Broadcast Oct 25, 2001
It's one thing for the government to give the airline industry $5 billion without strings. More than the market value of the five major airlines put together, and $10 billion in guaranteed loans. The bailout makes almost no economic sense. I mean, even if an airline went bankrupt, the planes and crews wouldn't disappear. They'd just be bought up by another airline. But at least the public understands that airlines have taken a real beating since September 11th, so it's not completely absurd to give them some financial support.
The same thing for the insurance industry. Congress is now readying legislation to protect insurers against the financial risk of future attacks. It's not clear why an industry that's in the business of assessing and covering risks should get this kind of handout, but let's give them the benefit of the doubt too. The insurance industry already absorbed $40 billion in losses from September 11th, and who knows how large losses from a future attack might be.
But here's one giveaway that doesn't even pass the benefit-of-the-doubt test. I'm talking about the plan to give away more than $25 billion next year to corporations that include some of America's most profitable, as part of the so-called stimulus package intended to spur America's ailing economy. The House would do this by repealing what's known as the alternative minimum tax, first adopted in 1986 to assure that no profitable business could use tax loopholes and shelters to avoid paying any tax at all. Repeal would, of course, reopen the floodgates of loopholes and shelters.
But even worse, the repeal would be retroactive. In other words, almost all of the minimum tax payments that big, profitable corporations have made during the past 15 years would be returned to them. Now we're not talking about companies facing bankruptcy here. About a quarter of the $25 billion windfall would go to 14 Fortune 500 corporations that together reported more than $33 billion in profits last year: IBM, General Motors, General Electric and onward right through America's biggest and best.
Supporters say with a straight face the purpose is to reduce pressure on companies to eliminate jobs and give Wall Street more confidence the companies can weather the economic downturn. But you know as well as I these companies are going to continue to cut jobs when it's more profitable to cut than to keep the jobs. And Wall Street isn't worried about big, profitable companies weathering this economic downturn.
At a time of national crisis when America is being asked to put partisanship aside and sacrifice for the common good, this is obscene. In fact, this is just about the most audacious, shameless instance of corporate welfare I have ever seen. And that is saying something.