Not this term. But why didn’t he? It’s a question that has begun to percolate these past few weeks as Colin Powell, in an intriguing populist flicker, scorned the “K Street welfare kings”–the lawyers and lobbyists who practice out-of-gridlock intercourse along Washington’s power corridors–while the Congress has struggled, futilely, to balance the budget on the backs of the poor. Powell may well have altered the nation’s geomythology: K Street now joins Wall Street, Main Street and Skid Row as a distinctive American place. It is the Boulevard of Broken Promises. And it begs, again, a question that has been studied to death by think tanks of the left and right: if you want to balance the budget – or lower taxes, or invest in the future – why not eliminate the tens of billions in subsidies and tax breaks that go to the undeserving rich each year?
Actually, the term “corporate welfare” was invented by Bill Clinton’s own labor secretary, Robert Reich. It has not made the secretary very popular in the White House, especially among the “realists” on Clinton’s staff. “Bob just couldn’t get a substantial discussion going,” said a fly on the wall at last winter’s budget strategy sessions. “If you come out of the Congress – as Leon [Panetta] and George [Stephanopoulos] do – this strikes you as the most ridiculous waste of time. You always get beat by the lobbyists. You embarrass your friends in Congress, all of whom have loopholes they’re trying to protect. The only person who kind of liked the idea was the president.”
But not enough to go with it. The Clinton administration hasn’t even paid the expected waffletory lip service to ending corporate welfare. Which is mystifying on at least four counts. First, it would he good policy. “It’s pure reform,” says Robert Shapiro of the Progressive Policy Institute, who did the most extensive (and convincing) study of corporate loopholes and subsidies and believes $265 billion can be saved over five years. “It eliminates market distortions, helps create a more efficient economy – and it could give you a lot of money to play with.”
Second, it’s good politics – macro and micro. It became even better politics this year, as Republicans declared war on all manner of social spending (much of which is badly in need of reform, to be sure). The president might have wondered why the new GOP majority was so intent on cutting school lunches while increasing the subsidy – if you can believe it – that companies like McDonald’s get to advertise Big Macs overseas. It would have been an honorable way to keep the GOP on the defensive, as opposed to the stale, squalid scare tactics on Medicare he is rehearsing now. “Corporate America dodged a bullet this year while a lot of poor people didn’t,” says Stephen Moore of the Cato Institute, who believes big businesses receive $85 billion in direct subsidies each year. (Aid to Families With Dependent Children is $12.5 billion.)
Third, what have Clinton’s “friends” in Congress done for him lately? The president spent his first two years in office prostrating himself before the likes of Mitchell, Foley, Daschle and Dingell. They were barely able to pass his 1993 budget; they completely misread their own troops on health-care reform in 1994. And they practiced a corrupt, extortionary brand of interest-group politics – perfected in the 1980s, by disgraced House Majority Leader Tony Coelho – that Clinton supposedly ran against in 1992. They got whomped in the last election. Why not pile on?
Finally, someone else might steal the issue. Like Colin Powell. Or maybe even the Republicans. Indeed, there were signs last week that the earth has begun to move in Congress. House Ways and Means Committee chairman Bill Archer of Texas, a fierce opponent of reform in the past, suddenly announced a $30 billion loophole-closing package, some of which actually closed loopholes (like $200 million per year in ethanol subsidies). Budgetary skeptics might point out that these loophole closings merely restore money lost in an earlier $27 billion loophole opening – the repeal of the alternate minimum tax (which snags companies that receive so much corporate welfare they avoid taxation entirely). Skeptics will also note that the House Agriculture Committee just blinked on an important agri-pork reform bill. “But hey, look, we’re doing more than the Democrats ever did,” said House Budget Committee chairman John Kasich, one of the more aggressive loophole closers. “This is the beginning of a huge cultural change in Washington.”
If we’re lucky. “Oh, it’s starting to happen,” Shapiro agrees. “The Republicans have no choice if they want to balance the budget. It’s where the money is.” More important, it’s where the public is. Bill Clinton, however, appears to be someplace else.
