Corporate Handouts

“Welfare reform” is becoming the talk of Washington’s politicians from the White House to Congress. Clinton wants to end welfare “as we know it” by getting recipients jobs within a reasonable time. Some Republicans want to eliminate welfare, following some of their comfortable theorists, and let the misfortunate children and adults be taken care of by relatives, neighbors and private charities.

But no one is talking about the “other welfare” — the dozens and dozens of hugely expensive federal government handouts to corporations. It is difficult to find any major corporation or any industry that has not benefited over the years from this corporate welfare state. Tens of billions of taxpayer dollars flow out yearly into corporate coffers, headed by those same chief executives who, with regular hypocrisy, denounce big government and praise the free market.

If you read columnist David Broder or listen to Senator Robert Dole, the words “welfare” and “entitlements” just apply to poverty programs. Compelling taxpayers to subsidize business is not an “entitlement”. Welfare for rich corporations or other powerful vested interests just aren’t subjects for reform. After all, why would Senators and Representatives want to bite the hands that feed them?

Essential Information, an organization I helped start twelve years ago, has just completed a partial survey that compared government welfare for corporations and welfare programs for lower income children and adults. The reason why the survey was “partial” was that its author, Jim Donahue, compiled the dollar costs for each category just from the classification system of the federal government.

That federal system leaves out lots of corporate welfare programs. Because the Office of Management and Budget covers direct payments, grants and tax breaks to corporations, it leaves out such big ticket items as the free use of the public airwaves (which legally belong to the people) by broadcasters, below cost sales of water and timber on public lands to business, loan guarantees, big debt-forgiveness (as the recent erasure of most of the atomic power utilities megabillion dollar debt to Uncle Sam for past uranium enrichment services), export promotions, giveaways of valuable taxpayer funded government research and development, as in the gifting of clinically tested drugs to selected drug companies with no royalties nor price restraints to consumer, and on and on.

The governments classification system also excludes medicaid from its poverty welfare calculations. In western countries with universal health insurance, paying for medical bills of the poor would never be considered welfare.

In any event, taking the government’s own definitions, here is the comparative total for fiscal year 1994. Federal government spending for social welfare programs on the poor — such as the school lunch and food stamp programs — total $75.1 billion. In contrast, federal spending for corporate welfare total $104.3 billion.

So, in the coming debate on welfare reform and cutting entitlements’ spending, does it not make sense to “reform” welfare for corporations as it does for lower income Americans? To ignore corporations who feed at the taxpayer trough, while paying their executives very amply, would be to admit indefensible ideological bias.

While the Sunday morning Washington television pundits continue to be “politically correct” and avoid talking about corporate welfare, the new Entitlements Commission, co-chaired by Senator Bob Kerrey (D-NE) and Senator John Danforth (R-MO), can not get away with a similar myopia.

I have written Senator Kerrey asking him to include the vast variety of corporate entitlements within the Commission’s deliberations. If you agree, drop the Senator a note with your reasons. Ask him why taxpayers should be paying millions to promote almond sales by private companies overseas, or $100,000 to help Turkey build a cigarette plant or millions of additional dollars promoting tobacco sales abroad or giving the public’s gold or other metals free to mining companies — to name a few of many misuses of your money.

For more information on corporate welfare, write to Essential Information, P. 0. Box 19405, Washington, DC 20036.

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