Tags: Mattera | loan | credit | grant

Good Jobs First's Mattera Explains Federal Grants and Credits

By    |   Tuesday, 07 Apr 2015 07:43 AM


Amid the heart of the budget and tax season, Philip Mattera, research director of Good Jobs First, appeared on C-SPAN's "Your Money" to talk about the $68 billion in federal grants and tax credits that have been dispensed to corporations since 2000.

Good Jobs First is a nonprofit, nonpartisan research center that has traditionally worked on state and local economic development policy and has developed a database called Subsidy Tracker to compile data on corporate subsidies that has recently been extended to the federal level, covering 137 federal programs that provide grants, allocated tax credits, loans, loan guarantees and bailout assistance to corporations.

Mattera cautioned that the figures are only for those programs where it is possible to identify specific companies, but for many programs this cannot be done. He estimated that the grants and allocated tax credits work out to $10 billion per year, with loans and guarantees of $30 billion per year, but much higher after the 2008 financial crisis.

The group has produced a report called "Uncle Sam's Favorite Corporations," and host Bill Scanlon posted a list of the parent companies that have received $500 million or more in federal grants and tax credits, topped by a Spanish energy company most Americans have never heard of called Iberdrola, which has received $2.172 billion, followed by a group of mostly domestic energy companies down to at least number nine.

Mattera explained that this outsized amount was due to a specific program that allowed companies that installed renewable energy equipment to receive cash grants, and Iberdrola has purchased a lot of wind farms in the U.S.

Next Scanlon posted a list of parent companies that have received loans and bailout assistance from the federal government of $100 billion or more, topped by the aptly named Bank of America at $3.497 trillion, with a "t": Citigroup at $2.591 trillion; Morgan Stanley, $2.117 trillion; Barclays, $943 billion; Goldman Sachs, $912 billion; Royal Bank of Scotland, $652 billion; Credit Suisse, $532 billion; Deutsche Bank, $478 billion; and BNP Paribas, $374 billion.

These funds were pumped into banks to buy up toxic securities through several Federal Reserve programs, "basically to prevent the banking system from collapsing." The figures don't offset repayments.

Mattera explained further that at the state level, New York is at the top of states that have subsidized corporations, with large subsidies extended to some upstate chip fabricators and to Alcoa for energy.

He said the center hopes the data will be used "to inform the very heated debate" on these subsidies, although the group itself doesn't take a position, but "a lot of people have strong opinions on "corporate welfare."

When a caller asked why the middle class would support programs like these, Mattera responded, "Corporations spend a lot of money in lobbying to persuade Congress and the public that these programs are necessary. They usually justify them in terms of job creation."

He referred to the current debate over extending the charter of the Export-Import Bank, which is justified as a job creator.

This writer would add that some of the biggest recipients have, in effect been able to stage an "Occupy Treasury" program by serially installing their executives as secretary and in other high posts at the Treasury Department.

(Archived video can be found here.)

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Philip Mattera, research director of Good Jobs First, appeared on C-SPAN's "Washington Journal Your Money" series to talk about the $68 billion in federal grants and tax credits that have been dispensed to corporations since 2000.
Mattera, loan, credit, grant
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2015-43-07
Tuesday, 07 Apr 2015 07:43 AM
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