A:

So-called "pork barrel politics" has been present in the United States' legislative and, to a lesser degree, executive branches since the 1800s. Generally used in a derogatory manner, the term refers to the practice of politicians trading favors granted to constituents or special interest groups in exchange for political support, such as in the form of votes or campaign contributions. Also known as patronage, pork barrel politics generally is funded by the larger community but primarily or exclusively benefits just a particular segment of people.

Pork barrel spending and the intersection of money and politics extend back more than a hundred years in U.S. politics. Abraham Lincoln, for example, traded Civil War contracts to northern businessmen in exchange for patronage jobs and campaign support. On a more local level, early 20th century New York government was dominated by Tammany Hall, which frequently bartered government contracts and the like for political power.

Between 1991 and 2014, the number of pork barrel projects and the amount of money distributed through pork barrel spending peaked in 2006 with about 14,000 projects receiving about $30 billion. In 2010, Congress put a moratorium on the practice of "earmarking," which placed legislative add-ons, or earmarks, on appropriations bills to funnel money to special projects in a lawmaker's state. Earmarks were a common practice used by legislators when attempting to pass a broad bill.

The American public turned against the practice of earmarking money through pork barrel politics toward the end of 2005 in reaction to some pork intended for Alaska that was inserted in a few places in a large federal highway transportation bill. In the infamous "bridge to nowhere" incident, Congress initially approved more than $220 million for construction of a bridge to connect the town of Kethikan, Alaska, with a population of less than 9,000, to the airport on the Island of Gravina, with a population of 50. The $320 million dollar project would be funded by federal taxpayers, yet only a few Alaskans would benefit. After public outcry over the blatant exhibition of pork barrel politics, the funds were rerouted, and the bridge was not built.

Examples of wasteful government spending are found each year in the budgets proposed by Congress. One such pork barrel project funded in 2011 benefited Montana State University, which was awarded more than $740,000 to research the use of sheep grazing as a means of weed control. In the Fiscal Year 2014 budget, more than $90 million was allocated for tank upgrades that the Army did not even want. The award apparently was made because the supplier of the tanks had operations across several congressional districts. Historically, the Department of Defense (DOD) Appropriations Act contains the most pork.

Another infamous example of pork barrel politics is found in the project nicknamed the "Big Dig" in Boston, in which a 3.5-mile section of highway was relocated underground. The Speaker of the House at the time directed federal funds to the local project. Initiated in 1982 and finally completed in 2007, the project cost nearly $15 billion — a cost significantly higher than the original budget of almost $3 billion.

The practice of pork belly politics relates to crony capitalism. Rather than the free market leading to economic success, relationships between businessmen and the government determine success.

RELATED FAQS
  1. How are futures used to hedge a position?

    Learn how futures contracts can be used to limit risk exposure. Read Answer >>
  2. Who sets fiscal policy, the president or congress?

    Discover how fiscal policy is set in the United States, including how all three branches of government can affect a given ... Read Answer >>
  3. How does a nation's national debt affect the budget process?

    See how the national debt has traditionally impacted, or purported to impact, the budgeting process for the U.S. federal ... Read Answer >>
  4. What is the history of futures?

    Explore the history of futures trading and the origin of the major commodity futures trading exchanges in England and the ... Read Answer >>
  5. How do you use the profitability index rule when scoping out a project?

    Understand the parameters of the profitability index rule and how this rule is used in corporate capital allocation to determine ... Read Answer >>
  6. How much debt is too much when calculating capital budgeting?

    Learn how companies determine how much debt is acceptable when funding a new project by using the net present value to estimate ... Read Answer >>
Related Articles
  1. Insights

    China's Commodity Exchange Introduces Pork Index

    The Dalian Commodity Exchange launched its first official pork price index, in a country that consumes half a billion pigs a year.
  2. Insights

    6 Outrageous Political Earmarks

    Congress recently failed to adopt a ban on all earmarks. Find out why this type of funding is so controversial, and where it has gone wrong in the past.
  3. Investing

    Why Bacon Still Has Sizzle as an Investment

    A combination of factors is pushing up beef and pork prices and could continue doing so for the foreseeable future.
  4. Investing

    A Quick Guide for Futures Quotes

    Here is a quick guide to futures quotes.
  5. Insights

    Chipotle Stock: Analyzing 5 Key Suppliers (CMG)

    Find out which companies generate significant portions of their revenues from Chipotle Mexican Grill and what makes their relationships unique.
  6. Investing

    5 Big Food Industry M&A Deals in 2015 (KHC, KO)

    Read about some of the most important M&A transactions announced in the food sector in 2015, including one of the most talked about deals in any industry.
  7. Investing

    Commodity Traders Are Using This ETF To Invest In Livestock

    Strategic traders should be paying attention to the livestock markets.
  8. Insights

    Can Infrastructure Spending Really Stimulate the Economy?

    Public infrastructure spending rarely stimulates long-term positive growth for the economy, even in times of recession...
  9. Insights

    How to Invest In Developing Markets

    Developing markets can be attractive additions to many investor's portfolios, but carry additional risks that must be considered.
  10. Investing

    Play Politics With ETFs ... for Real

    If these ETFs come to market, they could give investors direct lines politically inspired market moves.
RELATED TERMS
  1. Basis Quote

    A method for simplifying and shortening the quoted price of a ...
  2. Political Economy

    Political economy is the study and use of how economic theory ...
  3. Political Risk Insurance

    Political risk insurance provides financial protection to investors, ...
  4. Breakfast Index

    A metric that measures wholesale food prices. The breakfast index ...
  5. Capital Project

    A long-term investment made in order to build upon, add or improve ...
  6. Special Revenue Fund

    A special revenue fund is an account established by a government ...
Hot Definitions
  1. Fibonacci Retracement

    A term used in technical analysis that refers to areas of support (price stops going lower) or resistance (price stops going ...
  2. Ethereum

    Ethereum is a decentralized software platform that enables SmartContracts and Distributed Applications (ĐApps) to be built ...
  3. Cryptocurrency

    A digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of ...
  4. Financial Industry Regulatory Authority - FINRA

    A regulatory body created after the merger of the National Association of Securities Dealers and the New York Stock Exchange's ...
  5. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs are often issued by companies seeking the capital to expand ...
  6. Cost of Goods Sold - COGS

    Cost of goods sold (COGS) is the direct costs attributable to the production of the goods sold in a company.
Trading Center