Chipping Away At Corporate Welfare
March 7, 2001
Over the past 20 years, through Democrat and Republican administrations, the federal corporate welfare budget has grown as corporate subsidies, bailouts, tax expenditures, loan guarantees and marketing assistance have grown.
While the Bush administration shows no sign of a wholesale reversal, observers do see hopeful signs that the trend may be somewhat curtailed. Funding cutbacks are in store for the Overseas Private Investment Corp., the Export-Import Bank and the Advanced Technology Program.
- The budget proposes a 25 percent cutback for the Ex-Im Bank, which provides loans and loan guarantees to assist foreign buyers purchasing U.S. exports.
- It would eliminate 2002 budget support for OPIC, which provides insurance against currency fluctuations, political risk and other uncertainties for overseas investments by U.S. firms.
- The budget would suspend funding for ATP, which supports research and development efforts of private corporations.
Critics argue these are positive steps, because OPIC and Ex-Im put the federal government in the role which ought to be filled by private lenders and insurers, forcing taxpayers to bear the risk that should be absorbed by business.
The next target, critics believe, should be the Partnership for a New Generation of Vehicles (PNGV), a Clinton-era partnership between 20 federal laboratories, seven federal agencies and the big three car makers to develop a fuel-efficient "supercar" -- a project the vastly rich auto industry could easily manage on its own.
Source: Ralph Nader and Robert Weissman, "Ending Corporate Welfare As We Know It," Wall Street Journal, March 7, 2001.
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