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Press Release

    Issue Analysis 105 - Bill Clinton's $ 66 Billion Corporate Assistance Budget: It's Time to End this Welfare as We Know It

    06/08/2000

    Issue Analysis 105

    While repeatedly rejecting meaningful tax relief for hard working Americans on the phony excuse that tax cuts might in some way favor the “rich,” this administration has proposed a record $66 billion in corporate welfare spending. That’s a 10 percent increase above current year’s level and a 20 percent increase above the amount spent on corporate welfare in FY 1999.
    The majority of Clinton’s corporate welfare dollars flow to two agencies, the Department of Agriculture (USDA) - $29 billion – and the Department of Housing and Urban Development (HUD) - $16.4 billion. However, dozens of other programs confer vast sums of benefits on wealthy industries without even the slightest of pretense of benefiting the public at large.
    Some of the proposals in Clinton’s FY 2001 budget include:

    A 23 percent increase in funding for the Advanced Technology Program (ATP), to $175 million, which gave a $2 million grant last year to PPL Therapeutics, Inc., a British-based company, to clone pigs in order to provide organs for human transplant. PPL is best known for cloning Dolly the sheep.

    15 percent increase in Small Business Administration (SBA) loan guarantees (to $18 billion) and a 36 percent increase in subsidies for those guaranteed loans (to $194 million). Among the undeserving loans SBA doled out last year: $4.2 million in loans to 23 pawn shops; $21 million in loans to dozens of golf clubs, yacht clubs, and riding stables; $177 million in loans to more than 2,000 doctors, lawyers, dentists, and chiropractors; and, $550 million in loans to more than 1,800 franchises of some of the largest multinational conglomerates in the world.

    More than $72 million to subsidize $960 million in direct loans under the Export-Import Bank (Eximbank). This direct loan request - 27 percent larger than FY 2000 - claims the administration, is needed to “partially offset the higher risks, and costs, of international lending” and to “finance exports to riskier markets.” Eximbank hardly needs to take on more risk. Currently, the Bank has nearly $8.3 billion in outstanding direct loans and $30 billion in outstanding guaranteed loans. In 1999, it wrote off $1 billion in defaulted loans and is expected to write off $425 million in loans in FY 2001.
    Ending “welfare as we know it” for poor Americans has proven far easier than ending welfare for the wealthiest of industries. After all, the poor cannot write substantial checks to political campaigns.

    For a copy, Call 202 942 7611 or email adowney@cse.org