Congressional 'Pork' Spending Skyrockets

Federal Reserve Chairman Ben Bernanke has been getting plenty of heat from Congress for stepping in to rescue Bear Stearns. But a new report shows that lawmakers themselves don't show much restraint when it comes to spending taxpayer money on pet projects.

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AP

The amount of so-called pork barrel spending jumped30 percent — to $17.2 billion — during the current fiscal year, according to Citizens Against Government Waste, a non-partisan watchdog organization.

That’s less than the $30 billion guarantee the Fed used to help JPMorgan buy Bear Stearns. But the Fed’s money may or may not be needed. And even the most radical free-marketers say the Fed did the right thing to head off a possible financial system meltdown.

“I hate situations of moral hazard but on the other hand if Bear Stearns had sunk, that would have been a tremendous mess,” says Tom Firey, a policy analyst with Cato Institute. “The radical free market guy in me is very nervous about it, but I guess if we are going to have a Fed this is what they should do — it is the lender of last resort.”

The public’s money the Fed put at risk is a fraction of what is spent elsewhere in Washington.

The defense department, for instance, was $295 billion over budget last year on spending for major weapons systems, which totaled $1.6 trillion, according to a scathing report by the Government Accountability Office released on Monday.

“I have been looking at this [defense spending] for 40 years but I have never seen it this bad,” said Lawrence Korb, a former high-ranking defense department official, now at the Center for American Progress, a liberal think-tank.

He estimated that the Pentagon procurement process wastes about 25 percent of its appropriations, far higher that what he considers a more typical rate, for past Republican and Democratic administrations, of 10 percent.

Thomas Schatz, the president of Citizens Against Government Waste (CAGW), said the sheer volume of earmarks is such a serious distraction he believes there is a direct trade off between earmarks and oversight.

“The pork has gone up, and the oversight has gone down,” he said, while unveiling his group’s annual report: ‘2008 Congressional Pig Book.’

Lawmakers awarded money to 11,610 pet projects, a 337 percent increase from 2007 but that was just one-third of the 36,000 requests that Congress actually pitched itself.

Each request is considered in appropriations committees, eating up valuable oversight time.

“Most legislators, at any level of government, like to take credit for ‘doing something’ and that usually is spending money and the credit usually goes in creating something new,” said Schatz. ‘It is easier to create a new program or a new weapons system than to determine whether what they are doing already is being done effectively.”

This dynamic, he cautioned, could compromise critical Congressional oversight of the administration’s current rescue efforts of the financial system.

“Whatever happens to the financial system with [Treasury] Secretary [Henry] Paulson’s proposal is really something that Congress should be focused on … [but some] members of Congress are probably thinking in the back of their minds, ‘Am I going to get my pet projects this year,’” offered Schatz, referring to the sweeping financial industry regulatory reorganization Paulson unveiled Monday.

That might be unduly harsh on most of Congress, but reflects thinking shaped by the 22 years Schatz has spent at the CAGW, which was founded to attack federal government waste in 1984, by the late industrialist J. Peter Grace, after he led President Ronald Reagan’s Private Sector Survey on Cost Control, also known as the Grace Commission.

The issue of government spending — and waste — is bound to become more contentious in coming years, say experts, as the accumulated weight of swelling fiscal deficits gradually crush the government’s ability to invest in the future and respond to emergencies.

The Pentagon’s weapons programs could be a particular focus. It is the largest discretionary item in the US budget and is at its highest levels in two decades

“Every dollar spent inefficiently in developing and procuring weapons systems is less money available for many other internal and external budget priorities – such as the global war on terror and growing entitlements programs,” noted Gene Dodaro, the acting Comptroller General, in a letter accompanying the GAO report.

“In coming decades, our ability to sustain even the constitutionally enumerated responsibilities of the federal government will come under increasing pressure,” he added.

“The waste issue is extremely important but solving the waste issue doesn’t solve our fiscal problem, by any means,” added Eugene Steuerle, a budget expert at the Urban Institute who said the bigger looming budget problems are ballooning retirement and health care costs.