Ending Corporate Welfare
by Rep. Bernie Sanders





In the United States today, despite an explosion in technology and a huge increase in worker productivity over the last 30 years, the middle class is shrinking and millions of Americans are working longer hours for lower wages. There are a number of reasons for this, but one of the key factors is the loss of good-paying manufacturing and information technology jobs - many of which are being outsourced by major American corporations to China , India and other countries where workers are paid a fraction of the wages that American workers receive.



Incredibly, in the last three years we have lost 2.8 million good-paying manufacturing jobs - 16 percent of our entire manufacturing work force. That includes over 9,000 manufacturing jobs in Vermont . During that same period we have lost over half a million good-paying information technology jobs, and there are estimates that, in the coming years, millions of information technology jobs will be outsourced. We are seeing that trend occur in our state.



In terms of the future of our economy, and the kind of jobs that will be available for our kids and grandchildren, a recent study showed that the new jobs being created in this country paid 21 percent less than the jobs that we are losing. Twenty years ago the largest employer in the United States was General Motors - a company that has a strong union and pays its workers good wages and good benefits. Today, the largest employer in the United States is Wal-Mart, vehemently anti-union, and a company that pays its employees poverty wages and minimal benefits. In a nutshell, that is what the "new American economy" is all about and why the middle class in this country is collapsing.



While corporate America is selling out the working people of this country and moving millions of jobs abroad, the taxpayers of this country continue to provide tens of billions a year in corporate welfare - loans, loan guarantees, grants, low-cost insurance and tax breaks - to the very same corporations that are throwing American workers out on the street. Here are just a few examples:



* Since 2001, Motorola has laid off 42,900 workers and invested $3.4 billion in China , while receiving over $190 million from the U.S. Export-Import Bank and $16 million from the Advanced Technology Program.



* Since 1975, General Electric eliminated more than 260,000 U.S. jobs and invested over $1.5 billion in China , while receiving more than $2.5 billion from the U.S. Export-Import Bank, more than $100 million from the Fossil Energy Research and Development Program, and $8.2 million in corporate welfare from the Advanced Technology Program.



* Since 1990, Boeing laid off 135,000 workers increasingly outsourcing design work to China , Russia and Japan , while receiving over $18 billion in corporate welfare from the Export-Import Bank.



* Since 2001, General Motors laid off 37,500 workers and invested $3.5 billion building manufacturing plants in China , while receiving over $500 million from the U.S. Export-Import Bank, $9.1 million from the Advanced Technology Program, and more than $8.5 million from the Partnership for a New Generation of Vehicles. GM has recently announced that it will be buying $6 billion in auto parts from China every year, up from $2.8 billion last year.



* Since 2001, IBM laid off over 15,000 U.S. workers and signed deals to train 100,000 software specialists in China over the next three years, while receiving more than $20 million from the U.S. Export-Import Bank.



* While Halliburton laid off 10,000 workers when they merged with Dresser, and has used foreign subsidiaries to evade U.S. taxes, they and their subsidiary Kellogg, Brown and Root received $551 million in corporate welfare from the Export-Import Bank since 2000.



And the list goes on. Dozens of America 's largest corporations are on the dole while they move our jobs abroad.



If an American worker loses his job and applies for unemployment benefits, he has to fill out paperwork explaining why he is entitled to that federal help. On the other hand, a multinational corporation can receive billions of dollars in federal aid for "job creation" while, at the same time, laying off thousands of workers - with no questions asked. This is insane public policy.



Legislation that I have just introduced with over 50 co-sponsors, the Defending American Jobs Act of 2004, would change all of that. For the first time, companies that apply for grants, loans and loan guarantees from the federal government would have to let the American people know on an annual basis how many workers they have in the United States, how many workers they have outside the United States and a brief description of wages. And if these companies lay off a greater percentage of workers in the United States than they do overseas, they would be prohibited from receiving future taxpayer assistance from the federal government until they, at the very least, went back to the same employment level that they had when they first applied for government assistance.



Is this legislation the only approach to stop the massive layoffs that we are seeing in manufacturing and information technology? Absolutely not. Among other initiatives, we need to fundamentally rethink our disastrous trade agreements which have given us a $500 billion trade deficit. We should also be providing federal support to those businesses and worker-owned enterprises that want to invest in the United States and create good-paying jobs here, rather than move to China .



One thing is certain, however. The American people should not be providing billions in corporate welfare to the same companies that are throwing American workers out on the street. We should not be adding insult to injury.



Bernard Sanders is the independent member of the U.S. House from Vermont.