News Release

October 10, 2001

Corporate welfare soars to $87 billion, study shows
Private companies get largest federal subsidies in congressional history

WASHINGTON-As Congress makes its final appropriations for FY 2002 this week and next, keep an eye on the dollars that go to corporate welfare. Those tax dollars are likely to exceed the $87 billion in federal subsidies that went to private companies in FY 2001-the largest corporate welfare budget to date. Some of the private firms that got handouts in 2001 include General Motors, Dow Chemical, Motorola and General Electric.

If that corporate welfare ended, the government could provide U.S. taxpayers with an annual tax cut more than twice as large as the tax rebate checks mailed out this summer, according to Stephen Slivinski, a fiscal policy analyst at the Cato Institute and author of the study, "The Corporate Welfare Budget Bigger Than Ever."

The $87 billion for FY 2001 was doled-down through federal departments and programs and out to the private firms. The departments that are the leading corporate welfare providers are the Departments of Agriculture and Commerce, followed by the Department of Energy. How much did some federal departments give away?

"With large increases in national security spending, not to mention the recently-passed $40 billion in emergency spending and the $15 billion airline bailout, the last thing we need is money wasted on corporate welfare programs," said Slivinski.

Mitch Daniels, director of the Office of Management and Budget, says that it is not the government's role to "subsidize, sometimes deeply subsidize, private interests." A way to end this problem, says Slivinski, is to convene a corporate welfare commission. "That commission could function like the successful military base closure commission. The commission could compose a list of corporate welfare programs to eliminate and then present that list to Congress, which would have to hold an up-or-down vote on the commission proposal. The commission would help reform-minded legislators to end federal subsidies to business."

"The Corporate Welfare Budget"