So devastating was the news of U.S. Sen. Daniel K. Inouye that Gov. Neil Abercrombie canceled Monday’s press conference on the biennium budget.

Though inadvertent, the interruption managed to underscore the profound impact Inouye had on Hawaii’s fiscal picture.

Inouye’s death also comes as Congress and the White House continue to wrangle over how to keep the nation from going over a “fiscal cliff,” only adding to worries that Hawaii may be facing dire fiscal consequences in the senator’s absence.

As Inouye’s office noted in the press release announcing his death Monday at the age of 88, the senator “spent his career building an enduring federal presence in Hawaii to ensure that the state would receive its fair share of federal resources.”

To be sure, money will continue to flow to that “federal presence” and other programs, subject to Congress and the president. But in Inouye’s absence it is likely that Hawaii will lose some funding.

Over the years, that funding has been incalculable.

Inouye’s earmarks in fiscal years 2008-2010 totaled $2.7 billion, according to the latest data available from nonpartisan LegiStorm. That’s 4 percent of Hawaii’s $64 billion economy at that time.

At the end of this article we’ve included a list of Inouye’s accomplishments that was assembled for his 2010 re-election campaign. It’s staggering in its breadth and depth.

Still, in a related area of Inouye’s powerful influence — his chairmanship of the Senate Committee on Appropriations — Hawaii may not suffer nearly as badly as anticipated. That’s based on the experience of Alaska after U.S. Sen. Ted Stevens, a Republican, stopped chairing the Appropriations Committee in 2005.

“The good news for Hawaii is that the drop-off in federal funding may not be as significant as you may fear — with one caveat,” said Matt Zencey, the former editorial page editor of the Anchorage Daily News. “Which is, if you can get another senator on the appropriations committee.”

Alaska and Hawaii

Having come into the union just one year apart, Alaska and Hawaii have always been sister states.

They have other things in common too: a large indigenous population, lots of conservation land and rural areas, and a military presence.

Stevens, who lost re-election in 2008 and died two years later in a plane crash, was perhaps Inouye’s closest friend in the U.S. Senate.

As Inouye was the self-described “king of pork” for the 50th state, Stevens did much the same for the 49th. He was chairman of Senate Appropriations from 1997–2001 and from 2003–2005.

Like Inouye, Stevens ability to pump federal dollars into his state long predated his chairmanship of Appropriations. He was elected senator in 1968, just six years after Inouye.

After leaving Appropriations, the money kept flowing, said Zencey. In 2008, the last full year Stevens was in office, Zencey said Alaska roughly $3.2 billion in federal funding went into the state’s budget, up from $2.5 billion the previous year.

One reason for the increase was stimulus money that came from the American Recovery and Reinvestment Act of 2009. But Alaska’s state budget is still getting tons of federal money, about $3.1 billion in 2012.

Why? Because Lisa Murkowski, now Alaska’s senior senator, sits on Appropriations.

“She is helping to keep the pipeline going,” said Zencey. “Alaska is still enjoy a little bounce from the stimulus, and Lisa’s strategy was to get her feet on the ground by going to Appropriations. My take home message for Hawaii is, get someone on Appropriations.”

Just days before Inouye’s death, he was appointed by his colleagues to continue another term chairing Appropriations. But that appointment was challenged by some Democrats who felt new leadership was needed — a challenge angrily denounced by U.S. Sen. Jay Rockefeller, who called the suggestions “cowardly.”

The fight over the chairmanship shows just how important Appropriations is to the Senate. But as of this writing Senator-elect Mazie Hirono has been assigned other committees besides Appropriations while local Democrats are scrambling to send the names of possible replacements for Inouye to the governor.

Meanwhile, on Tuesday — just a day after Inouye’s death — Democrats moved to name Vermont Sen. Patrick Leahy — another close friend of Inouye — to pick up his appropriations gavel.

Committee assignments are decided by the Democratic Steering Committee, which will finalize appointments when the 113th Congress convenes in January.

Scholarly Views

There’s another lesson from Alaska when it comes to federal funding: After huge growth over the past 32 years, it’s dropping off.

“After nearly a decade of explosive growth, federal spending in Alaska has turned flat,” said Scott Goldsmith, emeritus professor of economics at the Institute of Social and Economic Research, University of Alaska Anchorage.

That comes from Goldsmith’s 2012 study, Federal Spending in Alaska: Running Out of Steam?

“Total federal spending in Alaska was $11.2 billion in 2009 and $10.9 billion in 2010, compared with about $9.4 billion in 2008,” he wrote, spending which includes direct funding to defense, national park and Native Alaskan programs.

But Goldsmith’s report was not all doom and gloom.

“Spending is no longer growing for either defense or grants — the largest categories of federal dollars coming into the state,” he wrote. “Still, the special characteristics that have historically kept Alaska near the top of the state rankings for federal funds per capita will continue to guarantee a strong role for federal dollars in the economy.”

Reached via email, Goldsmith was asked by Civil Beat about the impact on Alaska when Stevens left office.

He replied that he divides federal funding into four categories, of which military and grants “are the most vulnerable to cuts.”

He pointed to a trend in federal grants to Alaska, which show funding increased dramatically from 1996 to 2002 and have since trended downward (except in the ARRA stimulus numbers of 2009 and 2010).

Goldsmith acknowledged that that coincided with Stevens’ terms chairing Appropriations from 1997 to 2005, except for the 18 months when Democrats controlled the chamber.

“I concur,” said Goldsmith, “Although much of the change was a slowdown in the growth rate since a portion of grants are tied to population and other measures of demand.”

Another scholar at the University of Alaska Anchorage — Steven W. Haycox, an American cultural historian — offered his take on Stevens and federal money.

“Ted Stevens’ death’s impact on Alaska was not as significant economically as many people feared, though there was some impact,” said Haycox, who specializes in the history of the American West and Alaska. “The reason it was not as severe as some expected is because three of the four areas of federal funding for Alaska, which is one-third of Alaska’s economic base, are stable: Native services, conservation unit management, and military. The fourth area, general infrastructure, is the one that took the hardest hit.”

Haycox added: “The current Congressional delegation does a good job bringing home the bacon.”

In one way, the death of Inouye, like Stevens, may be felt significantly in areas besides federal funding.

“Stevens’ death had an enormous political effect — opening up political dialogue to some degree” he said. “Before his death, since virtually everyone in the state was beholden to Stevens for some level of funding, no one dared criticize him. Now people can speak more freely.”

Tight Times

The loss of Inouye as Appropriations chair should not be minimized. The committee “writes the legislation that allocates federal funds to the numerous government agencies, departments, and organizations on an annual basis.”

The committee is also responsible for supplemental spending bills in the middle of a fiscal year. While it is the largest committee in the U.S. Senate — there are 30 members — the chair wields tremendous power.

Inouye was named chairman of Senate Appropriations in 2009 after chairman Robert Byrd, the Democrat of West Virginia, stepped down. Earlier that year, Inouye was profiled in the New York Times, which noted that he brought home more than $1 billion in earmarks every year.

However, Inouye’s chairmanship coincided with the global recession, and Washington entered into a period of fiscal belt-tightening that it has not left. Inouye’s ability to “bring home the bacon” was crimped. The election of Tea Party conservatives in the 2010 elections, and the GOP takeover of the U.S. House of Representatives, crimped it further.

In December 2010, during the lame-duck session of Congress, a $1.3 trillion omnibus spending bill — with 6,700 earmarks totaling $8 billion — was blocked by Republicans. It included $321 million for 141 Hawaii projects.

It was a major rebuff of Inouye and Democrats, the first time in 25 years that the congressional spending and budget process “completely collapsed” and Congress “did not fulfill its most basic responsibility, allocating money to federal agencies,” according to The New York Times.

The senator told Civil Beat in January 2011 that he thought earmark spending would eventually return because Republicans want to help their states just like Democrats.

Inouye, it should be noted, had not lost his ability to deliver pork.

Barely a year later, in December 2011, he succeeded in funding $490 million for a variety of Hawaii projects — mostly for the military — in the the Consolidated Appropriations Act of 2012. It included reinstatement of $16.7 million to fund the East-West Center.

Hawaii will likely not see that kind of money returning to the islands anytime soon.

Source: DanInouyeHawaii.Com

About the Author