THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Sunday, August 27, 1995 TAG: 9508250019
SECTION: COMMENTARY PAGE: J4 EDITION: FINAL
TYPE: Editorial
LENGTH: Medium: 57 lines
The federal budget needs to be balanced and Republicans were given power because they seemed intent on doing the job. Legislators have been gung-ho about reducing spending for so-called liberal programs. But they have flinched from imposing similar discipline on handouts to big business. Protection of corporate welfare continues to mar the record of the new Republican Congress for fiscal responsibility.
According to figures from the Office of Management and Budget and the Joint Committee on Taxation compiled by The Washington Post, the federal government spent $51 billion last year on direct subsidies and $53 billion more on tax breaks for selected businesses.
Among the many boondoggles is the Agricultural Marketing Promotion program that pays for overseas advertising for corporate giants such as Campbell Soup, Pillsbury, Sunkist and MacDonalds that ought to be able to pitch their own products without resort to government largesse.
Another notorious program is the Section 936 tax credit that gives U.S. companies an incentive to move jobs to Puerto Rico. A third is the Export-Import Bank that provides below-market loans for prosperous exporters like GE, Motorola, Boeing and AT&T.
The libertarian-conservatives at the Cato Institute think government has no business supplanting the market by picking winners and shouldn't tax individuals to pay for subsidized loans, low-cost insurance, tax breaks and other benefits for big business. Cato believes $500 billion could be cut from the federal budget over 7 years in corporate welfare.
Chairman of the House Budget Committee John Kasich, R-Ohio, began the budget process with more modest aspirations. He wanted to cut $15 billion a year in subsidies and $25 billion in special-interest tax loopholes. His seven-year goal was $100 million in savings - just a fifth what Cato says could be achieved.
So how has Kasich's less ambitious proposal fared? The House agreed to cut just $1.5 billion from subsidies - a tenth of what Kasich hoped for. And the tax-writing Ways and Means Committee of Rep. Bill Archer, R-Texas, refused to cut a single dollar of the $53 billion in annual tax breaks. Archer claims eliminating loopholes is really just a tax increase, but it would save money for ordinary Americans who must now foot the bill for corporate tax breaks.
That gives the new Congress a lopsided and embarrassing record. There's no question the federal deficit needs to be cut, but the burden of bringing the budget into balance should be shared.
Yet, while Congress proposes zeroing out some programs and placing substantial curbs on Medicare, Medicaid and welfare, it could only bring itself to trim corporate welfare by 1.5 percent. What's happening on Capitol Hill looks less like a revolution than like business as usual, where the friends of the party in power prosper while others pay the price. by CNB