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?

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.