Corporate Subsidies

The Oklahoma humorist-sage, Will Rogers, called Congress the best money can buy about 60 years ago. The “buy” is much, much better today for corporate welfare. In this season of gift exchanges, here is a specific, very limited list of what some corporations got for their money; compliments of your taxpayer dollars:

1. $110 million for the Market Promotion Program (MPP) in FY96, $25 million more than FY95. The MPP funds overseas advertising by U.S. companies. Sunkist Growers received almost $3 million in MPP subsidies in FY94. Sunkist’s political action committee (PAC) made contributions totaling $123,820 during the 1993-1994 election cycle.

2. $1 billion authorized for the Export Enhancement Program (REP) in FY96. The EEP provides bonuses for companies that arrange exports of U.S. agricultural products. Cargill, Inc. and Continental Grain Company have received almost 34 percent of the more than $7 billion in bonuses distributed since the ESP’s inception in 1985. The two companies paid $105,497 in PAC contributions during the 1993-1994 election cycle.

3. $40 million for the Advanced Light-Water Reactor (ALWR) in FY96. General Electric and Westinghouse receive major funding from the ALWR program. The two companies paid $804,470 in PAC contributions during the 1993-1994 election cycle.

4. $742 million for the Export-Import Bank in FY96. The Foreign Operations conference report includes funding for the Ex-Im Bank, which provides low-interest loans and loan guarantees for foreign purchasers of U.S. products. Indonesia obtained over $125 million in Ex-Im loans in FY94 for purchases from Hughes Aircraft. Hughes’ PAC shelled out $248,800 during the 1993-1994 election cycle.

5. $68 million for subsidies to support credit programs of the Overseas Private Investment Corporation (ODIC) in FY96. The Foreign Operations conference report includes funding for OPIC, which provides taxpayer-subsidized financing so U.S. companies can invest and produce in newly independent and in developing countries. U.S. West, Inc. received $170 million in OPIC financing in FY94 for projects in Hungary and Russia. The U.S. West PAC contributed $319,610 to federal candidates during the 1993-1994 election cycle.

6. Regulatory deforms that ease environmental rules for salvage logging on federal lands: U.S. taxpayers incurred net losses in excess of $19 million in 1994 from salvage logging in just 63 national forests. Louisiana-Pacific and Weyerhaeuser contributed $58,982 in PAC money during the 1993-1994 election cycle, while the American Forest and Paper Association and the National Forest Products Association PACs contributed a total of $80,528.

7. $5.5 billion in savings in 1996 on bank insurance premiums. An 83 percent cut in Federal Deposit Insurance Corporation deposit insurance premiums paid by financial institutions to the federal government shaved about $4.4 billion from the industry’s annual expenses beginning in 1995; a second drop will save nearly $1 billion more in 1996. The biggest winner will be Citibank of New York, with $142 billion in deposits. Citicorp shelled out $333,168 in PAC contributions to federal candidates during the 1993-1994 election cycle, supplemented by almost $2 million from three banking trade associations.

8. $3.2 billion for the FY96 Foreign Military Financing Program. The federal government negotiates foreign arms exports for companies, then provides subsidies to countries to purchase the military products. In FY94, General Dynamics Corp, and Lockheed Martin benefited from a total of $1.9 billion in Foreign Military Sales awards. The two companies’ PACs paid more than $1.5 million to federal candidates during the 1993-1994 election cycle.

9. $1.4 billion in higher prices annually for U.S. sugar suppliers. The House and Senate extended for seven years the U.S. Sugar Program, which controls supply by imposing import quotas and restricting U.S. production, causing U.S. sugar prices to be twice the world price. Flo-Sun, Inc. a major sugar grower, spent $35,038 in federal PAC contributions during the 1993-1994 election cycle, supplementing $485,410 from the American Sugar Cane League and the American Sugar Beet Growers Association.

10. $2.2 billion in annual tax benefits by cutting the alternative minimum tax in half. The alternative minimum tax, established to ensure that profitable corporations pay at least a minimum amount of taxes, was reduced by 50 percent in the Balanced Budget Act just passed by the House and Senate. Key beneficiaries of the reduction in the alternative minimum tax are oil companies. Exxon Corporation, Amoco and Atlantic Richfield PACs alone spent almost $1.5 million during the 1993-1994 election cycle.

House Speaker Newt Gingrich and Senate Majority leader, Bob Dole, have been charging after the poverty welfare budget but leaving handouts for far bigger corporate welfare intact. I’ve just sent a letter requesting their opinion about cutting these boondoggles for the corporate rich. Perhaps you may also wish to send your Senators and Representatives this list and ask for their reaction too.