Two-thirds of the $68 billion in business grants and tax credits awarded by the federal government since 2000 went to 528 companies. Nearly 80 percent of the hundreds of billions of dollars in federal loans, loan guarantees, and bailout assistance awarded during that period went to just 12 American and foreign banks. Overall, the lion’s share of federal subsidies and other financial support meant to spur domestic job creation and investment has gone to a relatively select group of banks, energy companies, and government contractors.
Those are the key findings of the nonprofit watchdog Good Jobs First, which expanded its Subsidy Tracker database to include information on 164,000 awards from 137 federal programs over the last 15 years. Subsidy Tracker, launched in December 2010, also includes information about 277,000 awards from 567 state and local government programs. The database tracks more than 1,800 parent companies.
Of particular interest to the Project On Government Oversight are the findings pertaining to federal contractors. Nearly half of the 100 largest federal contractors have received allocated tax credits or federal grants, 30 have received loans, loan guarantees, or bailout assistance, and 24 have received both. At the same time, these companies were awarded billions of dollars in federal contracts.
Many of these companies also have track records of questionable business practices, contract fraud, and other instances of misconduct. Several are notorious tax dodgers.
The federal contractor with the most grants and tax credits is General Electric with $836.5 million, mostly from the Energy and Defense Departments. General Atomics comes in second with $614.7 million from Energy. Other major defense contractors—United Technologies, Boeing, Lockheed Martin, Honeywell, and Raytheon—have each received tens of millions of dollars in Pentagon grants.
GE has also received $28.5 billion in loans and loan guarantees, most of which is bailout assistance from the Federal Reserve. (Since loans are eventually repaid, and the government sometimes makes a profit on the lending, Good Jobs First tallied the loan and bailout amounts separately from grants and allocated tax credits.) The contractor with the most in loans and loan guarantees is Boeing, with $64 billion from the Export-Import Bank. Boeing’s hundreds of billions of dollars in federal contracts and nearly $65 billion in federal subsidies and other financial support since 2000 make it one of “Uncle Sam’s favorite corporations,” according to a report accompanying the revamped database.
Energy services contractor McDermott International has the dubious distinction of being one of the largest federal subsidy recipients that have “inverted,”—reincorporated or merged abroad in order to avoid U.S. taxes. McDermott—now incorporated in Panama but based in Texas—received $12 million in Energy and Defense grants and tax credits and $36.8 million in Export-Import Bank loan guarantees. Subsidy Tracker links to Citizen for Tax Justice’s Corporate Tax Explorer database, so you can quickly see what many recipients of government largesse pay in federal and state income taxes. GE, for example, currently has an average federal tax rate of -9%.
To complete the picture, Subsidy Tracker also links to the Sunlight Foundation’s Fixed Fortunes report, which compares the amount in federal contracts and subsidies (grants, loans, financial assistance) received by 200 large corporations with their federal lobbying expenses and campaign contributions. POGO blogged about the report when it was released last fall, highlighting the federal contractors among the 200 with the largest returns on investment. For example, we discovered that Lockheed, Boeing, Raytheon, General Dynamics, and Northrop received a combined total of $1,540 in federal contracts and support for every $1 they spent on lobbying and political donations.
The new-and-improved Subsidy Tracker is a great way to celebrate Sunshine Week. This free and easy-to-use database opens up a vast trove of information about the “corporate welfare” being doled out around the country by governments at all levels.