Ron Paul on Subprime

[lehighguy]

http://www.youtube.com/watch?v=SrJ4MI63yrk

Ron Paul on Subrime

[ianlippert]

Could someone elxplain to me what earmarking is? Did Ron Paul get accused of taking earmarked money? I dont really know what he meant by he tinkers with the bills so that they are more transparent. Is he still about the pork?

[lehighguy]

Well, his district is going to end up getting some money. Even if he votes against a bill, once the funds are approved (the bill passes) a certain percentage are going to get earmarked for his district.

The alternative is to turn the distribution over to a government agency, which can waste it however it wants.

[iron81]

Earmarks are specific provisions inserted into legislation whereby Congress (usually one congressman in particular) designates that money should be spent on a particular project rather than letting bureaucrats decide where the money should go or spending it on a program with national reach.

[Borodog]

Wow. I had thought that the earmark situation was an Achilles Heel for Dr. Paul, and I did not like at all that he requested them. However, his point that the Congress has the RESPONSIBILITY to earmark spending lest it just be turned over to bureaucrats to allocate is an excellent point.

[Kaj]

[ QUOTE ]
Wow. I had thought that the earmark situation was an Achilles Heel for Dr. Paul, and I did not like at all that he requested them. However, his point that the Congress has the RESPONSIBILITY to earmark spending lest it just be turned over to bureaucrats to allocate is an excellent point.

[/ QUOTE ]

There's some truth to the accountability point (at least earmarks are traceable to Congressmen), but in reality earmarks are much more insidious than you realize -- and "bureaucrats" generally refers to the professionals whose responsibility it is to execute the money in the best interests of the nation as a whole and not a particular Congressman's district, and according to the laws of the land.

I'll give you a real-world example of earmarks in action.

Congress earmarks $3M for a particular Air Force technology. Now, the AF is responsible for developing this technology through its research labs and submits a budget for the technologies it wants to develop based on current and future mission priorities. By earmarking this $3M, Congress is circumventing the AF planning and programming process (the AF leaders responsible for shaping the force are the "bureaucrats" in this case). But Congress isn't earmarking this money because of considerations for AF needs (although they claim it -- and maybe just maybe they are doing it for the right reasons every once in awhile, at least possible in theory, highly doubtful in practice). Rather, this $3M is earmarked by Congressmen Doe with the full intention of going to Company Y in his district.

So what does the AF do? It is required BY LAW to openly compete its contracts. However, if it doesn't select Company Y as the winner, it will infuriate a Congressmen who specifically intended the money to go to his district. And if this Congressmen finds out his earmark went to another district, he can simply zero out budgeting for the particular AF organization responsible for executing this earmark, or have its commander denied for promotion, or a host of other miserable things. You see, Congress can not specifically write laws for the money to go to a particular company. So it writes the earmark in a very general fashion ($3M for infrared sensors research, for example). Now the AF has to contact the Congressman's staffers and find out who the Congressmen wants this money to go to. And this is only done over the phone -- no emails or written letters as this whole business is technically breaking Congress's own laws regarding open and fair competition in defense acquisition. I am not making this up -- executing earmarks means avoiding a paper trail that a FOIA request could find and use to prove that competition laws are being broken. So Congressmen Doe's staffers tell the AF organization that the money is to go to Company Y (in many cases, the AF already knows this as these earmarks are annually renewed). So now the AF has to write the proposal specifically with requirements that only Company Y will be able to meet (or at least the AF can defend choosing Company Y to the GAO or other oversight authority)-- this is a ridiculous exercise only for show and is completely the antithesis of how these people are trained to do business. These AF "bureaucrats" (in this case, the "bureaucrats" are the leading scientists and technologists in their field responsible for developing this technology for AF needs) have the national interests at heart and want to spend the money the best way possible to get the most return on this investment to meet the AF needs. But the earmarks process forces them to not only circumvent the law (and their own ethical principles), but also send the money to one particular company, who in many cases, is developing a technology with much less (sometimes no) utility for the AF compared to other contractors working in this area. It's frankly disgusting in action. And earmarks have dramatically risen during the Republicans administration from 2000-2006. They are simply a way to ensure our money goes into their districts and those companies who are supporting their campaigns, with little to no interest in the needs of the nation as a whole.

So it irks me when those responsible for planning, programming, and executing a particular government function are derogatorily termed the "bureaucrats" and Congressmen act as if they are white knights protecting your money from them. In reality, the picture is the exact opposite. Congressmen are shipping your tax dollars into the pockets of their backers by taking the decision-making away from those who are most knowledgeable in the area, responsible and accountable for its success, committed to national interests, and required by law to conduct fair and open competition.

[Borodog]

Bureaucrats will not spend money in the "best interests of the nation", they will spend it in their own best interests, just like the politicians who appoint them. But at least when the politicians allocate the pork they are seen to be directly responsible by the public. The bureaucrats are hidden from public scrutiny within the bureaucratic apparatus, granting politicians plausible deniability about how the money is being spent.

[Kaj]

[ QUOTE ]
Bureaucrats will not spend money in the "best interests of the nation", they will spend it in their own best interests, just like the politicians who appoint them. But at least when the politicians allocate the pork they are seen to be directly responsible by the public. The bureaucrats are hidden from public scrutiny within the bureaucratic apparatus, granting politicians plausible deniability about how the money is being spent.

[/ QUOTE ]

You are wrong. Please spare me your ivory tower analysis, I've been in the trenches working under the table in the earmark process -- see my PM. Better yet, I'll post it for everyone.

[ QUOTE ]
I can tell you more about earmarks if you want to know. I'm quite familiar with the process as it concerns defense R&D. The whole thing stinks from top to bottom -- the appropriate term should be "corruption". And the process is not only corrupt in the sense that Congressmen are directly funneling money to their backers or creating jobs in their district to ensure their control of power, but it can corrupt those responsible for executing the earmarks. As I said in my post, it forces people to break the law and do things under the table. But it also has a benefit. Most organizations can get away with a "tax" on earmarks so long as it isn't so much to draw attention from the Congressman -- in other words, so long as the recipient doesn't complain too loudly. When I worked in the research labs, we'd nominally tax earmarked money at about 10% for administration overhead (we have to write proposals for the work being earmarked, review proposals, provide oversight to the project, etc.). So for a $2M earmark, we'd keep $200k and in actuality use this money for research related to our mission area or upgrading our facilities. So there is an incentive to keep this earmarked money coming. And eventually, you may intentionally not budget for an activity knowing that Congressmen Bigshot will earmark it anyway and you can skim off the earmark. This is not the way you prefer to conduct business in an open government. The whole system was ripe for abuse -- as you'd expect from a system that relies on people breaking the law and their principles to do business. I know of one case where one of our divisions openly bid the earmarked money and gave it to the best proposal from the open competition, rather than the company it was intended for in the Congressman's district. I don't know if they did this because of naivety, because of their principles, or because the company's proposal was just indefensible to select. I do know, however, that a [censored] ensued, with HQ Air Force coming down on them because HQ had an angry Congressman coming down on it. Unfortunately, HQ AF came down on them through emails. The whole brouhaha eventually went to the GAO, who recovered emails from HQ telling the evaluators that the money was intended for Company X. This violates federal law. I don't know what the career impact, or criminal impact, was to those who got caught up in this affair (and again, they were only doing this as part of a process Congress imposes on us, not as corrupt officials). For the rest of us, it was reiterated how important it was that we do not leave documentation on pre-selection bias for earmark contracts. Needless to say, this whole process does little for the morale of contracting officers and other public officials who want to serve for the best interests of their country, not a particular Congressman. It's simple corruption.

[/ QUOTE ]

Since Congressmen don't specify the company but expect you to contact them under the table for this info, they are the ones with plausible denial of corruption. You really don't seem to understand how this process works (which is understandable), so I suggest you read what I'm telling you and think about it, rather than deny it outright based on a few soundbytes from Ron Paul (who I also support, but he's spinning this issue, which is reasonable for his position and interests).

[Borodog]

Look dude, I'm not defending earmarks, OK? You just have to look at the alternatives as well, which is to take the responsibility for spending taxpayer dollars out of the hands of elected officials and put it into the hands of unelected officials. That's all I'm saying. Like I said via PM, *all* government is corruption by definition.

Here's the PM you sent me for the interested reader:

[ QUOTE ]
I can tell you more about earmarks if you want to know. I'm quite familiar with the process as it concerns defense R&D. The whole thing stinks from top to bottom -- the appropriate term should be "corruption". And the process is not only corrupt in the sense that Congressmen are directly funneling money to their backers or creating jobs in their district to ensure their control of power, but it can corrupt those responsible for executing the earmarks. As I said in my post, it forces people to break the law and do things under the table. But it also has a benefit. Most organizations can get away with a "tax" on earmarks so long as it isn't so much to draw attention from the Congressman -- in other words, so long as the recipient doesn't complain too loudly. When I worked in the research labs, we'd nominally tax earmarked money at about 10% for administration overhead (we have to write proposals for the work being earmarked, review proposals, provide oversight to the project, etc.). So for a $2M earmark, we'd keep $200k and in actuality use this money for research related to our mission area or upgrading our facilities. So there is an incentive to keep this earmarked money coming. And eventually, you may intentionally not budget for an activity knowing that Congressmen Bigshot will earmark it anyway and you can skim off the earmark. This is not the way you prefer to conduct business in an open government. The whole system was ripe for abuse -- as you'd expect from a system that relies on people breaking the law and their principles to do business. I know of one case where one of our divisions openly bid the earmarked money and gave it to the best proposal from the open competition, rather than the company it was intended for in the Congressman's district. I don't know if they did this because of naivety, because of their principles, or because the company's proposal was just indefensible to select. I do know, however, that a [censored] ensued, with HQ Air Force coming down on them because HQ had an angry Congressman coming down on it. Unfortunately, HQ AF came down on them through emails. The whole brouhaha eventually went to the GAO, who recovered emails from HQ telling the evaluators that the money was intended for Company X. This violates federal law. I don't know what the career impact, or criminal impact, was to those who got caught up in this affair (and again, they were only doing this as part of a process Congress imposes on us, not as corrupt officials). For the rest of us, it was reiterated how important it was that we do not leave documentation on pre-selection bias for earmark contracts. Needless to say, this whole process does little for the morale of contracting officers and other public officials who want to serve for the best interests of their country, not a particular Congressman. It's simple corruption.

[/ QUOTE ]

[Kaj]

[ QUOTE ]
Look dude, I'm not defending earmarks, OK? You just have to look at the alternatives as well, which is to take the responsibility for spending taxpayer dollars out of the hands of elected officials and put it into the hands of unelected officials. That's all I'm saying.

[/ QUOTE ]

As I said in my second PM, every dollar spent by the federal govt is traceable to a line item in the budget -- and this is public info and in Congressional law just as clearly as earmarks. The only difference is that those line items are competed openly and awarded to the best proposal, whereas earmarks are funneled to a particular company through under-the-table communication and violation of fair competition laws. Government officials are not given blank checks to spend as they wish. You are absolutely wrong if you think this or characterize it as such. Any government spending is merely the execution of public law, and that law gets pretty well detailed. Earmarks are in no way more detailed than the rest of the budget, they are merely intended for a special recipient in violation of Congress's own laws regarding federal spending.