CEOs Want Balanced Budget; Won't Give Up Corporate Welfare

[Janice Shields <jshields@essential.org>]

              CEOs DEMAND BALANCED BUDGET BUT WON'T GIVE UP 
                            CORPORATE WELFARE


     CEOs of 91 companies signed a letter to President Clinton,
Senate Majority Leader Dole, House Speaker Gingrich and all members
of Congress last December, calling on the President and Congress to
balance the budget.  Consumer advocate Ralph Nader responded by
sending letters to all of the signatories of the CEOs' letter,
asking them to identify federal subsidies and tax breaks that
benefit their corporations and to select the subsidies and tax
expenditures that the CEOs would agree to begin to forego
immediately in order to help balance the budget.  More than five
months later and after Ralph Nader's Corporate Welfare Project
contacted a second time the signatories to the balanced budget
letter, none of the 91 CEOs have identified even one federal
subsidy or tax break that their companies would give up to help
balance the budget.

     "This is the ultimate form of corporate hypocrisy," said Ralph
Nader.  "Wealthy CEOs demand a balanced budget, but refuse to take
their snouts out of the federal corporate welfare trough," added
Nader.

     Ralph Nader pointed out in his letter to the CEOs that if
Congress abolished only five subsidies* for corporations,  $5.12
billion in federal spending would be saved in fiscal year 1996.  If
only five tax breaks* for businesses were eliminated, $46.4 billion
in additional federal revenue would be collected in 1996.  These
ten subsidies and tax breaks will total $51.52 billion in 1996; in
its annual report, Aid for Dependent Corporations (AFDC), the
Corporate Welfare Project identified 153 examples of 1995 federal
corporate welfare totalling $167 billion. 

     The Corporate Welfare Project has identified several examples
of subsidies and tax breaks enjoyed by specific companies whose
CEOs were signatories to the balanced budget letter.  For example,
Eastman Kodak was able to reduce its 1995 U.S. taxes by $37 million
due to export sales and manufacturing tax credits; Kodak's 1995
profits were $1.252 billion.  Chevron had deferred payment of more
than $4 billion in taxes as of the end of its 1995 fiscal year, by
using accelerated depreciation; Chevron's 1995 profits were $930
million.  Union Carbide received $200 million in Overseas Private
Investment Corporation insurance in 1995 for its investment in
Kuwait; Union Carbide's 1995 profits were $925 million. 
AlliedSignal was awarded an Advanced Technologies Program grant for
$1.2 million in 1995; AlliedSignal's 1995 profits were $875
million.  "CEOs of profitable corporations call for balancing the
federal budget, but won't give up their federal subsidies and tax
breaks," said Janice Shields, Coordinator of Ralph Nader's
Corporate Welfare Project.  "Does this mean that these wealthy CEOs
want the budget balanced on the backs of low and moderate income
families?," she asked.        
     
     *The subsidies come from the Export-Import Bank, the Overseas
Private Investment Corporation, the Export Enhancement Program, the
Market Promotion Program and the Foreign Military Financing
Program.  The tax breaks include accelerated depreciation, reduced
rates on the first $10 million of corporate taxable income, the
exception to the source rule for the sale of inventory property,
tax credits for corporations with income in U.S. possessions and
expensing rather than amortizing research and development costs.

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-----
Janice Shields
Center for Study of Responsive Law
P.O. Box 19367, Washington, DC  20036
202-387-8030			|   Internet:	jshields@essential.org