Corporate Welfare At Its Worst

Date: Tuesday, May 28, 2002 1:32 PM

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I thought this article was very interesting because Congressman Sanders
discusses some of the various ways that our government subsidizes
companies
that destroy US jobs.

http://www.progress.org/corpw30.htm

Steady Stream of Embarrassing Scandals

Congressman Sanders on US Corporate Welfare Giveaways

The US federal government is guilty of making huge corporate welfare
handouts. Taxpayers are forced to pay for ridiculous things, including
handouts to Enron, General Motors and AT&T.
Here is a new article by Representative Bernie Sanders. It appears here
with
the permission of BuzzFlash.

The Export-Import Bank: Corporate Welfare At Its Worst
by Rep. Bernie Sanders (I-VT)
This country has a $6 trillion national debt, a growing deficit and is
borrowing money from the Social Security Trust Fund in order to fund
government services. We can no longer afford to provide over $125
billion
every year in corporate welfare - tax breaks, subsidies and other
wasteful
spending - that goes to some of the largest, most profitable
corporations in
America.

One of the most egregious forms of corporate welfare can be found at a
little known federal agency called the Export-Import Bank, an
institution
that has a budget of about $1 billion a year and the capability of
putting
at risk some $15.5 billion in loan guarantees annually. At a time when
the
government is under-funding veterans' needs, education, health care,
housing
and many other vital services, over 80% of the subsidies distributed by
the
Export-Import Bank goes to Fortune 500 corporations. Among the companies
that receive taxpayer support from the Ex-Im are Enron, Boeing,
Halliburton,
Mobil Oil, IBM, General Electric, AT&T, Motorola, Lucent Technologies,
FedEx, General Motors, Raytheon, and United Technologies.

You name the large multinational corporation, many of which make
substantial
campaign contributions to both political parties, and they're on the
Ex-Im
welfare line. Needless to say, many of these same companies receiving
taxpayer support pay exorbitant salaries and benefits to their CEOs.
IBM,
for example, gave their former CEO Lou Gerstner over $260 million in
stock
options while they were lining up for their Ex-Im handouts.

The great irony of Ex-Im policy is not just that taxpayer support goes
to
wealthy and profitable corporations that don't need it, but that in the
name
of "job creation" a substantial amount of federal funding goes to
precisely
those corporations that are eliminating hundreds of thousands of
American
jobs. In other words, American workers are providing funding to
companies
that are shutting down the plants in which they work, and are moving
them to
China, Mexico, Vietnam and wherever else they can find cheap labor. What
a
deal!

For example, General Electric has received over $2.5 billion in direct
loans
and loan guarantees from the Ex-Im Bank. And what was the result? From
1975-1995 GE reduced its workforce from 667,000 to 398,000, a decline of
269,000 jobs. In fact, while taking the Ex-Im Bank subsidies, GE was
extremely public about it's "globalization" plans to lay off American
workers and move jobs to Third World countries. Jack Welch, the longtime
CEO
of GE stated, "Ideally, you'd have every plant you own on a barge."

General Motors has received over $500 million in direct loans and loan
guarantees from the Export-Import Bank. The result? GM has shrunk its
U.S.
workforce from 559,000 to 314,000.

Motorola has received almost $500 million in direct loans and loan
subsidies
from the Ex-Im Bank. The result? A mere 56 percent of its workforce is
now
located in the United States.

In fact, according to Time Magazine, the top five recipients of Ex-Im
subsidies over the past decade have reduced their workforce by 38% -
more
than a third of a million jobs down the drain. These same five companies
have received more than 60 percent of all Export-Import Bank subsidies.
Boeing, the leading Ex-Im recipient, has reduced its workforce by more
than
100,000 employees over the past ten years.

Here are a few examples of your Ex-Im taxpayer dollars at work:

The Export-Import Bank has provided an $18 million loan to help a
Chinese
steel mill purchase equipment to modernize their plant. This Chinese
company
has been accused of illegally dumping steel into the U.S. - exacerbating
the
crisis in our steel industry.

Since 1994, the Export-Import Bank has provided $673 million in loans
and
loan guarantees for projects related to the Enron Corporation, leaving
taxpayers exposed to $514 million. The Ex-Im Bank approved a $300
million
loan for an Enron-related project in India even though the World Bank
repeatedly refused to finance this project because it was "not
economically
viable."

The Export-Import Bank is subsidizing Boeing aircraft sales to the
Chinese
military. According to the President of Machinists' Local 751: "Boeing
used
to make tail sections for the 737 in Wichita, but they moved the work to
a
military factory in Xian, China. Is this Boeing's definition of free
trade,
to have American workers compete with Chinese labor making $50 a month
under
military discipline?"

The Ex-Im Bank insured a $3-million loan to aid General Electric build a
factory where Mexican workers will make parts for appliances to export
back
to the United States. This project is responsible for the loss of 1,500
American jobs in Bloomington, Indiana.

And on and on it goes. The bottom line is that if the Export-Import Bank
cannot be reformed so as to become a vehicle for real job creation in
the
United States, it should be eliminated. American citizens have better
things
to do with their money than support an agency that provides welfare for
corporations that could care less about American workers.

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