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May 1, 1997
Briefing Paper no. 28

Federal Aid to Dependent Corporations: Clinton and Congress Fail to Eliminate Business Subsidies

by Dean Stansel and Stephen Moore

Dean Stansel is a fiscal policy analyst and Stephen Moore is director of fiscal policy studies at the Cato Institute.

Published on May 1, 1997

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p align="center">Executive Summary

The federal government currently spends more than $65 billion a year on programs that provide subsidies to American businesses. Both Congress and the White House have pledged to attack that pervasive corporate safety net. Those promises have been largely unfulfilled.

In this study we examine the funding levels for 55 of the most easily identifiable corporate subsidy programs in the federal budget. In 1995 Congress reduced corporate welfare spending by about 15 percent. In 1996, of the $37.7 billion budgeted for these subsidies, Congress increased spending by about $500 million, or by 1.3 percent.

Dean Stansel is a fiscal policy analyst and Stephen Moore is director of fiscal policy studies at the Cato Institute.

The Clinton administration had been a fervent defender of taxpayer aid to American industry. Last year, the White House requested a 3.6 percent hike in funding for corporations. In this year's budget request, the president has called for further increases. Sixteen programs would receive an increase of 10 percent or more. Eight would see their budgets go up by 20 percent or more.

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