It is not every day that a large corporation comes to the government for $1 billion in special aid, as the wounded Chrysler Corp. did Tuesday.
But Chrysler's request, made as the company announced that it lost $207.1 million last quarter, was in some respects not so unusual.
There is more public help for private companies in this country than the rhetoric of free enterprise sometimes suggests. And Chrysler, the nation's chronically ailing third-largest automaker and 10th-largest manufacturing corporation, has gone to the government for special help before in recent years.
That was in 1975. In the tax act of that year, Congress considered changing the rules on what are knowwn as net operating loss carrybacks. The reject provision in effect would have allowed selected companies to claim refunds of taxes paid in the previous years.
One company lobbying for the provision was W. T. Grant, which has since gone bankrupt. One was Lockheed Aircraft, the defense contractor since bailed out through a system of federal bank loan guarantees. One was Pan American World Airways. And a fourth was Chrysler, then hurting from loss of sales in the 1974-75 recession. Chrysler would have gained $180 million from that provision.
The unusual aspect of Chrysler's new request for aid is that it apparently would be tailored for just one company.
"Usually," one jaded congressional aide noted yesterday, "it's a whole industry coming in, rather than one company intentionally excluding it's competitors," as it seems Chrysler might do.
And often these industries get what they seek. The government's costly social insurance and welfare programs for needy individuals are well publicized. It runs such "income security" program for corporations, too.
In the early 1970s, Congress' Joint Economic Committee published a series of studies of federal subsidy programs. The series, still the most complete study of its kind, was coordinated by economist Jerry Jasinowski now an assistant secretary of commerce.
It estimated total federal subsidies of all kinds at $95 billion in fiscal 1975. Much of this money went to corporations.
The government was providing funds, Sen. William Proxmire (D-Wis.), then chairman of the committee, observed reufully, "to fly airplanes, to compensate beekeepers for dead bees, to build fish ponds, to induce business firms to hire workers and buy equipment, to encourage farmers to produce and not produce to accelerate the use of natural resources, to aid small businesses, credit unions, banks, life insurance companies and hundreds of other groups."
Most of these subsidies do not even appear in the regular federal budget. They are given out, as Chrysler's would have been in 1975, in the form of special tax concessions. Such special corporate concessions now cost the Treasury billions of dollars a year.
The largest by far is the investment tax credit, under which companies can deduct from their taxes 10 percent of the cost of most machinery they buy.
In effect, the government pays part of the cost of the machinery. The purpose is to encourage industrial expansion, at a cost next fiscal year of about $15 billion. The program subsidizes both machinery buyers and machinery manufacturers.
Other large tax subsidies go to oil and insurance companies, railroads, banks, exporters, timber companies and real estate developers.
The government also gives money directly to many industries. The maritime industry is one of the nation's most heavily subsidized. The government helps pay the cost of both building and operating U.S. merchant ships. The theory is that, without such help, the U.S. merchant marine would be wiped out by lower cost foreign competitors.
The government also helps the steel industry fight foreign competition, with import limitations and price floors on imports.