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Ending welfare for the rich

Congress and President Clinton ended welfare for the needy last year. Now it is time to do something about the other welfare system: alms for Corporate America.

Billions can be saved if only lawmakers have the guts to take as big a whack out of corporate bloat as they did out of the entitlement system for the poor.

Corporate welfare is not a new target. Prospects may be better for serious reform this year, though, for two reasons.

First, the welfare entitlement system, which lasted 60 years, has been dismantled. President Clinton has talked about trying to undo some of the worst elements of welfare reform, but it is unlikely anything will come of his efforts.

Second, some prominent Republicans finally are making an issue out of corporate welfare reform. Rep. John Kasich, R-Ohio, believes members of his party should be ready to go after any welfare abuse, whether in entitlements for poor people or companies. He put together a group that identified a dozen programs that could be eliminated, saving the government $11.5-billion over five years.

This month, another group of House members, mostly Democrats, produced its own corporate welfare reform cuts, which are estimated to save $261-billion over five years. In its study of corporate welfare reform two years ago, the Congressional Budget Office cited 60 tax breaks benefiting businesses, 14 of which cost the government at least $1-billion each annually.

Corporate welfare is handed out in numerous forms. In addition to tax breaks and loan subsidies, a variety of programs promote the use of favored products both in this country and in the world market. For example, the government subsidizes the use of ethanol as a motor fuel, and it pays wine companies to promote their wares abroad. Each program may have some merit. But at a time when both the Clinton administration and Congress want to balance the federal budget, can the government afford such luxuries?

Lawmakers should begin with an accurate accounting of the money being spent on corporate welfare. Truly wasteful and counterproductive programs should be eliminated, and those corporate subsidies that produce some larger economic or social benefit should be thrown into the mix with the many other worthy programs that compete for scarce federal dollars. If President Clinton and Congress are really serious about cutting corporate welfare, they will identify enough savings to reduce the deficit and redirect some funds to programs that serve the truly needy.