Earmarks and the Earmarking Process

OMBW Background Brief Today, OMB Watch released a timely background brief on earmarks and the federal earmarking process -- an issue hotly debated in the print and electronic media and on the House and Senate floor over the last several weeks. The brief clarifies the definition of an earmark, demystifies the process by which earmarking occurs, and shows why an outright ban on earmarks in appropriations bills won't reduce federal spending. The skinny:

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Saxton: Top 1% Pay Too Much in Taxes

Joint Economic Committee ranking member Rep. Jim Saxton (R-NJ) wants us to know what a soul-crushing burden of taxes the richest one percent of income earners shoulder. The share of federal income taxes paid by the top 1 percent of households ranked by income increased from 36.5 percent in 2000 to 38.8 percent in 2005, recent Congressional Budget Office (CBO) data show. ... "Despite the contention that the tax cuts would unfairly reduce the tax burden of the rich, their share of taxes has in fact gone up," Saxton concluded.

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Sen. Voinovich's "Emergency" Supplemental Amendment

OMB Watch Statement OMB Watch supports Sen. Voinovich's amendment (# 4238). It would curb the recent over-reliance on supplemental spending legislation. Spending under any supplemental is entirely outside the regular order of the budget process and not included in formal deficit and debt projections, raising issues of fiscal transparency and accountability. This is an opportune moment to take stock of the evolving nature and policy implications of the recent over-reliance on supplemental appropriations bills and to consider some specific reforms.

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Estate Tax Madness

The Senate has officially gone over the the bad place. Three out of the first seven amendments to the FY 2009 budget resolution propose to make costly changes to the estate tax. While only one of them was adopted, unfortunately the breakdown of the votes showed less support for a rational, fiscally responsible reform to the estate tax. Here's a quick summary of the amendments:

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    DAILY FISCAL POLICY REPORT -- Mar. 13, 2008

    Budget Resolution -- Votes on Amendments and Substitutes:
    • Senate: Voting is expected all day -- and night -- on amendments, concluding with a rapid-fire vote-a-rama. As of last night, these were the pending amendments.
    • House: Voting is also expected, but on a smaller number of amendments and the following substitutes offered by the GOP, the Progressive Caucus, and the Congressional Black Caucus.
    Final votes in each chamber on their respective budget resolutions are expected on Friday

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    Earmarks -- Worse Than You Thought

    Did You Know They Threaten U.S. Scientific Greatness? Neither did I, until I read this write-up by the White House Office of Science and Technology Policy:

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    Quotations of the Day

    In case it escaped your attention in perusing Craig's blog below, John McMaverick, the presumptive GOP nominee for president, lets slip a surprising sentiment: ... the facts are that I never showed any bias in any way against anybody — except for the taxpayer. -- Sen. John McCain (R-AZ) And, for bipartisan measure: ... the facts are that I never showed any bias in any way against anybody — except for the taxpayer. .. I hope that senators of good will on both sides of the aisle will step forward and say, 'We have an obligation to our clients, um, to our constituents" [emph. added].

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    Federal Contract Bidding: It's Complicated

    Last week, we noted that Sen. John McCain (R-AZ) played a role in killing the Air Force's deal with Boeing to provide tanker planes. Citing corruption in the original bidding process as the reason for his intervention into the deal, McCain said: All I asked for in this situation was a fair competition...I never weighed in for or against anybody that competed for the contract. All I asked for was a fair process. And the facts are that I never showed any bias in any way against anybody — except for the taxpayer.

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    Imagine Spending $3 Trillion on the Iraq War

    It's Easy if You Try Sunday's Washington Post carried an op-ed piece entitled The Iraq War Will Cost Us $3 Trillion, and Much More. Take a moment to read it; this is serious subject matter.

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    DAILY FISCAL POLICY REPORT -- Mar. 12, 2008

    Economy -- Fed Moves to Ease Credit Crunch: The Federal Reserve is making $200 billion in short-term loans available banks holding diostresed mortgage-backed securities. The Dow jumped over 400 points on the news, its biggest one-day gain in five years. Wall Street Journal.

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