Michael Tanner of the Cato Institute reminds us in his latest National Review Online column that both major parties have been guilty of supporting corporate welfare. The most recent example of Democratic corporate welfare involves the legislation that has dominated much of the political debate during Barack Obama’s administration.
The conventional wisdom says that corporate welfare is the exclusive province of Republicans, always eager to do the bidding of their corporate donors. And, indeed, there are far too many examples of Republicans confusing “free markets” with “good for business.”
Still, there are more than enough examples to show that corporate welfare is a bipartisan sin. The Export-Import Bank? It’s backed by such “populist” Democrats as Senators Elizabeth Warren (Mass.) and Sherrod Brown (Ohio). More Democrats than Republicans support sugar subsidies and programs like the Market Access Program, which subsidizes overseas marketing and promotional activities for agricultural companies and trade associations.
But to see corporate welfare at its most insidious, one need look no further than Obamacare.
President Obama may have indulged the fantasy of himself as lone champion of consumers, standing up to evil Republican-allied insurance companies. But, in reality, Obamacare was a deal between the administration and insurers from the very beginning. In fact, a recent House Oversight Committee report details the close cooperation between White House adviser Valerie Jarrett and insurance-company executives.
This should not be a big surprise. One can go all the way back to Hillarycare in the 1990s, when the Big Five insurance companies at the time (Travelers, Aetna, Cigna, Metropolitan Life, and Prudential, in addition to Blue Cross/Blue Shield plans) were part of the secret White House task force that helped Clinton draft her version of government-run health care.
To see the outlines of the deal that President Obama cut, look no further than the individual mandate. Insurers would accept additional regulation, but in exchange would be guaranteed millions of new customers. After all, what business would not like the government to require consumers to buy its products? If that wasn’t enough to make insurance bigwigs smile, Obamacare would even provide subsidies to help people buy their products.
So far, insurers have done very well under Obamacare. Most of the major insurance companies have seen their stocks rise more than 100 percent since 2010, significantly outperforming the market as a whole.
