By Emelie Rutherford
A key senator pushed back yesterday on new House earmark reforms that would change Pentagon budgeting processes, leaving the proposed changes in question.
The House Appropriations Committee (HAC) announced yesterday morning it will no longer earmark funding in appropriations bills for for-profit companies. HAC Chairman David Obey (D-Wis.) and Defense subcommittee (HAC-D) Chairman Norm Dicks (D-Wash.) also said a new Pentagon program will be created to allow small businesses to present their ideas and products directly to the Department of Defense–instead of to lawmakers who would otherwise earmark funds for the firms in the defense budget.
Aides and lobbyists immediately questioned if earmarks for for-profit companies would really become things of the past, and Senate Appropriations Committee (SAC) Daniel Inouye (D-Hawaii) quickly criticized the House appropriators’ plan.
“I don’t believe this policy or ceding authority to the executive branch on any spending decision is in the best interests of the Congress or the American people,” Inouye said in an unusually long statement issued yesterday afternoon. “In my view, it does not make sense to discriminate against for-profit organizations.”
Inouye, who is known to secure significant numbers of earmarks, argued that for-profit earmarks already are subject to competition and transparency requirements. He called the HAC’s announcement “quizzical” and said he is “troubled by what this policy insinuates.”
“It seems to suggest that for-profit entities are corrupt and non-profit entities are above reproach,” said Inouye, who also chairs the SAC’s Defense subcommittee. He added the well-regarded General Atomics Aeronautical Systems Predator unmanned-aerial vehicle resulted from an earmark to a for-profit company, not as an executive branch initiative.
The new House earmark rules also call for the inspector general of the Pentagon and other executive agencies to audit at least 5 percent of earmarks for for-profit entities, to ensure no for-profit firms are masquerading as non-profit organizations.
Dicks told reporters yesterday he is not surprised by the pushback from Inouye and will not be deterred by it.
“Sen. Inouye is…chairman of the (Senate Appropriations) Committee and he has the right to his view on this,” Dicks said at the Capitol. “This is something we decided to do in the House.” Asked if Inouye’s opposition makes the House plan moot, because the Senate could still insert earmarks for for-profit companies into appropriations bills, Dicks said, “We’ll have to wait and see.”
He said if the ban on for-profit earmarks was in place last year, there would have been 1,000 fewer earmarks in appropriations bills, though some observers said the number is higher.
“It’s a very large number,” Dicks said. “We’re trying to create another way of doing this that is less controversial.”
Dicks is among the members of Congress who have been investigated because of earmarks in spending bills. A House ethics panel officially concluded two weeks ago that he and six other HAC-D members, including the recently deceased former chairman Rep. John Murtha (D-Pa.), did not improperly earmark funds for defense firms linked to campaign contributions and a former aide’s lobbying shop.
“I just think this is a better way to do it, instead of us putting in the earmarks here,” Dicks said yesterday about the new policy. He officially became the HAC-D chairman on Tuesday.
The new program for businesses to pitch themselves directly the Pentagon can be made by expanding the existing Small Business Innovation Research effort, he said. While the new program is intended to help small firms, it does not preclude larger companies, he said.
“We think that will be a better way to do this,” Dicks said. “A lot of the innovation comes from the smaller companies, so we want to make sure they have a place to go.”
Dicks said he doesn’t “see why the Senate would disagree” with this new business program.
The HAC announcement, in describing the new defense-business program, said: “With this change, the committee is ensuring that any for-profit entity applying for federal funding will earn that funding in a competitive process based on the merits. “
Dicks noted House rules created last year already called for earmarked funds for private firms to be competed after awarded. He also pointed out the for-profit-company earmark ban in no way impacts lawmakers’ ability to make major increases or reductions in national programs.
House Armed Services Committee Chairman Ike Skelton (D-Mo.), for his part, issued a statement saying his panel “is committed to transparency and competition.”
“As we enter the early stages of crafting the FY ’11 defense authorization bill, we will adjust our processes to reflect the earmark changes adopted by this Congress,” Skelton said.
House Republicans, meanwhile, are considering a moratorium on all earmarks.
Government watchdog Stephen Ellis, vice president of Taxpayers for Common Sense, yesterday hailed the HAC announcement as “a positive step forward for earmark reform.”
“But much of this ground gained will be lost if the Senate doesn’t step up to the plate,” Ellis said in a statement. “The campaign cash will just flow a little more heavily to the Senate side of the Capitol and for-profit earmarks will remain alive and well.”
He called for President Barack Obama to veto spending bills that end up having earmarks for for-profit firms, noting Obama’s past criticism of such earmarks.