Excessive government spending has rightly or wrongly been implicated in causing inflationary pressures on our economy, which forced the Federal Reserve to raise interest rates again. Of course, the whole story of inflation is more complicated, but Congress must keep in mind the well-known connection with too much federal spending in an economy already running hot. This is important now, as policymakers will likely pass an omnibus spending package during the lame-duck Congress, and many items will be tucked into that spending bill that will be a waste of tax dollars.
So let’s talk about good old-fashioned earmarks that often get thrown into these “must-pass” spending bills that are often rushed through Congress right before it adjourns for the year: earmarks for Department of Defense projects. After all, the Pentagon budget accounts for nearly half of all discretionary spending in the entire federal budget.
HOW EARMARKS COME TO BE
Each year, the president proposes a federal budget for the coming fiscal year, and each year, Congress conducts hearings to query the decision-making behind that budget request. In the case of the Pentagon, military service chiefs and uniformed brass spend hundreds of hours preparing for, testifying at, and responding to “Questions for the Record” at these hearings.
This back-and-forth between the two branches of government guides the four congressional committees directly involved in finalizing the Pentagon budget — House Armed Service Committee, Senate Armed Services Committee, House Appropriations Committee’s Subcommittee on Defense, and the Senate Appropriations Committee’s Subcommittee on Defense — as they produce different drafts of legislation to set policy and spending for the Pentagon for the next fiscal year. The Pentagon budget request, which is a (big) subset of the overall “national security” spending, is already at $773 billion for fiscal year 2023.
My organization, Taxpayers for Common Sense, is tracking the suspiciously specific research and development projects added to the Pentagon’s budget as congressional consideration for this fiscal year. These highly speculative research projects are, for the most part, not requested by the Pentagon — not even on their so-called Unfunded Priorities Lists.
If we are concerned about the impact of federal spending on inflation, Congress should not waste billions of federal dollars on unrequested, speculative research projects that only benefit defense contractors.
Most of these projects are the heart’s desire of defense contractors looking to have the federal government pay for the research and development costs that happen to be incurred by these companies. Accordingly, lobbyists for those defense contractors produce glossy “fact sheets” and expensive websites and head to Capitol Hill to search for a legislative champion. For an online example of the public relations that defense contractors deploy to promote their weapons programs, Lockheed Martin has an impressive website touting its F-35 fighter jet, helpfully showing website visitors and policymakers the program’s massive expenditures in each state around the country.
Members of Congress, looking to keep local defense facilities busy and employing constituents, are eager to take up the cudgel for these projects. However, it’s important to remember that the long-term goal of each of these projects is to ultimately transition into a procurement “program of record” at the Pentagon because that’s where the real money is.
But also keep in mind many of these research projects, which can each range from two million to hundreds of millions of dollars, have yet to be formally requested by the Pentagon. Some may have just missed the cut for the formal request to Congress, and these show up as “unfunded priorities.” But most of these research projects don’t even make that list. For example, the US Navy UPL had just eight Research, Development, Test, and Evaluation Appropriations or RDT&E projects on its total list of 43 items. But the House Appropriations Committee added 82 projects to Navy RDT&E budget lines. The largest addition by House appropriators was $50.3 million for “ATRT including Project Overmatch integration,” which doesn’t appear on the Navy’s list.
Let’s face it: If a few million dollars isn’t available out of the hundreds of billions of dollars requested, the project isn’t much of a priority.
Generally, once the federal government puts its finger in your research pie, even a little, it has rights to the intellectual property from whatever research you produce. This is not too surprising, but it is significant because it means the direct results of this research can’t be developed and sold on the private market. So, this research is exclusively for government use, and the Pentagon may not have even asked for it.
WHERE EARMARKS ARE HIDING
Imagine a scene like the one in Batman where Morgan Freeman and Christian Bale are walking around the research floor of Wayne Enterprises looking for cool gizmos, like the Scrambler, which ultimately becomes the Batmobile. Of course, we won’t know how much these “program increases” will cost until the final bill passes Congress, but it is not an exaggeration to say it will be in the billions of dollars.
Before earmarks were “eliminated” a decade ago, they were a process by which members of Congress individually inserted specific spending projects into appropriations bills, usually to direct federal spending into their home districts. My organization opposed earmarks because, too often, political muscle trumped a project’s merit, which is a bad way to budget and spend tax dollars.
Earmarks, affectionately called “Congressionally Directed Spending Requests,” were banned in 2011 and then revived in 2021 as “Community Project Funding.” But the earmarking process never completely went away. It just burrowed deeper with new names. In this case, earmarks are hiding behind the veil of “Research, Development, Test, and Evaluation Appropriations” or RDT&E, because who could be against that?
Federal lobbyists are eager to put a bug in the ear of their local senator or representative about the great idea they have for some future widget. And since that widget the lobbyist is talking about will keep engineers at a local government contractor employed, members of Congress are eager to hear all about this widget. As just one illustrative example, the Senate Appropriations Committee’s Subcommittee on Defense, which has 18 members, added 580 RDT&E-related spending requests to the Pentagon spending bill this year.
If we are concerned about the impact of federal spending on inflation, Congress should not waste billions of federal dollars on these kinds of unrequested, speculative research projects pushed by lobbyists for the benefit of defense contractors. After all, the Pentagon is already requesting more than it needs.
Steve Ellis is president of Taxpayers for Common Sense, which is a nonpartisan budget watchdog that has served as an independent voice for the American taxpayer since 1995. It works to ensure that taxpayer dollars are spent responsibly and that government operates within its means.