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Ending corporate welfare?


Democrats make the claim that poor people are not the only feeders at the government trough. They are right. What they don't say is that the Democrats, who held power for 40 years, were equal opportunity Santa Clauses, giving taxpayer money to every special interest group that asked for it.

The battle now being waged by Rep. John Kasich, R-Ohio, Sen. Spencer Abraham, R-Mich., Rep. Dick Chrysler, R-Mich., and others will determine whether the Republican Party is truly the party of smaller government or not. They are trying to defund "corporate welfare," the web of tax breaks, incentives and subsidies threaded throughout the federal budget that benefits corporations at taxpayers' expense. If Republicans cannot bring themselves to take a serious whack out of these benefactions, the voters will be justified in concluding that the difference between the two parties amounts only to this: Democrats refuse to cut anything, and Republicans will cut only those programs aimed at the poor.

Big spending

The Republican Party has an opportunity to be better than that, and Messrs. Abraham and Kasich are pushing it in that direction.

Did you know that you pay taxes to help McDonald's sell Chicken McNuggets overseas? The government spent $465,000 on it in 1992. U.S. taxpayers also forked over $10 million to promote the sale of Sunkist oranges and $1.2 million to help sell American Legend mink coats. The Market Promotion Program gets $110 million yearly. It strains the imagination to come up with less needy beneficiaries of federal largesse. According to the libertarian Cato Institute, there are 129 spending programs in the budget that benefit business at a cost of $87 million annually.

That's small change. The real money is to be found in tax breaks. It costs taxpayers $3.4 billion to help U.S. companies that do business in Guam and Puerto Rico. The government gives $500 million in tax breaks to companies that produce ethanol; $333 million in tax breaks to the big car makers to help them develop more fuel-efficient models; $2 billion in low-interest loans to electric utility cooperatives in rural areas, the better to provide cheap electricity to such impoverished areas as Aspen, Colo., and Las Vegas, Nev.; $5.4 billion in grants and loans to foreign countries to help them buy U.S. manufactured military equipment and supplies; $451 million to help such companies as Xerox, DuPont and Caterpillar convert basic research into consumer products; and more.

We ought to judge government programs by whether they are necessary.

Most of us don't object to paying taxes to ensure that our streets are safe, (though we're not getting value for money on that at the moment), our nation is defended from foreign threats, our courts are functioning smoothly and our children are educated. But when you go beyond essential functions, you find that government involvement inhibits, rather than creates, prosperity.

Mona Charen is a syndicated columnist.

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