This morning I read a piece in Politico about a difficult choice for Rep. Jeb Hensarling, chairman of the House Financial Services Committee: reauthorize the Export Import Bank or let its charter expire?
Specifically, the reporters describe his options as preserving the bank with the promise of future reform (that’s what they promised the last time I fought the reauthorization of the Ex-Im Bank) or maintaining “ideological purity, and let the bank vanish, leaving companies at risk of losing billions of dollars.”
The reporters create a false choice for Hensarling: “to govern, or not to govern.” In their minds, ending corporate welfare equates to a dereliction of duty. For these reporters and the proponents of this big government bank, if Hensarling doesn’t want to use taxpayer dollars to subsidize big business, he might as well not show up to work!
The Heritage Foundation and Daily Signal have reported on Ex-Im Bank extensively. It’s an 80-year-old program started under the Roosevelt administration to facilitate American exports, which meant making loans to the Soviets so they could buy American products. The basic plan hasn’t changed much since: Ex-Im underwrites loans to big businesses in foreign countries like China and Russia using American taxpayer dollars so that our companies can sell their products overseas.
This is primarily a marriage between big government and a few big businesses.
Only 2 percent of all exports involve Ex-Im assistance—it’s nowhere near a “priority of most businesses” as Politico states—and most of the ones which have it don’t need it.
Former congressman and Office of Management and Budget Director David Stockman recently dismissed the specter of lost sales: “We are talking about 0.6% of exports and 0.1% of GDP. That is, we are talking about economic “noise” that is so faint that even Janet Yellen could not detect it!”
The Politico reporters misleadingly claim that “businesses large and small” have been pleading for Ex-Im reauthorization, but the truth is that the beneficiaries of its activities are overwhelmingly big businesses.
The Mercatus Center at George Mason University has created some wonderful visuals of this:
Note the “unknown” section. This isn’t a fluke: Ex-Im routinely loses track of whom they’ve been helping.
The story correctly notes that Boeing is a major beneficiary of Ex-Im guarantees, but omits that Boeing benefited from $8.3 billion out of a total of $27.3 billion authorized in 2013. General Electric, another massive company that is entirely capable of taking care of itself, benefited from $2.6 billion.
There’s nothing wrong with businesses being large and successful. A few years ago, I was very happy to see Boeing locate a factory in South Carolina, my home state that had instituted right-to-work protections, after getting pushed around by union bosses elsewhere.
But I still went after corporate welfare at Ex-Im. On the Senate floor, I noted that it isn’t the government’s job to tilt the field for one team or another but to guarantee a level playing field for everyone.
People asked if I went from being pro-Boeing to anti-Boeing. It was neither. I was just pro-freedom.
If Boeing makes cool airplanes, and General Electric makes hot toasters, then I’ll applaud their success overseas. And if another American company starts making cooler planes and hotter toasters, I’ll applaud them, too.
The government should not be picking winners and losers in this country.
I lost count of the occasions when my colleagues in Congress would pretend that throwing billions of dollars at the private sector and distorting the market was “governing.”
Everyone would nod grimly at a problem and say we all needed to be “adults” and make the tough choice to shovel money that wasn’t ours to benefit certain business interests. That isn’t acting like adults; it’s acting like my grandkids at Chuck E. Cheese. The so-called “adults” in Congress are the ones who gave us our $17 trillion debt and a stagnant economy.
We’re hearing the exact same excuses from Ex-Im proponents now. Forget the corruption, favoritism and risk to taxpayers. Let’s govern!
This all reminds me of the debate over ending pork-barrel earmarks that allowed politicians to funnel money unchecked to favored recipients, which, of course, led to corruption and waste. And wouldn’t you know, it’s no different with Ex-Im. Heritage scholar Diane Katz exposed that Ex-Im has had at least 74 cases of fraud and corruption in just the last five years.
Ex-Im is rife with corruption, doesn’t promote competition, costs taxpayers billions of dollars and threatens American jobs. It’s all about politically connected big businesses getting bigger with help from Uncle Sam. It’s not fair, not necessary, and shouldn’t be a hard decision for Congress.
America needs champions in Congress with the courage to stop this nonsense. On this issue, Jeb Hensarling has been a champion. In my mind, that’s good governance!