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MICROCOMP Output File UNNECESSARY BUSINESS SUBSIDIES HEARING BEFORE THE COMMITTEE ON THE BUDGET HOUSE OF REPRESENTATIVES ONE HUNDRED SIXTH CONGRESS FIRST SESSION HEARING HELD IN WASHINGTON, DC, JUNE 30, 1999 Serial No. 106±5 ( Printed for the use of the Committee on the Budget U.S. GOVERNMENT PRINTING OFFICE 57±748cc WASHINGTON : 1999 VerDate 04-JAN-2000 08:41 Jan 10, 2000 Jkt 010199 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 E:\HEARINGS\57748.TXT txed02 PsN: txed02 COMMITTEE ON THE BUDGET JOHN R. KASICH, Ohio, Chairman SAXBY CHAMBLISS, Georgia, JOHN M. SPRATT, Jr., South Carolina, Speaker's Designee Ranking Minority Member CHRISTOPHER SHAYS, Connecticut JIM MCDERMOTT, Washington, WALLY HERGER, California Leadership Designee BOB FRANKS, New Jersey LYNN N. RIVERS, Michigan NICK SMITH, Michigan BENNIE G. THOMPSON, Mississippi JIM NUSSLE, Iowa DAVID MINGE, Minnesota PETER HOEKSTRA, Michigan KEN BENTSEN, Texas GEORGE P. RADANOVICH, California JIM DAVIS, Florida CHARLES F. BASS, New Hampshire ROBERT A. WEYGAND, Rhode Island GIL GUTKNECHT, Minnesota EVA M. CLAYTON, North Carolina VAN HILLEARY, Tennessee DAVID E. PRICE, North Carolina JOHN E. SUNUNU, New Hampshire EDWARD J. MARKEY, Massachusetts JOSEPH PITTS, Pennsylvania GERALD D. KLECZKA, Wisconsin JOE KNOLLENBERG, Michigan BOB CLEMENT, Tennessee MAC THORNBERRY, Texas JAMES P. MORAN, Virginia JIM RYUN, Kansas DARLENE HOOLEY, Oregon MAC COLLINS, Georgia KEN LUCAS, Kentucky ZACH WAMP, Tennessee RUSH D. HOLT, New Jersey MARK GREEN, Wisconsin JOSEPH M. HOEFFEL III, Pennsylvania ERNIE FLETCHER, Kentucky TAMMY BALDWIN, Wisconsin GARY MILLER, California PAUL RYAN, Wisconsin PAT TOOMEY, Pennsylvania PROFESSIONAL STAFF WAYNE T. STRUBLE, Staff Director THOMAS S. KAHN, Minority Staff Director and Chief Counsel (II) VerDate 04-JAN-2000 08:41 Jan 10, 2000 Jkt 010199 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 E:\HEARINGS\57748.TXT txed02 PsN: txed02 C O N T E N T S Page Hearing held in Washington, DC, June 30, 1999 ................................................. 1 Statement of: Ralph Nader, consumer advocate .................................................................... 6 Hon. Dan Miller, a Representative in Congress from the State of Florida . 213 Hon. John B. Shadegg, a Representative in Congress from the State of Arizona ...................................................................................................... 218 Hon. John E. Sununu, a Representative in Congress from the State of New Hampshire ........................................................................................ 227 Hon. David Minge, a Representative in Congress from the State of Min- nesota ............................................................................................................. 272 Hon. Robert Shamansky, a former Representative in Congress from the State of Ohio .................................................................................................. 279 Hon. Joseph M. Hoeffel, a Representative in Congress from the State of Pennsylvania ............................................................................................. 289 Jill Lancelot, Legislative Director, Taxpayers for Common Sense ............... 295 Thomas Schatz, President, Citizens Against Government Waste ................ 301 Robert McIntyre, Director, Citizens for Tax Justice ...................................... 306 Stephen Moore, Director of Fiscal Policy Studies, the Cato Institute .......... 317 Grover Norquist, President, Americans for Tax Reform ............................... 330 Prepared statement of: Mr. Nader (attachments) ................................................................................. 8 Mr. Nader (prepared statement) ..................................................................... 168 Mr. Miller .......................................................................................................... 215 Mr. Shadegg ...................................................................................................... 221 Hon. Edward R. Royce, a Representative in Congress from the State of California ................................................................................................... 229 T.J. Rodgers, President and CEO, Cypress Semiconductor Corp. ................ 231 Mr. Minge .......................................................................................................... 274 Mr. Shamansky ................................................................................................. 286 Mr. Hoeffel ........................................................................................................ 291 Ms. Lancelot ...................................................................................................... 298 Mr. Schatz ......................................................................................................... 303 Mr. McIntyre ..................................................................................................... 308 Mr. Moore .......................................................................................................... 320 Mr. Norquist ..................................................................................................... 332 (III) VerDate 04-JAN-2000 08:41 Jan 10, 2000 Jkt 010199 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 E:\HEARINGS\57748.TXT txed02 PsN: txed02 UNNECESSARY BUSINESS SUBSIDIES WEDNESDAY, JUNE 30, 1999 HOUSE OF REPRESENTATIVES, COMMITTEE ON THE BUDGET, Washington, DC. The committee met, pursuant to call, at 10:10 a.m. in room 210, Cannon House Office Building, Hon. John R. Kasich (chairman of the committee) presiding. Members present: Representatives Kasich, Chambliss, Herger, Franks, Smith, Hilleary, Sununu, Collins, Wamp, Green, Fletcher, Miller, Ryan, Toomey, Spratt, Rivers, Minge, Price, Hoeffel, and Moran. Chairman KASICH. The committee will come to order. We will get started, Mr. Nader, and get you up there. I want to thank every- body who is going to be testifying today, and I think everybody has heard of Ralph Nader, especially if you ever drove a Corvair. Of course, Ralph, most of the people in this room don't even know what a Corvair is. That shows that you and I both are getting older, doesn't it? We are also going to have a panel of Members, former members, and experts who are going to examine corporate subsidies and the way in which they might be curtailed. We had a State representa- tive from Pennsylvania who couldn't make it; and T.G. Rodgers, the president of Cypress Semiconductor, wanted to be here, but he had problems with a conflict. There are a number of people who are going to submit written testimony which I think we will find interesting, and we are here today really to examine the proper role of the Federal Government in regards to our free market and our free enterprise system. Ralph, I think as you know, and John, as you know, I have been subject to some criticism by people in the business community be- cause I have decided that it was necessary to try to clean up this subject area that I call corporate welfare. I believe very strongly in free enterprise and believe very strong- ly in free markets. I believe that free enterprise and free markets can only occur when there are limits on government, and I am a passionate supporter and believer in this capitalist system because what it allows us to do is to take ideas way from the back of our heads and be able to translate those ideas into products that, in fact, can make improvements for every individual on the face of the earth, and I think during the course of my lifetime there was a long argument about which economic system is the most humane, and we tried all kinds of systems around the world. (1) VerDate 04-JAN-2000 08:41 Jan 10, 2000 Jkt 010199 PO 00000 Frm 00004 Fmt 6633 Sfmt 6633 E:\HEARINGS\57748.TXT txed02 PsN: txed02 2 Most of them top down, capitalist system being one that stresses the individual, and I fundamentally believe is a bottom up system, and I think what we know as the greatest threat to our free enter- prise system is growing government, government that gets in the middle by excessive regulation or, for that matter, that creates a program of subsidies that tries to pick winners and losers. So if, in fact, you are a strong supporter of free enterprise and of free markets and if you believe in capitalism, then you ought to be working aggressively on Capitol Hill to end these special sub- sidies that businesses get that distort the marketplace and result in the government of the United States picking winners and losers. And it is interesting that those persons who tend to be the strong- est supporters of free enterprise and free market often tend to be- lieve these subsidies are appropriate; I have got to call attention to the fact that there is a great, great inconsistency. I am particularly against the government subsidies that accrue to some but not to all companies in the United States, and I am against the special deals that are provided to many businesses from government. The problem is many times the special deals, la- dies and gentlemen, go to the largest companies in America. A small businessman living on main Street can't get the same kind of benefits that some of the very largest multinational corporations can get inside of this country. Steve Moore, who, Ralph, would be a strange ally of yours, is going to testify here today, and he has noted in the past, quote, there are hundreds of thousands, millions of small businesses that pay taxes that do not participate in these special programs.
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