In the crusade to trim federal spending, it's business's turn to face the knife. But which funding programs? And how far should we go?
On November 22, 1994, Robert Reich, then U.S. Secretary of Labor, issued a challenge to Washington's public policy "think tanks" to identify business subsidies he characterized as "federal aid to dependent corporations."(1) Along with the many social welfare programs being targeted for reduction or termination by the incoming Republican-controlled 104th Congress, Reich believed that "corporate welfare" subsidies would provide considerable fuel for deficit reduction. Reich challenged congressional Republicans to terminate inappropriate federal government involvement in the workings of the U.S
On November 22, 1994, Robert Reich, then U.S. Secretary of Labor, issued a challenge to Washington's public policy "think tanks" to identify business subsidies he characterized as "federal aid to dependent corporations."(1) Along with the many social welfare programs being targeted for reduction or termination by the incoming Republican-controlled 104th Congress, Reich believed that "corporate welfare" subsidies would provide considerable fuel for deficit reduction. Reich challenged congressional Republicans to terminate inappropriate federal government involvement in the workings of the U.S
Secretary Reich's call to action was answered the following year with corporate welfare "white papers" issued by the libertarian Cato Institute, the centrist Progressive Policy Institute, and the liberal Center for Responsive Law and Essential Information. The reports' findings and recommendations were stunning. The Cato Institute identified 125 federal programs that subsidize business to the tune of $85 billion annually. The Progressive Policy Institute found 121 spending and tax subsidies benefiting specific industries that, if eliminated or reformed, would save $265.2 million over five years. Not to be outdone, the Center for Responsive Law and Essential Information's report uncovered 153 federal business welfare programs totaling $167.2 billion in taxpayer subsidies for Fiscal Year (FY) 1995.
How did corporate welfare endure under a Republican congress and a Democrat president? According to Cato Institute analysts Stephen Moore and Dean Stansel, it came out of the budget debate relatively unscathed. Of the $19.5 billion budgeted for the 35 least defensible programs identified by the Cato Institute, Congress cut only $2.8 billion (or 15 percent) for FY96. Moore and Stansel found that many programs were reduced nominally or not at all. Meanwhile, although President Clinton called Secretary Reich's proposal an "attractive idea," he clearly articulated that he did not endorse cutbacks in benefits to business. In fact, Moore and Stansel found that the Clinton administration actually proposed increased spending in the 35 least defensible programs. And the White House vetoed Republican budget bills because
How did corporate welfare endure under a Republican congress and a Democrat president? According to Cato Institute analysts Stephen Moore and Dean Stansel, it came out of the budget debate relatively unscathed. Of the $19.5 billion budgeted for the 35 least defensible programs identified by the Cato Institute, Congress cut only $2.8 billion (or 15 percent) for FY96. Moore and Stansel found that many programs were reduced nominally or not at all. Meanwhile, although President Clinton called Secretary Reich's proposal an "attractive idea," he clearly articulated that he did not endorse cutbacks in benefits to business. In fact, Moore and Stansel found that the Clinton administration actually proposed increased spending in the 35 least defensible programs. And the White House vetoed Republican budget bills because
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