Let’s Quit Giving Business Federal Handouts

Democrats make the claim that poor people are not the only feeders at the government trough. They are right.

What they don’t say is that the Democrats, who held power for 40 years, were equal-opportunity Santa Clauses, giving taxpayers’ money to every special interest - from the poor to the rich - who asked for it.

The battle now being waged by Rep. John Kasich, R-Ohio; Sen. Spencer Abraham, R-Mich.; Rep. Dick Chrysler, R-Mich., and others will determine whether the Republican Party is truly the party of smaller government or not. They are trying to de-fund “corporate welfare” - the web of tax breaks, incentives and subsidies threaded throughout the federal budget that benefits corporations at taxpayers’ expense.

If Republicans cannot bring themselves to take a serious whack out of these benefactions, voters will be justified in concluding that the difference between the two parties amounts only to this: Democrats refuse to cut anything, while Republicans will cut only those programs aimed at the poor.

The Republican Party has an opportunity to be better than that, and Abraham and Kasich are pushing it in that direction.

Did you know that you pay taxes to help McDonald’s sell Chicken McNuggets overseas? The government spent $465,000 on that in 1992. U.S. taxpayers also forked over $10 million to promote the sale of Sunkist oranges and $1.2 million to help sell American Legend mink coats.

The Market Promotion Program gets $110 million yearly. It strains the imagination to come up with less needy beneficiaries of federal largess.

According to the libertarian Cato Institute, there are 129 spending programs in the budget that benefit business at a cost of $87 million annually.

But that’s small change. The real money is to be found in tax breaks, whose costs run into the billions.

It costs taxpayers $3.4 billion to help U.S. companies that do business in Guam and Puerto Rico. The government gives $500 million in tax breaks to companies that produce ethanol; $333 million in tax breaks to the big carmakers to help them develop more fuel-efficient models; $2 billion in low-interest loans to electric utility cooperatives in rural areas, the better to provide cheap electricity to impoverished areas such as Aspen, Colo., and Las Vegas; $5.4 billion in grants and loans to foreign countries to help them buy U.S.-manufactured military equipment and supplies; and $451 million to help companies such as Xerox, Du Pont and Caterpillar convert basic research into consumer products. And the list goes on.

Even some beneficiaries want to see corporate welfare killed.

Over the past decade, according to the Guardian of London, Cargill Corp. has received almost $1.3 billion in cash bonuses from Uncle Sam for selling grain abroad at below-market prices. Cargill opposes the practice, saying it distorts the market, letting the government decide which commodities will be sold, to whom and at what price.

But others will fight fiercely for their welfare.

“The uniform castigation of all government outlay programs is ridiculous,” Paul Huard of the National Association of Manufacturers told the Minneapolis Star Tribune. “We judge government programs by whether they create jobs and increase prosperity. If they don’t, maybe we stop doing them. If they do, let’s keep them. It’s a pretty straightforward standard.”

Yes, but it’s the wrong standard. We ought to judge government programs by whether they are necessary.

Most of us don’t object to paying taxes to ensure that our streets are safe (though we’re not getting value for our money on that at the moment), that our nation is defended from foreign threats, that our courts are functioning smoothly and that our children are being educated (though we’d like more choice about where).

But when you go beyond essential functions, you find that government involvement inhibits - rather than creates - prosperity. Companies that get government money are companies that needn’t struggle to compete.

The true story of corporate welfare is the story of raw power. Those interests - business and otherwise - that can persuade Congress to smile upon them have an unfair advantage over everyone else.

It isn’t the job of the government to help McDonald’s or Cargill or Honeywell or their competitors. It is the job of the government to stay out.

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