How Corporate Welfare Hurts You

By Robert Reich, Robert Reich's Blog

18 July 19

ou often hear Trump and Republicans in Congress railing against so-called “welfare programs” – by which they mean programs that provide health care or safety nets to ordinary Americans. 

But you almost never hear them complaining about another form of welfare that lines the pockets of wealthy corporations. We must end corporate welfare. Now.

There are several ways corporations get rich on the taxpayer’s dime. The most obvious comes through subsidies or tax breaks for certain businesses or industries.

Consider the fossil fuel industry, one of the most profitable and privileged sectors of the economy. Every year, oil companies get to deduct millions of dollars from their tax bills for the cost of new wells, oil exploration, and other drilling and mining expenses.

It’s been estimated that repealing these special tax breaks would save taxpayers $39 billion over 10 years.

Other examples of corporate welfare include billions in government subsidies for agricultural conglomerates, pharmaceutical makers, tech giants and defense contractors. 

Other industries don’t get these benefits. Meanwhile, most families don’t even benefit from tax credits and deductions for childcare.

State and local governments are also handing out corporate welfare, often with no strings attached. In 2013, for example, the state of Washington approved a record $8.7 billion handout to Boeing in order “to maintain and grow its workforce within the state.“ What did Boeing do? In the following years, it laid off more than 12,000 workers in the state.

State and local tax breaks for corporations are estimated to cost local schools almost $2 billion a year in lost tax revenue. 

It’s argued they create jobs, yet nationwide, not a single new job is created. At most, the jobs are merely moved from state to state.

How do corporations get this corporate welfare? Follow the money. They spend hundreds of millions on lobbying and campaign contributions.

An even more insidious example of corporate welfare occurs when corporations don’t pay their workers a living wage. As a result, those workers often have to rely on programs like Medicaid, public housing, food stamps and other safety nets.

Which means you and I and other taxpayers end up subsidizing these low wages so those corporations can enjoy even higher profits for their executives and wealthy investors.

For example, every year, Americans spend an estimated $153 billion in taxes and on programs to subsidize McDonald’s and Walmart’s low-wage workers.

Here’s the bottom-line: When corporations get special handouts from the government, it costs the rest of us. We have to pay more in taxes to make up for these hidden tax breaks, subsidies, and loopholes. In turn, there’s less money for good schools and roads, Medicare and national defense, and everything else we need.

So the next time you hear conservatives railing against welfare handouts for the poor, remind them that we should really be cutting corporate welfare – unnecessary and unwarranted aid for dependent corporations.

Kamala Harris Might Be Surging - but Her Record Will Soon Catch Up With Her

By Bhaskar Sunkara, Guardian UK

17 July 19

A leftward moving party is hungry for change. Just like Joe Biden, Kamala Harris’ past will prove to be a liability

he first pair of Democratic presidential primary debates showed how wide open the field is. Former vice-president Joe Biden came in with a comfortable lead, but stumbled during the debates and has dropped in the polls since.

California senator Kamala Harris emerged the victor after the debate, confronting Biden on his past chummy relations with segregationist senators and vehement opposition to busing policies meant to integrate public schools. According to one poll, she’s now within two points of him.

Joe Biden had a couple things going for him: he was connected to a popular Obama administration and he is still widely perceived as being electable. For stalwart Democratic voters, preventing a second term for Trump and an ever-rightward moving Republican party is a key priority.

Biden might have stood out with his relatively conservative stances on healthcare, the environment, financial regulations and other issues that the Democratic base cared about – but at least he seemed like a safe bet to take on Trump. But now with the former vice-president crumbling under debate pressure and committing a seemingly endless string of gaffes, his electability may now be in question.

The Biden team is constantly talking about “Obama-Biden” accomplishments, trying to inexorably tie him to the first black president’s legacy, but the more people find out about his own record, the more they’re turned off by it. The same will be true of Kamala Harris, a candidate who says all the right things on the debate stage, is surging in the polls, but will soon find out that positive attention may soon turn into negative scrutiny.

Harris is talking about financial industry abuses, but she’s doing fundraisers with a Wells Fargo executive. Though often glibly compared to Obama, Harris’s policy triangulations, donor-base ties, and questionable political past are all reminiscent of Hillary Clinton. Take her stance on what was once seemingly her strongest policy stances. Harris was an initial endorser of Bernie Sanders’s 2017 healthcare bill, which would have set up a Medicare for All, single-payer system. Such a plan would get rid of private insurance middlemen, and improve health outcomes and efficiency across the country. “Let’s eliminate all of that. Let’s move on,” she said at a January town hall.

Discussing her mother’s battle with colon cancer, Harris declared that “healthcare should be a right.”

When candidates were asked during the debate whether they would “abolish private insurance in favor of a government-run plan”, she joined Bernie Sanders in raising her hand. That’s all fine and good, a brave stance that could have been followed up with an explanation telling millions of curious Americans that they can still keep seeing their regular doctors, only in our future universal healthcare system they no longer will have to deal with insurance companies and the accompanying hefty deductible and premium payments.

Instead, she beat a hasty retreat. The morning after the debate, she said she had misunderstood the question and certainly believed the private insurance would continue to play a role providing supplementary coverage. In other words, she would keep around the same companies responsible for our failed healthcare system and allow them to rally their forces to undermine a Medicare for All plan. (Most Americans favor getting rid of private insurance, when told they can keep their doctors.)

It’s no wonder that likely Democratic voters see Bernie Sanders as the best candidate to handle health policy – agree or disagree, he’s consistent, and has been standing firm for single-payer as others vacillate. Why trust newcomers to progressive stances over someone who has been saying the same thing for decades?

Part of Harris’s dilemma must stem from the fact that she sees that her party’s voters are moving leftward, and sees Biden’s centrist vulnerabilities, but is at the same time reliant on far-from-progressive campaign donors. A recent New York Times headline captures the situation well: “Wall Street Donors Are Swooning for Mayor Pete. (And They Like Biden and Harris, Too.)”

Harris is talking about financial industry abuses, but she’s doing fundraisers with a Wells Fargo executive, Miguel Bustos, implicated in the company’s fake accounts scandal. When it comes time to take on big banking interests, is it unreasonable to assume that she’ll be less willing to challenge the sector than, say, Senator Warren?

And let’s not forget about racial justice, an issue Harris expertly used to contest Biden’s record. But what will happen when people start to pay closer attention to her history as California attorney general. Harris can talk about her past as a young black girl who personally benefited from school integration. But what about the young black people she sent to prison for drug violations? What about the poor mothers trying to get by in a society that gives them no support that Harris threatened to jail and fine if their kids didn’t show up on time to school?

Some political evolutions are genuine, and Harris’s “law-and-order” past wasn’t out of place in the Democratic party at the time. But that old wisdom is now being called into question. It’s hard to imagine that a party tacking to the left in an increasingly polarized country is about to elect a criminal prosecutor as its nominee.

For now, Sanders is still among the frontrunners but has some ground to make up. His debate performance was mediocre, and he needs to appeal better to older voters still in the Biden camp. But by having a record that matches his rhetoric and by avoiding monied interests, he’s showing that campaigns can be run on a very different basis than Harris is running hers.

Bernie Sanders raised $24m in the second quarter of 2019. The workers that donated to him the most were teachers. His largest sum came from Walmart workers. That shouldn’t be a surprise – when other candidates were holding lavish fundraisers, Sanders was raising hell at a Walmart shareholder meeting, denouncing the Walton family’s greed and calling for the company to pay a living wage to its employees.

That’s how you break from a stale establishment consensus. That’s how you actually show Americans that you’re different and that you care. That’s the type of angry and earnest politics that can beat President Trump.

Kamala Harris isn’t just not leftwing enough to be the Democratic party’s nominee, she’s also not bold enough to win a presidential election and bring about the change we desperately need.