Corporate Welfare Payments Siphon Billions From Treasury
Most of them hardly qualify as indigent, dependent or otherwise needy, but corporations, including the mightiest, get their share of welfare.
They work hard to get it too, employing well-paid lobbyists to assure tax breaks, subsidies and protective legislation. It’s worth it, because access to $87 billion a year of taxpayers’ money is important business.
That amount, say researchers Stephen Moore and Dean Stansel, is for just 125 programs and is a mere fraction of the total. The total, they say, may be in the hundreds of billions of dollars.
Moore and Stansel work for the Cato Foundation, a free-market think tank that was challenged by Labor Secretary Robert Reich to list senseless business subsidies.
They jumped at the opportunity. While Cato research is very often cited by conservatives, it is fiercely independent. Welfare for the poor is as wrong, ineffective and wasteful as welfare for the rich. Get rid of both.
Moore and Stansel went even further than the Democratic Leadership Council’s Progressive Policy Institute, which earlier had listed 30 “tax subsidies” that cost $134 billion in federal revenues over five years.
They found corporate welfare to be much larger - nearing the size of that for low-income families, somewhere between $250 billion and $300 billion a year, and concluded that both “failed empires” should be toppled.
That would take some doing. While there are hundreds of elected officials in Washington, there are many thousands of professionals seeking to influence them to funnel public funds to private operations of many sorts. But Moore and Stansel are undeterred.
They maintain that almost every spending program of the Agriculture and Commerce departments underwrites private businesses.
They cite a General Accounting Office report on the $1.4 billion sugar price support program, 40 percent of which benefits the largest 1 percent of sugar farms. Thirty-three of the largest got more than $1 million each.
They include a study from two other think tanks about the Forest Service’s road-building efforts over the past 20 years: 340,000 miles of roads, mainly benefiting loggers.
Among their sources was a House of Representatives investigative team. It found Martin Marietta Corp. charged the Pentagon $263,000 for a Smokey Robinson concert, $20,000 for golf balls, $7,500 for an office Christmas party.
Everywhere Moore and Stansel looked they found what they call corporate welfare. “Every major Cabinet department … has become a conduit for government funding of private industry.”
Some might question inclusion of certain examples, mainly those in which government contributes sums in pursuit of its own interest, such as military security, or, for example, in the interest of seeding technology.
Moore and Stansel exclude none, and they cite their reasons:
1. The federal government has a poor record in picking industrial winners and losers.
2. Corporate welfare is a huge drain on the federal Treasury for little economic benefit.
3. Corporate welfare creates an uneven playing field, diverting capital and credit to politically wellconnected companies.
4. Corporate welfare fosters an incestuous relationship between business and government.
5. It is anti-consumer, raising prices in the marketplace by tens of billions of dollars.
6. Corporate welfare is anticapitalist.
7. It is unconstitutional. This, they say, is the most critical reason of all.
Nowhere in the Constitution, they state, “is Congress granted authority to spend funds to subsidize the computer industry, or to enter into joint ventures with automobile companies, or to guarantee loans to favored business owners.”
They accept no exceptions, concluding that “business subsidies have a corrupting influence on both America’s system of democratic government and our system of entrepreneurial capitalism.”
Whether you agree or not, the case seems plainly stated.