Corporate Welfare – The Bankrupting of America
The Corporate Welfare Program is not a recent addition to our government’s frenzied spending and it is definitely not solely the responsibility of President Obama, although he has made no effort to reign in this fiscal monster. The responsibility for this malfeasance rests equally with both political parties and in particular with each individual Senator or Congressman who voted for continuation or funding of this abhorrent behavior in an attempt to buy votes or curry favor through the use of your tax dollars.
We live in a capitalistic free market society, where some businesses survive and thrive while others fail, based solely on fair competition. Corporate welfare in the form of subsidies and direct payments to private companies, state governments, and business sectors has perched us on the edge of the fiscal cliff and has us picking up speed in our descent into mediocrity. The scope of federal subsidies has greatly expanded in recent decades, along with the size of the federal budget. The federal government subsidizes as of April 2011, according to the Cato Institute, more than 2,000 separate subsidy programs, including farm businesses, school lunches, rural utilities, the energy industry, rental housing, public broadcasting, job training, foreign aid activities, foreign purchases of weapons, urban transit services, and many other types of activities and people.
In fact the Congress has been recently grappling with how much of our tax dollars should be spent on the Farm Bill. Just to put things in proper perspective, according to the Maryland PIRG Foundation about 75 percent of the farm subsidies go to just 3.8 percent of farmers. The subsidies support just a few commodity crops, including corn and soybeans. Corn and soy crops are processed into high fructose corn syrup and vegetable oils used in junk food. Between 1995 and 2011, $18.2 billion in tax dollars subsidized four common junk food additives – corn syrup, high fructose corn syrup, corn starch, and soy oils (which are processed further into hydrogenated vegetable oils). One could easily make the argument that our childhood obesity problem is a result of cheap junk food produced by federal subsidies.
Each subsidy program costs money, generates a bureaucracy, spawns lobby groups, and encourages more people to demand freebies from the government. Congress has undertaken many activities that were traditionally reserved under the Tenth Amendment to state and local governments through the “grants-in-aid” programs. Grant programs are subsidies that are combined with federal regulatory controls to micromanage state and local activities. In fiscal 2011, federal aid to the states totaled about $625 billion, which was distributed through more than 1,100 separate programs. The theory behind grants-in-aid is that the federal government can operate programs which it considers to be in the national interest in order to solve local problems. Sounds good in theory by fails in practicality because federal politicians become consumed by the desire to maximize subsidies for their states, regardless of efficiency, fairness, or overall budget limitations. As with most federally run programs, grants-in-aid does nothing more than create a self perpetuating web of complex federal regulations that destroys state innovation.
At all levels of the federal aid system, the focus is on regulatory compliance and spending, not on delivering quality services. Policymakers need to revive federalism and begin to terminate grant programs. There is no reason why local activities should not be funded at the city or county level. As published by our government’s own web site, grants have been awarded for fiscal year 2012 totaling $426.8 billion with $18.6 billion to the Pennsylvania Department of Public Welfare, $6.7 billion to the Wisconsin Department of Health Services, $6.4 billion to the Michigan Department of Community Health, $831 million to the Illinois Department of Commerce and Economic Opportunity and the list goes on. Is it just me or is there a pattern emerging concerning blue states and battleground states?
Also as reported by the same government web site, direct payments in addition to the grant program, have been projected for fiscal year 2012 totaling $719.8 billion. That is a total of $1.45 trillion of our tax dollars being doled out to corporations, individuals, and local governments without any appreciable return to the taxpayer. These numbers do not include subsidies given in the form of tax credits such as those provided to the major oil companies. The average annual support for the oil and gas industry alone has been $4.86 billion.
As our elected officials posture and make speeches concerning the upcoming cuts to our Nation’s defense programs and what action is needed to avoid sequestration, one only has to look as far as the government give away programs to solve the dilemma. When one understands that our government spends more on subsidies and direct payments for corporate welfare than it does on the much debated social welfare programs then there is a problem that needs to be immediately addressed.
It is time we returned to federalism by returning the control and funding of state programs back to the states and ending the preferential treatment afforded to certain corporations and business sectors through what is nothing more than a Corporate Welfare Program. We as taxpayers have the right and responsibility to hold our elected officials responsible for this unacceptable behavior and we should reflect our displeasure with their conduct in the voting booth on November 6, 2012.