Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Author: Scarinci Hollenbeck, LLC
Date: December 29, 2020
The Firm
201-896-4100 info@sh-law.comThe New Year is poised to bring sweeping changes to the federal government, which may include the return of infrastructure earmarks. Congress is reportedly considering whether the revive the controversial practice of appropriation bill earmarks as a means to promote bipartisanship.
Prior to 2011, Congress permitted Member-directed spending, commonly referred to as “earmarks.” During this period, committees were given an administrative choice to include an earmark in legislation or an accompanying report. However, concerns about transparency, which sprang from several high-profile abuses of the practice, such as the 2005 Alaska “bridge to nowhere” scandal, resulted in a moratorium that has lasted nearly a decade.
As the House Select Committee on the Modernization of Congress noted in its September 2020 report, there is no enforceable ban on earmarks. Rather, there are currently three standing rules that govern congressionally-directed spending. First, spending requests are not permitted to directly benefit a Member of Congress (or their spouse). Second, House and Senate Rules require that relevant legislation or reports include a list of spending requests, limited tax benefit, or limited tariff—or a statement that the legislation includes no congressionally directed spending. And third, it is the responsibility of the committee of jurisdiction to identify Member-directed spending in legislative texts or accompanying reports. Congressional committees can also establish their own policy requirements, deadlines, or restrictions, regarding earmarks.
The bi-partisan Modernization Committee is one of several groups to call for reinstating earmarks, albeit in a revised fashion. “Despite best intentions, the decision to end congressionally-directed spending has faced widespread backlash across the political spectrum,” its report stated. “Scholars from the Heritage Foundation to the Congressional Institute to the Brookings Institution have called for the reinstatement of some form of Member-directed spending.”
The Modernization Committee’s proposed framework for earmarks would establish Community-Focused Grant Program (CFGP) as a competitive grant program designed to fund projects that originate at the local level and have local support. Public entities, including certain non-profits, would be able to apply for grants by submitting an application to at least one Member of Congress. It is up to each member to determine which projects they will support via a uniform request process to the appropriate congressional committee. For discretionary programs, the grant program is limited to one percent of discretionary spending. The grant program will give special consideration to projects that have broad support at the local level, as evidenced by supporting documentation, bipartisan support, and multi-member support.
Democrats are hopeful that bringing back earmarks will help them garner support for President-elect Joe Biden’s policy plans, including an expansive infrastructure bill. However, they will need Republicans to get on board, particularly if the party maintains control of the Senate.
In the Senate, Appropriations Committee Chairman Richard Shelby (R-AL) and Vice Chairman Patrick Leahy (D-VT) both support reviving earmarks. However, Shelby emphasized that restrictions must be in place this time around. “Directed appropriations are in the Constitution, but people abused them and there’s a lot of opposition to that,” he said. “So we will have to see.”
In the House, Representatives Rosa DeLauro (D-CT), Marcy Kaptur (D-OH), and Debbie Wasserman Schultz (D-FL) are all vying to head Appropriations Committee. To date, Kaptur and Wasserman Schultz have both stated that they support reinstating earmarks. Other House members have expressed concerns. “A lot of the corruption scandals of the early 2000s revolved around earmarks,” Representative Tom McClintock (R-CA) said. “When the same body that is appropriating the money is also spending the money, there is no check in the system.”
While appropriation bill earmarks may return to Congress in 2021, they will certainly look different. Nonetheless, there will likely be opportunities for companies and localities to secure directed funding.
If you have any questions or if you would like to discuss the matter further, please contact me, Teddy Eynon, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Corporate consolidation involves two or more businesses merging to become a single larger entity. The result is often a stronger and more competitive company that can better navigate today’s competitive marketplace. What Is Corporate Consolidation? Corporate consolidation closely resembles a basic merger transaction. The primary difference is that a consolidation creates an entirely new business […]
Author: Dan Brecher
Business law plays a critical role in nearly every aspect of running a successful enterprise, from negotiating a commercial lease to drafting employee policies to fulfilling corporate disclosure obligations. Understanding what is business law and your legal obligations can help your business run smoothly and build productive relationships with clients, business partners, regulators, and others. […]
Author: Dan Brecher
Corporate transactions can have significant implications for a corporation and its stakeholders. For deals to be successful, companies must act strategically to maximize value and minimize risk. It is also important to fully understand the legal and financial ramifications of corporate transactions, both in the near and long term. Understanding Corporate Transactions The term “corporate […]
Author: Dan Brecher
Ongoing economic uncertainty is forcing many companies to make tough decisions, which includes lowering staff levels. The legal landscape on both the state and federal level also continues to evolve, especially with significant changes to the priorities of the Equal Employment Opportunity Commission (“EEOC”) under the Trump Administration. Terminating an employee is one of the […]
Author: Angela A. Turiano
While filing annual reports may seem like a nuisance, failing to do so can have significant ramifications. These include fines, reputational harm, and interruption of your business operations. In basic terms, “admin dissolution for annual report” means that a company is dissolved by the government. This happens because it failed to submit its annual report […]
Author: Dan Brecher
Antitrust laws are designed to ensure that businesses compete fairly. There are three federal antitrust laws that businesses must navigate. These include the Sherman Act, the Federal Trade Commission Act, and the Clayton Act. States also have their own antitrust regimes. These may vary from federal regulations. Understanding antitrust litigation helps businesses navigate these complex […]
Author: Robert E. Levy
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!