Top 10 Corporate Welfare Queens
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 by taxpayers and consumers.
10. United States Postal Service (USPS)
The USPS is a monopoly more interested in job protection than efficiency or innovation. Labor costs consume 80% of USPS revenue, while UPS and FedEx spend only 56% and 42% of their revenue on labor, respectively. Reform would allow competition for mailbox and first-class mail service.
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 protectionism costs the economy $1.3 billion a year in higher shipping prices, according to a 1999 study by the International Trade Commission. It’s time to repeal the Jones Act restrictions.
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, public schools continue to decline despite dramatic increases in per-student spending. States should give all students a voucher that allows them to attend the school of their choice.
7. FreddieMac and FannieMae
These are 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. If the real estate market tanks today, taxpayers could be on the hook for billions. It’s time for Freddie and Fannie to grow up and cut the cord.
6. Big Sugar
Uncle Sam gives sugar special status and protects growers from competition through import quotas and marketing allotments. A handful of industrial growers dominate the industry and receive more than $1 billion a year in subsidies from rigged prices, according to the GAO. Congress should end sugar’s sweet deal.
5. Big Cotton
U.S. taxpayers and consumers 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, Tenn., collected more than $186 million from 1995-2004 just in cash payments, according to the Environmental Working Group. Congress should terminate the cotton program.
4. Asbestos lawyers
While trial lawyers of all stripes abuse the legal and political system for personal gain, 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. Congress should pass medical criteria legislation to stop asbestos pillaging.
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 $1 billion a year from federal taxpayers. Amtrak should be completely privatized and opened to competition.
2. Corporation for Public Broadcasting (NPR/PBS)
Big Bird is on welfare, to the tune of about $347 million a year. While taxpayers foot the bills, Sesame Street’s owners make millions from licensing toys and videos. With massive budget deficits and plenty of new channels on cable and satellite radio, it’s time for Big Bird and his buddies to get off the dole.
1. Archer Daniels Midland (ADM)
From ethanol mandates to sugar subsidies, 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.