Controversial earmarks always make for sensational headlines, usually casting a politician in a negative light. Even though the media often focuses on these scandals, politicians keep on trying to put them in legislation, either hoping no one will notice, or at least not mind too much. Meaningful earmark reform is something many Washington watchdog groups want, but congress recently failed to adopt a ban on all earmarks. Why is this type of funding so controversial, and where has it gone wrong in the past?

In Pictures: 6 Biggest Millionaire Flops

What is an Earmark?
Earmark is the polite word for what most laypeople would call pork barrel legislation, alluding to the fatness of its contents. Earmarks can be thought of as "carve outs" from an appropriation bill (spending legislation) that is put towards a specific pet project of a politician. This is done to ingratiate a politician to a powerful group of people, or to possibly ensure an incumbent re-election in their home state or district.

In the past, most people called into question the lack of transparency related to earmarks and the back room dealings that put them in legislation in order to entice a politician to vote for a particular bill. (This instrument of foreign policy and economic pressure is preferred over military action, but can still pack a punch. Find out more in The Power Of Economic Sanctions.)

Why Do They Do It?
Earmarks are powerful tools, often wielded by the heads of powerful congressional committees. The earmarks we hear about most in the press are usually tied to some other sort of scandal. The whole process seems shady to much of the public. The controversies may make it seem like they are illegal. In fact, they are not.

However, they are sometimes done in tandem with illegal kickbacks, making the quid pro quo criminal. Here are some of the more famous or infamous, earmarks, but by no means is this a conclusive list. The Office of Management and Budget has downloadable databases for Earmarks in Appropriation Bills dating back to 2005. There are over 11,000 unique earmarks in the estimates for fiscal year 2009 alone! Sometimes it's the amount of the earmark that makes it outrageous; sometimes it's the use of funds that makes people scratch their heads. (Corporate lobbyists have the power, influence and political backing to affect your portfolio. Find out how, in Lobbying: K Street's Influence On Wall Street.)

  1. Most Famous Earmark - The Bridge to Nowhere
    Watchdog groups are always looking to "out" the worst offenders, and former Alaska Senator Ted Stevens is tied to, by far, the most famous earmark - The Bridge to Nowhere. The actual name of the $223 million dollar bridge to an island with a population of fifty is the Gravina Island Bridge. It's so famous it's become a catchphrase for pork projects and wasteful spending and made Ted Stevens the poster child for government pork.

  2. Some Earmarks Land Politicians in Prison
    Rep. Duke Cunningham was sentenced in 2006 to eight years and four months in prison for pleading guilty to accepting $2.4 million in bribes. Duke accepted kickbacks from military contractors for steering business their way, using his positions on the Defense Appropriations subcommittee and the Intelligence Committee to insert earmarks for military spending.

    Not all earmarks are associated with criminal behavior, but without a watchful eye, some politicians reverted to accepting bribes. (Find out what happens to municipalities when they need money, but have no other option than bankruptcy, in Municipalities Free Up Cash With Chapter 9.)

  3. I'm a Little Teapot
    In 2006, $500,000 was appropriated for the construction of the Sparta Teapot Museum in Sparta, North Carolina. While some museums are destinations and really draw in the tourists, I'm not sure a museum devoted just to teapots will bring droves of people to Sparta.

  4. The Big Dig
    The Big Dig in Boston ended up being the most expensive transportation earmark in history. From planning to finish, the Big Dig took over 20 years and more than $14 billion dollars to complete. The idea was to take an above-ground highway and relocate it underground to improve traffic flow to Boston's Logan airport and fix traffic gridlock in Boston. While the results have improved traffic flow in Boston, the ticket price was astonishing.

    Congress originally tried to appropriate funding for the project in a 1987 bill, but it was vetoed by President Ronald Reagan. Congress subsequently overrode the veto and federal funds were earmarked for this large project. Extreme cost overages, fraud and a death kept this project controversial. (Does the amount of goods and services produced set the pace for economic growth? Find out, in Understanding Supply-Side Economics.)

  5. Turtle Tunnel
    The $787 billion American Recovery and Reinvestment Act (ARRA) signed last year was supposed to provide earmark funding for "shovel-ready" projects across the country to get Americans back to work. Turtles in Florida can breathe a sigh of relief, as they are the lucky recipients of a $3.4 million "turtle-crossing" project to construct a tunnel under Highway 27, so wildlife can safely cross. I don't hate turtles, but this seems like a lot of money.

  6. Drunk Mice
    By no means were large sums of money spent, but the use of the funds is comical. A little over $15,000 of earmarked stimulus funds were used at Florida Atlantic University to study how alcohol affects a mouse's motor function. Hopefully these mice did not operate any heavy machinery during the study!

Earmarks - A Way to Get Things Done
Not all of the earmarked money is wasted or goes towards useless projects. Inserting earmarks in spending bills is certainly a way to get things done amongst Washington gridlock, but it too often leads to uncompetitive bids and a lot of waste. Hopefully in this day and age of 24-hour news and the internet, we can get the wasteful spending under control by shining the light on the earmark process and making politicians more accountable. (Read about the political parties' differences in tax ideology, and how it can affect your paycheck, in Parties For Taxes: Republicans Vs. Democrats.)

Check out last week's business highlights in Water Cooler Finance: My iPad Beats Your Toyota.

Related Articles
  1. Insurance

    Medicare 101: Do You Need All 4 Parts?

    Medicare is the United States’ health insurance program for those over age 65. Medicare has four parts, but you might not need them all.
  2. Economics

    Understanding Donald Trump's Stance on China

    Find out why China bothers Donald Trump so much, and why the 2016 Republican presidential candidate argues for a return to protectionist trade policies.
  3. Economics

    Will Putin Ever Leave Office?

    Find out when, or if, Russian President Vladimir Putin will ever relinquish control over the Russian government, and whether it matters.
  4. Markets

    Will Paris Attacks Undo the European Union Dream?

    Last Friday's attacks in Paris are transforming the migrant crisis into an EU security threat, which could undermine the European Union dream.
  5. Budgeting

    How Much Will it Cost to Become President In 2016?

    The 2016 race to the White House will largely be determined by who can spend the most money. Here is a look at how much it will cost to win the presidency.
  6. Economics

    Current Probability of Donald Trump as President

    Predict the current odds of a Donald Trump presidency, and understand the factors that have kept him on top and the looming challenges he faces.
  7. Economics

    Why is Puerto Rico in So Much Debt?

    Learn about the origins and economic factors that led to the downfall of the Puerto Rican economy and what the U.S. government can do to fix the situation.
  8. Retirement

    No, Social Security Is Not Being Depleted

    There are a number of reasons why concerns over Social Security depletion have emerged, but there are ways you can prepare for it.
  9. Professionals

    The Highest Paying Government Jobs

    Learn how professionals can work for the government and still make high salaries; identify the specific professions that pay the most in government work.
  10. Investing

    Would an Infrastructure Bank Help America's Faltering Roads and Bridges

    Politicians are now calling for a National Infrastructure Bank to create jobs. But would a bank provide adequate funding to fix our roads and bridges?
  1. What causes politicians or governments to begin "pork barrel" spending?

    Pork barrel spending occurs when the government taxes the general population to hand out concentrated benefits to special ... Read Full Answer >>
  2. How much money does Florida make from unclaimed property each year?

    Each year, goods such as money, financial investments and physical property are either auctioned off or appraised before ... Read Full Answer >>
  3. How much money does New York make from unclaimed property each year?

    According to the Office of the New York State Comptroller, types of unclaimed property accounts include bank accounts, wages, ... Read Full Answer >>
  4. What is the Social Security administration responsible for?

    The main responsibility of the U.S. Social Security Administration, or SSA, is overseeing the country's Social Security program. ... Read Full Answer >>
  5. Where are the Social Security administration headquarters?

    The U.S. Social Security Administration, or SSA, is headquartered in Woodlawn, Maryland, a suburb just outside of Baltimore. ... Read Full Answer >>
  6. Is the Social Security administration a government corporation?

    The U.S. Social Security Administration (SSA) is a government agency, not a government corporation. President Franklin Roosevelt ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Take A Bath

    A slang term referring to the situation of an investor who has experienced a large loss from an investment or speculative ...
  2. Black Friday

    1. A day of stock market catastrophe. Originally, September 24, 1869, was deemed Black Friday. The crash was sparked by gold ...
  3. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  4. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  5. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  6. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
Trading Center