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Corporate Welfare Spending

by March 4, 2025
March 4, 2025

Chris Edwards

Republicans must cut federal spending to tame exploding deficits. DOGE is trimming the bureaucracy and the House budget plan trims entitlements, but more cuts are needed.

A new Cato study identifies $181 billion a year in federal spending on corporate welfare, or business subsidies. The government hands out subsidies to agriculture, broadband, semiconductors, energy, airports, automobiles, and many other industries. The spending increases deficits and damages the economy in a dozen ways described by the study.

The federal government has been subsidizing businesses a long time. It subsidized the fur industry in the 18th century, railroads in the 19th century, and farm businesses beginning in the 1920s. But the size and scope of business subsidies have grown sharply in recent years.

President Trump’s tariffs, plus President Biden’s massive green tax breaks, plus $181 billion a year in corporate welfare spending amounts to an alarming increase in central planning in the American economy.

The new study is here.

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