{"id":40472,"date":"2025-03-21T22:06:29","date_gmt":"2025-03-22T05:06:29","guid":{"rendered":"https:\/\/occupysf.net\/?p=40472"},"modified":"2025-03-21T22:06:30","modified_gmt":"2025-03-22T05:06:30","slug":"want-to-cut-wasteful-spending-start-with-corporate-welfare","status":"publish","type":"post","link":"https:\/\/occupysf.net\/index.php\/2025\/03\/21\/want-to-cut-wasteful-spending-start-with-corporate-welfare\/","title":{"rendered":"Want to cut wasteful spending? Start with corporate welfare"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

President Donald Trump claims he’s cutting wasteful government spending but there are billions of dollars a year lying in wait that he could push Congress to cut in corporate subsidies.Andrew Harnik\/Getty Images<\/em><\/p>\n\n\n\n

By\u00a0Chris Edwards<\/p>\n\n\n\n

March 19, 2025 (SFChronicle.com)<\/p>\n\n\n\n

<\/a><\/a><\/a><\/a><\/p>\n\n\n\n

In his recent address<\/a> to Congress, President Donald Trump lauded Elon Musk\u2019s efforts to cut \u201cappalling waste\u201d in the federal government. Musk heads the president\u2019s Department of Government Efficiency, which is laying off federal workers and ending grants for research, foreign aid and other activities.<\/p>\n\n\n\n

Trump and Musk are cutting spending that conservatives oppose, but there\u2019s one type of wasteful spending that nearly all taxpayers oppose \u2014 subsidies to big businesses.<\/p>\n\n\n\n

Why not cut there?<\/p>\n\n\n\n

In his address, Trump listed wasteful federal grants costing millions of dollars as being emblematic of government excess. But there are billions of dollars a year lying in wait that Trump could push Congress to cut in subsidies to agriculture, broadband, semiconductors, energy, airports, automobiles and many other industries.<\/p>\n\n\n\n

In an analysis I recently conducted<\/a> for the Cato Institute, I found that the federal government spent $181 billion in 2024 on business subsidies, otherwise known as \u201ccorporate welfare.\u201d A great example is the $44 billion spent on agricultural subsidies, much of which goes to large corporate-style farms. About 60% of subsidies<\/a> from the three largest farm programs go to the largest 10% of farm businesses. <\/p>\n\n\n\n

The government began subsidizing agriculture during the Great Depression when many farmers were desperate. But the farm economy has greatly changed, and farm households today have average incomes 29% higher <\/a>than the overall U.S. average. These days, even billionaire farmers receive aid<\/a>. The original goal of helping poor farmers is obsolete, and the aid programs should be cut.<\/p>\n\n\n\n

Also obsolete are the many corporate welfare programs passed to jumpstart new industries. For example, the government began subsidizing the new broadband industry in the 1990s and has since provided more than $100 billion<\/a> in aid. The subsidies have been mainly for extending fiber service to rural areas. That purpose is now obsolete because of the plunging cost of satellite broadband, yet the government is still dishing out billions of dollars a year to the industry. <\/p>\n\n\n\n

The government began subsidizing the solar power industry in the 1970s, but it still provides billions of dollars a year to today\u2019s mature solar industry led by big corporations. Similarly, the nuclear power industry no longer needs subsidies after decades of federal handouts.<\/p>\n\n\n\n

Congress keeps launching new subsidy programs despite the government\u2019s huge budget deficits. The 2022 CHIPS and Science Act<\/a> gave the semiconductor industry $53 billion to supposedly improve competitiveness. Intel\u2019s then-CEO, Pat Gelsinger, lobbied policymakers to pass the subsidies and then won billions of dollars in grants for his company.<\/p>\n\n\n\n

Despite the subsidies, Intel is in trouble and slashed 15,000 jobs last year. Gelsinger admitted<\/a> that Intel needs to \u201cfundamentally change the way we operate.\u201d But he also declared<\/a>, \u201cWe\u2019ll need at least a CHIPS 2 to finish that job.\u201d But the \u201cjob\u201d of high-tech companies is never finished because they must continually innovate to stay ahead and ongoing subsidies would become a crutch discouraging needed changes.<\/p>\n\n\n\n

Once the subsidies start flowing, industries start relying on them and they often just displace market-based funding. Subsidies for high-tech industries displace venture capital and share issues. Federal farm insurance displaces private insurance. Federal small business loans displace private bank loans. Airport subsidies displace market-based revenues, such as airline landing fees. And subsidies for government-owned Amtrak displace private investment and entrepreneurship in passenger rail. <\/p>\n\n\n\n

President Trump says<\/a> that he wants to combat inflation by cutting \u201cflagrant waste,\u201d but whether he downsizes business subsidies remains to be seen. He is calling<\/a> for ending semiconductor subsidies and cutting aid to the renewable energy, battery and electric vehicle industries.<\/p>\n\n\n\n

However, Trump has a first-term record of defending ethanol subsidies and handing out more than $20 billion to the agricultural industry. He also signed bills during the COVID pandemic providing more than $900 billion<\/a> in aid to businesses, which spawned up to $200 billion<\/a> in erroneous and fraudulent payments.<\/p>\n\n\n\n

About Opinion<\/p>\n\n\n\n

Guest opinions in Open Forum and Insight<\/strong> are produced by writers with expertise, personal experience or original insights on a subject of interest to our readers. Their views do not necessarily reflect<\/strong> the opinion of The Chronicle editorial board, which is committed to providing a diversity of ideas to our readership.<\/p>\n\n\n\n

Read more about our transparency and ethics policies<\/em><\/a><\/p>\n\n\n\n

Furthermore, Trump\u2019s protectionist tariffs are a type of corporate welfare. They micromanage the economy to benefit politically favored companies at the expense of other companies and consumers. Trump\u2019s new tariffs on aluminum<\/a>, for example, may temporarily boost profits for a handful of aluminum makers, but they will hurt U.S. automobile companies and their customers. <\/p>\n\n\n\n

In his most recent address to Congress, Trump claimed that in the near future he was going to balance the federal budget. But he will not reach that goal by canceling a \u201c$3.5 million consulting contract for lavish fish monitoring\u201d and \u201c$10 million for male circumcision in Mozambique.\u201d Instead, he should target big-time waste \u2014 including $181 billion a year in corporate welfare subsidies.<\/p>\n\n\n\n

Chris Edwards is Kilts Family Chair in Fiscal Studies at the Cato Institute.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

President Donald Trump claims he’s cutting wasteful government spending but there are billions of dollars a year lying in wait that he could push Congress to cut in corporate subsidies.Andrew Harnik\/Getty Images By\u00a0Chris Edwards March 19, 2025 (SFChronicle.com) In his recent address to Congress, President Donald Trump lauded Elon Musk\u2019s efforts to… Continue reading → <\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts\/40472"}],"collection":[{"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/comments?post=40472"}],"version-history":[{"count":1,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts\/40472\/revisions"}],"predecessor-version":[{"id":40474,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts\/40472\/revisions\/40474"}],"wp:attachment":[{"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/media?parent=40472"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/categories?post=40472"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/tags?post=40472"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}