Welfare Kings

April 28, 1997|By CARL T. ROWAN

WASHINGTON -- We've all heard former President Ronald Reagan's stories of the "welfare queen" who drives around in a Cadillac and uses food stamps to buy gin and vodka and steaks.

But we haven't heard much about the ethanol subsidies given to farmers who grow corn, or the billions in government help for road repair and construction projects requested by individual lawmakers, or about a $1.4 billion Energy Department program to develop new technology for oil, coal and natural gas companies, or the $347 million in tax money that goes to help American food companies such as Mars, Dole and Sunkist advertise their exports.

That is starting to change. An unlikely coalition linking Republicans such as the budget-cutting Rep. John R. Kasich of Ohio with the likes of consumer advocate Ralph Nader has launched a campaign to end $11.5 billion in business subsidies.

Sen. John McCain, R-Ariz., and Sen. Edward M. Kennedy, D-Mass., are sponsoring a bill to create a Corporate Subsidy Reform Commission. Patterned after a panel that studied and recommended which military bases to close, the commission would target questionable programs and tax loopholes that should be reformed or ended.

"As a matter of simple fairness, Congress has an obligation to ensure that corporate interests share the burden of deficit reduction," Mr. McCain says. "This commission will give Congress an enormous, one-time opportunity to restore fairness, plug loopholes and end these programs once and for all."

"Corporate welfare"

No one is really sure just how much "corporate welfare" there is, because no one has a clear definition of just what it is. But estimates range all the way up to $150 billion a year, including special subsidies and tax breaks. According to the Cato Institute, a libertarian research center in Washington, the federal government spends about $60 billion a year on special subsidies to businesses and $30 billion on tax breaks for industries. A Congressional Budget Office study found more than 60 tax breaks written into law for specific businesses, 14 of which cost the Treasury more than $1 billion a year each.

While both Democrats and Republicans have backed reform, they come at it from different angles. The GOP generally wants to end government subsidies and loans to businesses; the Democrats want to target the tax breaks those businesses get.

Even with bipartisan support, change will not be easy. Many business leaders balk when someone suggests cutting subsidies to big corporations, even though they saw nothing wrong with revamping welfare and forcing millions of people into poverty.

"Dismantling or reducing these programs [which encourage overseas trade] would amount to unilateral disarmament in the battle for world markets," complains Edmund Rice, executive director of the Coalition for Employment through Exports.

It's too early to know if the corporate welfare reformers will get anywhere. But Ralph Nader was probably right when he predicted "a lot of sparks flying as a result of this effort."

Carl T. Rowan is a syndicated columnist.

Pub Date: 4/28/97

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