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by Ron Forthofer
Originally in the Boulder Daily Camera, June 27, 1998
At the same time, Congress and the White House claim we must cut Medicare and Medicaid, they won't consider the sacred cows within the budget. It is easier to cut programs benefiting the voiceless. For example, the recent $6 billion emergency bill on disaster relief and military spending is partially being paid for with funds set aside for low-income housing.
What are these sacred cows? Corporate welfare and the bloated military budget fit the bill. The Cato Institute has estimated that we taxpayers give corporations at least $86 billion every year. Other estimates are higher as, in 1995, the Corporate Welfare Project identified 153 federal programs totaling $167 billion in annual subsidies and tax breaks.
One of the most egregious examples of corporate welfare was the recent telecommunications act in which Congress and the President gave control of more of our airways to corporations at no charge. Estimates for the value of this giveaway are $70 billion or more and even Bob Dole strongly objected.
Bailouts of banks, savings and loans and other corporation are not included in the above estimates. We are all familiar with the huge S&L bailout that may cost taxpayers as much as $500 billion. We also recognize the recent $50 billion bailout of Mexico really bailed out U.S. banks, Wall Street and other speculators. This bailout was repeated in 1997 in Southeast Asia to the tune of over $100 billion.
During the 1940s and as late as 1954, corporations paid over 30% of the taxes collected by the federal government. The corporate share was 9.2% in 1991. In addition, according to a 1993 study by the General Accounting Office, more than 40% of corporations doing business in the U.S. with assets of more than $250 million either paid no income taxes or paid less than $100,000.
Who makes up for the taxes corporations no longer pay? We taxpayers do. The individual share of the federal revenue went from 36% in the 1940s to 47% now. And corporations lay off thousands while giving obscene compensation packages to executives. During a three-year period in the early 1990s, IBM, ATT, GM, Sears and GTE announced layoffs totaling 324,650. During this same period, Disney's Michael Eisner received $216 million and Anthony O'Reilly of Heinz took home $114 million. Business Week named both of them to its list of "those who gave shareholders the least."
President Eisenhower warned us about the military-industrial complex, but we have not heeded his words. We spend more money on our military than most of the rest of the world combined. In peacetime, military programs still account for roughly half of the discretionary budget spending. It is hard (impossible?) to justify this outlay when there are no real military threats to the U.S. A recent Washington Post series debunked Russia as a threat. Its strategic nuclear arsenal is expected to decline from a cold war high of nearly 11,000 weapons in 1990 to a low of roughly 1,000 by 2007. Moreover, a growing number of Russia's nuclear-powered submarines are piled up in port unfit for patrol, many of her strategic bombers are incapable of combat, and there is a steady deterioration of her land-based missile force.
We are in an arms race with ourselves. Military contractors are selling some of our most advanced planes, the F-15 and F16, to almost any nation with the money. The Pentagon then requests new weapons because others have these modern planes. The Pentagon now wants 338 new F-22s at a cost of $62.5 billion; and contractors are already taking orders from other nations for the F-22.
The following chart by Bridget Moix in the December, 1997 Quaker Life clarifies the priorities of our elected officials. The U.S. ranks:
As a nation, is this where we want to be? Don't be fooled by those claiming we lack the resources. The issue is not the resources; rather, it is a question of allocation of those resources.
1st in military expenditures, technology, bases worldwide, naval fleet, combat aircraft, nuclear reactors, nuclear warheads and bombs, and arms exports 4th in literacy rate 5th in GNP per capita 8th in public health expenditures per capita 10th in public education expenditures per student 12th in maternal mortality rate 13th in infant mortality rate 14th in life expectancy 18th in percent of school-age children in school and in mortality rate under age 5 29th in the percent of infants with low birthweight 39th in physician per population and in teacher per student