Public policy reform

The Department of Agriculture's Market Access Program (MAP) spent $85.5 million in FY96 advertising products of America's largest and most profitable companies overseas. In 1993, American taxpayers spent $6.6 million a year promoting Sunkist oranges; Ernest & Julio Gallo received $4.9 million to market its wines internationally; $1.5 million was spent pushing sales of mink coats; M&M Mars received $1 million to improve consumer recognition of its candy; and Campbell Soup received more than $500,000 to defray its advertising expenses. Although the 1996 appropriations bill targeted assistance for advertising promotions of small businesses, major companies still benefit from payments to industry associations and agricultural cooperatives.

Through Sematech, a consortium of major U.S. computer microchip producers, the Pentagon provides nearly $100 million a year of direct subsidy to the industry. However, of the more than 200 chip manufacturers in the United States, only the 14 largest, including Intel and National Semiconductor, receive support from Sematech. Originally designed to help U.S. firms compete against foreign competition, Sematech now subsidizes the largest producers to battle smaller domestic competitors. It also helped Digital Equipment Corporation, though Digital still shifted part of its work force and capital to Ireland and Singapore.
Not all the counterarguments against corporate welfare are representative of the various interest groups critical of the concept. But the Cato list of criticisms is quite exhaustive and especially convincing in the present era of deficit reduction and government downsizing.
Public Policy Reform

Because earlier efforts to rein in corporate welfare met with limited success, a new bipartisan effort has been announced for the 105th Congress. Buoyed by last year's success at blocking Congress's efforts to double the appropriation of OPIC and reauthorizing funding for only one year rather than the five years it had sought, Stop Corporate Welfare (SCW), an ad hoc coalition representing a range of taxpayer, consumer, free market, and environmental groups, decided to expand its array of targets. The SCW Coalition announced in late January 1997 a "hit list" of 12 corporate welfare programs for Congress to eliminate that would result in an estimated savings to taxpayers of $11.5 billion over five years. The coalition has strong House support from Budget Committee Chair John R. Kasich (R-Ohio), a longtime congressional foe of corporate welfare; Rep. Edward Royce (R-California); and Rep. Robert E. Andrews (D-New Jersey).
The SCW Coalition reviewed most federal spending programs (except entitlement programs) before reaching consensus on the following wide-ranging list of 12 initial targets:
* commercial research endeavors (Fossil Energy Research and Development Program, Clean Coal Technology Program);
* export advertising for food and wine companies (MAP);
* low-interest loans, loan guarantees, and political risk insurance for American corporations investing in developing countries (OPIC);