THE CORPORATE WELFARE CONGRESS
October 23, 2007
On present trends, the 110th Congress will go down as one of the biggest blowouts in corporate welfare history, says the Wall Street Journal.
Agribusiness is one of the big winners, says the Journal:
- The House has already passed a five-year farm bill with a cost of $286 billion; the U.S. Department of Agriculture (USDA) calculates that two-thirds of these subsidies are directed to the richest 10 percent of farmers.
- On top of the 51 cent per gallon tax credit for the inefficient fuel ethanol, the Senate energy bill requires a doubling of ethanol production from corn, $500 million in new direct payments to ethanol producers, and $2 billion more for loan guarantees for new ethanol refineries.
- The farm bill also requires the USDA to buy up domestic sugar equal to the amount that is imported from Mexico, at the taxpayer cost of $1.4 billion.
Federal insurance is another big handout:
- The House has passed a bill that replenishes a flood insurance fund, which, according to the National Taxpayers Union, could cost taxpayers $100 billion in future losses.
- The House also approved a new federal terrorism backstop for developers at an estimated 10-year cost of $10.4 billion.
- The original terrorism insurance bill was supposed to be temporary; but under pressure from business lobbies and insurers, industry won a 15-year extension covering up to 90 percent of terrorism-related losses.
Another big winner is the "renewable" fuels industry, says the Journal:
- Energy bills moving through Congress tax oil companies and pass most of the $25 billion or so in expected revenue to wind, solar and Midwestern biofuels companies, even though private venture capital for such fuels hit new peaks in 2005 and 2006.
- For 20 years, the feds have poured more than $10 billion into this industry with little reduction in U.S. oil dependence.
Source: Editorial, "The Corporate Welfare Congress," Wall Street Journal, October 23, 2007.
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