Business Aid Is under Attack Congress Urged to Cut Programs for Corporations

By Christopher Carey Of the Post-Dispatch | St Louis Post-Dispatch (MO), July 23, 1995 | Go to article overview

Business Aid Is under Attack Congress Urged to Cut Programs for Corporations


Christopher Carey Of the Post-Dispatch, St Louis Post-Dispatch (MO)


B.J. King hardly fits the stereotype of a welfare recipient.

She drives a BMW, albeit an old one, and lives in a comfortable house in Kirkwood.

But because King's filtration systems company borrowed about $350,000 through a Small Business Administration guaranteed loan program a year and a half ago, some members of Congress would brand her a beneficiary of public aid.

Those lawmakers - an uncommon alliance of conservatives and liberals - began their attack on "corporate welfare" last week by using the appropriations process to cut or cancel spending for programs that subsidize private enterprises.

One likely victim is the U.S. Bureau of Mines, which provides statistical information and research that helps coal producers in Illinois and lead producers in Missouri.

People who want to eliminate the bureau argue that big mining companies - like Peabody Holding Co. and Zeigler Coal Holding Co. in the St. Louis area - can finance those studies themselves.

Lawmakers also have taken aim at the Agriculture Department's market promotion program, which picks up part of the advertising bill for U.S. companies trying to sell food and farm products in foreign countries.

The market promotion program is on the "Dirty Dozen" list issued last month by a coalition of interest groups from across the political spectrum.

One of their bigger, and more elusive, targets is the Export-Import Bank. The bank provides low-cost financing or loan guarantees to foreign buyers of American products, including the $2 billion in airliners Saudi Arabia just ordered from McDonnell Douglas Corp.

The groups that compiled the Dirty Dozen list contend that scaling back or scrapping those programs could save as much as $18.5 billion annually, money that could offset some of the deep cuts already planned in public assistance, housing and food stamp programs.

In challenging the new Republican leaders in Congress to apply their smaller-government doctrine to economic programs as well as to social programs, Labor Secretary Robert Reich labeled them a second type of AFDC - Aid For Dependent Corporations.

Businesspeople in the St. Louis area who have taken part in some of the endangered programs bristle at the suggestion that they have profited at taxpayers' expense. They say the nation got more than its money's worth.

"There's a tremendous benefit, to employment and the economy as a whole," said King, who has built King Filtration Systems Inc. in Creve Coeur from a struggling company with $200,000 in annual sales to a successful one 20 times that size. The expansion - which included a successful assault on the tough Japanese market - was one reason that King Filtration was honored as the SBA's exporter of the year for Missouri.

The company borrowed money through a government program that subsidizes and guarantees bank loans. The loan paid for a bigger headquarters and enabled King Filtration to hire three new workers; the company is looking for two more.

King says she has seen little, if any, personal financial benefit. She went without a paycheck for many years while expanding the business. She relied on the income of her husband, Steven Gissy, as an insurance broker to support their family.

Other companies in the St. Louis area that have received money under federal programs being targeted by public-interest groups include Ralston Purina Co., Pet Inc., Petrofsky's International Inc. and Raskas Foods Inc.

***** Bagels And Cream Cheese

Petrofsky's International, which sells frozen bagel dough, signed up for the Agriculture Department's program five years ago as part of its push to develop new foreign markets, President Jerry Shapiro said.

"I think it's phenomenal - I don't know if that's a strong enough word," he said.

Thanks to the money and expertise the government provided, the company now sells its dough in Japan, Hong Kong, Singapore, Australia, England and several other European countries. …

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