Corporate welfare hurts public When big business buys political access, taxpayers foot the bill

July 19, 1998|By ANN McBRIDE

As the House of Representatives takes up campaign finance reform, some people may wonder, "What's the big deal?" "Why does this matter to me?"

Let me tell you why campaign finance reform matters and why - as the kids say these days - it matters "big time."

Put simply, the current corrupt campaign finance system means you pay higher taxes.

How? Under the current system, corporations and other powerful special interests are allowed to funnel huge campaign contributions through the political parties to buy access and influence with elected officials in Washington. Politicians get big bucks for their campaigns, corporations get the special breaks they seek and the American people are left holding the bag.

The huge, unlimited, unregulated contributions flooding the political system are called "soft money" and the special tax breaks and other benefits big business receives in return are called "corporate welfare."

The link between soft money and corporate welfare not only guarantees a higher bill for average taxpayers, but in some cases undermines public health, degrades the environment and increases costs to consumers.

Not surprisingly, corporate welfare often - too often - goes to the companies that are among the biggest political contributors and especially those that have contributed millions in soft money. Here are six examples.:

* Logging Boondoggle: The U.S. Forest Service purchaser road credit program since 1991 has given the timber industry a $458 million subsidy to build logging roads in national forests. When I explain in speeches around the country that the American people subsidize industry to cut down trees in our national forests, many in the audience stare back in stark disbelief.

In 1997, the Clinton budget targeted the logging subsidy for elimination. Fiscal conservatives dubbed the subsidy corporate welfare and "food stamps for the timber industry." Environmentalists charged that the vast network of existing forest roads - more than twice the size of the national highway system - causes erosion, increases flooding and destroys wildlife and fish habitats.

But timber interest lobbyists roamed Capitol Hill lobbying for the program - backed up by more than $8 million in political contributions since 1991, including $2.7 million in unregulated soft money contributions.

The result: Congress not only saved - but expanded - the timber industry's logging subsidy - a subsidy paid for by the American taxpayer.

* Subsidizing ADM: Archer Daniels Midland (ADM), its subsidiaries and the family of ADM Chairman Dwayne Andreas have given more than $3 million in soft money contributions to the national political parties since 1988 - more than $2 million to Republicans and more than $1.1 million to Democrats - to protect the huge government subsidy for a corn-based fuel additive called ethanol. ADM is the nation's largest producer of ethanol.

By giving huge contributions to Democrats and Republicans, ADM makes clear that these contributions are not about ideology, beliefs or who wins the election. ADM contributions are given to guarantee that no matter who wins, ADM will have a place at the table - and access and influence in Washington.

ADM's double giving has paid off. In 1995, the conservative Cato Institute described ADM as "the most prominent recipient of corporate welfare in recent U.S. history. I At least 43 percent of ADM's annual profits [are] from products heavily subsidized or protected by the American government."

Even after pleading guilty to price-fixing and in 1996 paying the largest-ever government fine in a federal anti-trust case, ADM continues to benefit from corporate welfare.

Even after studies showed that ethanol does little to reduce pollution or to reduce our reliance on foreign oil, ADM continues to benefit from corporate welfare.

The large transportation spending bill passed by Congress in May extends the tax credit for ethanol through 2007. That tax subsidy, according to the General Accounting Office, has cost more than $7 billion since 1979 - and taxpayers are footing the bill.

* Special Deal for Amway: Buried in last year's budget and tax deal is a lucrative lobby victory for Amway Corp. Since 1991, Amway its corporate officers and affiliated donors have given more than $4 million in soft money - all to Republicans - including the largest single contribution ever, of $2.5 million. When Amway lobbies, Congress listens. That's why Amway was able to secure an obscure foreign investment provision that primarily benefits Amway and its shareholders and promises to be worth millions of dollars - millions of dollars at the expense of American taxpayers.

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