Smoke, Mirrors, and Earmarks in the FY2010 Budget

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While we understand some of the arguments in favor of earmarks, especially those raised by rural groups that point out how earmarks constitute a small but important mechanism for getting money to rural areas notwithstanding the frequent built-in urban biases to many federal competitive programs, we tend to be unsympathetic toward earmarks in the federal budget.  Relatively few nonprofits to our knowledge have the political connections or can pay for the earmark-lobbying experts to win these grants.  The playing field for nonprofits competing for grant support of any kind is hardly level, we know, but earmarks clearly reflect one of the most uneven, asymmetrical dimensions of the federal grants scrum.

Without reprinting pages and pages of earmarks, we offer a selection of the House Appropriations Committee’s choices (including some that appear to been requested by President Obama and endorsed by Congressional co-requesters).

Community development earmarks

Since this writer’s professional background in the nonprofit sector and the public sector is rooted in community development–and he used to oversee a midsized city’s Community Development Block Grant dollars–the Appropriations Committee’s earmarks from the HUD community development accounts have meaning.

Within the $4.6 billion Community Development Fund, $151 million is specified for “economic development initiative activities” and $18 million for neighborhood initiative activities.”  The Committee has already picked the bulk of projects that will score moneys in these programs.  In the economic development column, the Committee specified these among various nonprofit-linked ventures, some of them more affordable housing than economic development:

  • Action for Children (Columbus OH), $150,000 for renovation of early childhood learning centers
  • Alianza Dominicana (New York NY), $250,000 for the construction of a mixed-use facility
  • five Boys and Girls Clubs (in NE, WA, CT, and elsewhere) for building renovations for the most part
  • homeless shelter and permanent units designed for the homeless get support through earmarks, including $500,000 for Mercy Housing (Hartford CT)
  • $500,000 for Chicanos por la Causa (Phoenix AZ) for the construction of a workforce development center
  • Central Connecticut Coast YMCA (New Haven), $400,000 for a community recreation facility
  • Eden Housing (Haywood, CA) for affordable housing renovations
  • acquisition and rehabilitation of blighted properties by Riverworks Development Corporation (Milwaukee WI), $250,000
  • Nicetown CDC (Philadelphia), $400,000 toward an affordable housing tax credit project
  • Uptown Theater (Philadelphia), $350,000 for theater renovations, Pregones Theater (Bronx, NY), $150,000 for renovations
  • YMCA of Greater New York (New York City), $300,000 toward planning and design of a community center
  • $400,000 for Rebuilding Together (Houston TX) (Rebuilding Together was previously Christmas in April) for veterans housing

The neighborhood initiative funding gets allocated as earmarks to a number of cities and nonprofits, including the following:

  • $1 million to fund the Inland Empire Economic Recovery Corporation (Riverside and San Bernandino counties, CA)
  • $1 million for the National Community Renaissance Affordable Housing Program in Rancho Cucamonga (CA)
  • $1 million into the National Council of La Raza’s community development revolving loan fund
  • $2 million to Indiana University (Indiana PA) for the construction of a multi-purpose center

Worthy projects?  Many of them undoubtedly are, and certainly some of the groups mentioned here are well known and respected in the community development field.  But one has to wonder about other worthy recipients that might not have been in the running for these grants.

Labor and Education earmarks

While not labeled “earmarks”, the appropriations for “pilots, demonstrations, and research” in Department of Labor national initiatives include numerous groups getting Congressionally-directed grants, several for well known community development groups:

  • Coastal Enterprises (Wiscasset ME), $250,000 for a green business and job creation initiative
  • Guadalupe Centers (Kansas City MO), $200,000 for its culinary arts job training program
  • National Council of Negro Women (Washington DC), $350,000 for job skills and life readiness program
  • Living Classrooms of the National Capital Region (Washington DC), $350,000 for youth workforce development program
  • St. Nicholas Neighborhood Preservation Corporation (Brooklyn NY), $150,000 for a workforce development center
  • Summit Academy OIC (Minneapolis MN), $400,000 for weatherization technician training

In the Department of Education, one list of $51.7 million in earmarks (from the “innovation and improvement” category) includes the following $300,000 to the United Way of Miami-Dade (FL) for teacher training, $100,000 to the United Way of Youngstown/Mahoning Valley (OH) for an early childhood education program, $300,000 for the YMCA in South Bay CA for early childhood education, $225,000 for the Upper Palmetto YMCA (Rock Hill SC) for environmental education programs, $100,000 for the YMCA in Warren (OH) for an after-school program, $500,000 for the Center for Rural Development (Somerset KY) for a literacy program, $100,000 for Eden Housing for a technology training program, $250,000 for Girls Incorporated (San Leandro CA) for a literacy program for young girls, $255,000 for the Peaceable Kingdom Retreat for Children in Killeen TX for educational programming, and $350,000 for the Special Olympics 2010 USA National Games.

Another drawn from the $217.7 million appropriated for the Fund for the Improvement of Education includes $15 million for Teach for America, which appears to be the Committee’s agreement with a request from the White House.  Embedded in the Appropriations Committee report is a list of “Presidentially Directed Spending Items,” which seems to be the list of the Committee’s approvals of the President’s earmark requests including $8 million for the Special Olympics and $1 million for the National Association of Child Care Resources and Referral Agencies (in addition to TFA’s $15 million).

Some earmarks require distinctive budget archeology.  How about the $10.32 million in earmarks to museums embedded in the $275.7 million budget of the Institute for Museum and Library Services (IMLS)?  Oddly, the Appropriations Committee topped the Obama Administration’s IMLS budget request by exactly $10.32 million, all of which went to Committee’s earmark recipients.  That’s about as explicit a Congressional earmark agenda as one might find.

Playing the game

Don’t imagine that nonprofits have scarfed up all of the earmarks in the Appropriations Committee’s deliberations.  Try the specific numbers attached to “high priority projects” in the Federal Aviation Administration (FAA) budget, our particular favorite being the first in the list, $500,000 for airport apron expansion in Wasilia, Alaska, recently home to a vice-presidential candidate.  The Committee was kind enough to note that these special high priority allocations should not count against these airports’ competition for other, competitively allocated, FAA funds.  In other words, scoring an earmark doesn’t mean not scoring competitive funding on top of the earmark.  The Department of Transportation’s budget is absolutely loaded with airport, highway, and port earmarks, most of them pretty hefty.

In essence, the HUD neighborhood initiatives and economic development initiatives sliced out of the community development fund, the education programs slipped in under the rubric of innovation, and the DOL demonstrations are not the responsibilities of HUD and the Education and Labor departments, except in theory to monitor that the moneys are spent for the purposes enumerated.  Rather, these are legislators’ initiatives, Congress stepping into the role of the executive branch, in part, to do what program implementers are supposed to do–determine the groups and projects worthy of support and funnel the grants and contracts to them.

Nonprofits didn’t invent this stuff.  Anyone who has worked for local or state government knows first-hand the bevy of federal grants consultants, including the earmarking pros, that lurk around city halls.  That’s the game.  If your agency has influence with Congressional staff, particularly those working the key committees, or if you’re able to hire those consultants, you’re in the ballgame and able to pitch for earmarks.

But for the vast bulk of nonprofits, they’re on the outside looking in. While plenty of good groups get earmarks, there is no way at all for the nonprofit sector to assume carte blanche that the best, most qualified, most creative groups get the earmarks.  This is a competition of the influence, not quality.  It would be worth someone’s while to compare the performance and impact of earmark recipients compared to those groups who got their federal support the old-fashioned way by simply earning it.  We suspect that the groups who competed based on quality and performance might well outperform–by a large margin–some of the earmark winners.