Reduce dysfunction in the annual budgeting process through the establishment of a congressionally-directed program that calls for transparency and accountability, and that supports meaningful and transformative investments in local communities across the United States. The program will harness the authority of Congress under Article One of the Constitution to appropriate federal dollars.
The Committee’s exploration of Article One was in many ways about looking inward. Article One establishes the legislative branch and enumerates Congress’ constitutional powers. But Congress’ capacity to uphold these powers has weakened, drastically affecting the institution’s ability to properly serve the American people. Unfortunately, this has also impacted Congress’ ability to allocate funding for state and local projects and programs (also known as discretionary grant spending).
The power of the purse is, arguably, Congress’ most essential responsibility. Laid out by the Founding Fathers in the U.S. Constitution, Article One provides a critical building block for the legislative branch, and explicitly designates to the U.S. House the responsibility of appropriating funds:
“All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other Bills.”
U.S. Constitution, Article I, section 7, clause 1
“No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.”
U.S. Constitution, Article I, section 9, clause 7
While Congress continues to negotiate funding levels for federal agencies and programs, the decision-making on who receives competitive discretionary grants is being done by unelected executive branch officials. No one knows a district’s needs better than the Member elected to represent their community. But the current system doesn’t acknowledge this reality and leaves the funding decisions up to executive branch officials that are more disconnected from a community’s needs.
This shift in decision-making from Members of Congress to the executive branch has serious implications for the American people. It is not only a breach of the expectations outlined in the Constitution, but perhaps more importantly, when decision-making is removed from Congress, there is substantially less accountability for how taxpayer dollars are spent. Members, not unelected officials, should be advocating for and making the decisions about the projects needed to improve the community that they call home.
Executive branch control of discretionary grant spending is a relatively new trend. Previously permitted Member-directed spending was eliminated in 2011, in part because of a perceived lack of transparency. The Committee sought to address the problem with not only constitutionality and community in mind, but also transparency and accountability. The result is a Community-Focused Grant Program (CFGP) that allows Members of Congress to advocate for district-specific projects requested by the communities themselves. The process is grounded in community input, bipartisan support, and unprecedented transparency.
This section outlines a CFGP that will reinstate Congress’ power of the purse, and put the decision making for local projects in the hands of those who know their community best: the communities and the Members elected to represent their interests in Congress. The remainder of this section provides the history and background on how competitive discretionary grant spending is allocated, discusses prior efforts to reclaim the power of the purse, and details the Committee’s CFGP recommendation and the process for developing this recommendation.
Background on Congress’ Power of the Purse
Executive Branch Control of Congressional Spending
As discussed above, the growth of the United States population and economy since World War II has led to a massive increase in the responsibilities of the federal government. But while the House has stayed the same size at 435 Representatives since 1929, the executive branch has continued to expand. This chapter has outlined the impact of this significant growth in the executive branch on rulemaking, congressional oversight, and capacity, but it has had a particularly concerning impact on discretionary grant spending.
Congress still maintains some control over expenditures in certain areas. One of these areas includes block grant funding, which are federal funds set aside for a specific state program or community. But for a large chunk of spending, Congress determines spending levels and baseline amounts—not the actual recipients of these tax dollars. Instead, the executive branch, appointees, and federal officials make these decisions on behalf of Congress and the American people. These grants add up to a tremendous amount of money. In his book on executive branch spending, Dr. John Hudak estimates that well over $100 billion each year is spent by unelected federal officials, in projects in all 50 states. The executive branch, rather than Congress, makes decisions about funding schools, community programs, bridges, and countless other projects with implications for domestic policy. Research has found that Presidents often use these grants to influence policy and support their preferred projects without receiving approval from Congress.
From a Constitutional standpoint, this is a worrisome breach of Article One responsibilities. As Dr. Hudak noted in his testimony to the Committee on January 14, 2020:
“Congress has spent decades delegating power to the executive branch and right now stands at a moment in history where the institution is weakened. Congress’ ability to perform its constitutionally mandated tasks has been hampered. And nowhere is this issue more important and more damning than in the arena of spending power. In Article I, sections 8 and 9 of the Constitution, Congress is charged to pass laws, to fund government operations, and make significant choices over the amount of money that is spent by which institutions and under what conditions. I would argue that, in the past 20 years in particular, Congress has undermined its own spending power and simultaneously empowered the executive beyond practical necessity.”
John Hudak, January 14, 2020
Beyond reclaiming the Article One power outlined in the Constitution, the current process of allocating billions of dollars around the country lacks transparency. This massive amount of spending is often “overlooked as the public, the media, and academics focus on congressional ribbon cutting.” It is very difficult to track not only the outcome of executive discretionary spending, but the actual process of project application and selection. While there are some publicized formulas that detail how projects are prioritized, the American people—and even most Members of Congress—have no way of knowing how agencies ultimately select projects for funding. Given that taxpayer dollars are being allocated, this too is a concerning violation of Article One responsibilities.
Furthermore, any federal formulaic approaches, even the best-intentioned and objective ones, do not have the level of nuanced understanding of the district that Members of Congress and community leaders do. Members of Congress know their congressional districts arguably better than most. They understand how a school program would support a neighborhood, which bridges are in need of repair, and the importance of community health centers. In addition, Members and their staff tend to have deep relationships with community leaders and organizations. Executive branch employees—even the most experienced ones—do not have the depth of knowledge and community relationships that Members of Congress are required to have to be successful.
The Decline of Regular Order in the Appropriations Process
This drift towards executive branch spending has also removed an important tool from the congressional appropriations process. Prior to reforms in the 112th Congress (2011-2012) that removed Member-directed spending from the appropriations process, Members worked closely together to craft legislation that would serve the needs of districts across the country. Projects that spanned multiple congressional districts were a source of unity, and the result was a bipartisan and efficient appropriations process. By allowing the executive branch to make these decisions, Members of Congress have little opportunity for program-specific input during the appropriations process.
As outlined in Chapter 2 (Bipartisanship) and Chapter 11 (Budget and Appropriations Reforms), the appropriations process has steadily suffered over the past few decades—and the lack of individual Member input has played an important role in the decline of a timely, cohesive appropriations process. Lacking individual Member input on specific projects, Congress today often passes large, omnibus spending packages. And these omnibus spending bills ultimately defer the details of discretionary grant spending to the executive branch. Figure 2 demonstrates this phenomenon—as passage of individual appropriations bills has fallen, and the size and scope of the bills that do pass has steadily risen.
Figure 10.3: Total Appropriations Bills Passed and the Average Number of Appropriations Titles per Bill
Source: McCarty, Nolan, for the APSA Select Committee on the Modernization of Congress, final Report.
And increasingly, these appropriations bills do not even pass omnibus form. Instead Congress has come to rely heavily on the use of continuing resolutions (CRs). Figure 10.4 illustrates the decline in the passage of appropriations bills, and an increased reliance on CRs to fill the gaps.
Notes: Calculations by author
While CRs are intended to provide a short, “stop-gap” solution when an appropriations bill is missing, in reality, CRs often sustain federal funding for months, and in some cases, years. In addition to a decline in regular order appropriating, Congress has increasingly neglected its authorizing (and reauthorizing) responsibilities. This ultimately means that the executive agencies and programs that rely on appropriations and authorizing bills are unable to budget and plan ahead—and makes the receipt of federal grant money all the more tenuous for communities.
By limiting Members’ ability to advocate for specific funding for community grants in yearly appropriations bills, the responsibility of discretionary grant spending is handed to the executive branch. This has been compounded by an often-dysfunctional appropriations process, which provides the executive branch further validation to engage in this unauthorized spending and the funding of projects that may not reflect communities’ top priorities and greatest needs.
Prior Reforms and Concerns About Transparency
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, the executive branch often attempted to circumvent this congressional power. For example, an executive order under the George W. Bush Administration did not allow administrative agencies to spend funds that were earmarked in non-statutory language, such as a committee report. Committee Member Emanuel Cleaver reflected on this experience under the Obama Administration as well:
Image 10.3: Rep. Emanuel Cleaver discusses Member-directed spending during a Select Committee hearing.
“President Obama, for whom I served as national co-chair for his reelection, said during a speech, ‘I will not sign any more bills with earmarks in it,’… But that is our responsibility. It is our constitutional responsibility.”
“We are bypassing the opportunity to really do stuff for our community. We have earmarks now—you are absolutely right—except they are done in the White House. Obama did them. Bush did them. And Trump is doing them. And we are the ones sitting over here, you know, talking about they are taking our power. We gave it away.”
Rep. Emanuel Cleaver, January 14, 2020
However, in 2011, following a few high-profile cases of expensive congressional projects, an “earmark moratorium” was put in place. The goal of this moratorium was to encourage transparency and cut costs. In reality, as noted by Dr. Kevin Kosar during the January 14, 2020 Committee hearing, it ultimately led to far less transparency:
“You know, if you are a Member and you direct a bunch of spending on something that turns out to be a boondoggle, you are going to hear about it. You are going to get hammered. If it happens somewhere in the bowels of the Department of Transportation, no accountability whatsoever.”
“The whole conversation around earmarks is very anchored, as Representative Cleaver noted, on the few bad things that happened, and Mr. Davis mentioned that the positive is not often talked about. I mean, those are just not interesting stories. Media frequently do not pick them up. You might release a press release saying we did something good that helped back here. You might get a little bit of local coverage, but that is about all you get.”
Dr. Kevin Kosar, January 14, 2020
In addition, concerns about the cost of congressionally-directed spending were largely unfounded. Even at the highest point of earmark spending (FY 2006), earmarks accounted for just under 1.1 percent of federal spending.
Today, the moratorium exists in a congressional grey space. The moratorium is not enforced by points of order, because it does not exist in House or Senate rules, but there are three standing rules that govern—but do not ban—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. Committees can establish their own policy requirements, deadlines, or restrictions, regarding earmarks. These committee preferences are often distributed via a “Dear Colleague” letter at the start of a congressional session.
Despite best intentions, the decision to end congressionally-directed spending has faced wide-spread backlash across the political spectrum. 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. Members, facing the frustration of not being able to fully advocate for their districts in the appropriations process, have also taken up the call to reinstate the Article One power of the purse. The remainder of this chapter details the CFGP that the Committee developed, and the how the CFGP was developed.
Committee Approach to Addressing Challenges and Fulfilling Responsibilities
From the outset of the Committee’s work, it became clear the legislative branch has, over time, ceded the responsibilities and powers the framers entrusted to Congress to the executive branch. As the Committee continued to explore this issue, Members and experts shared how this erosion to congressional authority has resulted in states and congressional districts being shut out of the process of how the federal government funds programs and projects in communities across the country. If Congress was going to reclaim its Article One powers the Committee understood that meant reinserting the voice of the people—through their elected representatives—in the process of deciding how taxpayer dollars are spent while avoiding the perceived abuses of the past.
The CFGP was developed in a bipartisan fashion through numerous conversations between the Chair and Vice Chair. In addition to witness testimony, the Committee relied upon input from internal and external stakeholders across the political spectrum, models of government funding (such as TIGER grants and the Dayton, Ohio model), input from the committees of jurisdiction, and the history of congressionally directed spending.
The Committee voted on the framework on September 24, 2020. While the vote was bipartisan and unanimous, Rep. William Timmons raised a point of order on the CFPB, stating:
Image 10.4: Rep. William Timmons speaks to Chair Derek Kilmer during the Select Committee’s final business meeting.
“I appreciate the important steps the Committee took to include safeguards and improve transparency in the program, but believe more still needs to be done. I remain concerned that seniority will disproportionately control the amount of overall allocated funds in this program, and that potential receipt of these funds could be used to influence members to vote in a way they otherwise would not on unrelated legislation.
However, these recommendations do far more good than harm, and I appreciate that this Committee took steps to put forth a framework to reclaim our Article One authority. I look forward to working with my colleagues in the House next year to address these concerns prior to potential implementation.”
Rep. William Timmons, September 24, 2020
Through these discussions, a framework for the CFGP was developed that included overall guiding principles as well as specifics for a process that should be implemented. The Committee recognized while developing this recommendation certain aspects of this framework may be difficult to enforce or implement but felt the inclusion of these provisions were worthwhile to ensure intent and goals were clear.
Community-Focused Grant Program
The Community-Focused Grant Program (CFGP) is a competitive grant program intended to allow Congress to harness its unique constitutional authority to appropriate federal dollars through a congressional competitive award process, with an emphasis on supporting projects that have the broad support of local communities across the United States. Public entities, including certain non-profits and including the public entity collaborating with a Member of Congress to identify a local priority, may apply for grants, and they must do so 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-profit entities are prohibited from participating in the program, as are relatives of members of Congress.
A hallmark of CFGP is end-to-end accountability and transparency, with public access to every member request and supporting documentation, and routine independent audits. For discretionary programs, the grant program is limited to 1 percent of discretionary spending. The grant program will give special consideration to projects that have broad support at the local level, thorough supporting documentation, bipartisan support and multi-member support.
Congress will aim to distribute grants equitably across states and geographic regions, between rural, suburban and urban areas, and throughout economic sectors. From time-to-time, major projects of national or regional importance may merit a larger-than-normal grant share.
CFGP Goals and Recommendations:
1. Enhance House Rules and Implement End-to-End Transparency
A top priority of this program is to ensure transparency from the start of the application process to the final selection of grant funding. The Committee recommends combining all rules governing congressionally directed spending into the Rules of the House. Currently, House rules contain numerous transparency requirements, but several prior reforms were placed in the House Code of Official Conduct, rules governing the Democratic Caucus and Republican Conference, or were adopted as individual committee rules. While the Committee understands it could be difficult to incorporate these rules in the Rules of the House, it was important to make clear these should become House rules applicable to all Members and all committees.
This also includes reinstating transparency requirements prior to 2011: Specifically, no request for projects may benefit a Member or their spouse; no request may be made to private entities; and all projects that received funding must be made public, among other requirements. The Committee also recommends a ban on providing funds to for-profit entities, and an expansion on the certification of Member or Member spouse limitations to include the extensive House nepotism rules.
The Committee also recommends establishing a singular, public website with every detail of the grant-allocation process, including information on Member requests, accompanying documentation, and selected projects. The website will be a “.gov” website, and easily accessible and sortable. Each Member that participates in the grant program should have a prominent link to this website on their own congressional website. The goal of this singular website is to avoid the fractured process of 435 different websites posting results. The Office of the Clerk of the House will manage this website.
The Committee recognizes transparency is key to accountability in the process. Through this recommendation the public will be able to see those that apply and grant requests that are awarded, and ultimately hold their Members accountable should they feel programs or projects are not an effective use of taxpayer dollars.
2. Create a New Competitive Grant Program
Figure 10.6: Potential Process for the Competitive Grant Program under the CFGP
Note: At each of these stages, information will be posted on a centralized, “.gov” website to ensure total transparency.
A. A Process that Starts in Local Communities
Unlike prior endeavors that put the nomination and decision-making process in the sole hands of Members, this program will start outside of Washington and in the communities Members represent. Grant requests must originate with a public entity (including not-for-profit entities that serve a public interest) or state, local, or tribal governments (including subdivisions of state or local governments and including a local community or public entity collaborating with a Member of Congress to identify a local priority) via formal application submitted to at least one congressional office. Recognizing issues related to community capacity, the committee also acknowledges that this may also include a local community collaborating with a Member of Congress to identify a local priority.
The Committee felt it was important to allow not-for-profit entities to apply for a Community-Focused grant, given the valuable services many provide to communities across the nation. From schools and hospitals, to conservation programs and historical preservation efforts, the range of services provided by not-for-profit entities vary greatly across the country. One of the top priorities of the CFGP was to allow communities and Members to have the freedom to identify projects in most need of funding. Ruling out not-for-profits could hamstring that goal.
The Committee took important steps to ensure the process was easy for all communities across the nation to navigate—whether a large city with grant coordinators on staff or smaller, rural towns without resources on hand to help them navigate the grant process. As noted, public entities can collaborate with Members to ensure they are properly identifying projects and submitting necessary information. The form used to make grant requests should also be simple and allow communities and public entities to easily navigate the grant application process.
Only after a project is submitted by the appropriate entity will Members select which CFGP projects to support. Members will then submit those projects as individual requests to the applicable committee for review.
Members are stronglyencouraged to establish a process which facilitates nonpartisan engagement of local elected officials and stakeholders. A process could involve input from local economic development entities and state and local elected officials before the Member moves forward with the request. Prior to the 2011 ban, there were multiple examples of such processes being utilized by members. For public entities requesting funding for non-profit programs, Members should encourage consensus from local public leaders. One option the Committee considered as a model for Members was an approach similar to “the Dayton Model”—a non-partisan, independent review board that reviews requests for federal funding.
Applicants and Members will use a standardized grant application. The form should include but shouldn’t be limited to:
Identification of whether the grant requestor is a public entity, or a state, local, or tribal government
Detailed description of the project including data or evidence of project merits
Explanation of how the project is a good use of taxpayer dollars
Total cost of the project including a breakdown of expenses
Forecast of necessary future federal funding
Timeline for the project
Previous federal funding used to advance the project, if applicable
Non-federal share of dollars for the project if it is a public-private partnership
Citation of authorizing language for the program under which the project falls (to be completed by the Member office)
Letters of support from other state or local officials and entities
A list of support from other Members (to be completed by the Member office)
Indication if the request is bipartisan (to be completed by the Member office)
If a project would impact another state, district, or region, Members are strongly encouraged to work together with other Members on a robust, bipartisan (if applicable) request. To further encourage bipartisanship and transparency, committees should also strive to balance the prioritization of bipartisan, multi-Member, and multi-district projects with the requests of at-large and rural-representing Members. Committees are expected to ultimately fund projects that benefit rural and urban districts alike.
Standing committees should apply this framework to appropriate legislation under their jurisdiction. For example, the CFGP should be utilized to allow for community input when the Committee on Transportation and Infrastructure is crafting the highway bill or when the annual National Defense Authorization Act is being developed by the Committee on Armed Services.
It is important to note, the Committee took care to balance the importance of larger projects that could receive a great deal of Member support with equally important projects that could receive support from just one Member (a project in New York City versus a project in Helena, MT for example). The Committee incorporated language to make the intent clear that each project should be considered in an equitable manner.
Lastly, Members should submit this documentation and ultimate requests through the same website (CFGP.gov for example) so that the process from request, to public review, to approval or denial is seamless from start to finish across committees.
B. New Caps and Tighter Guardrails
The Committee considered several options to prevent abuse by any individual Member, and to ensure equitable distribution of grant awards. The Committee recommends a cap to prevent the possibility of inequitable distribution of funds, where, for example, some Members are successful in directing vastly more funding to their district than other Members. The Committee debated caps on the number of successful project awards and also on size of awards, but both proved to be very difficult to implement.
Rather than be overly prescriptive, the Committee recommends that any adoption of this program be guided by the principle of equitable distribution of funds and take great care to avoid any situation where the program would allow a small number of Members to direct far more investments than the rest of the body.
All requests will be capped to a combined total of 1 percent of discretionary spending, not including project-based accounts. Such a cap should encourage the applicable committee to ensure funds are “distributed equitably across geographic areas, between rural and urban areas” and among project modes, similar to TIGER grants.
If a CFGP request is funded in legislation, the committee should provide the following information to the Clerk of the House to be included on the Community-Focused Grants website:
- Updated tables that detail Member justifications
- Relevant grant application information
- A summary of statistics and demographics impacted by grant awardees (urban versus rural, average grant award, geographic disbursement, etc.).
Lastly, capacity for the Clerk of the House and any committee that has plans to fund CFPG awards should be evaluated to accommodate the new process, review of project requests, oversight of spending, and development of websites.
C. Heal the Legislative Process
In addition to reclaiming Article One responsibility and ensuring a more transparent and representative discretionary grant program, the CFGP provides individual Members with an opportunity to represent their community in the authorization and appropriations processes.
The Committee deliberated requiring congressional authorization of programs before funds could be awarded. However, a delay in a congressional authorization or reauthorization could have prevented projects from receiving needed funds and concerns were raised such a requirement could be overly prescriptive. Ideally, the CFGP would only be provided to projects under authorized accounts. Understanding this may not always be possible, any relevant committee shall include, on its website, the scope and criteria for unauthorized accounts that contain Community-Focused Grants.
The Committee recommends that a CFGP appear in a bill that has passed out of a committee. At a minimum, though, it should be required to appear on the CFGP.gov website as a Member request. The Committee also recommends that grant projects should be prohibited from being inserted into a Continuing Resolution.
To prevent unvetted, politically motivated projects replacing or taking funding from projects that went through the full process and were deemed to have merit, amendments on the floor for new projects should not be permitted.
D. Training for Member Offices
To ensure all offices and community members participate in the CFGP with equal footing, the Committee recommends that training be provided for staff and Members on how to apply. This training should be provided on a routine basis.
Furthermore, the Committee recommends that offices develop training for constituents and grant applicants, perhaps through district staff and online resources. This will ensure that all programs—regardless of applicant resources and experience—have an opportunity to apply for the CFGP.
E. Independent Audits and Clawbacks
Lastly, to further ensure that the process is transparent, fair, and implemented as intended, the Committee recommends independent oversight from the respective agencies’ Inspectors General. The agencies’ IGs should identify waste, fraud, and abuse and offer recommendations where funds should be reduced.
Rep. Susan Brooks also suggested that the CFGP could be implemented as a pilot program for review after a couple of years, or as in specific committees that would likely utilize the CFGP, such as the House Committee on Transportation and Infrastructure. The review of the pilot program could be performed by GAO, and should analyze how the grant program is functioning, highlighting areas of success or areas in need of improvement.
The Committee also considered a formal process for public comment. However, the Committee did not want to give the appearance that there was a beginning and end to public comment. End-to-end transparency of a process starting in communities allows for public engagement and Member accountability throughout.