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Capitol Correspondence - 04.19.21

Five Steps to Consider Before Venturing into the Brave New World of Earmarks

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The government relations world has been abuzz about the Democratic and Republican House caucuses voting to allow the return of earmarks, especially with Senate Republicans also now considering allowing them within their caucus. ANCOR members should be as well: in a nutshell, earmarks will give you future opportunities to advance your mission while lowering your overhead! Given that many providers of disability supports operate with one- or two-percent profit margins, the value of lowered overhead cannot be overstated.

In short, earmarks can help you lower your overhead and expand margins by securing dedicated funding for a specific project. This process was once common, but rules changes in Congress eliminated earmark spending when the mechanism fell into disrepute. Now, efforts to bring back earmark spending is offering the potential for community projects—including ones proposed by you (!!)—to receive dedicated congressional appropriations. 

This rule change came late in the fiscal year 2022 appropriations planning process, which is fast nearing the end of the drafting stage. Unless you have bandwidth to put together a proposal and begin advocating immediately, you will be better served spending the spring and summer thinking through your needs and potential projects. Then, when Congress begins its fiscal year 2023 process in the fall, you will be ready to lobby for your earmarks, officially referred to as Community Project Funding.

Here’s what you need to know about earmarks in the form of some frequently asked questions. First, what are earmarks, exactly? The formal definition of an earmark is any congressionally directed spending, tax benefit or tariff benefit that would boost a specific entity or a specific state, locality or congressional district. In other words, it’s a flexible form of spending that can be targeted at a specific organization or geographic area. Each party caucus in each chamber decides for itself whether it will allow its members to ask for earmarks, and so far House Democrats and Republicans have voted to allow earmarks. They do not need the Senate to do so as well to implement this change. Learn more about the history of earmarks with this Congressional Research Service report.

Second, why did earmarks go away…and why have they returned? Earmarks came under disrepute in the early 2000s, resulting in their ban after some particularly egregious abuses of the process came to light. However, they had served an important function meeting community needs that lawmakers were loath to do without. Most notably, they were a useful negotiating chip among members of Congress and party leadership. With gridlock on Capitol Hill causing historically low levels of legislative accomplishment no matter which party has been in control, Congress has come to see the value of earmarks in offering some extra leverage as lawmakers seek to advance their legislative goals.

With progress on this issue looming, here are five steps to consider before applying for earmarks.

1. Assess whether you are eligible.

Earmarks can be designated for nonprofit, local governments and state governments that can evidence community support for their work. There is an explicit ban on for-profits receiving earmarks at this time. Right now, we are not aware of a clear definition for “community support,” so a letter from family / consumer networks, local officials, local organizations or others who have had opportunities to be impressed by your work could be sufficient.

2. Decide how much you need.

We recommend sums between $50,000 and $500,000 to increase the odds of acceptance. Anything above $1 million will certainly receive higher scrutiny. The overall earmark budget is capped at one percent of the overall federal budget. While one percent sounds low, the federal budget is measured in trillions, so there is a lot of potential nonetheless.

3. Find a federal budget line item to which you can connect your project.

The House Appropriations Committee issues a report for each of its areas of jurisdiction (e.g., education, transportation, etc.) which breaks out the budget line items for each federal agency in that jurisdiction. You can find all the reports here. While ANCOR’s members operate largely within Medicaid, which falls under the Department of Health and Human Services (HHS), your project need not be confined to Medicaid or even to HHS. Are you trying to innovate in recruitment and retention? Look at what projects are being funded under the Department of Labor. Experimenting with new ways to provide transportation to the individuals you support? Yes, you guessed it, look at projects funded by the Department of Transportation.  

4. Ask your member of Congress to request Community Project Funding from the House Appropriations Committee.

The request has to be made by a member of Congress, and each member of Congress is limited to 10 projects per year. Members of Congress cannot have any conflict of interest with the request and must disclose their requests publicly. Manage your expectations during this process; although 10 projects can be submitted, your member of Congress is not required to submit 10 projects, nor are they guaranteed to have all of their projects accepted. After years of earmarks being considered politically taboo, Congress will be careful about the optics of what they are seeking to fund through this method.

5. Reach out to ANCOR for help.

Once you have a project outlined, you will need to advocate for your member of Congress to include it in their requests. As your trade association, ANCOR’s role is to advocate for its members. Reach out to let us know if you need help advocating to your members of Congress and to the Appropriations Committee!