Obama’s Earmark Ban Could Ripple Through Northwest Makers of Vaccines, Biofuels, Clean Water Technology

2/24/11Follow @curtwoodward

When most people hear the word “earmark,” they probably think of a bridge to nowhere, gilded Pentagon plumbing fixtures, or a dubious construction project in some fat-cat congressman’s hometown.

But federal earmarks can also fuel innovative research and development in life sciences, high tech, and clean energy—at least, they could until President Obama vowed to veto any of the direct grants in last month’s State of the Union speech.

I thought it would be interesting to see just what kind of spending the president would be cutting off for Washington state’s innovation community, so I put together this list.

It shows 25 projects that were seeking $2 million or more in earmarked spending, and the details are pretty interesting. Among the requests that stood out:

• Seattle’s PATH, a nonprofit global health R&D center, was hoping to get money for an array of projects, including $5 million for work on malaria vaccines and $2 million to develop large “electrochlorinator” devices, which use simple battery power to produce chlorine for purifying drinking water—a major global health concern.

• At Washington State University, researchers were seeking $3 million to support their work on capturing and storing high-energy positrons, $2.5 million for turning algae into biofuels, and up to $5 million to examine the ways that environmental toxin exposure can affect how genes are expressed in children.

• The University of Washington and Vancouver, WA-based Renewable Energy Composite Solutions were each hoping for $4 million or more to advance work on tidal energy technology for the Navy.

A little background for those unfamiliar with Capitol Hill lingo: Earmarks are specific, noncompetitive grants that members of Congress put in the federal budget to make sure dollars flow straight to the projects they want to finance back home.

Earmarks often become a political hot potato, but in reality experts say they only make up about 1 percent or less of the federal budget.

Howard Grimes is a vice president for research at WSU. He says the loss of earmarks isn’t leading to dramatic cuts or shutdown of the projects we listed. But it certainly crimps researchers’ ability to expand and can send them scrambling to find other sources of money to keep things growing—as Grimes puts it, “it slows the curve of productivity.”

But more fundamentally, Grimes says, shutting off or slowing a source of research money can have real economic effects in the communities that rely on R&D as a job engine.

“I often try to explain to people—the research scientists in their labs, yes, they’re contributing basic knowledge that often is innovative and enters the marketplace. But they’re also small businesses,” Grimes says. “They’re running their spreadsheets and they’re managing their workers and they’re running their research just as a small business would. All that goes away when the funding goes away.”

Our list is a sampling of the projects that were requested for the 2011 fiscal year by members of Washington state’s congressional delegation. I got the data from Taxpayers for Common Sense, which compiled  a master spreadsheet of all federal earmark requests for the 2011 fiscal year.

I narrowed that down to requests that listed Washington as the receiving state, and then applied my own nonscientific filter that screened for projects of $2 million or more in the areas we cover at Xconomy—high tech, life sciences, and cleantech.

Just because a project is on the list doesn’t mean it was a shoo-in to be bankrolled in the final budget. For instance, the folks at Seattle Biomedical Research Institute told me their request to support a next-generation drug for the parasitic disease leishmaniasis didn’t actually make the budget, even before Obama killed off earmarks.

Overall, it’s unclear how much a ban on earmarks would really change the flow of dollars coming out of Washington, D.C. Grimes says WSU is now focusing on trying to get enough money into federal agency budgets so they can compete with projects that had been seeking earmarked grants.

But any change is significant for companies and institutions that rely on direct grants as a major part of their finances.

Michael Lisagor of Bainbridge Island, WA-based Celerity Works, a consultancy that helps tech companies secure government business, says there are “literally thousands and thousands of small companies” that have built their business by targeting a specific technology or type of research that the feds have supported over the years.

“A lot of them do really good work and their funding, without earmarks, could dry up,” Lisagor says. “I think we’re probably going to see a bunch of them become subcontractors … We’re going to see some of their business go to other companies, because the government has no other choice. We’re going to see some of these projects go away.”

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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