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A Rose by Any Other Name: It’s Time to Bring Earmarks Back to Defense R&D | Commentary

In 2010, congressional Republicans campaigned in the midterm elections on a promise to end earmarks — the direction of appropriated dollars to specific projects, typically in a lawmaker’s district. Proponents of the ban championed it as a step towards fiscal discipline. In reality, the ban has come at the expense of America’s small businesses and our national security, and it coincides with an historic period of legislative inertia. It’s time to restore earmarks.

Small businesses are the lifeblood of the American economy. According to the U.S. Census Bureau, in 2011 (the last year for which data is available) there were nearly 5.7 million small businesses — a firm with fewer than 500 employees. In total, small businesses employed nearly 55 million Americans that year and paid nearly $2.2 trillion in wages — and it wasn’t a fluke. From 1993 to mid-2013, small businesses created 63 percent of the net new jobs in the United States. The truth is that the economy grows as small businesses grow.

Small businesses also play an important role in the American defense industrial base, where small, high-tech firms rapidly churn out or integrate cutting edge technology. Previously, these businesses lobbied Congress for earmarks to support investment in important, but unfunded, research and development (R&D). The resulting earmarks brought new thinkers to specific challenges with impressive results, such as the Predator drone.

The signature vehicle of American aerial strike since 9/11, the Predator began with a series of earmarks secured by Republican Reps. Buck McKeon and Jerry Lewis of Southern California. The local beneficiary of their efforts was a small, eight-person shop: General Atomics Aeronautical Systems, Inc. The firm is now one of the world’s leading developers of drones and employs thousands of workers.

In fact, between 2001 and 2010, congressional “plus-ups” increased Pentagon funding for research and development by an average of 4.5 percent each year. In 2011, the first year of the ban on earmarks, funding for R&D was reduced by two percent. In their zeal to curtail wasteful spending, earmark reformers inadvertently undercut America’s future success on the battlefield.

In fairness, Congress and the Department of Defense have allocated R&D funds to businesses through programs like the Rapid Innovation Fund. Winning a bid is said to be like winning the lottery, however, because of the fierce competition for limited resources. At minimum, it’s clear that opportunities for small businesses to contribute to innovative R&D have dwindled in the post-earmark era.

The experience of MIKEL Undersea Warfare Systems, a successful Rhode Island technology development and services company, provides an indication of the kind of innovation that’s been lost. With real expertise in acoustic tracking and navigation for America’s submarine force, MIKEL made important progress in the last decade helping submarine crews better understand where they — and their potential adversaries — are in an undersea environment where surveillance is extremely challenging and traditional global positioning systems are inaccessible. Some of that work began with an earmark, and it ended when earmarks ended — not because the work was unimportant, but because relatively small projects are unlikely to receive the kind of institutional support and nurturing they need from a bureaucracy like the Department of Defense. Only Congress, with all of its flaws and dysfunction, has the incentive structure in place to look out for a program like MIKEL’s or like the Predator more than a decade ago.

Actually, the end of the earmark coincides with worsening congressional dysfunction. The two Congresses since 2011 and the beginning of the earmark ban have produced fewer laws than any Congress in the last 40 years.

It’s time to restore earmarks — even if they have a new name. As an interim step, the House and Senate should establish a Congressionally Directed Small Business R&D Fund for Defense Innovation. The provisions should be simple and straight forward. First, both funding requests and their results should be completely transparent and publicized — something most members would do gladly. Second, members should not be able to submit funding requests to benefit campaign contributors.

Most fundamentally, earmarks should be awarded where constituent interests intersect with the national interest. Only Congress can faithfully make that judgment — and that is the Constitutional responsibility the founders gave its members. Predator drones, mine-resistant ambush protected vehicles, and even the Human Genome Project all began as earmarks. It’s time to unleash America’s ingenuity again.

James M. Ludes is executive director of the Pell Center at Salve Regina University and a former legislative assistant for defense to then-Sen. John Kerry. Kelly Mendell is president of MIKEL Undersea Warfare Systems, a Rhode Island-based, woman-owned, small business that provides innovative, cost-effective undersea solutions for the U.S. and foreign navies.

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