U.S. Is Generous to Boeing for Loan Guarantees, Subsidies

 - March 23, 2015, 8:17 PM
Shown is Boeing's 787 line in Everett, Wash., a state that gave the company an $8.7 billion incentive package in 2013. (Photo: Bill Carey)

Boeing is “exceptionally favored by Uncle Sam” when it comes to U.S. government contract awards, grants and loan guarantees, according to a new report by Good Jobs First, which pushes for greater accountability in the use of government funding for industry. The aerospace and defense manufacturer also leads other large corporations in the combined receipt of federal grants and tax credits, federal loans and loan guarantees and state and local subsidies.

Issued this month, Good Jobs First's report, “Uncle Sam’s Favorite Corporations,” found that Boeing since 2000 has received $64 billion in federal loans and loan guarantees—all from the Export-Import Bank—another $457 million in federal grants and tax credits and $13 billion in state and local subsidies. It leads Ford, General Electric, General Motors and JP Morgan Chase as the top five corporations in receiving subsidies from all levels of government.

Separately, Good Jobs First lists more than 300 “megadeals” involving state and local subsidies. Topping the list is the $8.7 billion incentives package, consisting of tax breaks, streamlined permitting and infrastructure improvements, the Washington state Legislature passed in November 2013 to entice Boeing to base assembly of its new 777X and manufacture of its composite wing in the Puget Sound region. The state granted the manufacturer $3.2 billion in tax subsidies in 2003 to land the first production line for the 787 Dreamliner.

Boeing also stood out as a “double-dipper” among federal contractors by landing $18 billion in contract awards in Fiscal Year 2014, according to the report. Good Jobs First, based in Washington, D.C., describes itself as a national policy resource center for grassroots groups and public officials, focused on corporate and government accountability.

The organization described the report as the first comprehensive compilation of company-specific federal subsidy data, based on 160,000 award records from 137 federal programs that cabinet agencies and independent federal entities such as the Ex-Im Bank administer. The report found that overall, the federal government in the last 15 years has provided $68 billion in grants and special tax credits to businesses, with a group of 582 large companies receiving 67 percent of the total. The largest single recipient of federal grants and tax credits is a Spanish energy company—Iberdrola—which acquired $2.2 billion in subsidies by investing in U.S. power generation facilities, including wind farms.

The federal contractor receiving the most in grants and tax credits is GE, with $836 million, mostly from the Departments of Energy and Defense ($153 million). General Atomics was second with $615 million, nearly all for the energy side of its business. They were followed, in order, by United Technologies, Boeing, Lockheed Martin, Honeywell and Raytheon.