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FYI Number 27: February 27, 2007

Bush Administration Draws a Firm Line on FY 2007 Earmarks

A February 15 memorandum from the Office of Management and Budget instructs the heads of federal departments and agencies not to obligate funding for earmarks contained in congressional reports or documents through September 30 of this year. Earmarked funding can only be provided for a project or activity if it has been “specifically identified in statutory text.” As a result, earmarks for thousands of projects remaining from previous years have been canceled.

Earmarking has increased dramatically during the last decade. Most earmarks are found in committee reports accompanying appropriations bills, and have no legal standing. However, federal agency heads have been reluctant to ignore these instructions from the appropriations committees.

When Congress adjourned last fall, it failed to pass nine of the eleven appropriations bills. After the election, the new chairmen of the House and Senate Appropriations Committees announced their intention to bundle the remaining bills into a single funding resolution that would not contain earmarks for FY 2007. Rep. David Obey (D-WI) and Senator Robert C. Byrd (D-WV) also announced their intentions for the FY 2008 appropriations cycle:

“There will be no Congressional earmarks in the joint funding resolution that we will pass. We will place a moratorium on all earmarks until a reformed process is put in place. Earmarks included in this year's House and Senate bills will be eligible for consideration in the 2008 process, subject to new standards for transparency and accountability. We will work to restore an accountable, above-board, transparent process for funding decisions and put an end to the abuses that have harmed the credibility of Congress.”

While critics of earmarking applauded this move, they charged that earmarks are typically not found in bills but in committee reports, and that the announcement was, they contended, ambiguous about the status of earmarks from previous years.

The February 15 memo from Rob Portman, Director of the Office of Management and Budget, appears to resolve any uncertainty about the use of FY 2007 funding for earmarks. Key sections of his 750-word memorandum state:

“For agencies funded by the CR [the final FY 2007 funding bill], this means that unless a project or activity is specifically identified in statutory text, agencies should not obligate funds on the basis of earmarks contained in Congressional reports or documents, or other written or oral communications regarding earmarks. While the Administration welcomes input to help make informed decisions, no oral or written communication concerning earmarks shall supersede statutory criteria, competitive awards, or merit-based decision-making, as set forth in Section II below.”

“II. Agencies shall fund activities based on authorized, transparent, statutory criteria and merit-based decision-making (including competitive awards). Federal funds shall be expended only for purposes where the CR grants authority in law for this spending or where there are other authorities in statutes to provide this funding. In particular, agencies subject to the CR are advised to fund activities within each account in accordance with authorizing law, using statutory criteria, such as funding formulas, eligibility standards, and merit-based decision-making. In the application of authorized discretion, each agency shall use transparent and merit-based determinations to achieve program objectives, consistent with the purpose of the statute and Administration policy (including the President's Budget). Government-wide and agency regulations and policy governing the selection of grant recipients or contractors will be in effect.”

“In short, funding decisions should be based on the merits, in accordance with the law.”

Note that FY 2007 funding for the Department of Defense and Department of Homeland Security was passed in stand-alone appropriations bills, and is not included in the Continuing Resolution referred to in the Portman memo. See http://www.whitehouse.gov/omb/memoranda/fy2007/m07-10.pdf for the entire text of the OMB memo.

Removing earmarks from funding will be dramatic in many instances. As an example, the final funding bill provided the Department of Energy Office of Science with a $200 million increase in its FY 2007 budget over last year’s budget of $3,596.4 million, which represents an increase of 5.6 percent. Removing the earmarks from this $3,596.4 million FY 2006 budget provides an estimated additional $130 million in “unrestricted” money, resulting in an increase of $330 million or 9.2 percent in available funding for the Office of Science this year.

Richard M. Jones
Media and Government Relations Division
American Institute of Physics
fyi@aip.org
301-209-3095

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