Fat Corporate Welfare Payouts | Citizens Against Government Waste

Fat Corporate Welfare Payouts

The WasteWatcher

On November 4, 2008 Barack Obama won the battle for the Presidency. On January 20, 2008, he will face many difficult challenges.  The national economic and financial crisis will place a heavy burden on the federal government.  With a $1 trillion budget deficit projected for the current fiscal year, and a federal debt spiraling past $10 trillion, President-elect Obama ought to be preparing to trim some serious fat.  Throughout his campaign, he pledged to go through the budget line-by-line in order to cut wasteful spending.  While there are multiple of ways to attack government waste, eliminating corporate welfare programs should be one of President-elect Obama’s top priorities.

Corporate welfare programs provide special government subsidies that benefit certain businesses and corporations.  According to the Cato Institute, in fiscal year 2006 the federal government spent $92 billion on corporate welfare programs.  Recipients of these special subsidies are often large and profitable corporations.  In addition to being wasteful, corporate welfare creates an unhealthy relationship between corporations and their benefactors in Congress that can lead to corruption.

CAGW has long recommended the elimination of one such program: the United States Department of Agriculture’s Market Access Program (MAP), which provides funding to companies so they can expand their overseas marketing.  Companies currently receiving funding from MAP include Ocean Spray Cranberries, Inc.; National Grape Co-operative Association/Welch’s; and Sunkist Growers.  On May 27, 2006, Rep. Steve Chabot’s (R-Ohio) attempt to eliminate funding for MAP failed when his amendment to the fiscal 2007 Agricultural Appropriations Act was defeated by a vote of 70-345.  President-elect Obama could save taxpayers $231 million over five years if he eliminated MAP.

Another massive corporate welfare venture is the Technology Improvement Program (TIP), which was known as the Advanced Technology Program until 2007.  The program, which is administered through the National Institute of Standards and Technology (NIST), claims to promote technology innovation intended to result in commercial payoffs.  According to the NIST website, for FY 2008, Congress appropriated $65.2 million to TIP.  Examples of corporations that received funding from TIP in 2007 are Caterpillar Inc., Boeing, General Electric, and General Motors which all ranked in the top 50 of the Fortune 500 list.  

Other corporate welfare programs benefit the dairy, steel, and sugar industries.  According to the Environmental Working Group, in 2006 the government spent $13.4 billion on farm subsidies.  Eliminating the USDA’s Foreign Marketing Development Cooperator Program would save $34.5 million.  The program’s objective is to help expand export markets for agricultural products.  Millions of dollars are going to consortia such as the American Peanut Council and the American Soybean Council.

In these tough financial times, President-elect Obama could begin to exercise fiscal restraint by eliminating corporate welfare and in doing so, save taxpayers tens of billions of dollars.

  -- Sarah Maroney

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