Since the Romney campaign is making welfare recipients a central focus of their advertising barrage, maybe it’s time to take a closer look at the identity of those who are–pardon the vulgarity–“sucking at the public tit.”
Common Dreams has published a list of entitlements, and who gets what. According to their analysis, social welfare programs cost taxpayers some 59 billion dollars a year. Corporate welfare, on the other hand, costs us much more.
What do they count as corporate welfare? Well, fossil fuel industries get more than $70 billion dollars annually in subsidies–most of which goes to the oil and gas sector. Another $58 billion a year is lost to the Treasury by reason of tax “deferrals” for off-shore profits. Taxing capital gains at 15% rather than at the rates imposed on wage and salary income costs another $59 billion, while hedge fund managers are able to avoid some $2.1 billion in taxes each year due to something called “carried interest.” (I have absolutely no idea what that is, but then, I’ve never been a hedge fund manager, never represented one when I was a practicing lawyer, and never even played one on TV.)
And those are just a few of the garden-variety, built-into-the-system subsidies. The bank bailout cost us $700 billion. And while most of that was apparently paid back–and we really did have to avert a global meltdown–the terms of those “loans” could have been less favorable to the banksters and more protective of the rest of us.
When I read these numbers, I was dubious about their accuracy. Everyone seems to be playing fast and loose with the facts these days, and Common Dreams is a liberal-leaning organization. So I did some research, and found verification in an unlikely place–Forbes Magazine. Here’s a quote from a Forbes article on the deficit:
Among the most outrageous expenditures is corporate welfare. Desperate businesses now overrun Washington, begging for alms. Believing that profits should be theirs while losses should be everyone else’s, corporations have convinced policymakers to underwrite virtually every industry: agriculture, education, energy, housing, manufacturing, medicine, transportation, and much more.
My Cato Institute colleague Tad DeHaven has published a new study, “Corporate Welfare in the Federal Budget,” on business subsidies, which he figures to cost about $100 billion a year. Slashing corporate welfare obviously won’t balance the budget—which is why middle class and defense welfare also have to go on the chopping block. However, cutting business subsidies would be a good start to balancing the budget. Moreover, going after corporate welfare is essential to create a budget package that the public will see as fair.
Not every subsidy is bad policy, of course. There are sound reasons for encouraging some new enterprises, or saving endangered ones. (I’d argue that rescuing the American automobile industry averted catastrophic economic losses.) But those reasons need to be publicly vetted, debated and justified. Right now, we have ample reason to believe that most corporate welfare is the result of cozy dealings between campaign donors, lobbyists and legislators. There’s a reason it’s called “crony capitalism.”
Before we nod approvingly at the self-righteous candidates who are beating up on those “shiftless” poor folks, maybe we should take a closer look at the other end of the income spectrum. Maybe we should look at the well-fed and prosperous folks who are so un-self-aware that they don’t even recognize that they are just as dependent on welfare as the people they like to diminish and scorn.