Bill Clinton’s corporate welfare hypocrisy

Over the last two years, Bill Clinton has repeatedly rejected meaningful tax relief for hard-working Americans on the excuse that tax cuts might in some way favor the “rich.”

When he recently vetoed Congress’ “marriage penalty” tax relief bill, Clinton charged it was “the first installment of a fiscally reckless tax strategy.” White House spokesman Joe Lockhart went even further in charging that the tax bill would disproportionately go to the wealthiest Americans.

These statements ring hollow in light of the fact that Clinton’s FY 2001 budget requested a record $66 billion in spending that will directly or indirectly benefit well-heeled businesses or industries _ spending some have coined “corporate welfare.” Indeed, when this amount is combined with the $114 billion in corporate welfare spending contained in the last two Clinton budgets, the three-year total comes to $180 billion _ that’s twice as much as the marriage penalty bill would have returned to taxpayers over five years.

A recent study published by Citizens for a Sound Economy Foundation found that the majority of Clinton’s corporate welfare dollars flow to two agencies, the Department of Agriculture _ $29 billion _ and the Department of Housing and Urban Development _ $16.4 billion. However, dozens of other programs confer vast sums of benefits on wealthy industries without even the slightest pretense of benefiting the public at large.

Some of Clinton’s proposals include:

_$175 million in funding for the Advanced Technology Program, 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.

_A 36 percent increase in subsidies for Small Business Administration loans. Among the questionable 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.

_Nearly $34 million to the Foreign Market Development Program, which gave grants last year to “trade” groups such as: the American Peanut Council ($572,123); the American Soybean Association ($6.97 million); the National Sunflower Association ($269,604); the U.S. Livestock Genetics Export group ($774,145); and, the U.S. Wheat Growers Associates ($6.78 million).

_$90 million to the Market Promotion Program that gives grants to corporate “front” organizations for “generic” marketing. These grants include: $245,526 to Asparagus USA; $57,749 to the Hop Growers of America; $110,344 to the National Watermelon Promotion Board; $3.2 million to the Wine Institute; $891,828 to the Pet Food Institute; $281,867 to the Catfish Institute; and $370,364 to the Popcorn Board.

_$340 million for the International Trade Administration, which last year sponsored “trade promotion” programs such as: Cosmetica ’99 in Sao Paulo, Brazil; Beauty Africa in Johannesburg, South Africa; Fashion Week in Lagos, Nigeria; and Golf Europe ’99 in Munich, Germany.

_$1 billion to the Export-Import Bank to subsidize $15 billion in guaranteed loans. Created in 1935 to promote trade with Russia, the Export-Import Bank now subsidizes the export loans of some of the largest corporations in America. 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.

Four years ago, Washington ended “welfare as we know it” for the poorest of Americans when it passed the Personal Responsibility and Welfare Reform Act of 1996. Lawmakers sent a clear signal to poor people that government assistance would no longer be a one-way handout: work and accountability would be required in order to receive federal aid. The goal was to gradually wean people from dependence to independence.

Sadly, the administration has failed to apply those same standards we now demand of poor people to the businesses and industries who already have the means to stand on their own. To be sure, there are many in the Congress who are just as supportive of this type of spending as is Clinton. But no one in Washington is as hypocritical as Clinton in demagoguing “tax cuts for the rich” one day, then justifying corporate welfare as “investing in the future” the next day.

Its hard to say whether a new administration will have the courage to cut corporate welfare spending. Ironically, we may find that ending “welfare as we know it” for poor Americans may have been a far easier task than will be ending welfare for the wealthiest industries. After all, poor people cannot write substantial checks to political campaigns.


Scott Hodge is director of tax and budget policy at Citizens for a Sound

Economy Foundation. Readers may write to him at: Citizens for a Sound Economy, 1250 H Street NW, Suite 700, Washington, D.C. 20005.

This essay is available to Knight Ridder/Tribune News Service subscribers. Knight Ridder/Tribune did not subsidize the writing of this column; the opinions are those of the writer and do not necessarily represent the views of Knight Ridder/Tribune or its editors.

CARICATURE of Bill Clinton available from Faces in the News on PressLink Online.

(c) 2000, Citizens for a Sound Economy