So the choices are no oversight on a federal level vs. responsible oversight on a state level. What do you think regional government is for? Why do we have alderman, town councilmen, state representatives, mayors, governors, etc.? If federal monies must be used for local projects, then share and share alike, and let regional governments do their jobs and oversee proper distribution and application of said monies. I'm sorry, but you are essentially arguing to enable, even encourage corruption in our federal government, and I know you're not alone. In the end, that is exactly why our government is as corrupt as it is.
No, those are NOT the two choices.
If you look at how earmarks are distributed, I believe you will find that most ARE overseen by state and local governments, not all simply pointed directly at specific dubious projects. That is my point completely. There are TWO different issues. One, the normal earmarks that go through process once funds are granted and the other the little [or not so little] bridges to nowhere, boat ramps and Prairie Parkways..
I am arguing that the Federal system of appropriations has to be cleaned up and monitored with COMPLETE transparency and monitoring. That process has started but is not complete by a long shot. Special interests have to be taken out of the process. But keep in mind that some of those alderman, town councilmen, state representatives, mayors, and governors are part of the "special interests" as they try and poach projects from one district to another for their area's benefit.
As long as money and politicians are in the mix there is not ever going to be a perfect system. But it seems to me that when you reduce the number of politicians you reduce the number of possible problems [and make it easier to monitor their ethics and projects]. You also gain economy of scale and reduce the bureaucratic costs associated with what would be a multiplication of administrations if each state started having to deal with all the things the Federal government now funds.
Keeping the system as streamlined as possible is the best way to monitor it and work on reducing the corruption.