HEY, YOU WANT TO CONTRIBUTE to a fund that helps Pillsbury advertise its baked goods overseas? Or maybe kick in a few bucks to promote Chicken McNuggets abroad?
How about donating to a program that subsidizes affluent U.S. exporters so they can sell their wares to foreign buyers at a discount? Better yet, how about sending some cash to bankroll those foreign buyers directly?
Perhaps you prefer to spend your money closer to home. If so, why not underwrite the $250 million U.S. catfish industry by chipping in for one of its pet projects, a fish-farming lab in Arkansas. In Toledo, Ohio, merchants are renovating their Farmer's Market and would welcome financial assistance. The nation's mining companies (annual sales: $85 billion) would love it if you defrayed their research and development costs.
All sorts of businesses are looking for handouts. You can donate to a fund to benefit rich corn farmers. Put something in the kitty for the Palmer Chiropractic School in Davenport, Iowa. Earmark some of your wages to bail out George Steinbrenner's American Shipbuilding Co. So how about it -- will you contribute?
Answer: Yes, you will contribute. You'll subsidize these enterprises -- and hundreds more -- whether you want to or not. In fact, you already do: Every time federal taxes come out of your paycheck, some private businesses get a little richer.
 You'd giggle too if the government sent you $1.75 million to promote your business |
Yes, Virginia, there really is a government fund that pays to advertise Chicken McNuggets -- and American Legend mink coats and Dole prunes and Jim Beam bourbon -- overseas. It's the Agriculture Department's Market Promotion Program: $110 million a year of pure welfare, funneled into the coffers of some of America's most affluent companies. No wonder the Pillsbury Dough Boy keeps giggling. He just got $1.75 million of taxpayers' money to market muffins in Mongolia.
Corporate welfare saturates the national budget. The federal sugar program doubles the domestic price of sugar, wringing $1.4 billion out of U.S. consumers to enrich a handful of wealthy U.S. sugar plantations. The Rural Electrification Administration subsidizes profitable electric utilities by some $2 billion each year. Conglomerates like General Electric and Westinghouse suck $40 million annually from the Energy Department to design light-water nuclear reactors -- even though no reactor has been ordered and built in America for 20 years. All told, favored industries and companies reap an estimated $85 billion every year in unearned grants and subsidies. The Cato Institute and the Progressive Policy Institute, two think tanks from opposite ends of the political spectrum, enumerate 125 federal programs that siphon money from the public for the benefit of private firms.
The rip-offs are obscene. The feckless Small Business Administration lends money to borrowers that commercial banks deem too risky. The Advanced Technology Program transfers millions of dollars from taxpayers to corporate giants: General Electric, Xerox, IBM, DuPont. Farmers (rich farmers especially) collect $10 billion annually in federal subsidies for growing wheat, corn, rice, and cotton ... while other farmers get money for growing nothing.
The corporate recipients of all this welfare defend it passionately, of course. So do the government officials they bribe -- er, support -- with campaign contributions. Whatever Bill Clinton and Bob Dole may disagree on, for example, both are staunch patrons of lucrative farm subsidies.
Naturally, then, the political difficulties in turning off this welfare spigot are enormous. In 1995, Republican Sens. John McCain of Arizona and Fred Thompson of Tennessee proposed an amendment to abolish, as McCain recalled it last week, "12 of the most celebrated and egregious forms of corporate pork" in the federal budget. "The fact that 74 senators voted against the amendment is ample testimony to the problem."
So McCain is urging a different strategy: Rather than attack the corporate welfare state a few recipients at a time, he suggests goring everyone's oxen simultaneously. Washington can muster the courage to scrap corporate subsidies, he thinks, only by reviving the formula it used to close unneeded military bases -- appoint a commission of experts, let them identify the giveaways that should be terminated, and require Congress to vote the package up or down. "The mentality," says McCain, "is: We either all go together or we don't go at all."
Welfare for business is Washington at its worst: It erodes democracy, undermines capitalism, robs consumers, distorts the marketplace, and bleeds the public treasury for private gain. If Republicans plan to drain this swamp, passing McCain's legislation would be a good start. "We know how to end programs," Speaker Newt Gingrich said after the GOP took control of Congress, "not just create them." But talk is cheap. It'll take more than words to end corporate welfare as we know it.
(Jeff Jacoby is a columnist for The Boston Globe).
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