Think of earmarks as unfunded request lists, or wish lists. For example, if the Navy requests a Gulfstream 550 jet, and it isn't funded by the government. They then make a "wish list" or set of earmarks, which then circulates amongst lobbyists. This is a backdoor way to get the Navy the goodies they wanted, but the government didn't initially approve.
These unfunded request lists circulate amongst lobbyists on Capitol Hill. They scour these lists for their clients' products, and work with the companies to hit up the home state legislators where the goods will be manufactured. They help convince the legislator that this will help create jobs back home.
After lobbying influences congessional spending, these legislators are not required to take a rival bid. For example, if a congressional leader wants to make an earmark for a new jet, he does not have to consider a cheaper alternative. He wants to create jobs back home, in Georgia, where the Gulfstream 550 is made, and a cheaper offer would not benefit him, or the lobbyist who influenced him.
These earmarks, once made by the legislators, are added to bills. For example, the Gulstream 550 jet being added to a defense bill. Congress cannot vote on parts of the bill, but rather the whole bill. So when they pass the defense bill, any earmarks added also pass.
After the passing of a bill with added earmarks, federal funds are then allocated. In the case of the Navy and their request for a Gulfstream 550, they took a backdoor method to get their request funded, despite the fact that their request was not funded initially.
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