Corporate Pork - the Sequel

We've said several times that to maintain fiscal discipline, the president and Congress should pay for tax cuts or spending hikes with cuts in other federal-government programs.

Conservatives and liberals alike agree that one area long overdue for cuts is "corporate welfare." The term has many definitions - conservatives would limit it to unfair or needless federal subsidies of businesses, while many liberals would include business tax breaks. But it means big bucks: The Congressional Budget Office pegs corporate welfare at $139 billion a year; the libertarian Cato Institute, $65 billion; the centrist "New Democrat" Progressive Policy Institute, $56 billion.

One obvious way to start the attack on corporate welfare: Eliminate the Department of Commerce. It has become a grab-bag of duplicative programs and failed attempts to pick winners and losers among start-up companies or new technologies. The biggest beneficiaries are often America's largest companies, who need little government assistance. The country needs a weather service, a census bureau, and perhaps a Small Business Administration, but these don't need Commerce to oversee them (not that it does much of that, anyway).

An example of Commerce's wastefulness is the Advanced Technology Program. It's supposed to help develop high-risk technologies that could bolster economic growth. Major beneficiaries include such "needy" outfits as General Motors, IBM, General Electric, and Sun Microsystems.

Elsewhere, several farm commodities continue to get government price subsidies even after the 1996 reform of federal agriculture programs. Most egregious is the sugar subsidy, which pays 33 cane growers more than $1 million a year each, with one getting $65 million. Some 58 percent of the benefits go to fewer than 1 percent of the nation's sugar growers. Both the sugar subsidy and that for peanuts, which keeps the domestic price 74.3 percent higher than world prices, should go.

Likewise, dropping dairy subsidies, which haven't and won't stop the decline in the number of dairy farmers, would save $300 million a year. (Besides, poor people would pay less for milk.)

Then there's a pipeline of programs at the Energy Department, which has spent billions on supposed new energy technologies with little to show for it.

The list goes on and on. The reason little gets done about corporate welfare is pure politics: One person's corporate subsidy is another's essential program, making it tough to tackle the problem.

A proposed solution is to create a Corporate Welfare Elimination Commission. Like the now-defunct, but very successful military-base-closing commissions, it would have a deadline to identify a package of corporate-welfare programs to be eliminated. Congress would then have to vote up or down on the package as a whole, making it harder for pork to slip by.

Corporate welfare costs the government and every taxpayer dearly. Such a commission would be a good start towards trimming the bill.

(c) Copyright 1999. The Christian Science Publishing Society

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