President Obama lards subsidies, bailouts and special tax credits on bankers, manufacturers, drugmakers and nearly every other industry you can think of. So how does he then inveigh against "corporate welfare," as he did in last Wednesday's debate?
Simple: He calls his own handouts "investments" and redefines "corporate welfare" to mean "giving equal treatment to a politically unpopular industry."
Obama slapped the "corporate welfare" tag on big oil, private jets and companies that move jobs overseas. But the policies he targets aren't really corporate welfare or even special treatment at all. And for most of the industries Obama mentioned, he has accelerated actual corporate welfare.
"My attitude is," Obama quipped in last week's presidential debate, "if you got a corporate jet, you can probably afford to pay full freight, not get a special break for it."
The "special break" Obama was talking about was an obscure detail in tax law. Briefly, this is the issue: A company is never allowed to deduct the full cost of a corporate jet in one year. It needs to spread the cost over many years of tax filings. This is called "depreciation."
A 1986 law increased the depreciation period for some jets to seven years, reducing the tax deduction the owner gets each year by spreading it over a longer period. But some types of jets were untouched by the 1986 law, and they can still be depreciated over five years. This difference is what Obama attacks as "corporate welfare" for private jets. The owners, who pay for their jets and are forced to spread their deduction over five years, are not "pay[ing] full freight," according to Obama.
Nobody is going to shed a tear for anyone owning a corporate jet -- and that's exactly why Obama targets them as corporate-welfare queens.
But the Obama administration has declared its policy of actually increasing subsidies for corporate jets. "Export-Import Bank Chairman Fred Hochberg plans to provide more financial aid to U.S. corporate jet manufacturers," Bloomberg News reported earlier this year.
Ex-Im subsidized $90 million worth of Cessnas, Gulfstreams and other private jets in fiscal 2011, and Obama's export-subsidy chief said he would multiply that more than tenfold by 2014, to a billion dollars worth of private-jet sales.
So this is Obamanomics: It's OK to give taxpayer-backed loans and loan guarantees to corporate jets, but if you don't hike their taxes it's "corporate welfare."
Obama played this game with big oil, too. "The oil industry gets $4 billion a year in corporate welfare." This is misleading. The biggest provisions Obama targets as "oil subsidies" are not favors to the oil industries, but are either broad-based deductions available to the oil industry, or aspects of the tax code that affect every business, including oil.
The "domestic production deduction" is the biggest tax break oil companies get. But coal companies also get it. So do timber companies, auto companies and drug companies. If you manufacture, extract or produce something in the U.S., you get this tax deduction. The entire deduction should probably be eliminated as part of tax reform, but Obama and his party aren't proposing that.
The Democratic legislation to address this "oil subsidy" instead leaves the deduction in place for manufacturing, timber, mineral mining and coal mining. It even leaves the deduction in place for small oil companies. It merely tells the five biggest oil companies they can't take that deduction.
Big oil does get actual subsidies, and Obama has favored many of these. A successful oilman once told me the biggest favor he gets from government is all the highways they pave. Obama's stimulus and his proposed infrastructure bank supply more "corporate welfare" to big oil than these broad-based tax deductions.
Obama's silliest canard on corporate welfare, though, involved offshoring jobs. "Right now, you can actually take a deduction for moving a plant overseas." No more than you can take a deduction for moving a plant domestically, or incurring any other costs.
Corporate income taxes, after all, are on profits, which are roughly revenues minus costs. Democrats have proposed a bill to disallow the deduction of moving costs, if that move takes you overseas.
Again, neutral treatment by the law is "corporate welfare" in Obama's world.
Obama's stimulus shoveled billions in grants, contracts and targeted tax credits to big business. He let the drug lobby write Obamacare. He has ballooned export subsidies and bailed out auto giants and big banks. The only way he can stand against corporate welfare is to change its definition.
Timothy P.Carney, The Examiner's senior political columnist, can be contacted at email@example.com. His column appears Monday and Thursday, and his stories and blog posts appear on washingtonexaminer.com.