The Corporate Welfare Congress
The Corporate Welfare Congress
Perhaps you've heard that this is the Congress for "the little guy," the "forgotten" middle class, the working stiff. If that was the plan, it isn't working. On present trends, the 110th Congress will go down as one of the biggest blowouts in corporate welfare history.
That's saying something, considering that the last GOP Congress gave big business some $92 billion a year in subsidies, according to the CATO Institute. Cato's latest analysis indicates that if all the pending spending bills pass, corporate welfare will exceed $100 billion in direct outlays in 2008.
The handouts for the rich that have a good chance of passing include the most expensive farm bill ever; a rise in the mortgage limits on loans that can be securitized by Fannie Mae and Freddie Mac (see below); some $2 billion in loan guarantees to ethanol producers; and expansions in flood and terrorism insurance to benefit home builders, mortgage banks and real estate developers.
Many of the 40 largest existing corporate welfare are set to get a raise, including the Commerce Department's $116 million manufacturing extension program, the $100 million Advanced Technology Program (which funds R&D for the likes of IBM, GE and Xerox), and the $200 million Agriculture Market Access Program, which underwrites foreign advertising for the likes of Pillsbury and Dole. We' call all of this the "K Street" project, but even Tom DeLay never thought this big"
-BIG AGRIBUSINESS. The House has already passed a five-year farm bill with a cost of $286 billion. The USDA calculates that two-thirds of these subsidies are directed to the richest 10% of farmers. The huge cooperatives that grow rice, cotton, corn wheat and soybeans will get $7.5 billion a year. These handouts will come despite record crop prices and farm land selling at an average of 18% above a year ago. The USDA estimates that farm net income will reach $87 billion this yar nearly 50% higher than in 2006.
-ETHANOL-On top of the 51-cent per gallon tax credit for this inefficient fuel, the Senate energy bill requires a doubling of ethanol production from corn, $500 million in new direct payments to ethanol producers, and $2 billion more for loan guarantees for new ethanol refineries.
-BIG SUGAR--The farm bill requires the USDA to buy up domestic sugar equal to the amount that is imported from Mexico under NAFTA, which is a disguised form of trade protection. This sweet deal is like requiring the Transportation Department to purchase a Ford and GM car for every Nissan and Toyota imported into the U.S. The taxpayer cost: $1.4 billion.
-FLOOD INSURANCE--The House has passed a bill that replenishes a fund drained by Hurricane Katrina. But along the way it also raises the maximum coverate limits, and for the first time covers wind damage for commercial properties [Comment: what about residential properties?]. The National Taxpayers Union calculates that taxpayers could be on the hook for $100 billion of future losses.
-TERROR INSURANCE--On September 19, the House approved a new federal terrorism backstop for developers at an estimated 10-year cost of $10.4 billion The original terrorism insurance bill, passed int he wake of 9/11, was supposed to be temporary. But under pressure from business lobbies and insurers, industry won a 15-year extension covering up to 90% of terrorism-related losses.
-"RENEWABLE" FUELS--Energy bills moving through congress tax oil companies and pass most of the $25 billion or so in expected revenue to wind, solar and Midwestern biofules companies, even though private venture capital for such fuels hit new peaks in 2005 and 2006. For 20 yars, the feds have poured more than $10 billion into this industry with little reduction in U.S. oil dependence.
-CORPORATE PORK--There are 13,000 earmarks in this year's appropriations bills, including hundreds that benefit narrow business groups. Such as : $500,000 to build a baseball stadium for the Cincinn ati Reds monor league team in Billings, Montana; $150,000 for the Troy, Michigan Chamber of Commerce; $500,00 for the Arkansas World Trade Center; $4 million for a rail bridge for CSX railroad.
If you want to know how good liberals can tolerat such largess for the rich, keep in mind that in Washington quids often come with a quo. The latest FEC fundraising reports indicate that industry lobbyists have shifted their allegiance from Republicans and are now funneling cash to Democrats they expect to hold their majority. Roll Call newspaper, which covers Congress, reports that in the first half of 2007 business lobbyists gave "all or most of their cash to Democratic candidates and party committees."
They're getting their money's worth.
Lead Wall Street Journal editorial October 23, 2007
More Corporate Pork
Corporate Welfare Information Center
- Corporate Welfare Information Center
Here's a link to a site that provides a wealth of information on corporate welfare in the United States.