Mining The Federal Treasury - Corporate Welfare For The Wealthy

Most Democrats, including the President, and their left wing, Keynesian economists cringe at the thought of the Federal government cutting spending. They hold onto the failed theory that government spending is essential to the functioning of our economy. They never seem to care, investigate, or understand how much of Federal government spending is totally wasteful and fulfills no positive impacts on the economy.

Consider the following wasteful spending, from a wide range of government departments, we have covered many times in this blog:

• Social Security, Medicare, Medicaid, Federal food stamp programs, and Federal unemployment programs waste well over $200 billion a year due to inefficiencies, criminal fraud, and just plan waste.
• The IRS fails to collect almost $400 billion in taxes due to the Federal government from tax evaders.
• The Navy built two ships for $300 million that it recently scrapped without ever using.
• The State Department spent $80 million to build a consulate in Afghanistan, only to abandon it before it was ever used.
• GSA employees treated themselves to a lavish Las Vegas convention, costing $832,000, where they put on skits about wasting taxpayer money.
• The National Sciences Foundation wastes millions of dollars a year working on projects that serve no national or taxpayer interests such as when did dog become man's best friend, why do boys play with trucks and girls play with dolls, how to ride a bike, etc.

This is just a small sample of waste, spending that could be taken out of the Federal budget, reduce the growth in our national debt, and return some taxpayer wealth to the American taxpayer and the American economy, all without affecting social safety net benefits, without making people homeless or hungry, etc.

If the President and others ever decided to take some excessive and unnecessary spending out of the Federal government, spending that fulfills no positive purpose for the average American, they may want to start with a recent publication from Senator Tom Coburn entitled: "Treasure Map - The Market Access Program's Bounty of Waste, Loot, and Spoils Plundered From Taxpayers."

The Market Access Program (MAP) is a Department of Agriculture program that hands out taxpayer money to a variety of trade organizations and companies to promote their own products in the marketplace. The purpose of MAP is to: “improve foreign market access for U.S. products, build new markets, increase competitiveness for U.S. agriculture in the global marketplace, and [provide] assistance to developing foreign countries.”

It is only one of many Ag Department programs that grant taxpayer money to these types of organizations. One would have thought that the recipients of MAP funding would and should do this marketing work with their own shareholders' wealth, not taxpayers' wealth. The Senator's analysis and publication uncovered some of the waste:

• American Peanut Council, headquartered in the Washington suburb of Alexandria, Virginia, receives over $2 million annually from taxpayers for international market development.

• American Forest and Paper Association based in Washington, DC, receives over $9 million from taxpayers to promote industry products outside the United States.

• American Hardwood Export Council based in Reston, Virginia receives $8.4 million annually.

• American Seed Trade Association receives more than $50,000 annually and is based in Alexandria, Virginia.

• Cotton Council International, based in Washington, DC, receives over $18 million.

• Distilled Spirits Council, based in Washington, DC, receives nearly $250,000 annually.

• National Confectioners Association, based in Washington, DC, receives $1.3 million annually.

• National Renderers Association, based in Alexandria, Virginia received nearly $1 million annually.

• Pet Food Institute, based in Washington, DC, receives $1.3 million each year.

• U.S. Dairy Export Council, based in Arlington, Virginia, receives $4 million annually.


• U.S. Dry Bean Council based in Washington, DC, receives $1 million.

• U.S. Grains Council, Washington, D.C, receives over $7 million.

• U.S Hide, Skin, and Leather Association, Washington, DC, receives $76,000.

• US Wheat Associates, Arlington, Virginia, receives $6 million.

• USA Rice Federation, Arlington, Virginia, receives $2.8 million.

• American Sheep Industry Association based in Eagleton, Colorado receives $410,300.

• National Potato Promotion Board based in Denver, Colorado $5.2 million.

• America Soybean Association based in St. Louis, Missouri receives $5.8 million.

• Florida Department of Citrus based in Lake Alfred, Florida receives $5.3 million.

• Western United States Agricultural Trade Association based in Vancouver, Washington receives $9.7 million.

A few obvious questions come to mind:

1. Where in the Constitution does it say that the American taxpayer should work and pay taxes in order for the political class to redistribute it to private industry companies and trade groups?
2. Of those organizations listed above, how many of them made election and reelection campaign contributions to the politicians in Washington in order to get this free treasure, courtesy of the American taxpayer?
3. Did you notice how many of these entities receiving free taxpayer money are located where the treasure is, the greater Washington DC area?

Disgusting, wasteful, and unnecessary corporate welfare that renders no benefits to most Americans. The Senator's report also goes into some degree of detail regarding the largest recipients of this treasure:

Black Diamond Growers

• Blue Diamond Growers is the “world's largest tree nut processing and marketing company.”
• Since 1999, the company has received more than $28 million from the Market Access Program to market its almonds overseas.
• Blue Diamond’s trademarked products are the dominant almond products brand in the United States, found in 93% of all American grocery stores.
• Blue Diamond reported $3.3 billion in sales over the past five years, $709 million in 2009 alone.
• Blue Diamond Grower is a prolific advertiser, with recent ads featuring major league baseball and football themes.
• Blue Diamond annual sales are almost three times the amount USDA spends each year on the entire MAP program.

Despite the wealth, profitability, reach, and success of Blue Diamond, the company received $3.3 million this year, its highest taxpayer treasure take in a decade.

California Wine Institute

• California’s Wine Institute is the one of the single largest recipients of MAP taxpayer funds, having received $6.9 million in 2012.
• The Wine Institute has received nearly $60 million from MAP in the past decade.
• The Wine Institute has a membership list that includes some of the world’s most prominent and wealthiest wine makers.
• California winery owners travel around the world to promote their products with MAP funds.
• MAP provides reimbursement for half of all eligible expenses related to marketing junkets overseas including travel, international wine tasting events, trade shows, and consumer advertising, and 100% reimbursement of all eligible expenses for regional or “wine-style associations."
• Past trips financed with taxpayer MAP funds have included wine festivals and tastings in London, Denmark, Mexico, and Dublin.

Rich people and rich companies traveling around the world, drinking wine on the taxpayer dime. Whoever thought this was a good idea and good use of taxpayer funds? The really insulting aspect about these expenses is how do citizens in other wine producing states feel about their tax dollars being sent to California wineries, the competitors of wineries in these other states?

Sunkist

• Sunkist Growers, with sales exceeding $1.2 billion annually, is considered one of the biggest sellers of fresh fruit internationally.
• According to the Sunkist website, Sunkist claims their brand is among the most recognized and respected in the world.
• The company has had a century of successful advertising campaigns, and has long been associated with prominent, and likely expensive, advertising firm, DraftFCB, whose clients also includes Boeing, Kraft, KFC, Motorola, and Hilton.
• Despite its long and successful business and marketing history, Sunkist receives $3-4 million annually from U.S. Department of Agriculture to promote its products worldwide and to perform market research.
• In total, $34.1 million in taxpayer funds have been collected by Sunkist since 1999.
• Recent MAP funded activities have included advertising Sunkist lemons in Japan, China, and Hong Kong, and Sunkist oranges in Singapore.

Looks like Sunkist can squeeze the American taxpayer as well as it squeezes oranges and lemons.

You get the idea, I could go on, pulling the research out of the Senator's report on other companies being served by MAP but nothing would change the fact that the political class has a long, pathetic history of giving taxpayer money to companies and trade associations that should be using their own wealth for their own marketing activities.

The really sad part of this giveaway and treasure hunt is that MAP is not the only government organ handing out the free money. Just within the Department of Agriculture there are four other entities, besides MAP, that regularly give away millions and millions of taxpayer dollars to companies to promote their own products. There are at least nine Federal agencies or departments operating dozens of market development assistance programs including the following Federal organizations:

• International Trade Administration
• Economic Development Administration
• Small Business Administration 
• United States Trade and Development Agency
• Overseas Private Investment Corporation
• The Bureau of Economic, Energy, and Business Affairs 
• Senior Visitor Business Liaison
•  USDA has Foreign Agricultural Service employees stationed around the world.
• Export-Import Bank of the United States

Such redundancy and waste. Spending money on functions it should not be spending money on and dong it over and over from different government organizations.

But are these programs successful and worth the expense? According to the Senator's analysis and report, they are probably not successful. The Senator points to various studies over the years that tend to conclude the programs are not worth their expenses. Even if they were worthwhile investments, they still should not be done. These are  only thinly disguised corporate welfare programs which highlights the high level relationships between large private market entities and the Washington political class.

None of this waste would occur if Step 45 from "Love My Country, Loathe My Government" was in place. Step 45 would prohibit the spending of Federal taxpayer wealth unless that expenditure would materially affect a significant number of citizens in at least five states. If California wants to promote its wine industry, let California citizens pay for the promotion efforts. If Sunkist wants to promote its products, let Sunkist and its shareholders pay for the the promotion efforts.

How Democrats and the President can be so against reducing these types of unnecessary expenses is beyond me. Is it because they love almonds, California wine, and fresh fruit? Or is it because they like the campaign money that comes from nuts, wine, and fresh fruit? This seems to be the more logical reason and has nothing to do economics and our dire national fiscal crisis, regardless of how it runs up our national debt.


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