The Corporate Welfare at the Heart of Biden’s Infrastructure Plan
A key component of the Biden administration’s $2.25 trillion infrastructure proposal is a plan to spend hundreds of billions of dollars on specific U.S. industries to enhance their global competitiveness.
The Cato Institute’s Chris Edwards says it’s nothing more than old-fashioned corporate welfare. But this time, on a massive scale:
He wants $300 billion for manufacturing, $100 billion for broadband, $100 billion for electric utilities, $174 billion for electric vehicles, $180 billion for research, and much else. Much of this spending would subsidize big corporations.
Big corporations who are already doing the work Biden now wants to subsidize:
AT&T, Verizon, and other corporations invest more than $50 billion a year in broadband. Big corporations such as GE, Siemens, and Mitsubishi already invest heavily in wind power. Tesla, General Motors, Volkswagen, and other corporations already spend billions on electric vehicles. Biden wants subsidies for EV charging stations, but Tesla has already built more than 2,500 of them. The private sector with its own money build America’s 136,000 gas stations, and it should do the same for EV charging stations, if that’s what consumers want. There is no need for the federal government to pump up the profits of corporations in these industries.
Handing out taxpayer money to corporations to do more of what they already do is hardly a novelty in Washington. Neither is the spectacle of shoveling money in the corporate front door while hauling it out through the back:
What is really perverse is that Biden is proposing these corporate subsidies at the same time he wants to jack up corporate taxes. During the campaign, the Tax Foundation estimated that Biden’s overall tax package would slash business investment by more than $1 trillion. So broadband, energy, manufacturing, and other industries would get billions in new subsidies from Biden, but they will be paying billions more in taxes. Biden’s plan would be a giant, wasteful circular flow of money from corporations, through Washington, then back to favored corporations.
The infrastructure bill, then, isn’t really a proposal to increase people’s faith in big government. It’s to remind them of the things that made them distrust big government in the first place.
Image Credit: Gage Skidmore Flickr