Consumer Power

Ronald Reagan’s 1983 budget package is out and once again we learn how much he cares for the truly greedy. The corporate rich and the wealthy classes can still feed at the public trough because Reagan’s corporate welfare handouts are still thriving.

Life is quite different for 73-year-old Lois Gatewood, a diabetic from Woodbridge, Va. She was told recently that her Medicaid card would no longer be honored. Her sole support–a $388 monthly Social Security check–was what made her ineligible, she discovered while at the local drugstore to buy insulin. Yet giant corporations in the oil, agribusiness and maritime industries will receive taxpayer subsidies from Reagan’s Washington in the billions of dollars this year.

Public Citizen’s Congress Watch began adding up a clutch of corporate subsidies. By the time these citizen researchers reached $100 billion for the coming fiscal year, they decided to bundle them together under a program they called “Aid for Dependent Corporations.”Taking companies off federal welfare would eliminate the entire federal deficit projected by the president’s budget advisers. Even a small reduction in the size of the business dole could provide the means for helping many needy people like Lois Gatewood.

Reagan’s proposed $5.1 billion Medicare-Medicaid reduction (following a $2.5 billion slash last year) could be avoided, says Congress Watch, by eliminating the current $6 billion synthetic fuel subsidy. That is the handout to profit-glutted oil and coal companies to build what both conservative and liberal economists have called economically wasteful synthetic fuel plants. The proposed plants would devour huge amounts of scarce water needed by farmers and seriously contaminate the human environment. Just a fraction of that amount dedicated to helping people conserve energy would save far more fuel than this taxpayer subsidy of synthetics would produce. Instead, Reagan is virtually shutting down the conservation program.

Reagan’s current business subsidies come in many forms. Some are outright cash outlays; others are indirect–special tax breaks, import duties, guaranteed loans, donated federal research and development, and protection from domestic competitors, to name a few. These subsidies are defended by strong lobbies based in Washington and around the country. Product subsidies like tobacco, milk and sugar make their lobbyists wealthy almost beyond their dreams of avarice. And Congress, going along with the White House, continues to be, in Will Rogers’ pithy words, “The best money can buy.” For corporations, spending thousands to secure millions or billions in handouts is an irresistible investment.

But wait! Isn’t this the same Ronald Reagan who wanted Americans to end their dependence on the federal government? Why, I remember participating with Ronald Reagan and Hubert Humphrey at a Roundtable in 1975 where the subject of business subsidies was discussed. Reagan said that he often told his business friends that they should not go to Washington for a handout. The “government subsidy cocoon,” he called it then. Now that he rules in Washington, why is he giving these businesses such costly goodies?

Clearly, his beliefs have not changed. In addition, he has made some attempts to reduce the subsidized Export-Import Bank loans that benefit companies like Boeing and Westinghouse. But neither he nor his Cabinet is willing to use a fraction as much political muscle toward reducing the massive corporate welfare dole as they apply to slashing much smaller poor-infant nutrition projects and many other health and safety missions.

Contrasts such as these reveal this uneven treatment of wealthy winners and hard-pressed losers. The Congress Watch report recognized the gobbledygook that verbally camouflages these subsidies: “The ‘Accelerated Cost Recovery System’ contained in the Reagan tax bill means that corporations will be able to deduct more than a dollar for each dollar they spend on new equipment. Similarly, the ‘Hazardous Response Trust Fund’ means that the government must contribute a large portion of the money needed to help the chemical industry clean up its mess.”

Such clarifying translation will help more Americans observe in their own communities the results of a budgetary cruelty which drains away critical government services andrepairs so that business subsidies remain fat and full.

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