Home Corporate Welfare US Corporate Welfare: 2. Corporate Gravy Train

US Corporate Welfare: 2. Corporate Gravy Train

US Corporate Welfare:  2. Corporate Gravy Train

The total amount of subsidies paid to businesses and corporations by the federal government is unknown. However, the amount paid to a particular company or for a particular program is reported and available.

To help illustrate the size and scope of federal subsidies to business, this article will provide information on the largest grants, large corporate beneficiaries and foreign corporate beneficiaries. It will also comment on government contracts and bailouts.

Federal Grants Can Be Very Large Indeed

The largest single “for profit” beneficiary of federal subsidies is Amtrak, at over $1 billion annually. The next five largest corporate beneficiaries now being subsidized by federal grants are outlined below.

Largest Federal Grants 2017 ($ millions)

Beneficiary Grant Amount Purpose Period Federal Agency
Summit Texas Clean Energy 354.8 Clean Coal Carbon Capture 2010-2017 DOE
Petra Nova Parish Holdings 352.4 Clean Coal Carbon Capture 2010-2019 DOE
Hydrogen Energy California 336.7 Clean Coal Carbon Capture 2009-2017 DOE
Archer Daniels Midland 281.3 Clean Coal Carbon Capture 2009-2017 DOE
Bannister Transformation & Development 211.2 Environmental Remediation 2017-2023 DOE

Source: USASpending.gov

Money for Those That Need it the Least

To get a sense for the depth and breadth of government subsidies to business, The Informed Vermonter simply looked up top US corporations across a variety of different industries. The table below shows the total number of grant, direct payment and loan awards received from 2008 to 2018.

Federal Subsidies to Selected US Corporations: 2008-2018

Company Number of Grant Awards Number of Direct Payments Number of Loan Awards Largest Single Grant/Direct Payment ($ millions)
ADM/Archer Daniels Midland 11 682 281.3
Air Products & Chemicals 28 568.0
American Airlines 11 6.1
Boeing 78 1 28.5
Cargill 19 40 1,618 5.9
Chevron 8 116 30.6
Duke Energy 5 200.0
Dupont 5 88 4 3.7
GE 181 1 70.3
GM 48 1 105.7
Johnson Controls 6 184.0
PG&E 6 1 25.0
Raytheon 29 53.0
United Technologies 136 4 12.6

Source: USASpending.gov

The chart above excludes the value of tax credits, deductions and exemptions that these corporations also receive from the federal government. These will often be much greater than the direct handouts they receive via grants, subsidies and loans.

Foreign Corporations Line Up for Federal Money

It’s not just U.S. businesses that benefit from the federal government’s generosity. Foreign corporations are getting their fair share as well, at US taxpayers’ expense.

Abengoa, a Spanish alternate energy company, has received 28 federal grants and two loans to finance a large number of solar and biofuels power facilities in the USA. The largest grant was for $97.5 million and the largest loan was $127 million. The subsidy cost of the loan was $33 million.

LG Chemical, Korea’s largest chemical company, has received a $151 million grant for lithium-ion battery manufacturing.

Ineos, the UK’s largest chemical company, has a $50 million federal loan guarantee to finance a biofuels plant in Florida.

This list goes on. All of the above activities are creating businesses and jobs in the USA. However, enriching foreign owners with US subsidies may not be the wisest use of taxpayer money.

The Government is Also a Big Customer

In addition to getting outright grants, direct subsidy payments and subsidized loans, large US corporations are also selling their goods and services to the government on a very large scale. According to USASpending.gov, Boeing was awarded 72,071 federal government contracts from 2008 to 2018. GE had 31,741, United Technologies 12,792, Chevron 3,235, Air Products 1,739 and Archer Daniels Midland 788.

Given the scale of activity, its impossible to judge or even measure how profitable or competitive these government contracts are. However, given the very high number of contracts, these companies must like them. By the way, all the companies listed above have PAC’s for campaign contributions.


When grants, subsidies, loans and government contracts aren’t enough to keep a major corporation afloat, there is always the chance of a federal government bailout to save the day. General Motors would be gone if it wasn’t for the 2008 federal bailout. Citibank would also be gone. AIG would be gone. Fannie Mae and Freddie Mac would be gone. George Bush Senior had to bail out the entire S&L industry.

There were good reasons for all of these extraordinary government bailouts.   The systemic risks to the economy as a whole were simply too great to be ignored. However, the terms of these bailouts, the selection of those who get saved and those that don’t and the sharing of losses and gains as between taxpayers and shareholders can and will be debated for some time to come.

Some Observations

The USA likes to think of itself as a bastion of capitalism, free enterprise, free trade and the private sector. Just get the government out of the way and let the private sector take care of everything.

The truth is very different indeed. As illustrated above, the federal government channels countless billions into the coffers of US businesses. If you stripped away all the grants, subsidies, loans and government contracts, many of America’s corporate champions would certainly be smaller and possibly less competitive on the world stage.

Reducing a business’s tax bill is the functional equivalent to providing direct cash contributions via a grant or subsidy program. In the next article, the Informed Vermonter will explore the many tax loopholes available to US businesses.



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