Earmarks Still Have Friends in High Places

A provision for a uranium-enrichment plant in Ohio keeps cropping up all over Capitol Hill: $150 million in the Senate’s highway bill, $150 million in a Senate energy bill, $100 million in that bill’s House counterpart. There’s even talk of putting it in a final House-Senate transportation bill.

Weren’t grants like this — earmarks by another name — supposed to be banished by Republicans in Congress? Yes. And for most lawmakers, they are.

But the earmark has the top two Republicans in Congress on its side: House Speaker John Boehner (R-Ohio) and Senate Minority Leader Mitch McConnell (R-Ky.). And by Congress’ own rules, it’s not an earmark. Definitions aside, it is proof that when top politicians want to pay for a pet project, they can usually find a way.

Both men have a rooting interest: The company that would get the money, the United States Enrichment Corp., has a facility in Paducah in McConnell’s home state. Its new plant would be in Piketon, a little bit east of Boehner’s Ohio district. McConnell got the piece that he cared most about on Tuesday when the Energy Department extended operations at the Paducah site.

Even President Barack Obama has a stake in the outcome. In 2008, he promised then-Ohio Gov. Ted Strickland that he would support nuclear-energy programs like the one in Piketon. Now, he needs the state’s electoral votes again — and he wants the $150 million government subsidy, which could prevent layoffs in an election year.

Add to its list of backers both of Ohio’s senators, potential Republican vice presidential candidate Rob Portman and Sherrod Brown, a Democrat who is up for reelection this year, who teamed up to put it in the highway bill.

With that kind of muscle, the provision’s backers just needed a way around the earmark ban. So the money isn’t directed to the facility by name, it was requested by the administration and the legislative language doesn’t specify a precise dollar amount — rather it gives the Energy Department the power to spend “up to” a certain amount on the project. They argue that it should be treated as a national issue, not a local one, because USEC is the only U.S.-owned company that could do the work.

“Technically, it’s not an earmark, but it operates effectively as one,” said Steve Ellis, vice president of the watchdog group Taxpayers for Common Sense. “It’s definitely a backdoor earmark.”

It’s the kind that gave earmarks a bad name in the first place: Taxpayer dollars going to local projects sought by Washington’s power set, often without a hint of their fingerprints on it.

At times, the Ohio and Kentucky delegations have parted ways on the question of funding for the Ohio project. It could mean that the Paducah plant gets left behind in favor of a focus on the new technology that would be used in Piketon if it ever proves viable. But if USEC struggles, it’s bad for both states.

Last year, Boehner unsuccessfully pushed the White House to give USEC a $2 billion loan guarantee out of the same account from which the now-notorious renewable energy firm Solyndra got its government money. McConnell, a longtime supporter of loan guarantees for nuclear energy, appeared at an Appropriations Committee hearing last year to plead with Energy Secretary Steven Chu to save USEC jobs in Paducah.

The Energy Department didn’t award the loan guarantee — the company has run into some technological problems — but instead offered to enter into a cost-sharing arrangement to make it easier for USEC to do further research and development. USEC threatened to cut jobs. Boehner went public with his frustration.

“I urge the administration to not betray the citizens of Southern Ohio,” he wrote in his weekly column.

Early this year, the White House requested $150 million in taxpayer funds for the research in its fiscal 2013 budget.

USEC’s friends now are working to put up the government share of the money through the earmark.

McConnell is a member of the appropriations subcommittee that is trying to fund the new earmark. A Boehner spokesman said the speaker “has been kept apprised of these developments, but has not been actively involved” in pushing for it.

A source familiar with the provision noted that Boehner took criticism last year for not forcing money for the Piketon plant into a year-end spending bill.

In a brief hallway interview, McConnell declined to say whether he supports or opposes the Piketon provision, saying only that he backs Paducah’s operations.

A McConnell aide argued that his support for the bill in subcommittee does not amount to approval of the Piketon earmark but declined to say where McConnell stands on it.

It’s the Kentucky facility that McConnell cares about, and he did not put the language for Ohio in the appropriations bill, the aide said.

Other sources say it doesn’t take a forensic expert to figure out who has the power to get an earmark moving on four tracks at once and how Boehner and McConnell might use proxies to win its enactment.

Boehner appointed Rep. Ed Whitfield of Kentucky to the House-Senate negotiating team. Whitfield, who represents Paducah, is a close ally of both Boehner and McConnell, and his spokeswoman said he is hoping to get the money tucked into a final highway bill.

“Congressman Whitfield supports a domestic source of enrichment for our nuclear power plants,” Whitfield spokeswoman Corry Schiermeyer said. “A domestic source of enrichment ensures competition in the marketplace and meets our national security needs, as well. The congressman looks forward to working on this and other issues as the transportation conference moves forward.”

Another Kentucky lawmaker, Rep. Hal Rogers, is chairman of the Appropriations Committee and will be involved in any discussions with the Senate on whether to keep a provision that is now in both chambers’ versions of the energy and water spending bill.

Whitfield and Ohio Rep. Jean Schmidt, another supporter of the plant, are the leading House recipients of money from USEC’s political action committee in the current election cycle, at $5,000 apiece, according to the Center for Responsive Politics. The $3,000 USEC’s PAC gave McConnell is tops in the Senate, and Boehner got $5,000 from the PAC in the 2010 election cycle. USEC President John Welch has contributed to McConnell, Schmidt and Portman in the past.

Boehner says he’s never earmarked a dime during more than two decades in Congress, and several sources said they see the provision as a creation of the Ohio and Kentucky delegations — not Boehner or McConnell, specifically.

Only one lawmaker seems to object strenuously to the earmark. Rep. Steve Pearce (R-N.M.), whose home state houses USEC rival URENCO, has been trying to stir up Republican opposition in the House. Without training his fire on Boehner, Pearce railed against the provision during a closed-door meeting of House Republicans last week, according to a GOP source. And he co-authored a letter to highway bill conferees that trashed the Piketon project.

In it, Pearce details how USEC was originally a government entity that was privatized in the late 1990s but has since been the beneficiary of federal subsidies even as it has hemorrhaged money. The company lost $540.7 million in 2011.

Forget the question of whether it’s an earmark, Ellis said.

“It’s a bad project. It’s a bad investment,” he argued. “This doesn’t make any sense for the government to be spending on this when they don’t have a viable product.”

The reason Pearce is the only one putting up a fight, according to a senior GOP aide: “Basic lack of information.”