In Federal Grants Freeze Chaos, Corporations Get Off Scot-Free
Trump's priorities are clear: cut programs for the poor and vulnerable, but preserve and expand handouts for Big Business.
Earlier this week, the Trump administration sparked nationwide chaos by suspending federal assistance payments — an amorphously defined category in an embarrassingly drafted memorandum by the Office of Management and Budget (OMB). With local beneficiaries across the country — farmers and domestic violence shelters, state agencies and local Meals and Wheels programs, governors and city council representatives — responding with shock and outrage, the Trump administration quickly capitulated.
First, it issued a statement that the order would not affect any individuals, just institutions; then it rescinded the freeze altogether. It was an amazing defeat of Trump and his minions and an important reminder that they can be beaten.
But amidst all the fear and frenzy while the OMB memo appeared poised to take effect, one sector was notably calm: Corporate America, the giant beneficiary of government largesse.
The bizarre OMB memo announced an effort to root out “Marxist equity,” “woke gender ideology,” “Green New Deal social engineering” and other boogeymen programs from the ranks of federal grants and loans. The page-and-a-half memo, which purported to impact $3 trillion in annual funding was written as if it were a tweet to “own the libs” rather than a directive impacting vast reaches of the nation. No one was certain what it meant (including, as it turned out, its authors).
But one thing was clear all along: Corporate America was going to get off scot-free. Massive tax subsidies for large corporations? No problem. Below market leases to oil and gas companies? Not under review. Giveaways to Big Pharma? Keep at it. Gigantic overpayments to privatized Medicare insurance companies? Business as usual.
That’s because the vast array of supports for giant corporations come through a variety of elaborate channels, the least important of which are direct grants and loans.
Even more importantly, it’s because the Trump administration — which has touted its commitment to “government efficiency” and budget cutting — has no real interest in those objectives. It wants to cut government spending on programs that benefit the poor and vulnerable, to be sure, but it wants to preserve and expand subsidies and handouts for Big Business.
The amount the federal government spends on corporate giveaways is astounding. For anyone authentically worried about reducing government spending and advancing an “efficiency” agenda, this is the first place to look:
- Measures to reduce prescription drug prices could save taxpayers and consumers $200 billion annually.
- Ending privatized Medicare could save $100 billion annually, while improving quality of care.
- Ending tax subsidies and handouts to oil and gas corporations would save about $20 billion annually.
- Fair taxes on the rich and corporations could raise $500 billion annually, or potentially much more, as compared with the baseline of the expected extension of the Trump tax cuts.
Corporate tax manipulation is so bad that dozens of major, profitable corporations pay zero in taxes. From 2018 to 2020 – the first three years of the 2017 Trump tax cut — 39 profitable major corporations paid no taxes at all, according to the Institute for Tax and Economic Policy. Collectively, the 39 companies reported $122 billion in profits during the three-year period.
It’s no surprise that the Trump memo suspending federal assistance will leave these gifts to corporate America intact. Nor is there any reason to believe the Elon Musk-led “government efficiency” commission will take measures to curtail them.
Trump’s agenda is not only to preserve corporate handouts, but to lavish even more government largesse on the corporate class. And he’s wasting no time doing exactly that.
Trump’s executive orders aim to open more public land to oil and gas drilling, roll back existing measures to shift American energy away from fossil fuel reliance, confer even more advantages on the Big Tech artificial intelligence corporations and promote cryptocurrency businesses. He’s named the richest person in the history of the world – a person with direct business interest in a vast array of federal policies and contracting decisions – to make recommendations for deregulating and reshaping government. And he’s already ordered a halt to enforcement of environmental and civil rights cases, as well as a review of enforcement actions brought by the Federal Trade Commission and Securities and Exchange Commission.
The preposterous hysterics about “Marxist equity” programs and complaints about a Green New Deal that was not passed into law should not obscure the administration is engaging in class — not just cultural — warfare. This is an administration fervently committed to protecting the prerogatives of Big Business and conferring ever more wealth on the corporate class.