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Corporate Welfare

Private companies and entrepreneurs should be able to make their profits based on the value they create for society, not through government granted privileges and special favors. This cronyism or corporate welfare only results in less innovation and low economic growth.

 

Corporate welfare can come in the form of business subsides, regulatory preferences, counterproductive tax preferences, and protectionism, which, together, encourage businesses to focus less on their customers and more on securing government favors. Lobbying is now the new vehicle through which big business seeks taxpayer funds instead of innovating and providing value for the consumer. I will fight to end this type of cronyism in Washington.

 

A 2012 study from the Cato Institute estimated that “corporate welfare in the federal budget costs taxpayers almost $100 billion a year,” and this cost is presumably much higher today.

 

President Trump promised to “drain the swamp” but has not addressed one of the biggest issues that increase the size of the swamp, corporate welfare. The Jones Act is an example. This law, dating back to 1920, requires that all goods transported by water between U.S. ports be carried on U.S.-flag ships, constructed in the United States, owned by U.S. citizens, and crewed by U.S. citizens and U.S. permanent residents. In October 2013, when asked about waiving the Jones Act so Puerto Rico could get the necessary supplies they needed after a Hurricane Maria, Trump said, “We’re thinking about that, but we have a lot of shippers and a lot of people… who work in the shipping industry that don’t want the Jones Act lifted.” This type of cronyism, designed to protect the shipping industry, and is what goes on in Washington every day at taxpayers’ expense.

 

Here are some of the major programs I will cut to eliminate corporate welfare in America:

    • Farm Subsides: The government spends over $20 billion a year on farm subsidies that go mostly to high-earning households. The cuts to farm programs Trump proposed in the 2019 federal budget will not be enough. I will fight to fully repeal all farm subsidies and allow farms to stand on their own feet.
    • The Low-Income Housing Tax Credit: This program provides tax credits to support housing construction but is an inefficient way of promoting affordable housing and costs taxpayers $9 billion a year. Instead of federal subsidies, my solution is to address government-imposed barriers to construction and encourage states to reduce and simplify their building and zoning regulations in order to expand the supply of housing for low-income tenants.
    • Overseas Private Investment Corporation (OPIC): This government agency promotes investment in developing nations by providing taxpayer-backed loans and loan guarantees, subsidizing risk insurance from political interference such as terrorism and coups. They have lost billions of dollars in exposure to losses on defaulted loans and insurance claims. Their practices reduce economic output by shifting resources from productive uses to politically favored ones and their beneficiaries are very concentrated, with their largesse only going to a small group of large multinational entities.

Some additional programs I will cut: the Market Access Program, Economic Development Administration, TIGER grants (National Infrastructure Investment Grants), Essential Air Service Program, Amtrak Subsidies, Sugar Subsides, Airport Grants, Universal Service Fund and so many more.

 

These cuts will save the American taxpayer billions, while providing a level playing field that will ensure one business does not have an unfair advantage over another. Success will be earned! I will fight to ensure all individuals and businesses will be treated equally under the law.

 

 

“Big government is not a hedge against big corporations. Generally speaking, they work together against the consumer. While government intervention in healthcare reform, greenhouse emissions, and tobacco could be attempted in a way that didn’t line the pockets of big corporations, it rarely turns out that way. Entrenched interests are the ones with influence after all. The best way to reduce the power and influence of corporations is to reduce the power and influence of government. Such a reduction would force firms to compete without special favors on the free market. Price and quality would be what set companies apart, not their ability to influence politicians.” – Andrew Syrios