Damn The Deficit, And Pile On The Pork

Like any would-be defense contractor, FastShip Inc. naturally makes nice to its hometown lawmakers. Last year execs of the Philadelphia-based company doled out $8,500 to help reelect Republican Senator Arlen Specter. Now, FastShip may be on the receiving end. In April, Specter tucked a sentence into a 312-page emergency spending bill ordering the Pentagon to disperse $40 million "solely for the purpose of construction" of a new port and of "high-speed, advanced-design vessels," to be built "by a Philadelphia-based company." In other words, FastShip.

Welcome to a spring ritual in Washington. Each year giddy lawmakers rush to squeeze dozens of pet projects into a must-pass emergency spending bill. This year's $81.3 billion measure -- ostensibly to support troops in Iraq and help Asian tsunami victims -- is no different. Lawmakers are larding up the bill with hundreds of millions of dollars directed to specific projects, a process known as earmarking.

All this maneuvering might be business as usual in Congress, but the stakes are higher this time. Senators are especially eager to deliver pork to voters because the Senate's balance of power could shift with a single election. Yet with the regular budget subject to more scrutiny as deficits soar, lawmakers are scrambling to justify pet projects as emergency spending. "There is a spending frenzy going on in Washington, and people need to hold their senators and congressmen accountable," freshman Senator Tom Coburn (R-Okla.) said on CNBC on Apr. 26.

Specter insists he's not diverting any money from troops or tsunami victims because the $40 million for high-speed cargo ships was approved in 2004. He's simply making sure that the money will be spent in Philly. "There is no other port facility that can take these ships," Specter says. It's still pork, counters Senator John McCain (R-Ariz.), because "the Secretary of the Navy said: 'No, we do not want this money."'

FastShip isn't the only potential winner. Vaccine manufacturer Sanofi Pasteur (SNY) is hoping for $10 million in federal funds for a wastewater facility near its Swiftwater (Pa.) plant. And Senator Rick Santorum (R-Pa.) is pushing a federal loan guarantee for WMPI in Gilberton, Pa., which wants to build a plant to convert coal waste into clean fuel. Santorum spokeswoman Christine Shott says energy independence is "manifestly urgent." Keith Ashdown of budget watchdog group Taxpayers for Common Sense isn't buying that line. "This is an emergency only to Santorum's [2006] reelection," says Ashdown.

Spin City

The Bush White House isn't known for its budget restraint, but earmarks can wipe out even its modest spending cuts. Senator Saxby Chambliss (R-Ga.), wants to block the Administration from canceling Lockheed Martin's (LMT) contract for C-130J cargo jets built in his home state. Chambliss aide Clyde Taylor says the senator is saving taxpayers money because canceling the contract will cost $1.6 billion. But even with that expense, killing the plane would save nearly $5 billion over the next five years.

As senators gather behind closed doors with their House counterparts to hammer out the final bill, some projects will fall out, and others could be added. But the measure is almost certain to clear Congress and get George W. Bush's signature this spring. The only "emergency" left unaddressed will be the ballooning federal deficit.

The clock is ticking on Senate Majority Leader Bill Frist. He says he won't serve past 2006, which means he has 20 months before he goes up -- to seek the Republican Presidential nomination -- or out, to retirement. But if the first four months of 2005 were signposts, they would be pointing toward Iowa and New Hampshire.

As he woos Christian conservatives for a possible 2008 bid, the heart surgeon-turned-pol has seized on issues dear to the Religious Right but unpopular with many other Americans -- such as changing Senate rules on filibusters and stepping into the Terri Schiavo case. An Apr. 21-24 ABC News/Washington Post poll found that 66% of Americans consider barring filibusters on judicial nominations a bad idea, and a Mar. 23 CBS poll found that 82% disapprove of Congress' intervention in the Schiavo matter. Senator Barack Obama (D-Ill.) smells politics: "With his Presidential run, he's more concerned right now with his base."

Meanwhile, Frist is having trouble on the President's Social Security agenda and the fate of Bush's nominee for U.N. ambassador, John Bolton. Early 2008 polls show Frist lagging far behind possible rivals such as Senator John McCain (R-Ariz.) and former New York Mayor Rudy Giuliani. Still, there's one bright spot for Frist: As a doctor, he has another career to fall back on.

The Good Business Issue
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