If you've eaten a Tootsie Roll,
Story by Gayle Worland
Spurred by last year's success in Congress to block efforts to double appropriations for the Overseas Private Investment Corporation (OPIC), the group met through the fall and winter to draw up a list of 12 programs for reduction or elimination. The coalition estimated the cuts would save $11.5 billion over five years.
On March 12, the 57 members of the Progressive Caucus — including U.S. Reps. Lane Evans, Jesse L. Jackson Jr. and Luis Gutierrez of Illinois — upped the ante further, announcing a $240 billion list of "most wanted corporate welfare and fat cat cuts."
Threats to "Aid for Dependent Corporations," as some editorial writers call it, have become political currency on both sides of the political aisle. Not just money is at stake, advocates say.
"It's not waste," says Kasich spokesperson Bruce Cuthbertson. "We call it 'corporate welfare.' In an era when we have reduced welfare benefits for people with limited means ... it's a question of fairness," he explains. "It's unfair to have welfare reform only for people without lobbyists, and to not have welfare reform for those with lobbyists. Everybody has to be in the box."
Overall, government spending to promote commerce tops $28 billion a year, according to a 1995 study by the Congressional Budget office. Tax breaks for specific businesses may cost more than an additional $1 billion a year.
Kasich and his coalition have proposed cuts that would directly affect Illinois, such as the Department of Energy's plutonium processing program at Argonne National Laboratory at its sites in northeast Illinois and in Idaho. Environmental groups charge the program, designed to reprocess hazardous nuclear wastes, costs taxpayers at least $50 million a year, poses environmental hazards and raises the risk of proliferation.
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All these issues will affect residents of Illinois, says Courtney Cuff of the Washington-based group Friends of the Earth. The organization's annual "Green Scissors" report points to some 57 environmentally risky corporate subsidy programs costing $36.4 billion, including the 1872 Mining Act, a century-old law that allows mining companies to pay a small fraction of the value of minerals found on public lands; and a Forest Service program that builds woodland roads used by the timber industry. According to the Public Interest Research Group and the General Accounting Office, the U.S. Forest Service — and thus taxpayers — wrote off $1.4 million from 1992-94 for forest management programs in the Shawnee National Forest that ultimately benefited the timber industry. We don't merely pay at the front end, says Cuff. "We also pay for the cleanup."
Rep. John Porter, a Wilmette Republican, is a longtime supporter of the "Public Subsidies Deficit Reduction Act," designed to reduce tax dollars that provide businesses with cheap minerals and timber, subsidized water and other benefits. The current bill, several incarnations of which have previously failed in Congress, would require higher returns on land leases for oil, gas, minerals and livestock grazing, and would charge full costs for federal water used to irrigate surplus crops.
Illinois' Evans also has introduced corporate subsidy-related legislation that would cut loopholes allowing U.S. companies with foreign subsidiaries to shift income to their overseas operations, thus avoiding domestic income taxes.
One of Illinois agriculture's most sacred Washington cows — tax breaks for the ethanol industry — is not threatened under the coalition's plan. But cutting business subsidies — even when they're in someone else's district — is not always easy for members of Congress. "You may be in favor of eliminating corporate welfare in general. But if you're in a district with a lot of forests, for example, it may be hard to explain to the taxpayers in your district that you're voting to cut funds that would help build roads through those forests," says Gene Guerrero of Public Citizen, a pro-consumer interest group in Washington.
Public Citizen and the pro-market Competitive Enterprise Institute (CEI) are only two of the strange bedfellows to join Kasich's diverse coalition. CEI agrees that the debate over corporate subsidies is both "a moral and a market one," says the institute's Fred Smith. He points to OPIC, which provides loans and insurance to American companies that invest in developing countries — including, among others, a not-so-struggling restaurant chain in Oak 'Brook called McDonald's. Smith argues that government doesn't pay insurance premiums for the private individual; why should it insure businesses against loss in risky overseas markets? "Why is government involved in insurance at all?" he asks, adding that OPIC "has a good chance of going down."
Likewise, Smith compares the government's Market Access Program, which provides businesses with overseas advertising dollars, to the shopkeeper who throws $100 bills out the window in order to draw people into the store. Some American businesses who are trying to increase foreign trade argue government should pitch in and do its share. But, "It's not an efficient way of doing business," counters Smith. "Americans know how to sell goods abroad; get out of the way and let them do it."
Legislation from Kasich's coalition was scheduled to be introduced last month.
"All these projects are extremely complex," so no legislative deadline has been set, Cuthbertson explains. Even if primary legislation fails, the cuts may take hold in the appropriations process when each program is examined for funding, he says.
Despite the broad range of supporters, cutting subsidies doesn't appeal to everyone. "It's like campaign finance reform in a way," says Guerrero of Public Citizen.
"You have a lot of big money spending money to defend these programs that we call corporate welfare."
Gayle Worland is a Rock ford native now living in Washington, D. C. Her free-lance pieces have appeared in several publications, including Illinois Times and the Washington Post. Her most recent article for Illinois Issues was a profile of Illinois' U.S. Sen. Richard Durbin.
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