What may be unknown to many who observed the “fiscal cliff” legislative brawl is that nestled within the legislation was a smorgasbord of corporate goodies. The corporate welfare provisions within the bill received scant attention as the chief concern for most was whether or not the Republican Congress would kill the deal and plunge America off “the cliff.”
Some were not so easily distracted. As Matt Stoller reported the bill is packed with corporate handouts:
Throughout the months of November and December, a steady stream of corporate CEOs flowed in and out of the White House to discuss the impending fiscal cliff. Many of them, such as Lloyd Blankfein of Goldman Sachs, would then publicly come out and talk about how modest increases of tax rates on the wealthy were reasonable in order to deal with the deficit problem. What wasn’t mentioned is what these leaders wanted, which is what’s known as “tax extenders”, or roughly $205B of tax breaks for corporations…
The negotiations over the fiscal cliff involve more than the Democrats, Republicans, the middle class and the wealthy. The corporate sector is here in force as well.
The extenders include name brand companies such as NASCAR, Goldman Sachs, and Disney as well as tax credits for foreign subsidiaries and off-shore financing.
And according to other reports these were not last minute deals but the endgame of a long lobbying process:
The “fiscal cliff” legislation passed this week included $76 billion in special-interest tax credits for the likes of General Electric, Hollywood and even Captain Morgan. But these subsidies weren’t the fruit of eleventh-hour lobbying conducted on the cliff’s edge — they were crafted back in August in a Senate committee, and they sat dormant until the White House reportedly insisted on them this week…
General Electric and Citigroup, for instance, hired Breaux and Lott to extend a tax provision that allows multinational corporations to defer U.S. taxes by moving profits into offshore financial subsidiaries. This provision — known as the “active financing exception” — is the main tool GE uses to avoid nearly all U.S. corporate income tax.
Liquor giant Diageo also retained Breaux and Lott to win extensions on two provisions benefitting rum-making in Puerto Rico.
The K Street firm Capitol Tax Partners, led by Treasury Department alumni from the Clinton administration, represented an even more impressive list of tax clients, who paid CTP more than $1.68 million in the third quarter…
GE, Goldman Sachs, Diageo — they planted their seeds over the summer. They’ll enjoy the fruit in the new year.
While Republicans and Corporate Democrats begin discussions on all the social welfare programs they plan to cut let’s not forget they love welfare when it’s for people who will have enough money left over to give a campaign contribution – talk about promoting dependency.






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These machinations make more sense when the notion of epigovernment is added to the formula.
Superb post, Dan!
And your last paragraph sums up reality with precision and powerful implication.
Giving rise to the real question: What are we going to do about it?
Simply reacting to the latest outrage is, well, reactionary.
Perhaps it is time to suggest that we’ve need of discussing the nation and world we should like and NEED to have? From such discussion, which must be sufficiently powerful to evoke a sense that struggle for such a society and relation to the world would be worth the effort, and the vision must be “real” enough that others might actually feel the truth and power of such a “place”. If these things may be done, then the pathways to achieving such needful and necessary change will become clear and evident to those who realize, and may come to realize, that current “systems”, economic, legal, educational, “political”, and so on, are being deliberately and intentionally destroyed to the benefit and increasing power of a greedy and heartless few.
Thank you, DS, your very successful efforts to report and educate are very much appreciated.
DW
Senator John McCain issued a statement deploring the extras in the fiscal cliff bill:
· $430 million in tax breaks for Hollywood film and TV producers
· $70 million in tax incentives for NASCAR track builders
· $59 million in tax credits for algae growers
· $15 million in subsidies for asparagus growers
· $7 million for buyers of 2- or 3-wheel electric scooters
I agree. He even has a style very reminiscent of his predecessor.
I think we should keep the new guy. What say ye?
OMG. THis may be the most diffocult thing I have ever done in my life.
I agree with Sen. McCain.
(Thud)
Of the 170 or so House members who opposed the fiscal bunny slope deal, I imagine that this was one concern — of many — that helped several members decide to oppose it.
And when I saw the overwhelming support in the Senate, I was confident there were lots of corporate handouts in there. Months ago, I had concluded that the likes of Lieberman and Graham would support any increase in spending… as long as there was lots of payments to the MIC. That’s just the MIC though. Each corporate sector have their own number where the quid pro quo threshold is met.
I heartily second DW’s final remark – oh and my goodness we have another DW here with an ‘s’ in between! I shall have to be more discriminatory in my abbreviated appellations.
And indeed, DWB, your real question is indeed the one that needs to be answered. We can put aside, it does seem to me, what corporate goodies are in the legislation – that is always going to be the case with this present government we seem to have decided we want to have (‘we’ disincluding me and quite a number of other wouldbe FDL followers.) All one needs to do is look at the stock market to see that the Big Boys loved the deal, and we know Obama knew they would love it, and we know they knew he knew. (And that ‘we’ should include all of us by now.)
So, as Jane remarked a few diaries back, let’s quit the pretending.
Obama is a corporate shill (which some seem to like, though they are fastidious about the details of butchering the sheepies).
Congress is bought and paid for. (Did they or did they not get a pay raise? – there have been conflicting stories on that.)
No one in government is listening to us, whether we voted for them or not.
What are we going to do about it?
For that matter, look for the defense sequester to be averted in coming negotiations — gotta “promote the generals’ welfare” after all.
And I did mean to say most definitively,
DSW, rock on!!
It is apparent to me that the “purchase” of a United States senator invariably comes with a “specific performance” clause. From the POV of the corporations, that’s just being an “informed consumer”.
Heh,
I figured someone would hit the floor, leave it to you.
Obama is the most corporate-friendly “socialist” in world history.
Hope you and yours made it into the next disastrous year of the Obama presidency. Down here in “the South”, we eat black-eyed peas and cabbage on New Years. How ’bout you???
X2
Payback time. It’s the way the system works for the well heeled. There is no pretense about it.
We have such well informed colleagues (present company exzcepted) Does anybody have an “estimate” on how much corporate welfare is handed out?
Last I heard ADM-Archer Daniels Midland got the most handouts (something for doing nothing). Defense contracts not included since we do get a return on that.
Anybody have an idea??? From the above NASCAR, algae and asparagus growers are making out like bandits.
2- and 3-wheel electric scooter suppliers probably feel like pikers now.
A sad day for Minnesota today with the swearing in of that dreadful Amy Klobuchar. Activists have been trying to get a committment out of her to not vote for reduction in SS and Medicare but she refuses to comply. The silver lining in this cloud could be however is that once she votes to cut these programs for elderly and disabled Minnesota residents we might be able to get rid of her in the next election. We can only hope.
I don’t know what to do about it.
‘Wealth begets power, and power begets wealth’
Jeffrey Sachs, The Price of Civilisation
Discussed by Ross Gittins here
Sachs has been criticized as neo-liberal, but not by Gittins. If one is next to power, it might almost go without saying.
The power is so great that they can openly proclaim the arrival a plutonomy, without concern or caution.
What has not been reported on yet is which of those extenders went beyond restoring tax cuts that were sunsetted December 31. And whether the extenders made sunsetted provisions permanent instead of just extending them to a new sunset.
What McCain didn’t point out was the tax breaks in the farm bill for farmers of crops that didn’t have funny names like algae and asparagus. Or the huge subsidy for dairy farmers. or the tax breaks that might just apply to the fossil fuels industries. He didn’t make fun of the tax breaks he voted for in past legislation that were merely extended.
Or that subsidizing electric scooters might be a good idea if you intend to cut Social Security. Put Grandma on that electric Vespa.
You mean like in The Bible “begets”??????
Well that’s not good. UNless, you are involved in the “begetting” part. :-)
Alice, GREAT article. Thankls for the link.
THis should be required reading for everybody hare at FDL and, America
for that matter.
We need a Nadar type person to lead us to reforming our criminal political
system that rewards and enables the elites(corporate CEO’s and Bankster CEO’s) to own our democracy.
I think that what will move this nation is the cuts to SS and Medicare. When this happens I believe this will be the time that another party , group, organization or something will get off the ground. We need to remove these people that have been running this country for so many years, on both sides.
I’m shocked!
The trick is catching this shit when it’s being developed.
Like right now, there’s stuff being developed that will suddenly appear when this debt ceiling debacle comes to fruition.
Amy and Debbie Stab-me-now and Pelosi and Wasserman-Schultz and Schumer and Durbin and the rest are cut from the same old Democrat brand mold.
Brand old mold. We need brand new mold.
Corporate socialism for the made, crony Randian capitalism for the rest.
This is the problem. We know whats going on but the biggest percentage of the American population does not. We need an organization to run ads in every state letting the public know what they are doing every week. We would have to all financially support it but this is the way to get rid of these parasites.
Here is one thing we can do: make congress dependent on the public for campaign funding instead of the wealthy via something like the American Anti-Corruption Act (AACA). Trevor Potter and Lawrence Lessig are some names behind this, and Bill Moyers has also shown interest.
http://www.anticorruptionact.org and/or http://www.represent.us
Among many other provisions which impose restrictions on lobbying and increase disclosure, the AACA would give each citizen a $100 tax rebate for campaign financing that could be allocated as they see fit (if all of the people that voted in 2012 took advantage of their tax rebate, it’s something like $12+ billion–twice what was spent in 2012 altogether). Of course, politicians have to opt-in to the system and accept severe limits on contributions. It’s in the form of a tax rebate because it gives citizens an incentive to contribute (unlike matching systems)–and also because the right loves reductions in taxes, reducing the potential for absolute polarization over the issue.
We currently have about 310k signatures (“co-sponsors”). It was only introduced in November, so 310k isn’t so bad (yes, I think everyone knows a movement like this has to have feet on the ground, but it would be stupid not to use the internet to our advantage. I have no doubt that if this movement gained enough momentum online, there would be calls for mass protests)
I’m not saying this bill will solve everything, but the current system incentivizes corruption through the campaign finance system: you’re not getting into/staying in office unless you can raise 3-4 million for a senate seat (or 40+ million if it’s a competitive seat) or 1-2 million for a house seat, and it’s quite obvious where the vast majority of that money currently has to come from (and it’s also quite obvious that it comes with strings attached/expectations). Sometimes it can be hard to believe, but a good number of congressmen hate the current system of campaign finance for this very reason, and they complain of having to make sacrifices in order to effect some change (see Lawrence Lessig’s book “Republic, Lost”). Other people (e.g. “Big Money” Mitch) love it and seek to crush any form of campaign finance reform.
And, yes, it’s very unlikely that it will pass through congress even if we have vast numbers backing it–I don’t think anyone in this movement doubts that. But the plan is that once we get a large enough backing there will be a substantial foundation to push for a constitutional amendment (and possibly some media coverage) if congress refuses to pass it.
Even if you’re not entirely optimistic about this, it doesn’t cost you much to become a co-signer and pass it around. If everyone just keeps waiting for the “right” movement to come around, nothing’s going to happen (there are lots of people associated OWS backing this act, except now we’re talking about specific legislation. Believe it or not, there are also have some Tea Partiers involved too).
It’s definitely a huge step in the right direction. At this point we just need as many people as possible to converge around it.
EDIT: Also, if there is enough interest, it would be great if a news post could be made about this act on FDL.
Here’s some more for you to love on.
•$62 million tax credit for companies operating in American Samoa
•$222 million in accelerated depreciation for businesses located on Indian reservations
•$59 million in tax credits for cellulosic biofuels
•$2.2 billion in tax credits for biodiesel and “renewable diesel”
•$7 million in consumer tax credits for buying plug-in motorcycles
•$154 million for the manufacturers of energy-efficient appliances
•$650 million in tax credits for builders of energy-efficient homes
•$12 billion in wind-energy-production tax credits
Corporate welfare is only wrong if you don’t like the corporation.