Corporate welfare is a general term that refers to financial assistance, tax advantages, or other support given to corporations and other business entities by the United States government. Unlike welfare payments given to individuals, corporate welfare system is not intended to prevent poverty or raise the standard of living. Instead the federal government awards payments to specific industries or companies in the form of subsidies, grants, contracts, and other aid. Due to the wide range of interests, the system is not monitored or controlled by a single Congressional committee. In addition, since many Americans have mixed views on corporate welfare, this practice is sometimes an area of great debate.
The corporate welfare system in the US is extremely complex and widespread and often includes both direct subsidies and indirect subsidies. The direct subsidies are awarded to numerous fields and programs and used for specific projects or plans. For example, funds may be contributed to areas of agriculture, economic development, transportation, energy, research, and technology. Indirect subsidies usually support the promotion of US goods and services in foreign countries as well as attempts to resurrect failing businesses. Corporate welfare benefits may be short or long term and can vary greatly among different areas of commercial interest.
The largest direct subsidies of the welfare system are regularly given to the field of agribusiness or, more specifically, for crops and farming. There are a variety of opinions on this particular topic. While supporters of corporate welfare for farmers maintain that farming must make up a substantial portion of the US economy in order for it to remain strong, others argue that technological advances have changed the business of agriculture to one that does not require as much money to operate as it once did. Yet many farmers often have higher incomes and lower expenses than other households in the US, giving rise to the issue of responsible disbursement of funds.
Corporate welfare provides capitalization and assistance for a number of beneficial programs in the US. One such program is the incredibly popular Advanced Technology Program (AFT), which is intended to promote technological research that has great economic benefits for the nation. Many recipients of this federal funding are Fortune 500 companies, including General Motors, IBM, Lucent Technologies, Texas Instruments, 3M, Raytheon, Dow Chemical, and Xerox. AFT support allows these highly successful companies the means to turn some of their more costly ideas into innovative and cutting-edge products.
Another useful program, the Export-Import Bank, was created to protect American jobs by financing exports. This widely used program supports the purchase of US goods in foreign markets by providing loans to companies entering or already in the export market. Examples of companies participating in the Export-Import Bank include Boeing, Conoco-Phillips, and General Electric. However, Boeing is by far the largest participant as it consistently receives more than half of the financial backing each year.
Every year billions of taxpayer dollars are funneled into and out of the US corporate welfare system. Technological advances, research and development, and similar ventures are not inexpensive. In fact, many of the projects funded by corporate welfare can be extremely expensive, and some may even require millions of dollars in annual funding. Despite the controversy that exists, it is clear that American companies remain competitive leaders in the global business industry and many owe at least a portion of their success to the funding support provided by corporate welfare.