One of the questions asked of Dr. Ron Paul after his speech to the Robert Taft Club came from a guy I met at an Institute for Humane Studies (IHS) conference the previous summer. At that event, he was apoplectic after Randy Barnett's talk, in which the supposed Rothbardian outlined his justification of the state. We'll never be accepted by average Americans if we don't tailor our message and moderate our demands, my fellow IHS alum argued. I talked to him later in the week and he explained to me that while he was sympathetic to the free market, he considered himself a libertarian chiefly because he was a consistent social liberal who despised the restrictive social atmosphere that conservatives advocate. A beltway libertarian if there ever was one!
"Congressman, I have tremendous respect for you," the IHS alum averred, "but I was shocked to read in a Reason Magazine profile that you actually stuff earmarks into appropriation bills just like every other member of Congress and I thought you were different, sir, ah, you of course vote against the bill, but I was curious how you could justify stuffing earmarks just like every other member of Congress" (see here at 4:25). Dr. Paul's response is clear and convincing, but I'd like to go into more depth here. The issue is complicated and while earmark critics have some reasonable points, Dr. Paul's earmarking is ultimately not at odds with his philosophy.
As Paul notes in his answer, cutting the number of earmarks does not cut spending. An earmark is a congressional provision that directs federal agencies to spend funds already authorized on specific projects. If the funds aren't earmarked, the agencies can spend the money any way they see fit. That is, the executive branch, rather than Congress, will determine how the taxpayer's money is spent. This point cannot be stressed enough because even the writers at the Wall Street Journal do not understand it. After quoting a spokesman from Paul's office reminding them that earmarks do not directly increase spending, the WSJ reports, "On the other hand, good libertarians should want to start cutting somewhere." Didn't Paul's office just point out that cutting earmarks does not cut spending? Some argue that earmarks can indirectly increase spending by encouraging corruption – this problem will be dealt with below – but in this passage the WSJ seems to imply that adding earmarks directly increases spending. After writing that good libertarians should start cutting somewhere, they continue:
The problem with earmarking is that each year the habit grows by leaps and bounds so that it now represents real money. It is also a gateway to political corruption – a la Duke Cunningham, and other Congressmen currently under investigation for trading favors for earmarks. [Emphasis added]
By writing "it is also," the writers imply that in addition to increasing spending, earmarks encourage corruption rather than the more coherent argument that earmarks increase spending by encouraging corruption.
Ramesh Ponnuru has more sense on this issue than most other mainstream movement conservatives. He recognizes that earmarks make up less than two percent of the federal budget and that fiscal conservatives should be spending more time and energy on more important spending programs. His response to Senator Jim DeMint's criticisms of the earmarking process, however, is less than convincing. "The game," DeMint complained, "encouraged everyone to be asking for money and everyone to be voting for bills that were bigger than the budget that had been voted for earlier." Ponnuru counters that, "It is certainly true, as DeMint says, that earmarks can buy support for government-expanding bills. But they can buy support for government-shrinking bills, too [like NAFTA]." First, the hundreds of pages of legislation that created NAFTA did not shrink the size of government. Second, while it is conceivable that earmarks could be used to buy support for a government-shrinking bill, given the nature of government, the number of government-expanding bills is going to far outstrip the number of government-shrinking bills. On net, therefore, the quid pro quo of earmark trading is likely to increase government spending. Yet considering that Dr. Paul always votes "no" on the appropriations bills he requests earmarks for – as his critics concede – he is not involved in this negative aspect of the earmarking process. No amount of earmarks promised to him will convince him to vote "yes" on the bill. They are – as he says – projects meant to return some of his constituents' money that was stolen from them by the federal government, within the context of the current system. The excerpt of the Congressional Quarterly article that Tim Russert referenced (see 6:50) on the Meet the Press interview that reads, "There isn't much that Rep. Ron Paul thinks the federal government should do…Apparently, though earmarks [that benefit his district] are okay," leaves the impression that Paul would support increasing the federal budget by $400 million just to benefit his district. He would not. He supports forwarding the requests of his constituents that $400 million of funds that the federal government has already taken from them and designated for spending be returned to their district.
Given that Paul isn't involved in the trading of earmarks for "yes" votes, his requests for earmarks must be judged on the other pros and cons of the practice. Earmarks can lead to ridiculously inefficient projects like the infamous "Bridge to Nowhere" because, critics contend, earmarked funds do not go through a merit-based selection process as they would if granted to an executive agency. It's not surprising that President Bush is a leading advocate of this argument. Ultimately this argument is part of a fruitless crusade to make government more efficient. But that is impossible. There is no way government can allocate resources rationally, no matter what part of it has the authority to dispense funds. The absence of market prices and the profit-and-loss mechanism makes it impossible for governments to accurately compare the value of inputs with outputs. No matter how many forms an executive agency makes you fill out to receive a grant, government cannot accurately measure merit. The phony free market Wall Street crowd's dream of cutting spending and streamlining government by empowering a unitary executive is both hopeless and fraught with danger. What if, for example, the WSJ gets its way and the president is given the line item veto? Couldn't the president, as Dr. Paul points out, threaten to cut funding from a recalcitrant congressman's district if he didn't support the president's proposed legislation?
Senator Tom Coburn claims that "the Porkbusters represent what is arguably the only grassroots movement since 1994 to gain traction and build momentum on the core American principle of limited government" [Emphasis in original]. I've lived in DC for almost four years now and I've been involved with the beltway conservative/libertarian crowd since the beginning. I was working on the earmark issue before it became national news. The enthusiasm for the "Porkbusters" coalition in no way approaches the popularity and dedication of the Ron Paul Revolution, a movement dedicated to the wholesale dismantling of large swaths of the federal government. Barry Goldwater was right. Moderation isn't all it's cracked up to be. True free market supporters should stop bickering over the way less than two percent of the budget is allocated and start focusing on scraping whole departments, gutting the military industrial complex, and privatizing entitlements.