U.S. Sen. Daniel K. Inouye will become chairman of the Senate Appropriations Committee, which will give Hawai'i unprecedented leverage in the competitive, and often arcane, federal spending process.

The Hawai'i Democrat, who has aspired for nearly four decades to lead the influential panel, will take over in January when the new Congress convenes.

U.S. Sen. Robert Byrd, D-W.Va., who has been in poor health, announced yesterday he will step down as chairman and recommended Inouye, who was in line for the post by seniority. Senate Majority Leader Harry Reid, D-Nev., confirmed that Inouye will become the chairman.

"I hope that I am sufficiently prepared to succeed my mentor who has assisted and guided me over the past 30 years, and in particular, during the years that he has led this important panel with distinction," Inouye said in a statement from Washington, D.C.

Inouye, who first joined the committee in 1971, has used his influence to help direct billions in federal money to Hawai'i. While much of the money has gone to the military, given the state's strategic location in the Pacific, other spending has been for transportation, energy, health, education, agriculture and rural development. The senator's power also helps in negotiations with other senators on special projects, known as "earmarks," and on public-policy issues that affect the Islands.

The committee, the largest in the Senate, is responsible for the 13 annual appropriations bills that pay for government operations. Inouye is currently the chairman of the panel's defense subcommittee, and he said he expects to keep that position when he becomes chairman.

ALLIANCES

Inouye's leverage has been doubled by his partnership with U.S. Sen. Ted Stevens, R-Alaska, the second-ranking Republican on the panel. The friends have helped ensure that federal spending in Hawai'i and Alaska is protected no matter which political party controls Congress or the White House.

With Stevens' re-election still in doubt as ballot counting continues, and the possibility the Senate may punish him for his felony corruption convictions if he returns, Inouye's rise to chairman could help offset the potential loss of his ally.

Inouye's climb to chairman and the election of Hawai'i-born U.S. Sen. Barack Obama as president could potentially give the Islands unparalleled political power in Washington.

U.S. Rep. Neil Abercrombie, D-Hawai'i, said the juxtaposition of Inouye — a Japanese-American awarded the Medal of Honor for his bravery in World War II — and Obama — the first African-American elected president — is remarkable for Hawai'i.

"It's a remarkable story that, were you trying to write it fictionally, it probably never would have occurred to you," Abercrombie said.

Inouye's power could help Honolulu obtain federal money for a rail transit project and other infrastructure priorities. The senator has said that federal lawmakers are interested in such projects and that the initial federal money approved for rail is an indication of a future commitment.

"I think it's a recognition of his effectiveness in the United States Senate. For us, personally, here in Hawai'i, it could only mean better news in the future," Mayor Mufi Hannemann said in a telephone interview from American Samoa, where he was visiting his mother's graveside. "He has been a longtime proponent of rail transit."

'OLD GUARD'

Hannemann noted that Inouye has described the rail project as "now or never."

"I expect, and we already talked about it before he left Hawai'i, that he pledged his 100 percent commitment to me and the city so that we can be successful on this project," Hannemann said.

Inouye and Stevens have been criticized by some taxpayer and open government groups for the amount of federal money they steer to their home states in earmarks. The two senators have said that earmarks have funded important projects. Byrd is also renowned for his ability to obtain money for West Virginia.

Steve Ellis, vice president of Taxpayers for Common Sense, said Inouye "has not been any slouch in delivering the bacon to Hawai'i."

"Certainly Senator Byrd was not looking to change the process or change it to make it more transparent," he said. "I don't think Senator Inouye is about to pick up that mantle of reform or change. He is a member of the old guard."

During the presidential campaign, U.S. Sen. John McCain, R-Ariz., blasted earmarks as examples of government waste and challenged Obama on his earmark requests. Last March, Obama co-sponsored an amendment by U.S. Sen. Jim DeMint, R-S.C., that would have imposed a one-year moratorium on earmarks.

THOSE EARMARKS

"I have come to believe that the system is broken," Obama said in a statement at the time. "We can no longer accept a process that doles out earmarks based on a member of Congress' seniority, rather than the merit of the project. We can no longer accept an earmarks process that has become so complicated to navigate that a municipality or nonprofit group has to hire high-priced D.C. lobbyists to do it. And we can no longer accept an earmarks process in which many of the projects being funded fail to address the real needs of our country."

John J. Pitney, a professor of politics at Claremont McKenna College in California, said that while there has been increased concern about earmarks, he does not see change coming, because Congress remains divided on the issue.

"On the one hand, many members denounce them and on the other hand many members pursue them," he said. "During his time on appropriations, Byrd has fought strongly for the interests of West Virginia while Inouye has fought just as strongly for the interests of Hawai'i."

Pitney, a former congressional fellow and Capitol Hill staffer, said Inouye is very knowledgeable about and devoted to the appropriations committee. "He has an institutional loyalty to the appropriations process," he said.

Speculation about Byrd's future as chairman started earlier this year after the 90-year-old senator was hospitalized. Inouye, the chairman of the Senate Commerce, Science and Transportation Committee, was in line to be his successor but would not discuss the possibility publicly out of respect for Byrd and Senate decorum.

WAITED IN WINGS

Last month, after news reports suggested Reid wanted to ease Byrd out of the chairmanship, Byrd dismissed the talk as "Washington back-room gossip" that did not serve the party.

Asked about the speculation, Inouye, 84, told local reporters he was interested but not if it meant Byrd would be pushed aside.

Reid, in a statement yesterday, said Byrd's decision to step down "was eased by the knowledge that the gavel will continue to be in such capable hands."

Byrd, the longest-serving senator in history, said Inouye "has stood in line for many years and now his time has come. He is my friend. He is a genuine American hero. He will be a skillful and fair chairman of the appropriations committee because he is a man of outstanding character and great wisdom."