U.S. Stuffed Pig Symbolizes Fight Against "Corporate Welfare"
A stuffed toy in the shape of a pink pig with a green dollar sign on its side has become the unofficial mascot of a coalition opposed to the use of public funds to subsidize private corporations.The "Stop Corporate Welfare" coalition -- which includes politicians from both major U.S. parties and a range of free-market, anti-government, environmental, and consumer-rights organizations -- have unveiled a "dirty-dozen" list of corporate subsidy programmes it wants Congress to do away with. The resulting savings, the groups say, will amount to some $11.5 billion over five years -- a modest dent in federal corporate welfare spending.Some 125 federal programs subsidize big business to the tune of 85 billion dollars a year, with an additional 30 billion dollars a year in tax breaks, according to studies by the Cato Institute, a free-market think tank, and the left-wing Progressive Policy Institute.The groups' targets include the U.S. government's Overseas Private Investment Corporation (OPIC), as well as U.S. contributions to the International Monetary Fund's (IMF) Enhanced Structural Adjustment Facility (ESAF) and an IMF reserve line of credit.This week's coalition press conference, called by Republican Rep. John Kasich, chairman of the House of Representatives budget committee, was followed by an announcement from Senators John McCain, a Republican, and Russell Feingold, a Democrat, that they were reviving a bill to create a Corporate Subsidy Reform Commission.The nine-member commission would "comprehensively review, reform, and terminate inequitable federal subsidies to profit- making industries," according to a summary of the bill. The initiatives drew immediate fire from supporters of the IMF and OPIC, which provides loans, loan guarantees, and political risk insurance to U.S. firms investing in developing countries. Deputy treasury secretary Lawrence Summers dismissed the argument that U.S. participation in the IMF's ESAF and General Arrangements to Borrow (GAB) was a waste of taxpayers' money. Rather, it "saves U.S. taxpayers money by leveraging the contributions of other (countries) and promoting what Republicans and Democrats agree on -- trade liberalization, privatization, and competition," he was quoted as saying.The ESAF provides concessional loans to the poorest nations struggling with structural adjustment programs so they can keep up with debt payments -- including those to U.S. banks and corporations. GAB was set up by the IMF's wealthiest members so the agency has reserves it can borrow from to make emergency loans to them or, if they agree, to other IMF members when its own liquid assets are insufficient.Attempts to eliminate OPIC -- which has been fighting for its life since last summer -- amount to "unilateral disarmament in the battle for world markets," said Edmund Rice, executive director of the Coalition for Employment through Exports, a group of private exporters.Japan, Germany, France, Britain, and other rich countries maintain government export-assistance programs. These have faced increasing criticism, however. Development groups have opposed such programs as promoting donors' corporate interests -- usually in extractive industries and export-processing zones -- at the expense of local economies and environments.Free-marketeers who say they favor open competition and oppose government bureaucracy and regulations, have blasted such programs as trade-distorting "dinosaurs" that refuse to die. Up to 75 percent of the equity in OPIC-financed projects may be foreign, consumer advocate and coalition member Ralph Nader told journalists. "In 1995, OPIC provided loans to projects owned in part by companies from countries including Russia, Colombia, Jamaica, and Ghana," he said.Although Nader's comments were intended to highlight a difference between corporate and social welfare programs -- the latter designed for U.S. citizens -- they served to raise another question for some observers: How will this news be received in developing countries?The coalition now faces a tough fight against corporate lobbies that have beaten back previous attacks and tenaciously held on to their government "pork."Nevertheless, Stop Corporate Welfare members say they are optimistic about their chances of drastically reducing -- if not eliminating altogether -- some 11.5 billion dollars in corporate welfare spending over five years."We have not always been able to match our actions with our lofty rhetoric," Kasich admitted.But coalition members say public anger about corporate welfare has been building. This, coupled with perceptions that the Republican-majority Congress is too intimate with corporations and sustained pressure to close the federal budget gap, should help them push through specific legislative action to cut or kill corporate welfare payments."This welfare for wealthy companies wastes taxpayer dollars, harms the environment, and makes a mockery of the recent reductions in federal social spending programs for the poor and powerless," Nader said.In addition to OPIC, the ESAF and GAB, the coalition's targets include: the U.S. agriculture department's Market Access Program, which subsidizes U.S. agribusiness advertising overseas; roads built so timber companies and vacationers can enter national forests; highway demonstration projects; rural electricity and farm irrigation programs; and subsidies for fossil energy research, new coal technologies, and nuclear fuel reprocessing. The list represents a tenuous consensus among groups that are unanimous in wanting to see big cuts in spending programs, but have not reached agreement on what to do about tax loopholes. The Sate bill to create a corporate welfare commission, however, includes provisions to attack both tax breaks and subsidies.