Corporate Welfare

But “need” is a very subjective concept and is often misused. After a few decades of government handouts, many businesses that have become accustomed to receiving public funds make it their goal to continue getting subsidies. Corporations are the worst of the bunch, because by design they are just money-making vehicles—nothing more, nothing less. To them, subsidies are just another source of money that they can tap into.

Ironically, the bigger and more powerful the industry, the more likely it is to get government handouts—the exact opposite of the way it should be working. For example, the 2005 federal energy bill included $8.1 billion in tax breaks, with mature fossil fuel and nuclear industries receiving 93% of the subsidies and renewable energy industries receiving only about 7%. The bill included about $80 billion in authorized direct spending largely being paid out to nonrenewable-based industry. Indirect subsidies were also included in the bill, like exempting “hydraulic fracturing,” a particular natural gas well-drilling method, from the Clean Water Act.

These inappropriate allocations make it very difficult for renewable energy to get a solid foothold in the energy market. Determining appropriate need is where government subsidy programs often get on the wrong track, helped, of course, by fat campaign contributions, bevies of aggressive lobbyists, and the “revolving door” syndrome that often puts industry heads in charge of the very agencies designed to regulate them (which is also a kind of indirect subsidy). The constant pressure by business interests for our government to take care of the business’s particular needs results in passing massive government handouts to mature industries—many of which are at odds with national environmental and social priorities.