Two-Thirds Of Federal Subsidies Benefit Big Business, Banks
The federal government spends billions of dollars each year on business subsidies and tax credits, with most of the money accruing to large corporations, a new database reveals.
The database released Tuesday by the government accountability group Good Jobs First, called Subsidy Tracker 3.0, represents the first-ever comprehensive listing of federal economic development programs, expanding on the group’s existing database of state and local subsidies.
According to an accompanying report put out by the group, “two-thirds of the $68 billion in business grants and special tax credits awarded by the federal government over the past 15 years have gone to large corporations,” including numerous foreign firms. (RELATED: These Billionaires Make Bank When Taxpayers Subsidize Business)
Overall, just 582 companies account for 67 percent of the total, including six parent companies that have received $1 billion or more since 2000, 21 that have received $500 million or more and 98 that have received $100 million or more.
The largest recipient is the Spanish energy company Iberdrola, which has collected about $2.2 billion in subsidies “by investing heavily in U.S. power generation facilities, including wind farms that have made use of a renewable energy provision of the 2009 Recovery Act.” (RELATED: CBO: Most Energy Tax Subsidies Go Toward Green Energy, Energy Efficiency)
“For more than 20 years, so-called corporate welfare has been debated widely with little awareness of which companies were receiving most of the federal assistance,” Good Jobs First Executive Director Greg LeRoy asserted in a press release.
“We now see that big business dominates federal subsidy spending the way it does state and local programs,” added Philip Mattera, principal author of the study and creator of Subsidy Tracker. “Our hope is that the new Subsidy Tracker will serve as a resource in the ongoing debates over federal assistance to business.”
And that federal assistance is not limited to direct subsidies and tax credits. Good Jobs First notes that, “the U.S. government has made available hundreds of billions of dollars in loans, loan guarantees, and bailout assistance to businesses” since 2000, as well.
Much of the total is attributable to the TARP and Federal Reserve programs created to stabilize the financial sector during and after the financial crisis, meaning “seventy-eight percent of this assistance went to just a dozen U.S. and foreign-based banks.”
“Whereas the top grant/tax credit recipients received $1 or $2 billion, the biggest loan and bailout recipients received trillions,” the report says, with Bank of America topping the list at just under $3.5 trillion, followed by Citigroup ($2.6 trillion), Morgan Stanley ($2.1 trillion) and JPMorgan Chase ($1.3 trillion).
Moreover, “eleven parent companies among the 50 largest recipients of federal grants and allocated tax credits are also among the top 50 recipients of state and local subsidies,” as are “six of the 50 largest recipients of federal loans, loan guarantees, and bailout assistance.” (RELATED: States May Have to Disclose Business Subsidy Costs)
Five companies actually appear on all three lists—Boeing, Ford Motor, General Electric, General Motors and JPMorgan Chase—earning the distinction of being labeled “the corporations that have been most successful at obtaining subsidies from all levels of government.”
Good Jobs First refrains from offering any policy recommendations based on its findings, but does say that, “the public has a right to detailed, company-specific information on the support federal agencies are providing to the private sector, and that disclosure is fundamental to reform.”
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