The $150 Billion `Welfare' Recipients: U.S. Corporations” Boston Globe 7/7/96 Charles M. Sennott

It comes down to priorities. And to understand the choices made every day by the federal government on who should benefit from taxpayers' money, consider these stark examples:

Walt Disney Corp., whose profits in 1995 exceeded $1 billion, received $300,000 in federal assistance last year to perfect fireworks displays. But Joseph and Phyllis Fagone of East Boston, who are in their mid-80s and struggling on a fixed income, were among 1,000 state residents whose federally funded fuel assistance ran out before Christmas.

Kopin Corp., a Massachusetts technology company, has received $30 million in federal subsidies the last four years and tens of millions more in savings through the lease of a state-owned laboratory. Despite this huge public investment, the company plans to send more and more of its new manufacturing jobs overseas. Meanwhile, it looks like Derek Davis, 17, of Roxbury will be among the thousands of Boston youths who won't get summer jobs due to limited federal and state funding. He was hoping to save money for college.

Every year, an estimated $150 billion - in the form of direct federal subsidies and tax breaks that specifically benefit businesses - is funneled to American companies. Critics call it ``corporate welfare.''

The $150 billion for corporate subsidies and tax benefits eclipses the annual budget deficit of $130 billion. It's more than the $145 billion paid out annually for the core programs of the social welfare state: Aid to Families with Dependent Children (AFDC), student aid, housing, food and nutrition, and all direct public assistance (excluding Social Security and medical care).

. . .The subsidies range from $1.4 billion annually in price supports for large sugar farming interests; to nearly $2 million to help McDonald's market Chicken McNuggets in the Third World; to $20,000 for golf balls that defense manufacturer Lockheed Martin billed the federal government as an ``entertainment'' expense. . .

Said Gloria Larsen, who until recently was Gov. William F. Weld's secretary of economic affairs and served as deputy director of the Federal Trade Commission under President Bush: ``The personal responsibility argument is so readily tied to social welfare. Now it is time that it is tied to corporate welfare.''

Talk, but little action.

Despite such sentiments to cut back, corporate assistance continues. President Clinton's administration, through Labor Secretary Reich, has used the bully pulpit against these expenditures, but done relatively little to actually prevent them. In some instances, Clinton has even sought to increase subsidies. The Republican-controlled Congress has been equally recalcitrant about any proposed changes to tax provisions that steer billions of dollars to big business. And in Massachusetts, Weld has endorsed an active policy of subsidizing business through trade missions, support services, tax breaks and state offices that guide businesses, big and small, on how to tap federal money.

Corporate welfare goes virtually unmentioned in political campaigns, where candidates like Clinton and Bob Dole square off on how to reform social welfare. Neither has proposed ``two years and out'' for corporations receiving federal assistance.

And only recently has there been any policy debate on ``personal responsibility'' of corporations to the communities where they profit and receive public money.

Corporate welfare persists largely because of parochial politics. State by state, politicians are applauded for bringing home corporate pork with little regard for its drain on the national economy.

``Corporate welfare is a fashionable phrase inside the Beltway,'' says Sheila Krumholz, research director for the Washington-based Center for Responsive Politics, which tracks campaign finance issues. ``But when it comes to biting the hand that feeds them, politician after politician is walking away from their rhetoric. They cave in to each individual subsidy,

every one of which ... can be defended and rationalized.''

A Boston Globe examination of the issue has found:

A host of questionable federal giveaways, such as the $200 million a year Market Promotion Program which over the last two years gave Massachusetts-based Ocean Spray some $700,000 and California-based Gallo about $4 million to market ``Cranapple'' juice and wine all over the world. Hundreds of thousands of dollars more were given to Concord-based Welch's and a Lynn-based company that makes marshmallow Fluff.

While many federal programs have the stated purpose of creating jobs, some subsidized companies are downsizing. AT&T,General Electric, Raytheon and Digital - among many large companies receiving federal assistance - have laid off about 100,000 workers among them. And defense contractor Lockheed Martin is expected to receive $1 billion to help defray the cost of its $10 billion merger, including more than $16 million in pay and performance bonuses for top executives while nearly 50,000 of the conglomerate's employees have been laid off in the last five years.

Government subsidies to high-tech industries have resulted in tens of thousands of jobs going overseas. Federal officials and corporate chiefs boast about the promise of high-paying jobs created by ``partnerships'' with government. But they say little or nothing about the fact that many of the jobs created end up in Ireland, Malaysia, Singapore or Thailand because of low labor costs and taxes. The roughly $100 million a year Sematech consortium helped Digital Equipment Corp. and other semiconductor companies, but Digital still has shifted part of its workforce and capital to Ireland and Singapore. . .