Corporate-Welfare Queens: Conservatives Need to Take Them On

National Review ^ | 03/27/2014 | Stephen Moore

[SeekAndFind]

Representative Paul Ryan of Wisconsin will release his House Republican budget next week, and one of its themes will be the fighting against corporate welfare. Mr. Ryan says, “We can’t make the case to the American people that we are the reform party if we won’t reform the giant corporate-welfare state in Washington.” Bravo. Too bad so few of his colleagues agree with him.

It’s very simple, really: Republicans have to be willing to cut weak claims, not weak claimants, as Reagan budget director David Stockman used to say. But corporate welfare has strong claimants: deep-pocketed business interests that rely on federal largesse to pad their pockets and jack up stock prices. Too many companies in America, from Boeing to AT&T, have come to regard government as a giant customer. They cheerlead for big government because they are among its chief beneficiaries.

So why hasn’t it happened? Why haven’t Republicans pledged to end corporate welfare as we know it? Part of the explanation is that too many politicians have gotten confused about the difference between free-market capitalism and crony capitalism. Democrats love welfare of any kind and seem to relish the idea of making big business government-dependent. President Obama, with his stimulus plans and his green-energy giveaways, has been a master at that.

The business interests have also gotten away with their taxpayer heist for too long by pretending that business subsidies are just a small, inconsequential part of the budget. Actually, it’s a surprisingly large mountain of cash — even if it is well hidden.

This week an Illinois-based watchdog group, Open the Books, issued a new report that scrupulously tallies up all federal grants, loans, direct payments, and insurance subsidies flowing to individuals and companies. It examined all accounts from the Department of Commerce to the Department of Transportation and found that corporate-welfare payments from the federal government to the Fortune 100 companies, from 2000 to 2012, amounted to $1.2 trillion. I recommend a visit to the website openthebooks.com, if you can stomach it.

That $1.2 trillion number does not include the hundreds of billions of dollars in housing, bank, and auto-company bailouts in 2008 and 2009, because those payments are kept mostly invisible in the federal-agency books. It also doesn’t include the asset purchases of the Federal Reserve, indirect subsidies such as the ethanol mandate that enriches large agribusinesses like Archer Daniels Midland, or special tax breaks for wind and solar manufacturers.

Most of the payments Open the Books uncovered were contracts between government agencies and private firms. The largest of these are military-procurement deals with such firms as Lockheed Martin ($392 billion), General Dynamics ($170 billion), and United Technologies ($73 billion). At least taxpayers get services in exchange for these tax dollars. Still, the overall size of the government-industrial complex makes it all the harder to cut federal spending, because the recipients of all this money become high-roller lobbying forces for higher appropriations.

Far less defensible is the $21.3 billion that was doled out in the form of outright income-transfer subsidies to corporate America. On average, each Fortune 100 company received about $200 million in such handouts. So who are the major corporate-welfare queens? The biggest grant recipients were General Electric ($380 million), followed by General Motors ($370 million), Boeing ($264 million), Archer Daniels Midland ($174 million), and United Technologies ($160 million).

About $8.5 billion of this largesse came in the form of taxpayer-subsidized loans. The big winners here were Chevron, Exxon Mobil, Ford Motor Company, and other multibillion-dollar corporations whose franchisees received Small Business Administration loans.

Double- and triple-dipper Archer Daniels Midland got just under $1 billion for USDA farm-program loans, and this doesn’t include ethanol subsidies. Another $10 billion was doled out through federal insurance, often in the form of surety bonds. The No. 1 federal insurance program was the Export-Import Bank, with Wells Fargo and JPMorgan Chase both receiving more than $3 billion in such aid and Citigroup and Bank of America receiving more than $1.5 billion in taxpayer backstop insurance. (Remember, this doesn’t include TARP money.) Deere, American Express, and even Walmart reeled in federal insurance as well. Amazingly, all but one of the Fortune 100 stood in the federal soup line to take at least some form of corporate-welfare benefit. In other words, as Open the Books founder Adam Andrzejewski puts it: “Mitt Romney had it wrong. When it comes to the Fortune 100, it’s 99 percent, not 47 percent, on some form of the government’s gravy train.”

Uncle Sam could save billions of dollars a year if it just limited corporate welfare to any firm with profits of $1 million or even $10 million or less and prevented double-dipping by prohibiting the Fortune 100 from receiving more than one form of federal assistance at a time.

Imagine for a moment that you are sitting on your couch watching TV and there is a knock on the door. There in a corporate suit is an employee of General Dynamics with a tin cup and he asks if you would contribute a dollar for a research project. You would slam the door in his face. But somehow when the government collects a dollar from each of us and gives the money to General Dynamics, this is considered in Washington a wise “investment.”

Here’s a pretty safe bet: We’re never going to balance our budget in Washington again until our elected officials get big business off the dole. Paul Ryan wants to do that. So does Senator Rand Paul of Kentucky. They are, alas, lonely voices in the GOP. Too many of their colleagues have come to regard farm subsidies to wealthy agribusinesses and Export-Import Bank loans to Boeing as Republican entitlements. And then Republicans wonder why the public holds them in such disdain.

— Stephen Moore is chief economist with the Heritage Foundation.

[Wolfie]

Right in the middle of candidate buying season, er, I mean campaign donation season? I think not.

[mfish13]

Let’s start with Hollywood, and then check how much the unions get.

[amnestynone]

Government is now big money to corporations. It is now 35% of the economy and can give them subsidies, welfare, contracts and all kinds of goodies. They are conservative only to the extent that it affects their wallets. When you lower their taxes so that they have more money flowing into them from the government than flowing out, what do you expect? GE which gave us Ronald Reagan are now corporate flacks for the Donks.

[PapaBear3625]

from 2000 to 2012, amounted to $1.2 trillion.

I like how some make numbers look bigger by looking at 10 (or in this case 13 year) totals, rather than yearly averages (in this case, under $100B/year). How much of that was "corporate welfare" and how much was payment for actually-delivered goods and services was not explained.

Yes, we need to get rid of sweetheart deals to corporations, but lets try to dig up real numbers.

[dfwgator]

Corporations want socialism to block out any competition.

Businesses hate competition. That’s why it’s government’s job to make sure there is a free market, because companies will do everything in their power to stifle competition.

Government has abandoned that role.

[gdani]

There is so much corporate welfare in the U.S. I can’t fathom why we still refer to ourselves as a capitalist country.

[SeekAndFind]

Tyler Durden of ZeroHedge is right.

If Republicans are going to get truly serious about cutting government spending, they are going to have to snip the umbilical cord from the Treasury to corporate America. You can’t reform welfare programs for the poor until you’ve gotten Daddy Warbucks off the dole. Voters will insist on that as well they should.

Part of the explanation is that too many have gotten confused about the difference between free-market capitalism and crony capitalism.

And part of the problem is corporate welfare that is so well hidden from public view in the budget that no one has really measured how big this mountain of giveaway cash to the Fortune 500 really is. Finding out is like trying to break into the CIA.

Open Book, an Illinois based watchdog group, has been scrupulously monitoring all federal grants, loans, direct payments and insurance subsidies flowing to individuals and companies.

It’s an attempt to force federal agencies to release information on where the $4 trillion budget is really spent — and Open the Books will release a new report on corporate welfare payments to the Fortune 100 companies from 2000 to 2012.

Over that period, the 100 received $1.2 trillion in payments from the federal government.

That number does not include the hundreds of billions of dollars in housing, bank and auto company bailouts in 2008 and 2009, because those payments and where they went are kept mostly invisible in the federal agency books.

[SeekAndFind]

The biggest welfare queens in the U.S. are the super wealthy themselves, but they’d rather you focus on some single mother on welfare simply trying to survive.

[Jack Hydrazine]

Take ABBA’s song, “Dancing Queen,” and change it to “Welfare Queen,” with the appropriate lyrics for corporate and individuals.

“Banking Queen,” with Bawney Fwank.
https://www.youtube.com/watch?v=a5NrqqK60OI

[Responsibility2nd]

 

There is so much corporate welfare in the U.S. I can’t fathom why we still refer to ourselves as a capitalist country.

Indeed. But what with the USA having the HIGHEST Corporate Tax Rate of any nation; you gotta thank God there are some tax loopholes that benefit the uber-rich.

I don't mind Corporate Welfare as much as I object to the trillions of welfare dollars paid to lazy Obama voting deadbeats.