Corporate welfare reform

The welfare reforms under the Clinton administration shifted America's views on government assistance. Welfare, once viewed by much of the population as cash handouts to people unwilling to get a job, are now properly recognized as financial assistance that is often necessary in an unstable economy.

Welfare allows Americans who are between jobs, or are not earning enough to pay for housing or feed their families, to stay off the streets, while simultaneously providing incentives and assistance for finding employment. Without welfare, low and lower middle class Americans would be much closer to living impoverished lives.

Despite the success of welfare reform, American corporations still receive vast amounts of welfare from the government. Why should American people be limited to five years of government assistance when corporate America can continuously receive government funds? It is time for Congress to closely examine and reform the corporate welfare system. I propose modeling corporate welfare after the welfare American citizens receive.

Archer Daniels Midland (ADM), a large agriculture corporation, is rumored to be profitable only because of the massive subsidies it receives from federal and state governments. ADM is the corporate equivalent of someone too lazy to go out and get a job, relying instead on the monthly checks the government hands out.

In order to prevent more ADM style subsidy abuse, Congress should limit corporations to five years of government subsidies. Just as the five year welfare limit encourages Americans to find a steady job, a limit on corporate welfare would encourage corporations to find a way to return to profitability. If a corporation is unable to remain profitable after five years of government assistance the field is obviously not profitable and the government should allow the company to fail.

The government uses subsidies that make up the heart of corporate welfare as incentives to motivate companies to produce "common" or "public" goods: products that benefit all people instead of just those who purchase them. Corporations are hesitant to produce such products, as they do not receive money from everyone who benefits. Instead of using subsidies to encourage corporate production of public goods, the government should institute a tax break system. With tax breaks as motivation instead of subsidies, corporations will be unable to subsist only on corporate welfare. Companies that have already proven their ability to be profitable in other sectors will have a large incentive to produce public goods.

Competent companies with successful management structures and production models will receive awards for their abilities. Congress will still be able to provide incentives to corporate America, without allowing companies to abuse the corporate welfare system.

As global trade becomes more integrated, and the World Trade Organization gains power in the international marketplace, America will receive greater penalties for the corporate welfare it hands out. Already, many of our trading partners are angered by the unfair boost American corporations receive through government subsidies.

Unless we reform our corporate welfare system, we will face harsher and harsher penalties from trade management organizations. The penalties will hurt American companies, completely offsetting the benefits of subsidies. Tariffs harm corporations that do not receive welfare just as much as their subsidized competition. If American products are to remain competitive in the global economy, Congress must reform the corporate welfare system.

The current corporate welfare system is broken and unfair to the American taxpayers who fund it. Government subsidies do play a role in modern economies, but the government must ensure that corporations do not exist on subsidies alone.

Without corporate welfare reform, American companies will continue to face tariffs abroad. Welfare reform has proved itself successful. It is time for Congress to step up and make similar reforms to the corporate welfare system.