouye is trying to say is be careful what you wish for because you just might get it.

Certainly, I am not suggesting that the current level of our federal expenditures is acceptable. But it seems a bit disingenuous to target a spending practice that makes up three tenths of one percent of our federal budget. By comparison, Social Security and Defense spending make up 21 and 20 percent of the federal budget, respectively. Much of the political grandstanding to abolish earmarks is merely distraction from the real cause of damage.

Eliminating earmarks does not actually curb spending at all. It merely moves the decision of which projects get funded from Congressional members to the administrators of federal agencies. By the time earmarking occurs through the appropriations process, the budgets of the federal agencies have already been authorized. Earmarks merely provide legislators the ability to further divvy up a very small portion of those budgets to meet local needs of those they represent.

The good projects that benefit our nation and local communities are often overshadowed by the abuses and frivolous projects of a few. But for every “Bridge to Nowhere” there are examples of projects and program that fulfill a specific national interest and uplift local economies. Unfortunately, the examples of money well spent do not garner as much attention as the more rare occasions when taxpayer dollars are frivolously wasted on pet projects.

Forget about funding directed for regions in need of important flood control projects or high tech vaccine research and development to create life-saving Staph vaccines (the number one killer of wounded soldiers in the battlefield) for the military. These things are not important as long as an abomination like the “Bridge to Nowhere” has been perpetrated upon the taxpaying public. Small businesses and startup companies capable of producing high tech products that the government wants will now suffer as large corporate interests with unfair advantages deploy extensive resources to access fresh funding that now flows through federal agencies located far from Middle America.

It’s terrible timing for small business. Whispers in the U.S. House of Representatives of the impending doom of the federal Small Business Innovation Research Program could be a double gut punch for small research and manufacturing companies. Small companies get only 4.3% of federal research dollars, but produce five times as many patents per dollar as large companies and 20 times as many as universities.

What does this mean for local community leaders? Communities and small businesses must become more competitive. With the departure of earmarking, much of this funding will be redirected through agency grant programs. Unfortunately, the pool of recipients is often smaller and is more concentrated in large east and west coast interests. How do small interests compete? Companies may need to invest more time and money into pursuing procurement and contracting opportunities with the federal government. They may need to consider hiring experts to write grants, monitor agency program funding, or hire consultants to broker connections with program directors, contract managers, and decision makers within federal agencies. Often times, half the battle can be won by conveying your message to the proper audience.

If beauty is in the eye of the beholder, then I would suggest that wasteful spending is in the eye of those not receiving it. It has been my experience that the same people denouncing earmarks and government spending are the first ones with their hands out when they catch the slightest whiff of federal funding that may benefit their own interests. “It is not wasteful spending until it goes to someone who isn’t me”.

The future of earmarks remains an uncertain one. What is certain, however, is that the debate will rage on and good projects, small business and high tech startups will bear the consequences of tired rhetoric and political showmanship.

Ryan Aasheim is an Associate with Praxis Strategy Group where he works extensively with the Red River Valley Research Corridor technology-based economic development initiative. He was formerly Economic Development Director for U.S. Senator Byron Dorgan.

Photo by Nick Ares