Navigating the Challenges of Earmarks in Modern Lobbying

In government relations, earmarks have long been a double-edged sword. For decades, earmarks were a critical mechanism for directing federal funds to local projects, but controversy and scandal have tarnished their image. With earmarks reinstated under new guidelines today, organizations seeking funding and the lobbying industry face a complex landscape.

Understanding the intricacies of earmarks, the changes brought by their reintroduction, and the challenges they present is essential for successfully navigating this terrain. Today, we’ll explore the role of earmarks, the evolution of their practices, and their impact on lobbying efforts when trying to secure funding for organizations.

A Brief Overview of Earmarks

The term “earmark”, also formally referred to as “congressionally directed spending” or “community project funding,” refers to federal spending for a particular project dedicated to a specific congressional district, locality, or state. These funds allow lawmakers to allocate funds for hyper-specific projects under their own authority, often benefiting their constituencies through targeted projects.

Including earmarks in a proposed piece of legislation has always been a highly controversial action. Supporters argue that they empower local jurisdictions by enabling them to access federal funds for specific needs that might otherwise go unmet and better target specific needs. Opponents, however, criticize earmarks as opportunities for wasteful spending on legislators’ “pet projects,” leading to inefficiencies and potential corruption.

The legality of earmarks is grounded in Article 1, Section 9 of the United States Constitution, which requires Congress to direct all appropriations of federal funds. In the traditional process of federal appropriation, Congress grants an annual sum of money to an agency, but the internal budgeting process is determined and unique by the department itself. When Congress includes an earmark, it can funnel a specific amount into an agency’s budget that will finance a particular project, without the requirement that Congressmen and women identify themselves or the project. Earmarks can help catalyze bill movement through the federal government, as a party will often “win” a crucial party member’s vote via the inclusion of an earmark for an infrastructural or economic development in their district.

Earmarks can be described as either “hard” or “soft,” and distinguishing between the two is crucial in understanding the spending’s applicability. Hard earmarks are legally binding and included in the Congressional legislation text. Once enacted, they carry the total weight of the law, requiring federal agencies to allocate funds as specified.

Soft earmarks, or “softmarks,” are not legally binding and are typically found in congressional committee reports. Although they do not have the force of law, they are often interpreted as binding by the agencies involved, making them influential in practice.

The Pre-2011 Era: Earmarks in Practice

Prior to 2011, earmarks were authorized via a provision written into an appropriation bill that directed funding to specific projects without having to disclose their involvement. In May of each year, the House and Senate Appropriations committees divide the budget resolution into sub-allocations for appropriation subcommittees. These subcommittees write the spending bill that the full appropriation committee then may amend and approve. Earmarks can be added to either the subcommittee or full committee during amendment before moving to the floor of their respective chambers for a greater vote. Earmarks typically pass through appropriations bills since their vast size, haste in passing, and transportation through various committees reduce the likelihood that they will be closely screened.

The widespread use of earmarks became more prevalent in the 1980s, as more legislators allocated government funds for specific local projects in hopes of appeasing direct constituents. Their increased popularity in the 1990s and eventual codification in 2007, ultimately led several high-profile scandals. The most well-known example was in 2005 when Representative Don Young (R-AL) allocated $231 million earmark for a bridge in Alaska connecting the small town of Ketchikan, Alaska to Gavina Island that would have served just 50 residents. It was in response to this incident that the House of Representatives mandated every earmark be accompanied by a publicly named sponsor. The bridge was never built, but funds for a road leading to it continued to flow – leaving the island of Ketchikan with a 3-mile dead end highway, appropriately coined the “Bridge to Nowhere”.

While pointless, Young’s bridge earmark paled in comparison Congressman Bob Nay’s bribery scandal, facilitated by his use of earmarks as a mechanism of corruption. In 2006, Congressional Representative Bob Ney’s (R-Ohio) career flatlined after he was tried for accepting bribes from lobbyist Jack Abramoff in exchange for the inclusion of millions of dollars in earmarks directed to Abramoff’s clients. Ney pled guilty and was sentenced to 30 months in prison.

The reoccurring nature of earmark-related scandals led a bipartisan group of Senators to join with the Bush Administration to support the ‘Honest Leadership and Open Government Act,’ a transparency bill that required lawmakers to disclose all earmarked sums and document the sponsor and recipient of each earmark. These new transparency rules reduced earmark spending – in the fiscal years 2000 to 2006, earmarks constituted 2.8% of federal discretionary spending, but after reforms in 2007 earmarks only constituted 1.3%.

Despite this reform, concerns about federal spending via earmarks continued to grow and in 2011 Congress banned the act. Fearful of the use of their taxpayer dollars, the public agreed with this ruling, as evidenced by a 2016 poll by The Economist and YouGov that revealed 63% of Americans approved of the earmark moratorium. 59% of respondents agreed that the act of including earmarks was “unacceptable.”

The Return of Earmarks in 2021

In 2021, earmarks were reintroduced under new rules designed to enhance transparency and accountability. Fundamental changes included a cap on earmark spending at 1% of discretionary budget authority, with the fiscal year 2024 being capped at 0.5% total discretionary spending, a maximum of 10 projects per legislator, and a requirement for public disclosure of earmark requests.

One of the most significant changes was the exclusion of for-profit entities from receiving earmarked funds. This shift aimed to prevent conflicts of interest and reduce the potential for corruption. Legislators must certify that neither they nor their immediate family members have a financial interest in the projects they sponsor.

To the disappointment of earmark opponents, there are few limitations on what type of non-profit funding projects are eligible for earmarking. New post-moratorium guidelines note there must be “evidence of community support that were compelling factors” when deciding which projects are to be requested. Some point out that “compelling factors” are the same criteria that determine the winners of competitive grants, leading opponents to believe that earmarked projects are simply projects that could not earn a competitive grant due to their lack of community support or interest.

In terms of figures, in fiscal year 2022 congressionally directed spending remained under the 1% discretionary spending cap, hovering at around 0.6%. Congress spent $9.1 billion in earmarked spending on 4,963 projects. These figures increased for the fiscal year 2023, with Congress approving 8,852 earmarked projects estimated at $16.7 billion. Data from the U.S. Government Accountability Office in 2022 reveals that earmarks fund a diverse range of projects, with the largest categories of earmarks going toward environmental projects and community development projects. These categories were followed by transportation, national defense, and health-related projects. Besides a limit on for-profit projects and entities, there are no limitations on the industries or subject areas eligible for earmarked funds

10-year Comparison

Fiscal year 2021 and beyond is subject to a discretionary funding cap of 1%, unlike the fiscal years 2011 and prior. In 2023, Congress spent $16.7 billion on 8,852 earmark projects. Still, congressionally directed spending in 2022 and 2023 was less than the average of $17.8 billion in fiscal years 2008 through 2010. Where before the pre-moratorium legislators were not required to state their name when adding an earmark, officials are now subject to limits on their number of stated projects, as well as officially publishing their sponsorship of an earmark. Also, the limitations have changed regarding the entities eligible for earmarks: for-profit entities can no longer receive this form of funding.

The 111th Congress is an interesting period to examine records from as it ran from 2009 to 2010, right before the ban on earmarks. Records from this period reveal California, New York, and Pennsylvania received the highest number of earmarks, respectively. However, Hawaii, North Dakota, and West Virginia received the highest per capita distribution of Earmarked funds, with North Dakota receiving a high $318 per capita in earmark redistribution. California, on the other hand, received a $19 per capita earmark redistribution. As for the 2024 fiscal year, the same trend persisted where states with smaller populations received more “pork per capita.” Alaska earned the most earmark spending per person, with $645 per person. Maine was second, with $434 per person, and Hawaii at $336, followed. The bottom three states were Indiana at $4.32 per person, Puerto Rico at $3.67 per person and North Dakota, who received no earmarks.

The Brookings Institute’s research studying earmarks post-moratorium (2021 and beyond) analyzed the Democrat and Republican sponsors written justifications for their proposed earmark to better understand if party lines impacted earmark behavior. While 117th Congress Democratic representatives requested two more earmarks than their Republican counterparts (a ratio of 10 to 8), the Republicans requested an average of $3 million more per earmark then Democrats. These figures round out to individual Republican requests of $4.7 million per earmark, and $1.7 million per individual Democrat. Issues typically associated with Republicans (defense, the economy, immigration) are not suited for the capabilities of earmarks. Democrat-owned issues, on the other hand, are suited: social welfare, education, and community development. As such, Brookings’ research found that Democrats requested more earmarks with policy topics that they owned (welfare, education, community development) than Republicans, who used earmarks for larger infrastructure projects.

5 Best Practices for Securing Earmarks

1. Building Strong Relationships – Successful lobbying efforts rely on building strong relationships with legislators and their staff. Organizations can increase their chances of securing funding by understanding their priorities and demonstrating how an earmark can benefit their district.
2. Providing Robust Justifications – The new transparency rules require detailed and well-supported justifications for earmark requests, including evidence of community support, alignment with legislative priorities, and a clear demonstration of the project’s impact.
3. Adapting to the Political Landscape—Lobbying firms must stay attuned to the shifting political landscape and adjust their strategies accordingly. They must target legislators from both parties, craft messages that resonate with different political ideologies, and anticipate potential challenges.
4. Leveraging Data and Analytics – Using data and analytics to support earmark requests can provide a competitive edge, presenting demographic data, economic impact studies, or other quantifiable metrics that demonstrate the value of the proposed project.
5. Emphasizing Transparency and Accountability – In the current environment, transparency and accountability are paramount. Organizations should proactively disclose their intentions, ensure compliance with all regulations, and engage with stakeholders to build trust and support.

The reintroduction of earmarks has reshaped the lobbying landscape, presenting opportunities and challenges for organizations seeking federal funding. With increased scrutiny and new regulations, securing earmarks requires a strategic, well-documented approach that aligns with legislative priorities and demonstrates clear community benefits.

By understanding the complexities of the current earmark environment and adopting best practices, lobbying firms like A10 Associates effectively navigate this evolving landscape and help our clients achieve their funding goals. We look forward to hearing from your organization if you have questions or need funding.

FAQs About Earmark Spending

1.) What are earmarks, and why are they controversial? Earmarks are provisions in legislation that direct federal funds to specific local projects, districts, or states, allowing lawmakers to address unique needs within their constituencies. The controversy around earmarks stems from their potential use as tools for wasteful spending. While proponents argue that earmarks are essential for local development and addressing specific community needs that broader federal programs might overlook, critics see them as opportunities for legislators to funnel money into projects that may not serve the public interest. Past scandals over frivolous or self-serving projects and lack of transparency fueled these perceptions and created public distrust.

2.) How have earmarks changed since their reintroduction in 2021? Since their reintroduction in 2021, earmarks have undergone significant changes to improve transparency, accountability, and fairness in allocating federal funds. Key changes include:

• Spending Cap: Earmarks are capped at 1% of discretionary budget authority, with the fiscal year 2024 cap set at 0.5%. This limits the amount allocated through earmarks and ensures they do not dominate the federal budget.
• Transparency Requirements: Legislators must publicly disclose their earmark requests online, including justifications and evidence of community support. This will allow for public scrutiny and reduce the risk of hidden or unethical allocations.
• Limitations on Projects: Legislators are limited to requesting ten earmarked projects per year, encouraging them to prioritize the most critical needs in their districts. Additionally, for-profit entities are no longer eligible for earmarked funds, addressing concerns about conflicts of interest and the potential for corporate influence on earmarking decisions.
• Ethical Standards: Legislators must certify that they, their spouses, and immediate family members have no financial interest in the projects they sponsor. This rule prevents corruption and ensures that earmarks serve the public good rather than personal or economic interests.

These changes represent a significant shift from the pre-2011 era, where earmarks were often criticized for their opacity and potential for abuse.

3.) What challenges do lobbying firms face in securing earmarks today? Lobbying firms today face a range of challenges when it comes to securing earmarks for their clients, reflecting the increased scrutiny and regulation in the post-2021 environment:

• • Increased Scrutiny: With the new transparency rules, every earmark request is subject to public and media scrutiny. Lobbying firms must ensure that their requests are legally compliant and defensible in the court of public opinion. Any hint of impropriety or waste could derail a funding request.
  • Complex Justification Requirements: Earmark requests now require detailed justifications, including evidence of community support and a clear explanation of how the project aligns with broader legislative goals. This means that lobbying firms must be thorough in their research and documentation, often requiring extensive collaboration with clients and community stakeholders.
  • Navigating Partisan Differences: The partisan nature of earmark requests has become more pronounced, with Democrats and Republicans often prioritizing different projects. Lobbying firms must be adept at tailoring their strategies to appeal to legislators from both parties and understand the specific concerns and priorities that drive their decision-making.
  • Unequal Distribution of Funds: Smaller states or those with influential legislators tend to receive a larger share of earmarked funds per capita. This challenges organizations in larger, more populous states, where competition for limited earmark dollars is fierce. Lobbying firms must work harder to make their case in such environments, often requiring more sophisticated advocacy strategies.
  • Compliance with Ethical Standards: Legislators must certify that they have no financial interest in the projects they sponsor, which means that lobbying firms must be vigilant in ensuring that their clients are free from potential conflicts of interest. Any oversight in this area could lead to the rejection of an earmark request and damage the firm’s reputation.

4.) How can organizations improve their chances of securing earmarks? Organizations need a well-rounded strategy that encompasses relationship-building, thorough planning, and a deep understanding of legislative dynamics to navigate the complexities of securing earmarks in today’s environment. Here are some essential tactics:

• • Cultivating Key Relationships: The foundation of a successful earmark request lies in strong, trust-based relationships with legislators and their aides. Organizations should focus on consistently engaging with these key figures through personalized communication, regular updates, and meaningful interactions that highlight the alignment of their projects with the legislators’ goals and the needs of their districts.
  • Crafting Convincing Proposals: In an era of heightened scrutiny, earmark proposals must be meticulously prepared and well-supported. Organizations must demonstrate how their projects address specific local needs, show strong community backing, and articulate the broader benefits. A compelling narrative that distinguishes the project from others vying for limited funds is essential.
  • Adapting to Shifting Political Winds: The political landscape is fluid, and organizations must be ready to pivot their approach as needed. This could mean aligning earmark requests with the prevailing priorities of the dominant political party or strategically targeting lawmakers who hold influential positions. Understanding the current administration’s focus areas and their impact on earmark decisions is also crucial.
  • Utilizing Data to Strengthen Requests: Data is a powerful tool in making a case for earmarks. By leveraging demographic insights, economic impact assessments, and other relevant statistics, organizations can create a persuasive argument for why their project should be prioritized. This evidence-based approach strengthens the proposal and prepares the organization to address potential challenges or questions.
  • Prioritizing Transparency and Ethical Practices: In today’s environment, transparency and high ethical standards are critical to gaining trust and support. Organizations should be upfront about their objectives, ensure that all documentation is easily accessible, and actively involve community stakeholders. Demonstrating a commitment to accountability can set a project apart and reassure legislators of its integrity.

5.) Are there any success stories from the Post-2021 earmark era? Since earmarks made their comeback in 2021, we’ve seen some success stories that show how a thoughtful approach can really pay off:

• Environmental Projects: Many projects focused on the environment have hit the mark by securing earmark funds. These successes often come from aligning the projects with both local needs and broader goals, like sustainability and climate change. For instance, initiatives aimed at improving water infrastructure, protecting natural habitats, or boosting renewable energy have found strong support. The key has been demonstrating how these projects address pressing local issues while also contributing to national priorities.
• Community Development Initiatives: Projects aimed at enhancing community development, such as affordable housing, public health, and education, have also seen success. These initiatives typically strike a chord with lawmakers who are passionate about social welfare and equity. What makes them stand out is their ability to show strong local support and present clear, detailed plans on how the funding will benefit the community. By focusing on these tangible impacts, these projects have been able to secure the necessary backing.
• Infrastructure Improvements: Even with the current restrictions on for-profit entities, some infrastructure projects have managed to secure earmarks by showcasing their broader public benefits. Transportation projects, for example, have been particularly successful when they can demonstrate how they’ll improve road safety, reduce traffic congestion, or enhance public transit. When these projects align with regional development goals and promise significant economic impact, they’ve been able to attract the earmarked funds needed to move forward.

These examples highlight that with the right strategy, solid justifications, and a clear alignment with both legislative and community priorities, it’s possible to successfully navigate the earmark process. Despite the challenges, these success stories show that there’s still plenty of opportunity for organizations that know how to play the game.