I take it that liberals and libertarians mostly agree on drug legalization, hacking up the Pentagon's budget, and trimming subsidies for corporations. So I can safely link to the Cato Institute's new paper on the "Corporate Welfare State," which complains that the federal government spent some $92 billion on "direct and indirect subsidies to businesses" in 2006.
Some of that spending might be warranted (loans and subsidies for the solar industry have had success in Japan and Germany), but much of it isn't (the vast bulk of farm subsidies, say). So Cato's plan to set up an independent commission--similar to the military base closure commission--that would create a list of proposed cuts for Congress to vote on, sounds fair enough. But this caveat seems bizarre:
The commission would address only spending programs, not tax preferences in the budget, and no corporate welfare spending programs should be considered "off the table."
But why wouldn't "tax preferences" be considered? They're no different from other types of corporate subsidy, insofar as they let Congress pick winners and losers, and need to be paid for elsewhere in the budget via tax increases, spending cuts, or borrowing. Most Republicans have a similarly bizarre outlook, insofar as they'll oppose social programs that involve new spending, but are perfectly fine with using tax deductions and other credits (Health Savings Accounts, for instance) to do similar things. From a budgetary standpoint, though, it's a pretty meaningless distinction.