Top Ten Welfare Queens, 2006
A shorter version of this piece originally ran in Human Events.
These organizations grow fat and rich thanks to special treatment from the federal government. They manipulate the political system to get insider deals, government guarantees, fixed prices and other benefits, paid for courtesy of the taxpayers and consumers. These groups may not be able to stand on their own in the marketplace, but they are the best in the business of lobbying for favors and protection.
1. Archer Daniels Midland (ADM). From ethanol mandates to sugar subsidies (which drive up prices for corn syrup) ADM is a case study in corporate welfare. New studies show that it takes more fossil energy to create corn ethanol than the fuel provides – but Congress is doubling the amount we have to buy anyway.
2. Amtrak. Passenger railroads are a failure in America, and the Amtrak monopoly is the reason. Feather-bedding union rules and money-losing routes to nowhere are the hallmarks of this national embarrassment, which burns through more than a billion dollars a year from federal taxpayers. Amtrak should be completely privatized and opened to competition.
3. Corp. for Public Broadcasting (NPR/PBS). Big Bird is on welfare, to the tune of about $347 million a year. While taxpayers pay, Sesame Street’s owners make millions from licensing toys and videos. With massive U.S. budget deficits, and plenty of new channels on cable and satellite radio, its time for Big Bird and his buddies to get off the dole.
4. Asbestos lawyers. While trial lawyers of all stripes abuse the legal and political system for personal game, the asbestos litigation attorneys are a special breed. Runaway asbestos lawsuits have already bankrupted more than 70 American manufacturers, destroying 60,000 jobs and costing billions. Yet most of the litigants aren’t sick and the lawyers and court costs take a majority of the awards. Congress should pass medical criteria legislation to stop asbestos pillaging.
5. Big Cotton. The U.S. taxpayer and consumer provide billions of dollars to cotton growers through a numbingly complicated array of programs (that violate U.S. trade agreements.) One company, Allenberg Cotton of Cordova, Tennessee, collected more than $186 million from 1995-2004 just in cash payments, according to the Environmental Working Group. Congress should terminate the cotton program.
6. Big Sugar. Like cotton, Uncle Sam gives sugar special status and protects growers from competition through import quotes and marketing allotments. A handful of industrial growers dominate the industry and receive over a billion a year in subsidies from rigged prices, according to the GAO. Congress should end sugar’s sweet deal.
7. FreddieMac and FannieMae. These are a quasi-government companies that purchase wholesale mortgages, but unlike most investment banks they get special government loans and are backed by an implicit federal guarantee. Remember the S & L banking scandal from the 1980s? If the real estate market tanks today, taxpayers could be on the hook for billions once again. It’s time for Freddie and Fannie to grow up and cut the cord from Uncle Sam’s pocketbook.
8. National Education Association (NEA). The ultimate monopoly is America’s K-12 government schools, and the NEA is the gatekeeper that opposes almost any reform. Sheltered from competition, American public schools continue to decline despite dramatic increases in per-student spending. States should give every student a public voucher that allows them to attend the government or private school of their choice.
9. Maritime Shippers and Unions. The Jones Act mandates that all cargo shipped between U.S. ports—including deep-water shipping to Hawaii and Alaska– must be carried on U.S.-built and flagged- vessels. That’s a form of protectionism that costs the economy $1.3 billion a year from higher shipping prices, according to a 1999 study by the International Trade Commission (ITC). It’s time to repeal the Jones Act restrictions.
10. The USPS. Our Postal Service is a monopoly more interested in jobs protection than efficiency or innovation. Labor costs consume 80 percent of USPS revenue, while UPS and FedEx spend only 56 percent and 42 percent of their revenue on labor, respectively. Reform would allow competition for mailbox and first class mail service.
