GWEN IFILL: Congress got back to work in earnest today, starting with the verdict in a high-profile ethics trial.
Political drama spread from end to end on Capitol Hill today. After 40 years in Congress, less than a full term as chairman of the House Ways and Means Committee, and one day after he walked out of his own House ethics hearing, New York Democrat Charles Rangel was found guilty of violating House rules.
REP. ZOE LOFGREN (D-Calif.): Count XI, Conduct in Violation of the Code of Ethics for Government Service Clause II, we...
GWEN IFILL: California Democrat Zoe Lofgren, the panel's chairwoman, announced the verdicts on 11 counts.
REP. ZOE LOFGREN: We have tried to act with fairness, led only by the facts and the law. And I believe that we have accomplished that mission.
GWEN IFILL: Rangel, the panel found, broke ethics rules by using official letterhead to raise funds for a public service center at New York City College that was to bear his name, failing to disclose more than $600,000 in assets and income, not reporting income earned on the rental of a villa he owns in the Dominican Republic, and using a rent-controlled residential apartment in New York City as a campaign office.
Rangel called the panel's judgment unfair and said he had been deprived of due process rights and wasn't even in the room when the charges were considered. He argued yesterday that he could not afford his legal defense.
REP. ZOE LOFGREN: Thanks to all of you.
GWEN IFILL: It now falls to the full Ethics Committee to recommend what punishment the House will impose. Sanctions could include a vote deploring Rangel's conduct, a fine, and denial of privileges.
On the other side of the Capitol, senators from both parties returned their leaders to office. Democrats, who will hold a 53-47 seat advantage in the new Congress, reelected Nevada's Harry Reid as majority leader.
SEN. HARRY REID (D-NV), Majority Leader: It's been my honor to serve as the Democratic leader for the last six years. And my team was just reelected.
GWEN IFILL: A strengthened Republican Caucus stayed with Kentucky's Mitch McConnell and his team.
SEN. MITCH MCCONNELL (R-KY), Minority Leader: I think we have a great opportunity here to demonstrate that we are responding to what the American people clearly would like for us to do: cut the spending, cut the debt, and get private-sector job creation going again.
GWEN IFILL: But McConnell, reversing himself on a spending issue of importance to newly elected conservatives, has announced he will support an end to earmarks, money lawmakers typically designate for home state projects.
SEN. MITCH MCCONNELL: I don't apologize for them, but there is simply no doubt that the abuse of this practice has caused Americans to view it as a symbol of the waste and out-of-control spending that every Republican in Washington is determined to fight.
MAN: Take it away, Mitch.
GWEN IFILL: Only two weeks ago, McConnell made the opposite argument in a post-election speech at the Heritage Foundation.
SEN. MITCH MCCONNELL: You could eliminate every congressional earmark, and you would save no money. It's really an argument about discretion.
GWEN IFILL: President Obama, who argued against an earmark ban during the 2008 campaign, has also changed his mind.
In a radio address over the weekend and a statement yesterday, he embraced earmark reform, welcoming "McConnell's decision to join me and members of both parties who support cracking down on wasteful earmark spending."
And Democratic Leader Reid, who has defended earmarks, said this afternoon he now will allow the Senate to vote on banning them.
So, how much of this is about fiscal reform, how much of this is about politics, and how much of it is a little of both?
For that, we turn to James Thurber, director of the Center for Congressional and Presidential Studies at American University, and Maya MacGuineas, president of the Committee for a Responsible Federal Budget at the New America Foundation.
Maya, let's start with a little fact-checking. How much of the federal budget is actually devoted to what we call earmarks?
MAYA MACGUINEAS, president, Committee For a Responsible Federal Budget: Well, in fact, nobody actually knows, because it depends on how you define an earmark.
So, let's say that the range of how much we spend on earmarks a year is somewhere between $15 billion and three times that much. So, it's real money. There's savings to be had there. But given how big the whole budget is, it's really not even close to a significant slice of it.
GWEN IFILL: And what are they spent on, real projects, real bridges with people's names on them, or other things?
MAYA MACGUINEAS: Well, they're real, I mean, and the bridges are actually built. Sometimes, they go to nowhere. Sometimes, they go to real places.
MAYA MACGUINEAS: But what they are is that they are spending projects that are really directed by members of Congress, or, in cases, the White House as well, to certain interests generally in their district for their constituents.
And I would say that the biggest problem with them is that they don't tend to go through the normal budget process. They're not treated the way the rest of the budget is. They're kind of slipped in, and they're usually pretty specific interests, thereby not representing the public interest.
GWEN IFILL: James Thurber, we have heard this debate in many different forms over the years, including John McCain, who built his campaign in some respects around that in 2008, and now is kind of on the sidelines as there's movement going on.
How much of this is politics?
JAMES THURBER, director, Center for Congressional and Presidential Studies, American University: Well, you know, Senator Obama also wanted to have earmark reform. And he pushed it through. They're more transparent. Individuals cannot receive anything from the earmark. The family cannot. And he pushed that reform through. And there was a debate in the campaign.
GWEN IFILL: Reform, not ending it, ending...
JAMES THURBER: Not ending them. They're still there.
But we went from 15,000 earmarks to 8,000 after that reform in 2007. They're creeping back up. There are about 9,800. And the amount spent has been going down. And each one is smaller. It's controversial, though, because it seems that it's behind the scenes. We don't have the regular process in deciding them. And so a lot of Americans are very upset about it.
GWEN IFILL: Are they kind of hard to resist because it's bringing the bacon home; that's what a lot of legislators think they have come to Washington to do?
JAMES THURBER: Well, I think that the appropriators indeed don't want to get rid of it, because it helps them get votes for their bills. It helps them build relationships, power relationships. The power of the purse is with Congress. They have the right to do this.
But the question is whether it's transparent or not. And I think it's going to be very hard to give up, even though the president says he wants them cut and the leadership says that they're going to have a vote on it.
GWEN IFILL: Maya, how do you distinguish earmarks from pork? And how much of transparency of -- how much is transparency a factor in making that distinction?
MAYA MACGUINEAS: Well, I think there's two different ways to think about it.
So, in many ways, earmarks are some of the pork that is out there. But earmarks are either something that are done because of an individual member's interest or a local or very small, targeted area, or they could be pork because they're sort of wasted, and they're just to get money into the district.
The problem, of course, is that it's the same with all areas of waste, fraud and abuse, is that one person's waste is, you know, jobs for another district or projects for another district. And so it has some value there.
I think the big picture is, it undermines all of our sense that government is doing what it's doing well, because it ends up -- you start hearing sort of these laugh lines about where the money is being spent. And it undermines the credibility that the government is spending our money well, especially at a time we have to start thinking about scaling back spending, doing it more responsibly.
GWEN IFILL: Doesn't the executive branch have control over earmarks as well, their own set?
MAYA MACGUINEAS: Yes. A lot of the focus is always on congressional earmarks.
GWEN IFILL: Yes.
MAYA MACGUINEAS: And the White House directs plenty of money in separate ways, too. The White House doesn't tend to show that in its budget nearly as clearly as it focuses in on congressional earmarks.
But this is standard across the board. There are some members who don't take earmarks. They have been very principled on that.
GWEN IFILL: John Boehner among them.
MAYA MACGUINEAS: That's right. But this is the way that business gets done in a lot of ways.
And I think that's what people are rejecting. They don't want this to be the way that business gets done. A lot of times, these are slipped into bills, not in the regular process. It sort of it gives you that feeling of things getting done in the dead of night. You don't know where they have come from in the past. And people want to see that changed for their tax dollars, how they're spent.
GWEN IFILL: So, with all the debate that has gone on over the years about whether to get rid of these -- these -- this approach, what is different now? What -- why did we see Mitch McConnell switch yesterday? Why do we see Harry Reid saying he will allow debate? What's the different formula?
JAMES THURBER: Well, we had an election.
GWEN IFILL: Oh, that.
JAMES THURBER: And we had people sort of on the far right, conservatives from the Tea Party movement, saying, hey, in the caucus, you have got to do something about this. The American people want something done about this.
That's going on in the House of Representatives. And the leaders are responding to it. The House and the Senate get the leadership that they want. And the leaders are listening to these new members that are coming in. And they're going to go after earmarks.
GWEN IFILL: It's a fair -- it's fair to say this is a win for the Tea Party Caucus, such as it is?
JAMES THURBER: So far, it's a win. It's a rhetorical win. Let's see what happens because there are about...
GWEN IFILL: What do you mean by rhetorical win?
JAMES THURBER: Well, there are about 9,000 earmarks in this -- in these appropriation bills that have not passed yet. The tax cuts are going to be considered, but also the appropriation bills. Let's see, in the lame-duck, whether they deal with it or not.
GWEN IFILL: Is it possible, Maya MacGuineas, to make the case for earmarks anymore?
MAYA MACGUINEAS: I think the problem with the case for earmarks -- and some of things that earmarks go to fund are certainly worthwhile. And the truth is that, if we curtail them or eliminate that process, some of that money will still be spent. A lot of that money will probably be spent on those projects, because they're good projects.
But I think the argument is pretty on the side -- pretty strong on the side of, it's time to get rid of them for symbolic reasons. Let's be clear. They are not going to fix the budget. They are not going to make a real dent in the budget. But they are going to be a first step that's very important, before we move on to the real issues of dealing with our budget on the spending, entitlement, tax side, the tough stuff we have to do.
It is very hard to say to taxpayers or recipients of Social Security or those in Medicare or in defense, all the different programs that are going to be affected, you have to make real sacrifices, if we still read about bridges to nowhere or Rock and Roll Hall of Fame museums.
These kinds of things, if they undermine the sense that the money is being spent well, it's going to be harder to asked for shared sacrifice. So, I think it's a very important symbolic first step, albeit not one that is going to save us much money.
GWEN IFILL: OK. Why don't you see -- I will give you a chance to defend the Rock and Roll Hall of Fame.
JAMES THURBER: It's hard to defend these. And it's especially hard to defend them in the context of a member of Congress going to prison for taking bribes for earmarks.
GWEN IFILL: For instance?
JAMES THURBER: Duke Cunningham was his name.
And now we get campaign contributions and a direct relationship between campaign contributions and earmarks. It undermines trust. And democracy is a fragile thing. And I think that it's good to cut back on these things. I think some of them are very good. There have been books written about how some earmarks have led to very good things.
If you talk to Chairman Dave Obey, chairman of the Appropriations Committee, he certainly will say: We have the power of the purse. We need separation of powers. We need to control this. We have the right to do this. And we have had very good earmarks.
It's hard to make that argument these days, though.
GWEN IFILL: So, does this open the door now to other, broader reforms that have a greater effect?
JAMES THURBER: Well, I think that speaker-incumbent Boehner says that he's going to have more transparency, fewer closed rules out of the Rules Committee, meaning more deliberation.
And I think, with the earmarks, it's about deliberation and transparency. And I think the Republicans are going to try to do that. Now, the next step is, will they have them with tax earmarks? There are billions of dollars of tax breaks, as well as appropriations. And we have been just talking about appropriations. No one is talking about the earmarks on taxes.
GWEN IFILL: Do you see some -- this opening the way to -- to new, other changes, broader changes that he's talking about?
MAYA MACGUINEAS: I really hope so. And that point about tax expenditures and tax earmarks is a really good one.
I think this vote needed to happen. I think we have a bunch of new people coming in Congress to Washington, and they need to let off some steam. And they need to say, we're going to change the way things are done here.
And that's really important. What it can't do is focus us, so that we spend months debating earmarks, instead of getting to the real business of change, both improving how the budget process works -- listen, we didn't even pass a budget last year.
GWEN IFILL: Yes.
MAYA MACGUINEAS: I mean, we need to improve our budget process, and also to deal, obviously, with our deficit and debt situations. Those are the real challenges. So, this is an important symbolic first step.
GWEN IFILL: Maya MacGuineas of the Committee for a Responsible Budget, and James Thurber from American University, thank you both very much.
JAMES THURBER: Thank you, Gwen.
MAYA MACGUINEAS: Thank you.
JAMES THURBER: Thank you.