Corporate Welfare

An Act of Commissions

Congress declares half of America backward and poor.

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Every so often Congress steps back from the monumental issues of war, peace, and radio talk show hosts to remind us that it is fundamentally about power. A case in point: Last week's bi-partisan passage by the House of the Regional Economic and Infrastructure Development Act of 2007.

Proudly modeled on the Great Society-era Appalachian Regional Commission (ARC), the legislation aims to spend $1.25 billion between 2008 and 2012 to set up five regional commissions that would hand out money to state and local governments, Indian tribes, and nonprofit organizations "to promote economic and infrastructure development."

Uh-oh.

Those buzz words signal an open-ended commitment to eventually spend billions and billions of federal dollars in pursuit of elusive "economic development"—much like the ARC itself. Long a target of federal pork busters, ARC constantly finds new "needs" to be met. Lately, that has involved millions to subsidize broadband deployment within its 13-state purview. The Senate recently passed legislation which would take ARC's funding from about $95 million in 2007 to $109 million by 2011.

No wonder so many members want their own commissions. Also, with earmarks in federal appropriations receiving so much negative press recently, a network of ostensibly independent commissions could prove a great way to funnel cash back home.

These new commissions would be the Delta Regional Commission, the Northern Great Plains Regional Commission, the Southeast Crescent Regional Commission, the Southwest Border Regional Commission, and the Northern Border Regional Commission. In total, all or parts of 26 states would be eligible to receive funds from a new commission were the bill to become law.

The Southwest border region alone is massive. It includes all counties within 150 miles of the U.S.-Mexico border. That's 11 counties in New Mexico, 65 counties in Texas, 10 counties in Arizona, and 7 counties in California for a combined population of about 29 million. Figure a Peru or Iraq-sized populace with needs to be serviced.

The Congressional Budget Office relates that "at least 40 percent of the authorized funds would be used for grants to develop transportation, telecommunications, and other basic public infrastructure. Remaining funds would be used for other economic development activities, such as providing job training, improving public services, and promoting conservation, tourism, and development of renewable and alternative energy projects."

If that mission statement sounds like a lot of overlap with existing local, state, and federal entities, well, no one cares. All that the backers of bill care about are more photo ops with giant checks and more ribbon-cuttings.

Bill opponent Rep. Lee Terry (R-Neb.) noted during debate on the bill that the commissions would spend millions in administrative overhead doing what other organizations already do in his state. He was politely ignored.

In addition, Rep. Jim Jordan (R-Ohio) noted that the bill does not forbid commission funds from being spent on lobbying efforts. Anyone familiar with the economic development racket at the state and local level knows what that means: lobbyists and consultants will be hired and directed to cook up various deals involving public money flowing to private hands for work of dubious quality. Jordan's attempt to fix this oversight was slapped down on the House floor.

And for all the talk of the commissions being a response to "grassroots" efforts to target persistent problems, bill sponsor Rep. James Oberstar (D-Minn.) does not sound like he has a free-form, problem-solving process in mind.

"We need standard procedures. We need a voting structure," Oberstar said in arguing for his bill. "Commonality establishment of local economic development districts, a consistent method for distributing economic development funds, a uniform set of procedures that will apply to all of the commission, and, finally, with commonality then we can have uniform evaluation standards of the results of these commissions."

In short, the feds want to play the economic development/economic incentives game along with the states, regions, counties, and cities. Wonderful. Not only that, but it is perfectly reasonable to expect that in the near future that development dollars from the Northern Great Plains Regional Commission will compete with a plan funded by the Southeast Crescent Regional Commission for a corporate relocation of a firm located in the zone of the Northern Border Regional Commission, which will probably be offering its own incentive package for the firm to stay put.

This sort of thing routinely goes on at the state and local level now. The proposed federal commission framework would only make it worse. But what reveals the plan as a totally self-serving political construct is the way one proponent framed the supposed problem the commissions would fix.

"In short, Mr. Speaker, our mills are closing, our young people are leaving, and too many of our workers are looking for work," one Maine congressman lamented.

In other words people are voting with their feet and moving to where they can find jobs in the great and wonderful American labor market. With a Census coming up and reapportionment after that, those private choices are a mortal threat to certain members of Congress who might be re-districted out of their seats.

If trying to reverse that trend is not worth a few hundred million dollars a year, what is?

reason contributor Jeff Taylor writes from North Carolina.

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  1. Sweet! More of our money paying to take our property in the name of “economic development” and the like.

    Not to mention the whole new bureaucracy to oversee the (re)distribution.

    Must… not… rip… out… all… hair…

  2. What do you suppose [they] are in the Congress for, if it ain’t to split up the swag?
    –Will Rogers

  3. You gotta develop the economy. I mean, what are you, a commie?

  4. There is no native criminal class except Congress.

  5. Is it time to start drinking?

    yes, i believe it is

  6. Being close to the area, I have a good idea of which Maine Representative was griping, and he has good reason: his district is A Shithole. Yeah, mills close and people move elsewhere. No one wants to live in a ‘city’ where the best jobs are at the welfare office. Let folks leave, property values fall and become cheap for re-development, instead of propping up a totally wasted economic landscape.

    (Lewiston-Auburn, ME, is perhaps best known recently for the almost race-riots that happened a few years back after a huge influx of Somali immagrants flooded into the area in the span of a year or so. Google it.)

  7. Lewiston-Auburn, ME, is perhaps best known recently for the almost race-riots that happened a few years back after a huge influx of Somali immagrants flooded into the area in the span of a year or so. Google it.

    I remember this story. I think Sean Hannity or some other blowhard-in-kind was assuming the Somalis were setting up the next Al-Queda base in Maine…

  8. With a Census coming up and reapportionment after that, those private choices are a mortal threat to certain members of Congress who might be re-districted out of their seats.

    Mmmm, a man can dream, can’t he?

  9. “in the name of ‘economic development.'”

    That’s their favorite kind of pork. I mean with education, defense, welfare, etc. you have to make some pretense of accomplishing something or helping someone. With economic development, you just give the money to your friends, collect the kick backs and there’s absolute zero accountability.

  10. So this thing is a done deal, or is there still a way to kill it? Sorry, but I’m not all that familiar with procedural issues.

  11. I suppose that this is rather obvious but both Reps. Ron Paul and Jeff Flake voted against this piece of crap. Also, Mr. Pork himself, Don “Bridge to Nowhere” Young voted for it.

    See how your Rep Voted here.

  12. But wait, it gets worse. I am familiar with the Delta Regional Authority (DRA). If you look at the map of the area the DRA covers you will see that it encompasses a whole bunch of areas that can hardly be described as Mississippi River Delta country (it extends up to Missouri and Illinois, and random parts of Alabama are included–the counties aren’t even contiguous). It was designed this way to get support from more members of Congress, who wouldn’t back it if it was limited to the actual Delta areas. Check out the map online at http://www.dra.gov.

  13. Maybe my reading comprehension is bad. It’s $1.25B just to set up the commissions, before they even get any spending money? WTF?

  14. “In short, Mr. Speaker, our mills are closing, our young people are leaving, and too many of our workers are looking for work,” one Maine congressman lamented.

    DangerMan,

    I’m guessing MM. But TA could just as easily have made that statement.

  15. Thanks for the link Kwix. I noticed not even one democrat voted nay, and 39 republicans voted aye. Hold on to your wallets, folks.

  16. He who holds the purse, spends. Party affiliation is irrelevent.

  17. He who holds the purse, spends. Party affiliation is irrelevent.

    I foolishly thought that when the republicans were in power, (house, senate, president), that this crap would at least slow down. It didn’t. Fiscal responsibility is obviously something you lie about on the campaign trail and ignore on capitol hill. Now with the Dems in charge, I expect the sky is no longer a limit. Shit!

  18. The second half of Taylor’s piece, about how philosophically opposed he is to redevelopment efforts, really undercuts the credibility of the first half, when he argues how ineffective this is going to be.

  19. Why don’t they just stop screwing around and start have Five Year Plans?

  20. I wonder how joe will try to spin this fact:

    Democratic votes: 225 ayes, 0 nays, 6 abstained

    Is it possible that this bill is about pork for the party in power so they can further consolidate their power?

  21. I suppose that I shouldn’t have to point out to people commenting on a Libertarian blog that this is a scene straight out of Atlas Shrugged.

    So, of course, it will pass. *sigh*

  22. I suppose that I shouldn’t have to point out to people commenting on a Libertarian blog that this is a scene straight out of Atlas Shrugged.

    So, of course, it will pass. *sigh*

  23. prolefeed,

    Is it possible that Democrats genuinely disagree with you about the usefulness of regional-, community-, and economic-development issues? I know I do. You actually believe that letting cities fall into the dumps is better than revitalizing them, and I disagree with you. How many times have I been involved in principled debates over exactly that issue on these threads?

    Putting the distribution of funds for such projects in the hands of regional bodies, rather than via Congressional earmarks, would seem to be a way to take congressional sugar-daddy politics out of the process.

  24. er, “initiatives,” not “issues,” in that question to prolefeed there.

  25. With economic development, you just give the money to your friends, collect the kick backs and there’s absolute zero accountability.

    Shawn, that’s not true. According to Justice Brennan, they have to have a piece of paper which says that it will benefit the public. I’m assuming this piece of paper has to be… notarized… or something really official and stuff.

    It is not for the courts to oversee the choice of the boundary line nor to sit in review on the size of a particular project area. Once the question of the public purpose has been decided, the amount and character of land to be taken for the project and the need for a particular tract to complete the integrated plan rests in the discretion of the legisltive branch.” Berman, 348 U.S., at 35-36.

  26. Is it possible that Democrats genuinely disagree with you about the usefulness of regional-, community-, and economic-development issues? I know I do.

    joe, I imagine most Democratic congresspeople genuinely think that stealing money from people who tended to vote against them and handing it over to other people who tended to vote for them is a good idea. I would stop short of calling that principled. I recall congressional Democrats being less sanguine about this when the loot was going primarily to Republican-dominated areas.

    You actually believe that letting cities fall into the dumps is better than revitalizing them, and I disagree with you.

    I don’t recall ever saying anything like what the prolefeed in your head apparently said to you. I thoroughly disagree with the notion that this bill is about revitalization — my own experience with our state’s Department of Business and Economic Development is that most of the stuff they do is wasteful, and the rest is downright counterproductive. I somehow doubt that the congressional version of this bureaucracy is wonderfully productive.

    How many times have I been involved in principled debates over exactly that issue on these threads?

    I would hardly characterize your views on the vast majority of threads here as “principled”, since I don’t consider theft to be principled, however much you pretty it up with names like “contributions” or “taxes”. I don’t recall your prior posts on this specific issue — kinda new to this forum. I would agree that you have frequently passionately advocated for socialist positions I consider thoroughly wrongheaded, to the point of embodying some of the attributes of cartoonishly stereotypical villains in an Ayn Rand novel. You almost certainly view most of my libertarian views in a similarly unadmiring manner.

    Putting the distribution of funds for such projects in the hands of regional bodies, rather than via Congressional earmarks, would seem to be a way to take congressional sugar-daddy politics out of the process.

    Yeah, that’ll bring honestly and integrity back into politics. /snark

  27. Joe,

    “the usefulness of regional-, community-, and economic-development issues? I know I do. You actually believe that letting cities fall into the dumps is better than revitalizing them, and I disagree with you.”

    While I agree with your last statement that regional authorities are better than pork spending, I believe its just the lesser of two evils. Tunica, MS is the perfect example of a small, dirt poor town deciding to make themselves profitable. While I am not going to pretend they did not recieve any help from the government, but it was very little. They decided to roll up their sleeves and make something happen. Tunica Co. is now one of the fastest growing and richest counties in Mississippi, due to the gaming industry. It was not public handouts, it was private investors and local ingenuity. Think about this when those towns you speak of; perhaps they crumbling to bits because they are no longer economically viable. Things come and they go, and they change, and this will always happen. The only way to remain economically viable is to keep up with the times and due to an array of factors, some places simply have not or can not do this anymore. Governments shouldnt take taxpayers money and throw it at a problem that governments have no business trying to solve.

  28. The climate sucks up in Maine; The fact that people are leaving for better places in droves is good news; it means there is still lots of opportunity in nicer areas. Maybe I’ll establish residence long enough to get a slice of federal pork, then have my checks forwarded to me in Puerto Rico.

  29. Just when did “backing one’s losers” become sound strategy?

  30. At least the Democrats will get us out of Iraq.

  31. Its interesting seeing how much opposition there is to the idea of developing the economy of your country.

    I don’t care what reasons you think of for this opposition, but if you keep it up, eventually you will be so poor you won’t be able to fund your government. Worse for the rest of the world, you will be so poor you won’t be able to pay back your country’s debts or buy goods that us foreigners want to sell you.

  32. Julian,

    I think most of us are in favor of developing our economy…by spending our money on whatever we deem most appropriate, not by having it stolen from us and spent by someone else.

    If you are going to make statements that are so thoroughly ignorant of basic economics on this site, at least try to back them up. We already have Joe and Dan T doing a fine job of representing the economically ignorant ad nauseum. We don’t need a another socialist robot commenter.

  33. Its interesting seeing how much opposition there is to the idea of developing the economy of your country.

    Yes, it would not be called “economic development” unless it improved the economy. We need private industry’s balance sheet to look more like the federal government’s. After all, who is better situated to determine how the economy will change than Congress?

    If the American economy keeps shrinking at the rate is has for the last century, America will …

    Sorry, I cannot finish that. There are actually many plausible scenarios under which the United States would not be able to fund its government, but I do not think the commenter is interpreting that the way the rest of us might.

  34. *Rolls eyes*

    Yes, prolefeed. Whenever someone disagrees with you about politics, it’s because they’re unprincipled. Anyone who made an honest effort to do what was best must inevitably adopt the policies of right-libertarians. Yawn.

    Anyway, nice whiff on the fact that setting up these bodies REMOVES discretion over their distribution from Congress, and completely undercuts your argument about buying votes.

  35. Shawn,

    Please, Mr. Genius, what’s a Demand Kurv?

    Doesn’t that fact that your supply-side religion keeps failing suggest that maybe there is something other than ignorance about economics to explain why Robert Rubin thinks your policy prescriptions stink?

  36. Zach,

    Look at Gary, Indiana. Look at Detroit. Look at most of upstate New York.

    When a city or region collapses into the economic dumps, it doesn’t just go away, cashed out like some poorly-performing stock in a fund. It stays there, functioning as a black hole, sucking down everything around it and harming the economy and society as a whole. Why you hear about a city’s population declining, what that means is that there are still 50-75% of that city’s population still there.

  37. Maybe I missed something, but how did theft get into the picture? Taxes are not theft by any legal standard. Congress is authorized by the Constitution to levy and collect taxes. Just because someone doesn’t like them doesn’t make it theft.

  38. TrickyVic,
    There is a two fold question there. The first is, does Congress have the power to collect taxes, and if so what kind of taxes. The other is, what are they legally allowed to do with these taxes.

    From Article 1 Section 8:

    The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States;

    So, Congress can collect taxes. If you believe that the 16th Amendment was rightfully enacted by ratification then Congress has the right to income tax, the primary form of tax today.

    So, that leaves the matter of what they can legally spend your tax money on. When the constitution was written, “general Welfare”, meant a general state of Well-Being, an opportunity for prosperity. Thanks to the New-Deal era this meaning has changed to mean “health, food and shelter”, eg. Public Assistance. “Economic Redevelopment” falls into neither definition of “welfare” and is most likely an illegal use of tax monies.

    So, you are correct, it is not theft but rather illegal (or at most quasi-legal) re-distribution of funds.

  39. “If you are going to make statements that are so thoroughly ignorant of basic economics”

    *sits back eagerly to learn*

  40. You bring up some good points, but doesn’t economic welfare promote general welfare? General welfare could mean anything these days, unfortunately.

    Even if not, and lets just say it is illegal, who’s going to do anything about it? Goverment seems to have contemt for the Constitution and Congress seems to care little. Congress has the purse with the power to pour its citizens money into it at their whim. Too bad for us. They are addicted to our cash. It’s one more reason this country needs Ron Paul for Prez.

  41. “Taxes are not theft by any legal standard.”

    I was trying to be concise, but you do have a good point. By the dictionary definition the word I used, “stolen,” is ambiguous. Extorted would be closer to what I was aiming at, but even that is subject to interpretation based on the dictionary definition that I found.

    I don’t know of a word in English that means something taken from someone outside of a voluntary transaction, but that’s what I meant.

    I’m making a very simple economic argument, not a legalistic one, so what the constitution or any other legal framework says about it is irrelevant.

  42. “Please, Mr. Genius, what’s a Demand Kurv?”

    I don’t know, but I’m guessing it’s misspelled demand curve.

    “Doesn’t that fact that your supply-side religion keeps failing suggest that maybe there is something other than ignorance about economics to explain why Robert Rubin thinks your policy prescriptions stink?”

    I don’t have a religion, other than perhaps honesty.

    Robert Rubin seems like a bright guy and I have to give kudos to someone who helps to balance the federal budget. It doesn’t make him infallible. I also haven’t found where he claims that government funded economic development is a net gain for the country or that we will be so poor we won’t be able to fund our government without it. Link?

  43. Uh-oh. is right!

    Government is sending a multi point message to all Americans.
    – We need to develop this part of the country to get back with our people or there’s hell to pay later.
    – Get more land back from the desert.
    – Good place to create jobs and produce power ecologically => solar, wind, geo .. and since our oil reserves won’t last for ever.
    – Good way to control / intergrade the border with Mexico.
    – We need to play nice with other countries [since most think we are bullies].
    – There is hell of a lot of money to be made in the plan.
    You know, the general way of business and greasing the palms.

    As for cities and areas that are in disrepair? They have people there and it’s up to them to make the apropriate changes.

    True for all governments:
    Government is there as a test of the people. Hint: It is up to you to make sure the government is honest!

    You want changes then go out and vote in who you want [someone with a brain I hope], bitch like mad, make your own destiny. Create businesses that are condusive to the area, people and nature.
    Hint: the influx of Mexicans is a force to recon with

    It is not the smartest or the strongest who survive, it’s the ones that can adapt the best. [don’t know who said it but it’s true]

  44. “”Please, Mr. Genius, what’s a Demand Kurv?”

    I don’t know”

    FINALLY AN HONEST ANSWER FROM SEEN… ERRR SHAWN.

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