Between Pork and a Hard Place

What's the easiest way to balance the budget? Get rid of "wealthfare," the practice of granting subsidies and tax breaks to business. That message was delivered earlier this year by "Stop Corporate Welfare"--an unusually diverse coalition whose participants range from consumer advocate Ralph Nader to House Budget Committee Chair John R. Kasich (R-Ohio)--which named a "dirty dozen" of federal subsidies they believe should be amputated from the budget.

The call to chop business subsidies taps into public cynicism about politicians who empty the tables of poor families while heaping corporate pork on the plate of wealthy companies. Estimates of the annual cost of direct federal subsidies and tax breaks to companies vary from $87 billion (the conservative Cato Institute) to $150 billion (The Boston Globe, in a three-part series on corporate welfare last summer). Core social welfare programs, in comparison, cost $145 billion annually.

Trimming business subsidies, in line with other efforts to balance the budget and downsize government, garners popular support across the spectrum. It makes one wonder why the issue of corporate welfare has not been summarily dealt with. In practice, it’s not quite so easy.

Various definitions of corporate welfare have surfaced. Most agree that it includes direct grants and loans from government to businesses. Unlike the stringent accountability requirements for low-income recipients of welfare assistance, there are often no reporting requirements for these subsidies.

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Sojourners Magazine May-June 1997
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