Environmental Economics

I almost missed this one from yesterday while recovering from a Super Bowl party by attending a series of high-level and uber important university meetings:

A coalition of budget watchdog groups says that in the absence of the age-old practice of Congressional earmarks, the legislative tools that let members attach pet projects to bills, lawmakers appear to have found a backdoor method: special funds in spending and authorization bills that allow them to direct money to projects in their states. […]

The latest example, the groups say, is the recently passed budget for the Army Corps of Engineers. Budget documents show that Congress included 26 different funds — totaling $507 million — for the corps to spend on various construction, maintenance and other projects that were not included in President Obama’s budget or the final spending bill.

The funds were financed by reducing money for projects included in the president’s budget request and adding $375 million to the corps budget, documents show. […]

But Mr. Ellis of Taxpayers for Common Sense said Congress had added other criteria, like the number of jobs provided, which makes it easier for members to force the corps to pursue what he called questionable projects that were previously financed only through earmarks. […]

One example of using a jobs criterion to finance a questionable project, watchdog groups say, could be the Delaware River dredging project. For years, lawmakers from Delaware and Pennsylvania have earmarked millions of dollars to dredge the river to allow bigger ships to enter the port of Wilmington. But with an earmark ban in place, members have had to lobby the administration or the corps for money. Lawmakers and local officials have argued that the project is essential to national security and the local economy.

But a 2010 report by the Government Accountability Office questioned some of the economic claims of the project. Local officials called the report flawed.

Unless you stumbled over here by mistake, you've heard this over and over but I'll say it again: jobs are costs in benefit-cost analysis. That Congress is prioritizing COE projects based on jobs suggests the objective function is that costs, and the deficit, are being maximized subject to, what, a political constraint?

Another shame is the shady budget-making taking place in Congress (surprise!), but I'll let those watchdog groups handle the outrage over that.