EARMARKING

'Earmark' is a the term that dates to the 16th century, originally referring to cuts or marks in the ears of cattle and sheep made to show ownership. Today it is commonly used to refer to an institution's ability to designate funds for a specific use or owner. Earmark has different meanings in the fields of public finance and politics.

Contents

Earmarks in public finance

Earmarks in U.S. politics

Controvesy

References

Earmarks in public finance

In public finance, an earmark is a requirement that all or a portion of a certain source of revenue, such as a particular tax, be devoted to a specific public expenditure. For example, in the United Kingdom a tax on television licenses is directly allocated to the British Broadcasting Corporation (BBC).
Earmarking bypasses the normal procedure by which tax revenue is pooled in a general fund and then allocated among various government spending programs as opposed to a specific program.

Earmarks in U.S. politics

In U.S. politics, an earmark refers to congressional provisions that directs funds to be spent on specific projects (or directs specific exemptions from taxes or mandated fees). Earmarks can be found in both legislation (also called "Hard earmarks" or "Hardmarks") and in the text of Congressional committee reports (also called "Soft earmarks" or "Softmarks"). Hard earmarks are binding and have the effect of law, while soft earmarks do not have the effect of law but by custom are acted on as if they were binding.[1] Typically, legislators seek to insert earmarks which direct a specified amount of money to a particular organization or project in his/her home state or district.
There is no official definition of an earmark, though various public interest groups and government agencies have developed their own. Attempts have also been made to define earmarks in ethics and budget reform legislation. However, due to the controversial nature of earmarks and the effects these definitions would have on Congressional power, none of these has been widely accepted.
Despite the lack of a consensus definition, the one most widely was developed by the Congressional Research Service, the public policy research arm of the U.S. Congress:

"Provisions associated with legislation (appropriations or general legislation) that specify certain congressional spending priorities or in revenue bills that apply to a very limited number of individuals or entities. Earmarks may appear in either the legislative text or report language (committee reports accompanying reported bills and joint explanatory statement accompanying a conference report)."[2]

In the United States legislative appropriations process, Congress has, within the powers granted under of the United States Constitution, the ability to direct the appropriations of money drawn from the U.S. Treasury. This includes the power to earmark funds it appropriates to be spent on specific named projects. The earmarking process has become a regular part of the process of allocating funds within the Federal government.
Earmarking differs from the broader appropriations process in which Congress grants a yearly lump sum of money to a Federal agency. These monies are allocated by the agency according to its legal authority and internal budgeting process. With an earmark, Congress is able to direct that a specified amount of money from an agency's budget be spent on a particular project.

Controvesy

Earmarks in U.S. legislation have become a point of contention in recent years with critics feeling that the ability to earmark Federal funds should not be part of the legislative budget process [3]. Tax money, they argue, should be applied by Federal agencies according to objective findings of need rather than being earmarked subjectively by elected officials. Supporters of earmarks however, feel that elected officials are better able to prioritize funding needs in their own districts and states and that it is more democratic for these officials to make discreet funding decisions than unelected civil servants.

References

★ Etymology of the word ''earmark'', from the Online Etymology Dictionary.

★ Earmarks in Appropriations Acts, January 26, 2006 memorandum by the Congressional Research Service (CRS) appropriations team

★ The Budget System and Concepts, January 2006 document by the Office of Management and Budget (OMB)

★ Congressional Research Service report Comparison of Selected Senate Earmark Reform Proposals RL33295 published March 6, 2006.

★ Citizens Against Public Waste

★ U.S. News & World Report, Loading the Pork Train: A case study of why earmarks may be getting out of hand, Danielle Knight, 5/21/06