Rarely have Americans seen elected officials from both parties fight so hard to keep corporate cronyism alive.
A majority of congressional Democrats, with assistance from several Republicans, are desperately trying to reauthorize an 80-year-old corporate-welfare agency known as the U.S. Export-Import Bank before its charter expires Sept. 30.
Most Americans have never heard of it, even though it has them on the hook for $140 billion worth of foreign loan guarantees that benefit mostly giant multinational corporations such as Boeing, General Electric, Caterpillar and Dow Chemical.
This page has said it before: The Ex-Im Bank is a New Deal-era dinosaur that should be allowed to go extinct.
Earlier this year, fiscal conservatives seemed ready to do just that. Now it appears their resolve has weakened and status-quo
inertia is sinking in.
A bipartisan group of senators introduced a bill to reauthorize the bank just before Congress went on its five-week recess. In the House, more than three-dozen Republicans have publicly backed the agency, including U.S. Rep. Darrell Issa, R-Calif.
And in a joint letter to the House and Senate leadership, 37 governors – including 15 Republicans, Georgia Gov. Nathan Deal and South Carolina Gov. Nikki Haley not among them, thankfully – have asked Congress to reauthorize the bank.
How disappointing to see members of the “conservative” party advocating for an entity that does little more than offer sweetheart deals to a handful of favored corporations and foreign governments, including Russia and Venezuela.
It’s equally amusing to see Democrats join hands with Big Business lobbyists to tout the Ex-Im Bank, which a then-U.S. Sen. Barack Obama denounced in 2008 as “little more than a fund for corporate welfare.” Today, according to U.S. Commerce Secretary Penny Pritzker, the Obama administration is “100 percent committed” to the bank.
That could be because, as U.S. Rep. Barney Frank, D-Mass., told The Huffington Post, Democrats hope to score points with the corporate elites angered in 2010 by his onerous Dodd-Frank legislation.
“A lot of the business people supported Obama in ’08,” he said. “And then we really (ticked) them off mightily with the financial reform bill.”
Typical Washington capriciousness. Corporate welfare is wrong – unless it’s for corporations who support us, then it’s totally OK.
Big Business lobbyists, labor unions, the U.S. Chamber of Commerce and other corporate interest groups have been busy spinning the Ex-Im bank as an indispensable component to foreign trade, and crucial to America’s competitiveness in the global economy.
Chip Sheller of the Aerospace Industries Association went so far as to tell Reuters that “if you are not for the Ex-Im Bank, then you’re not pro-business.”
Really? It seems like business would do just fine without it, considering Ex-Im assisted in only 2.2 percent of U.S. exports last year. In other words, nearly 98 percent of export transactions somehow managed to occur without government involvement and taxpayer-funded loans, guarantees and insurance.
Surely, America’s private-sector banks would love the chance to compete for additional business. And even if they chose to turn down a deal, why would the government presume it’s OK to collateralize taxpayer money for something the private sector deems too risky?
Ex-Im supporters argue 89 percent of its 3,842 deals during the past fiscal year benefited small businesses. That sounds impressive – until you realize the incredibly miniscule volume of financing involved in those small-business transactions.
What the bank’s cheerleaders fail to mention is that, on a volume basis, 65 cents out of every $1 in long-term financing involves aircraft sales for a single corporation – Boeing, a Fortune 100 company more than capable of brokering export deals without taxpayer help.
No, Ex-Im is not some homey “mom-and-pop” community lender, by any means. There’s a reason it’s called “Boeing’s Bank” in Washington.
Some Republicans foolishly believe this Depression-era relic simply needs to be reformed. They are wrong.
There is no “fixing” something that shouldn’t exist in the first place. The government has no business playing banker to politically connected firms – especially when it’s the American taxpayer who’s on the hook for a $140-billion bailout if the bank’s portfolio goes south.
If the Ex-Im Bank never existed, there would be no reason for the government to create one today. If allowed to expire, as should have happened years ago, no one would notice except a handful of disappointed K Street lobbyists.
We sincerely hope Ex-Im opponents, including U.S. Sen. Ted Cruz, R-Texas, and U.S. Reps. Jeb Hensarling, R-Texas, and Kevin McCarthy, R-Calif., stick to their guns and allow the bank’s charter to expire at the end of September.
We also hope other congressional Republicans, during their five-week hiatus, locate their backbones.