January 25, 2006

January 25, 2006 | WebMemo on Federal Budget

Six Budget Reforms to Restrain Lobbyists and Special Interests

Aggressive lobbying is the predictable result of a larger problem: a massive federal government that imposes itself on every facet of economic life through high taxes, large subsidies, and expensive regulations. So long as Congress distributes largesse to favored industries and taxes and regulates disfavored ones, industries will do whatever they can to influence Congress. As columnist George Will recently wrote, "People serious about reducing the role of money in politics should be serious about reducing the role of politics in distributing money."[1] Big government and corruption go hand in hand.

Government has certainly grown bigger in recent years. Congress now spends $22,000 per household, up 33 percent since 2001 and the highest inflation-adjusted level since World War II.[2] Congress distributes 14,000 earmarks per year, often to those who provide large campaign donations. That "bring home the bacon" mindset further persuades lawmakers that the road to reelection is paved with government spending, which, in turn, leads to more big-government expansions. Restraining the influence of special interests will not possible until Congress restrains its own expansion into every nook and cranny of the American economy.

The key, then, is budget reform. Some lawmakers realize this and have put forward promising proposals. For example, the House Democrats would provide lawmakers with 24 hours to read bills before voting on them and rein in earmarks. Rep. Jeff Flake (R-AZ) would move earmarks from conference reports to the texts of bills so that they can be amended. But if lawmakers are serious about reining in lobbyists, they must go further and implement real restraints that reduce the demand for special treatment. The six reforms described in this paper would do more to change the role of money in politics than any "lobbying reform" effort alone.

1. Ban Pork Projects

Congress has a proper role in determining the rules, eligibility, and benefit criteria for federal grant programs. However, allowing lawmakers to select exactly who receives government grants invites corruption. Instead of entering a competitive application process within a federal agency, grant-seekers now often have to hire a lobbyist and make a campaign contribution to win the earmark auction.

In addition, doling out their share of the 14,000 annual pork projects has become an all-consuming endeavor for many congressional offices, meaning that oversight and reform of outdated programs take a back seat. Lawmakers hooked on pork come to see their job as maximizing the amount of federal dollars they can bring home, rather than reforming and improving government. No coincidence, the same lawmakers who voted to triple the number of pork projects since 2000 also enacted the largest education, farm, highway, and Medicare expansions ever. Pork drives lawmakers who are otherwise committed to fiscal responsibility to surrender their independence to vote against runaway spending-because only lawmakers who commit to voting for an entire spending bill get pork projects.

Congress should enact a permanent prohibition against legislation that specifies which businesses, organizations, and locations will receive federal grants. With this prohibition in place, grant-seekers will actually have to justify their projects to federal and state agencies, and lawmakers will be free to rein in runaway government and provide proper oversight.[3]

2. If Pork Remains, Add Sunshine

Even minimum pork-barrel spending reforms would add sunshine to the budget process and help lawmakers strike egregious earmarks. As Rep. Flake has proposed, earmarks should be placed in the legislative text, rather than in last-minute insertions to conference reports, thereby giving lawmakers an opportunity to debate and amend them. The text should also include the names of lawmakers requesting each earmark, the district in which the earmark is located, the earmark's national purpose, a constitutional justification for that purpose, and a list of the lobbyists who lobbied for the earmark. If an earmark would financially benefit a lawmaker or his or her family, that should be stated explicitly-if such earmarks are not banned altogether. Finally, these disclosure rules should be part of a larger reform package that assures lawmakers three full days to read each bill before voting on it, thereby guaranteeing sufficient time for scrutiny.

3. Make all Federal Grants Public

Earmarks are not the only grants that deserve more sunshine. Every year, federal agencies distribute thousands of federal grants with little public knowledge or accountability. The public has a right to know how the federal government is distributing grants, particularly to ideological and politically activist organizations. Congress should enact legislation creating a searchable public database of all government grant recipients.

4. Term-Limit Appropriators

The House and Senate appropriations committees have extraordinary power over the federal discretionary budget. Long tenures on appropriations committees often create a bias toward excessive spending by obscuring the big-picture perspective and serving as a perch to bring home federal dollars.

The powerful influence of these committees should be balanced with a steady rotation in their memberships. Limiting lawmakers to four years on any appropriations committee out of every twelve years they serve in Congress would ensure regular turnover and help the committees better represent the views of Congress as a whole.

5. Rewrite the Outdated 1974 Congressional Budget Act

Lawmakers cling to a budget process created in 1974 that is skewed to maximize federal spending. Over the past 30 years, successive Congresses have punched this process full of holes, and federal spending has tripled. The current budget process provides no workable tools to limit spending, no restrictions on passing massive costs onto future generations, and no incentives to bring all parties to the table early in the budget process to lay out a framework. Its few remaining restraints are routinely bypassed. America needs a federal budget process that reflects the nation's budget priorities: sound planning, responsible spending, and low taxes. A responsible budget process would include enforceable spending caps, a budget resolution holding the force of law, the termination of baseline budgeting rules that put expensive programs on autopilot, sunset provisions to end outdated programs, and an increase in the number of votes needed to waive points of order.[4]

6. Enact a Federal Taxpayers' Bill of Rights

Perhaps the best way to ensure that Congress spends money responsibly is to limit the amount that it can spend. A federal Taxpayers' Bill of Rights would limit the growth of government to the rate of inflation plus the rate of population growth and ensure that lawmakers set priorities, make trade-offs, and stretch taxpayers' dollars further. Enforceable spending limits like this constrain all 50 state governments, but not Washington. Because special interests will continue to pressure them to spend, lawmakers need a tough spending cap that helps them say no.[5]

Real Reform Means Spending Reform

Lobbying reform will not reduce the supply of special interests' lobbying in Washington unless Congress enacts budget restraints that reduce the demand for special treatment. Getting Congress out of the grant selection business, resisting the urge to select market winners and losers, and broadly restraining the growth of the government and its influence on the economy will reduce the need for special interests to play the Washington game.

<_p22_> Brian Riedl is Grover M. Hermann Fellow in Federal Budgetary Affairs in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

About the Author

Brian M. Riedl Grover Hermann Fellow in Federal Budgetary Affairs
Thomas A. Roe Institute for Economic Policy Studies

Related Issues: Federal Budget

Show references in this report

[1]George F. Will, "For the House GOP, A Belated Evolution," Washington Post, January 10. 2006, at http://www.washingtonpost.com/wp-dyn/content/article/2006/
01/09/AR2006010901428.html
.

[2] Brian M. Riedl, "Federal Spending: By the Numbers," Heritage Foundation Webmemo No. 881, October 11, 2005, at http://www.heritage.org/Research/Budget/wm881.cfm.

[3]For more on pork, see Ronald Utt and Christopher Summers, "Can Congress Be Embarrassed into Ending Wasteful Pork-Barrel Spending?," Heritage Foundation Backgrounder No. 1527, March 15, 2002, at http://www.heritage.org/Research/Budget/BG1527.cfm; and Ronald D. Utt, Ph.D., "Is Pork Barrel Spending Ready to Explode? The Anatomy of an Earmark," Heritage Foundation WebMemoNo. 608, November 10, 2004, at http://www.heritage.org/Research/Budget/wm608.cfm.

[4] For more on the Heritage Foundation's budget process agenda, see Brian M. Riedl, "What's Wrong with the Federal Budget Process," Heritage Foundation Backgrounder No. 1816, January 25, 2005, at http://www.heritage.org/Research/Budget/bg1816.cfm; and Brian M. Riedl, "A Budget Agenda for the 109th Congress," Heritage Foundation Backgrounder No. 1812, December 15, 2004, at http://www.heritage.org/Research/Budget/bg1812.cfm.

[5]See Brian M. Riedl, "Restrain Runaway Spending with a Federal Taxpayers' Bill of Rights," Heritage Foundation Backgrounder No. 1793, August 27, 2004, at http://www.heritage.org/Research/Budget/bg1793.cfm .

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