Wednesday, December 1, 2010

Earmark Ban

The Senate today voted against a ban on earmarks claiming in part that earmarks are not expensive costing only $16b in fiscal 2010. However, there are some bills where earmarks are used to get enough votes to pass the bill which would otherwise fail and in these cases I think that you should count the total cost of the bill and not just the cost of the earmark in determining how much would be saved by banning earmarks.

Recall that when it appeared that healthcare reform did not have enough votes in the Senate to pass that an earmark was included in the bill which would pay 100% of Nebraska's additional Medicaid expense with the other states only receiving a 50% federal reimbursement of the increased Medicaid costs. Assuming that Nebraska's Senator Bill Nelson's vote made the difference between the healthcare reform bill passing, should you count the cost of this earmark as the $90 million in additional Medicaid reimbursement over 10 years or the $1 trillion of the new healthcare reform over 10 years?

The argument that earmarks are not a significant cost item is misleading.