THE VIRGINIAN-PILOT 
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Thursday, May 18, 1995                 TAG: 9505170276
SECTION: FRONT                    PAGE: A14  EDITION: FINAL 
TYPE: Editorial 
                                             LENGTH: Medium:   57 lines

GOP BUDGETS MUST AX FRIENDS AS WELL AS FOES CUT CORPORATE WELFARE

The test of political courage is not taking hard stands against opponents. That's both easy and rewarding. The test is doing the right thing, even when it offends one's own supporters. By this test, there were disquieting signs from Republican budget makers last week.

The issue is so-called corporate welfare - tens, even hundreds of billions in government subsidies, tax breaks and programs that aid corporations in carrying on already profitable businesses. While there may be cases in which that's justified, it long ago degenerated into a morass of perks and pork.

Conservative think-tanks have identified billions of inessential corporate welfare. The National Taxpayers Union, for instance, would cut $33 billion that includes handouts to well-connected mining, forestry, insurance, banking, energy and agricultural interests.

At a time when tough-minded deficit reduction has finally won popular support, plans call for squeezing services for the poor, seniors and children. Yet easy corporate-welfare targets are not among the top priorities. Why? Probably because the beneficiaries are core Republican constituents who support the party and its candidates with votes and generous contributions.

Whatever the reason, budget planners have flinched. House Budget Chairman John Kasich wanted to make deep cuts, but was pressured to propose only token cuts of $12 billion over seven years.

To justify ignoring the Taxpayers Union, House Majority Leader Dick Armey and whip Tom DeLay have tried to paint it as a dupe of liberal environmentalists for proposing to cut timber and mining subsidies along with public-works pork.

Many subsidies come in the form of tax breaks. Rep. Bill Archer, who presides over the tax-writing Ways and Means Committee, says a plan to close $25 billion in such loopholes won't be allowed to come to a vote. Senate Republicans have rejected an even larger reform that would have cut $60 billion in corporate tax benefits for oil, gas, timber and mining companies.

``They have lost their nerve on tax subsidies,'' a disappointed Robert Shapiro told The Wall Street Journal. His Progressive Policy Institute has pushed for tax reforms that curb such practices.

Republicans have a golden opportunity to shrink government spending and reduce the deficit that threatens to eat our future prosperity alive. The country backs reform if the pain is fairly distributed.

But if Republicans insist on cuts for the disenfranchised while protecting their corporate friends, they risk turning into a self-caricature. Public sentiment could turn against them quickly and harshly. The stakes for the country are too high to permit such pandering. Republicans must show they favor belt tightening, not just for those already on short rations but for fat cats too. by CNB