Yesterday, Bill Clinton foolishly called on the country to use the bank robber Willie Sutton’s maxim to address the debt "crisis" (which, in my opinion, is a phony crisis) by going where the money is. Foolish because Clinton pointed the finger at entitlements. But, the real place where the money is lies with the massive amounts of CORPORATE WELFARE clogging the budget to the tune of trillions of dollars.
Here is one great new example from today, to go along with a more detailed list below. Today’s Wall Street Journal reports:
A new Pentagon forecast showing the total cost of owning and operating a fleet of F-35 Joint Strike Fighters topping $1 trillion over more than 50 years has caused a case of sticker shock in Washington.
And that price tag doesn’t even include the $385 billion the Defense Department will spend to purchase 2,500 of the stealthy planes through 2035[emphasis added].
Let that sink in. Almost $1.4 trillion to buy and operate a bunch of jets that are over-priced, behind schedule and, most important, by many accounts, not needed. By contrast, in 2011 dollars, as the Journal article cleverly points out in a related graphic, the entire cost of the whole interstate highway system (which is in dire need of repair) was $213 billion over 40 years.
Why is this corporate welfare? Because defense contractors, and their allies in the Pentagon, pushed for different versions of the plane for the Navy, Army and Marine Corps–and sought to get a second type of the engine built, though Congress cut the funding for that engine, though we’ll see if this lasts:
Congress voted to strip federal funding for a jet engine the President doesn’t want and the Pentagon says it doesn’t need. The second engine for the F-35 Joint Strike Fighter has long been viewed by good-government groups as the prime example of government spending and pork barrel politics run amok.
But, the larger point is this: we are pouring hundreds of billions of dollars into corporate pockets, draining dollars needed to keep the country healthy and put people to work.
Yes, this is in part a guns-versus-butter argument. And I certainly believe that putting tens of thousands of people back to work rebuilding our country’s roadways and infrastructure is a far better use of money than manufacturing a new generation of killing machines.
BUT…someone can be a rock-ribbed national security hawk and still be able to say, "this is a debate about corporate welfare vs. the smart use of money for the country".
We should be cutting corporate welfare first because we should always try to use money wisely and more productively–and our tax dollars should not be used to subsidize outlandish CEO salaries and benefits.
There is a lot of celebrating underway in Democratic Party circles about the triumph in the New York House race. Geniuses: they figured out how to actually speak about Medicare as a societal right and obligation to voters across the political spectrum.
But, what is missing is a louder, clear message to take on corporate welfare. Corporate welfare must go, not Medicare (and not schools, roads, jobs).
We need to take the TWO TRILLION DOLLARS in corporate welfare we are now wasting–even without talking about raising taxes on the rich (which we should do), enacting single-payer health care (which would save hundreds of billions of dollars and be the easiest way to shore up Medicare) and ending immoral wars–and put it to productive use starting with a 21st Century WPA project::
End Big Oil and Big Gas Tax Breaks
2011-2015 savings: $80 billion (Taxpayers for Common Sense).
Big Oil has made almost $855 billion in profits in the past decade. There is no need to give such a profitable industry a tax break.
End Deferral of Taxes on Income of U.S.-Controlled Corporations Abroad
2011-2015 savings: $199 billion (Citizens for Tax Justice estimate).
Encourages off-shoring of work and capital.
End Accelerated Depreciation on Equipment
2011-2015 savings: $141 billion (CTJ estimate).
Accelerated depreciation can result in a very low, or even negative, tax rate on profits from a particular investment.
End Deduction for Domestic Manufacturing
2011-2015 savings: $76.7 billion (CTJ estimate).
Provides virtually no benefit to the economy and is blatant corporate welfare.
End Last-In, First-Out Accounting (LIFO)
2011-2015 savings: $24.2 billion (CTJ estimate).
Corporations use LIFO to hide their true profits.
Cut Subsidies to Big Agribusiness
2011-2020 savings: $52 billion (Taxpayers for Common Sense).
Small farms are disappearing while big agri-business racks up huge profits—with corporate welfare support.
Permit Government to Negotiate Drug Prices for Medicare.
Savings 2012-2021: $157.9 billion. (Congressional Progressive Caucus).
Barring government involvement is an indirect corporate subsidy.
End Tax Breaks For Drug Companies.
2011-2020 savings: $50 billion (estimated based on figures from Rep. Jerrold Nadler).
Stops a $5 billion-a year annual tax break for direct-to-consumer advertising. We should pay for drug companies to market to us?
Enact A Financial Crisis Responsibility Fee.
2012-2021 Savings: $70.9 billion (Congressional Progressive Caucus).
Imposed on largest banks as a repayment of corporate welfare extended via bank bailouts for financial crisis precipitated by banks.
Enact a Derivatives and Speculation Tax.
2012-2022 savings: $650 billion (Congressional Progressive Caucus).
Wall Street receives indirect corporate welfare/subsidies via a regulatory system and infrastructure investment for which it pays virtually nothing. A very tiny transactions tax will end the corporate welfare.
Cut Military Budget
2011-2020 Savings: $550 billion (Sustainable Defense Task Force).
According to the Task Force, weapons research, development, and procurement activities…“now routinely cost taxpayers over $200 billion a year. Procurement costs are up 110% in real terms since 2000. Setting aside war-related expenditures, DoD “peacetime” spending on research, development, and procurement has increased 75% in real terms.” This focuses only on the Task Force’s cuts that reasonably have a “corporate welfare” component, primarily weapons systems that don’t work and/or aren’t needed to fight an enemy that does not exist.
