General Electric

A Shareholder Resolution on Corporate Welfare

WHEREAS, the federal government spends $125 billion annually on corporate welfare, according to Time magazine. Time defines corporate welfare as "any action by local, state or federal government that gives a corporation or an entire industry a benefit not offered to others. It can be an outright subsidy, a grant, real estate, a low-interest loan or a government service." Federal corporate welfare payments equaled an astounding 26% of total 1998 after-tax corporate profits in the US, and were equivalent to the total federal income taxes paid by 60 million Americans;

WHEREAS, only about 10% of American businesses receive any form of corporate welfare, suggesting that dependence on government assistance is not necessary for most corporations to remain healthy;

WHEREAS, General Electric is among the largest recipients of corporate welfare in America;

WHEREAS, there is a growing movement in America to end corporate welfare as we know it. On June 30, 1999 House Budget Committee Chairman John Kasich convened a watershed hearing on corporate welfare in the U.S. Capitol. Leaders from across the political spectrum, including Ralph Nader, representatives of the conservative Heritage Foundation and the libertarian Cato Institute, and joined voices in calling for substantive corporate welfare reform;

WHEREAS, a representative of a coalition of 78 CEOs also spoke before the House Budget Committee, vowing to refuse corporate welfare for their firms. These leaders cited their concerns that corporate welfare disrupts free market principles by creating an unlevel playing field. They worry that continued dependence on government support will soften the ability of American businesses to compete. In his testimony, the representative of this business coalition specifically mentioned approaching General Electric's CEO to join in their effort. They were refused;

WHEREAS, given how pervasive corporate welfare has become, political reforms to alter corporate welfare could have a material impact on some firms, including General Electric;

RESOLVED, that General Electric prepare a report outlining the financial benefit received by the company from following sources: a) direct government subsidies; b) below market real estate transactions offered as incentives by governments; c) tax abatements offered by state and local governments; d) tax credits that apply only to the company or to certain industries; e) below-market financing backed by government funds or government guarantees. This report shall be prepared at reasonable cost and may omit confidential information. It should be available to shareholders by September 30, 2000.

SUPPORTING STATEMENT

General Electric is a major beneficiary of corporate welfare provided by all levels of government. Though corporate welfare has been growing at rates approaching 10% in recent years, there are growing political forces to reverse this trend and end corporate welfare as we know it. Should this happen, shareholders of firms that are large recipients of corporate welfare could be subject to presently unquantifiable risks. The requested report will provide information to shareholders that will allow them to assess the vulnerability of General Electric to corporate welfare reform.

PLEASE VOTE YES.

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