Lawmakers give a pass to corporate welfare
Just a few weeks before the Tax Cuts and Jobs Act was signed into law last December, Speaker of the House Paul Ryan (R-Wis.) announced it was time to reduce the deficit by cutting entitlements. On talk radio, he said, “We’re going to have to get back next year at entitlement reform … it’s the health care entitlements that are the big drivers of our debt …”
Ryan is not alone. The Washington Post reported that Sen. Marco Rubio (R-Fla.) stated, “The driver of our debt is the structure of Social Security and Medicare for future beneficiaries.” Senator Orrin G. Hatch (R-Utah) refers to these expenditures as “liberal programs” for the poor and a waste of money.
But these lawmakers don’t say a word about corporate welfare.
The non-partisan research group, Good Jobs First, tracks both federal and state corporate welfare made in the way of grants, allocated tax credits — separate and apart from tax breaks provided in the IRS code — loans and loan guarantees. Lots of big handouts go to big business.
From 2000 to 2017, the federal government alone awarded big business $72.3 billion in grants and allocated tax credits.
According to Good Jobs First research director Philip Mattera, federal grants and allocated tax credits are now roughly $10 billion per year, and loans and loan guarantees are $30 billion.
Spanish energy company, Iberdrola, tops the list for federal subsidies received since 2000 at $2.1 billion. NextEra Energy is number two at $1.9 billion.
The logic behind these give-aways is they help corporations create jobs, and that’s good for everybody. Still, don’t we pride ourselves as a nation that thrives on capitalism and independence? Legislators see otherwise when it comes to big business.
Surprisingly, you don’t have to be a good corporate citizen to qualify for corporate welfare.
From 1997 through 2015, Goldman Sachs received $675 million in state and local subsidies such as allocated tax credits and property tax abatements. During roughly the same period, Morgan Stanley received $368 million in state and local subsidies. Goldman then paid $5.1 billion to settle a federal action for its role in causing the Great Recession, and Morgan Stanley paid $3.2 billion for its role.
A number of companies on the dole don’t pay their employees an adequate wage.
The top five Ohio companies in 2017 with the most employees receiving Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps, are Walmart, McDonald’s, Kroger, Bob Evans and Wendy’s. Each has received subsidies from Ohio or the federal government or both.
To qualify for SNAP, the maximum monthly income for a family of four is $2632. A total of 11,560 Ohio Walmart full and part-time employees and family members received SNAP benefits in 2017. For McDonalds employees and family members, the number was 9927. For Kroger, it was 5051. Public records don’t identify the employers for Ohioans receiving Medicaid, but the income limitations for Medicaid and SNAP are roughly the same, and so it’s likely some Ohio SNAP enrollees also receive Medicaid.
Let’s think about this for a minute. Federal and state governments subsidize large corporations, a practice that doesn’t get questioned. But some corporations that receive government subsidies pay such low salaries their employees depend on government assistance, which conservatives want to cut.
Why such different attitudes for corporate subsidies and social welfare entitlements? Conservatives work from the premise that the common good flows from the top down. President Donald Trump boasted on Twitter, “TAX CUTS will increase investment in the American economy and in U.S. workers, leading to higher growth, higher wages, and more JOBS!”
But here’s the problem: As of as the Census Bureau’s 2016 report, we have over 40 million people living in poverty.
That equate to $24,600 in annual income for a family of four. Sure, the trickle down from the tax cut may help, but it won’t solve the problem.
And yes, corporate welfare is a drop in the bucket compared to Social Security and other safety net programs, which account for roughly 60 percent of the federal budget. Cutting these programs, however, without remedying the root causes of poverty only further imperils the poor and elderly.
The size of the safety net is just one reason it’s such a big target and corporate welfare isn’t. There’s another as well.
Let’s follow the money.
Good Jobs First reports that 75% of government subsidies go to 965 corporations. NextEra Energy, Southern Company, General Motors and General Electric are in the top 20 for federal grants and allocated tax credits, and according to OpenSecrets.org, collectively spent nearly $33.6 million on federal lobbying in 2017.
Take a guess how much people receiving SNAP and Medicaid spent on lobbying.
[This piece was published in the Columbus Dispatch on Jan. 31, 2018.]
Originally published at Consider This by JD.