Ex-Im Bank: Unilateral Disarmament a Poor Excuse

Ryan Olson /

One argument keeps coming up in favor of reauthorizing the Export-Import Bank (Ex-Im) is that letting the bank expire would amount to unilateral disarmament. This argument doesn’t really mesh with reality.

Proponents of this line of thinking claim that the United States must subsidize exports to stay competitive since other industrialized countries do the same. Protectionists have been making similar claims for years against reducing tariffs, quotas, and subsidies in trade policy.

However, over the past three decades countries throughout the world have been steadily reducing tariffs unilaterally, and it has enhanced their relative competitiveness.

The most obvious examples are in South and East Asia, where countries have been unilaterally reducing trade restrictions for decades. In 1988, South and East Asian countries—including China—had average tariff rates of around 25 percent and 45 percent, respectively. In 2008, both of those rates were fell to about 10 percent. The effects certainly haven’t disadvantaged Asian companies: Since 1988, South and East Asia’s share of global gross domestic product (GDP) has risen from less than 20 percent to over 28 percent. Meanwhile, productivity has increased dramatically, as have standards of living for the world most populous region.

This phenomenon is reflected in measures of economic freedom as well. According to the Index of Economic Freedom, co-published by The Heritage Foundation and The Wall Street Journal,trade freedom in the Asia–Pacific Region has increased dramatically since economic freedom began to be measured in 1995. Since that year, trade freedom has increased by 42 percent despite an overall fall in regional economic freedom over the past two decades. This reflects a sustained commitment to “unilateral disarmament” that has reduced both tariff and non-tariff barriers and ushered in a period of rapid economic growth.

The success of unilateral action isn’t just reserved to the developing world, either, where much of the gains in Asia have been made. In the mid-1980s, New Zealand, a country at similar income levels to the U.S., underwent a round of extensive liberalization of trade rules and unilateral tariff reductions from an average of about 30 percent to 2.6 percent today. The rapid liberalization of the economy promoted strong economic performance, with GDP growth reaching as high as 6.2 percent in 1993.

The fear of unilateral disarmament is no excuse for keeping Ex-Im around. There are simply no examples of countries that unilaterally reduce tariff and non-tariff barriers (including subsidies) losing their competitive edge—and plenty of examples to the contrary. Supporters of the bank should cross this excuse off the list.

The Medicare Funding Problem Threatening Medicare’s Future - Daily Signal

The Medicare Funding Problem Threatening Medicare’s Future

Ryan Olson / Robert Moffit /

Medicare’s true cost is the biggest problem in Washington and the one most ignored.

The long-awaited 2014 Medicare Trustees report is out, and the “spinning “ is well underway. But the media is not yet reporting another big finding – this one by the Medicare Actuary and revealed on the same day: Taxpayers face a Medicare unfunded liability ranging from $28 trillion to $35 trillion, depending on the most realistic assumptions about the future. In other words, Washington politicians have promised seniors that over the next 75 years (the so-called long-term “actuarial window”) they will receive tens of trillions of dollars of Medicare benefits that are not paid for. It is Washington’s biggest, most expensive and most difficult federal entitlement problem. And it is one most politicians—with a few noble exceptions—continue to ignore.

Most of the focus on the Medicare Trustees’ report thus far has been on the relatively “small” stuff. The Obama administration and its allies are touting the news the Medicare Trust Fund now is not projected to become insolvent until 2030—four years later than previous predictions. They also say this means Obamacare is “working…” that things are better.

Some even say the program is “flush” with cash. They point to the continued slow growth in spending, even though, as the Trustees note, that could just as well reflect the slow growth in the economy rather than a permanent underlying trend.

All of which is good spin for the 24-hour news cycle, a feel-good moment for beleaguered taxpayers. But soon enough, the larger truth will sink in: The Medicare trust fund’s four-year extension is no big deal. The trust fund is now projected to run a cash deficit of roughly $14 billion this year. Though, it is projected to run surpluses until 2023; then it’s back to our regular programming of annual deficits and threatened insolvency—this time in 2030.

The Trustees say the Medicare trust fund, under the official actuarial standards, still fails their short- and long-term tests of actuarial balance. And the Medicare future, where a lot of us will live and work, looks positively awful.

Of course, the state of the Medicare Trust fund is only one indicator of Medicare’s financial health. The program is absorbing a huge surge in enrollments, driven by retiring Baby Boomers, projected to reach about 81 million in 2030, when the Medicare trust fund is to be depleted.

Meanwhile, the ratio of working taxpayers per beneficiary to finance this growing Medicare population will continue to shrink from roughly three workers per retiree to two in 2030. And remember that almost nine out of every $10 spent on Medicare is paid for by taxpayers. The year 2030 is not looking good.

Won’t Obamacare help? Make no mistake, the health law is largely a replay of the status quo policy of Medicare central planning and price controls. Of the roughly 165 provisions affecting Medicare, the most relevant are the health law’s Medicare payment reductions. Altogether, according to the Congressional Budget Office, these payment reductions and related changes would amount to $716 billion by 2022.

Of Obama’s Medicare payment cuts, $517 billion will be imposed on Part A providers—hospitals, nursing homes, home health agencies and even hospice care would be profoundly affected if these cuts were sustained. In a July 8 memo, the Medicare Actuary says that, because of the payment policies in Obamacare, “By 2019, up to 5 percent more hospitals would experience negative total facility margins…and [b]y 2040, approximately half of hospitals, two-thirds of skilled nursing facilities and 90 percent of home health agencies would have negative total facility margins.”

Obamacare will seriously damage Medicare. According to the Medicare Actuary, faced with such payment cuts, Medicare providers would withdraw from the program or shift their costs to private payers. Payment cuts for Medicare services that patients depend upon will affect patients, of course, not just providers. As the Medicare Actuary further noted, these financial pressures would increase the “possibility of access and quality of care issues for Medicare beneficiaries.”

Of course, nothing is inevitable. There is a much better way to control Medicare costs without imposing payment cuts that compromise seniors’ access to care. The best option is expanded consumer choice and intense market competition among private health plans and providers. This approach—“premium support” or defined contribution financing—governs Medicare Part D, which is a system of competing private plans that deliver prescription drug coverage.

Its stunning performance has inspired support for a broader reform of the Medicare program based on the same market-based approach. In September 2013, CBO issued a vitally important report that found Medicare premium support, and the intense competition among health plans and providers inherent in this approach, would save serious money for both seniors and taxpayers.

Competition works. Although most conservatives rightly opposed the creation of a universal drug entitlement in 2003, Medicare Part D’s defined-contribution financing has been a dramatic success. The reason: Government payment to private plans on behalf of enrollees is based entirely on market-based bidding outside of traditional Medicare’s rigid price fixing. Between 2006 and 2011, total Part D costs were 48 percent lower than the Medicare Trustees original projections.

CBO’s 2013 re-estimate of Medicare 10-year projections were considerably lower than previous estimates. And, based on the CBO estimates, about 67 percent of the total projected savings in the Medicare program came from the savings in Medicare Part D. No other health care program in the country registers such a strong performance in cost control.

There is a difference between politicians and statesmen. James Freeman Clarke, a famous 19th-century American clergyman, described that difference: “A politician thinks of the next election. A statesman, of the next generation.”

America needs leadership with the brains and the guts to tackle America’s entitlement crisis. Real Medicare reform, based on the free market principles of choice and competition, would drive innovation and secure higher quality. It would improve the prospects of both taxpayers and seniors and spare them the ugly consequences of doing nothing. We also should do it for the kids.

Northeast Asia: Opportunities for Alliance Cooperation - Daily Signal

Northeast Asia: Opportunities for Alliance Cooperation

Ryan Olson / Robert Moffit / Olivia Enos /

“Japan needs Korea as a strategic partner and friend,” said Takeo Kawamura, senior member of the House of Representatives in Japan at an event on alliances in Northeast Asia at The Heritage Foundation.

In recent years, tensions between Japan and South Korea—two of America’s key allies in Asia—have increased. But rather than dwelling on downward trends in relations, the event highlighted the myriad of mutual interests that Japan and Korea share.

Long-standing historical tensions between Japan and Korea continue to serve as an obstacle to improved relations. Over the past year, Prime Minister Shinzo Abe’s visit to Yasakuni shrine (which honors Japan’s World War II dead and which many Koreans find offensive) and insensitive comments by him and other politicians in Japan have enflamed tensions and chilled relations between the two nations. For Seoul’s part, its apparent inability to isolate history issues from critical strategic matters, as well as a misguided penchant for characterizing Japan as a modern-day security threat, has contributed to the downturn.

Kawamura noted that Japan and Korea have the potential for vast economic ties and share common security concerns, such as the rise of China and North Korean belligerence. Kawamura further stated that Japan needs Korea as a “main partner” in the region.

Bruce Klingner, Heritage’s senior research fellow for Northeast Asia, noted, “At a time when there should be greater cooperation amongst the three nations, there is less cooperation and even a refusal to have bilateral summit meetings.”

Klingner also noted the important role of the U.S. in easing tensions, saying, “Since there is no regional organization comparable to either NATO or the EU, the United States has proved to be the only nation with both the capabilities and the historical record necessary to assume the role of regional balancer and ‘honest broker.’”

The U.S. should challenge both countries to engage with one another through an established reconciliation process, Klingner noted. Practically, this means that Japan should suspend visits to Yasakuni that only complicate the “comfort women” issue and that Seoul should adopt a trustpolitik stance toward Tokyo, rather than viewing Japan as its most significant security threat.

Furthermore, North Korea, not Japan, should be viewed as the greatest threat to South Korean security. Tangible security challenges posed by North Korea are an opportunity for trilateral cooperation between the U.S., Japan, and South Korea, said Kawamura. Klingner further emphasized that the U.S. cannot defend South Korea without Japanese cooperation.

Japan and Korea can overcome their dark past and look to a brighter future, said Kawamura. Rather than allowing long-standing tensions to fester, Japan and South Korea should take steps to reconcile and move forward. Or at the very least, they should better manage their differences in the cause of common priorities. The U.S. can help.

Obama’s Self-Made Border Crisis - Daily Signal

Obama’s Self-Made Border Crisis

Ryan Olson / Robert Moffit / Olivia Enos / Mike Needham /

“You didn’t build that. Somebody else made that happen.” In the case of the ongoing crisis along America’s southwest border, that someone is President Obama. When the president used his pen to sign the Deferred Action for Childhood Arrivals, or DACA, memorandum on June 15, 2012, he effectively rolled out the welcome mat to those abroad seeking to immigrate illegally.

The numbers are undeniable. From 2011 to 2013, the number of minors crossing the border illegally increased threefold, from roughly 8,000 to 24,668. Officials initially estimated that number would soar to 60,000 this year, though it is now expected to be close to 90,000.

Some have attempted to attribute the sudden wave of migration to factors other than the actions taken by the Obama administration. Most frequently cited is the stunning violence plaguing Central America, but according to United Nations data the region’s dramatic increase in violence began in 2007.

The other frequently cited cause is a little-known anti-trafficking law that gave additional protections to certain immigrant minors, but that law passed in 2008. While those two factors may intensify the crisis, there was no greater pull factor than the president’s executive decree forbidding immigration officials from enforcing the law.

Accounts from those who have been encouraged to undertake the perilous journey from Central America to the United States confirm that the Obama Administration’s actions were their driving force. According to an internal Border Patrol memo leaked last month, the main reason minors and women from Central America had entered the U.S. was “to take advantage of the ‘new’ U.S. law that grants a free pass or permit” to stay in the country.

Some officials have defended lax enforcement, suggesting these so-called “permisos” are simply the notices to appear at a future immigration hearing issued to minors who enter the country illegally. It is important to understand, however, how the president’s DACA program works. It is not merely “deferred action,” as the name suggests, but rather a program that issues papers, identification and work permits for two years to those illegal immigrants under 30 who qualify.

What’s more, many minors believed June 2014 — two years after Obama’s DACA memo — was the cutoff for the program. In this light, one would be hard pressed to deny that the DACA initiative has been seen by minors and young adults as a “free pass” incentive program.

Earlier this month, Honduran President Juan Orlando Hernández seemed to confirm the notion, telling Time what we “shouldn’t forget” about “is the lack of clarity of U.S. immigration policy.” Hernández said “my call to the United States is that it defines these rules with clarity” to prevent smugglers from taking advantage of the ambiguity.

Rather than creating the clarity necessary to dispel the myths and rumors, the Obama administration is now considering expanding its so-called deferred action program to millions more.  Sen. Dianne Feinstein, D-Calif.,told the Washington Post that many of the children crossed the “border after hearing radio ads promising they would not be deported.” An expansion of deferred action will only reinforce the president’s declaration: regardless of age, making it to America will result in a quasi-legal status.

The storm at the borders will not abate until the executive fiat that fueled it is rescinded, and children of foreign lands are no longer urged to put themselves in harm’s way under the pretense that American law is disposable.  In the absence of a change of heart from a President long since resigned to the might of his pen, it is incumbent upon Congress to stand up for the system of law and order that has thus far sustained us.

It Wasn’t a Tax Before It Was a Tax: Court Upholds Obamacare Individual Mandate - Daily Signal

It Wasn’t a Tax Before It Was a Tax: Court Upholds Obamacare Individual Mandate

Ryan Olson / Robert Moffit / Olivia Enos / Mike Needham / Elizabeth Slattery /

A three-judge panel of the D.C. Circuit Court of Appeals on Tuesday ruled against a challenge to Obamacare’s individual mandate based on the origination clause of the Constitution.

The Supreme Court held in NFIB v. Sebelius (2012) that Obamacare’s individual mandate was constitutional because it was a tax. The Constitution also says tax legislation must originate in the House.

But the Obamacare individual mandate tax did not originate in the House. Senate Democrats took a House bill that provided tax credits to veterans purchasing new homes, gutted its language and “amended” it with the language that would become Obamacare.

Todd Gaziano, one of the lawyers for Matt Sissel, likened this amendment to “the complete destruction of a house and the erection of a massive skyscraper on the same street address.”

In a unanimous ruling in Tuesday’s case, Sissel v. U.S. Department of Health and Human Services, the D.C. Circuit panel held that since the individual mandate’s purpose was to require people to buy health insurance, not to raise revenue, the law did not need to comply with the origination clause.

Citing Twin City Bank v. Nebeker (1897), the court pointed out the Supreme Court has long held that “revenue bills are those that levy taxes in the strict sense of the word, and are not bills for other purposes which may incidentally create revenue.” The D.C. Circuit panel cited NFIB v. Sebelius, noting:

[I]t is beyond dispute that the paramount aim of the Affordable Care Act is to increase the number of Americans covered by health insurance and decrease the cost of health care…not to raise revenue by means of the shared responsibility payment [of the individual mandate].

Thus, one of the  largest tax increases in our nation’s history (an estimated $4 billion in only 2016) was not a revenue bill because any revenue is “a byproduct of the Affordable Care Act’s primary aim to induce participation in health insurance plans.”

This sole focus on the “aim” of Obamacare ignores the means by which it was enacted—the gutting of a House bill and its replacement with completely unrelated provisions.

“If any act violates the Origination Clause, it would seem to be the Affordable Care Act,” said constitutional scholar Randy Barnett. “The Supreme Court has never approved the “strike-and-replace” procedure the Congress employed here.”

The Founders knew all too well the dangers of an unchecked taxing power. They placed this power in the House of Representatives because, as Massachusetts delegate Elbridge Gerry described, “Taxation and representation are strongly associated in the minds of the people, and they will not agree that any but their immediate representatives shall meddle with their purses.”

The Founders also intended the “power of the purse” to protect the separation of powers since it would be “the most complete and effectual weapon with which any constitution can arm the immediate representatives of the people,” as James Madison wrote in The Federalist No. 58.

The need for protection is even stronger following the passage of the 16th and 17th Amendments, which provided for the federal income tax and the direct election of senators. Unfortunately, today’s decision by the D.C. Circuit throws this bulwark of liberty onto the proverbial ash heap of history.

Lawmaker Who Backed Export-Import Bank in 2012 Now Says He’s Undecided - Daily Signal

Lawmaker Who Backed Export-Import Bank in 2012 Now Says He’s Undecided

Ryan Olson / Robert Moffit / Olivia Enos / Mike Needham / Elizabeth Slattery / Kelsey Harkness / Alex Anderson /

Rep. Mike Kelly, R-Pa., who previously voted to reauthorize the Export-Import Bank, told The Daily Signal this week he’s undecided about whether he’ll support the bank this time around. “There’s been a lot of reforms put forward,” he said after speaking atThe Heritage Foundation. “I want to see the total package as we get closer to the end of September.”

>>> ‘No Way’ Obama’s Climate Change Plan Will Reduce Temperatures, Says Rep. Mike Kelly

Michigan Union Tricks Teachers Into Prolonging Membership - Daily Signal

Michigan Union Tricks Teachers Into Prolonging Membership

Ryan Olson / Robert Moffit / Olivia Enos / Mike Needham / Elizabeth Slattery / Kelsey Harkness / Alex Anderson / Mary Tillotson /

Rob Wiersema teaches high school economics, and he knows the merits of a simple cost-benefit analysis.

Leaving the Michigan Education Association, he surmised, made economic sense. He had found another professional association that offered better benefits at a lower cost.

But his simple economics become complicated. The union didn’t want him to go.

In December 2012, Michigan passed a right-to-work law, which allowed teachers and other workers to keep their jobs without belonging to the union. Until then, union membership was all but a requirement for employment.

“I thought, great, I’m out,” Wiersema said. “As soon as I heard you could leave, I thought, great. My contract is up in 2013. I sent letters to the MEA and the local association to say I quit, but it obviously didn’t work.”

He called the union and sent letters asking how to leave, but he got no reply. In June, he sent a “quit letter” to the state and local branches and the school. In July, union dues showed up on his credit card.

He disputed the charge and said he wasn’t going to pay. Then, he heard the union was going after people who didn’t pay it “and have their credit reports take a hit.”

The union contends teachers can leave in August only. As for teachers who did not opt out during the narrow window in August, “They’re sending a collection agency after them,” said Vincent Vernuccio, director of labor policy for the Mackinac Center for Public Policy.

The Mackinac Center developed AugustOptOut.org to give teachers the information they need to leave the union. It’s the union’s job to inform its members, Vernuccio said, but the Mackinac Center is trying to fill the information gap.

Lisa Jelenek, who retired this spring after 40 years of teaching, and some of her co-workers chose not to re-join the union for the 2013-14 school year, the first year right-to-work applied. They didn’t know about the August window until too late.

“Early September, we got an e-bill statement from the union treasurer, the dues statement for the year,” Jelenek said. “We said, ‘What? We’re not joining.’ We found it very convenient that we got it right at the beginning of September, when all the powers that be knew we had to do something in August.”

The union was did not return calls for comment.

Read more on Watchdog.org.

Obama Follows Europe in Expanding Sanctions on Russia - Daily Signal

Obama Follows Europe in Expanding Sanctions on Russia

Ryan Olson / Robert Moffit / Olivia Enos / Mike Needham / Elizabeth Slattery / Kelsey Harkness / Alex Anderson / Mary Tillotson / Josh Siegel /

Following the lead of the European Union, President Obama announced expanded sanctions against Russia Tuesday for supporting separatists in Ukraine.

The latest American sanctions target Russia’s financial, energy and military sectors.

The Treasury Department released a list of large Russian banks that are blocked from transactions with Americans, including the Bank of Moscow, the Russian Agricultural Bank and VTB Bank.

Most of the sanctions imposed in the past have been aimed at individuals.

The new measures, which are similar to those announced earlier today in Europe, will “have an even bigger bite” on Russia than the lesser sanctions, President Obama said.

European nations such as Germany and Britain previously resisted punishing Russia because they depend on the Russians for energy. .

But the newfound collaboration with the U.S suggests the downing of Malaysia Airlines Flight 17 over eastern Ukraine this month may have hardened the allies’ resolve.

U.S. intelligence officials blame the Russians for supplying separatists the missile they say was used to shoot down the plane.

“Russia and its proxies in Ukraine have failed to cooperate with the investigations, continue to interfere with the crash investigation, continue to shoot down Ukrainian aircraft,” Obama said on the South Lawn of the White House.

“Russia is once again isolating itself from the international community, setting back decades of genuine progress. And it doesn’t have to come to this. It didn’t have to come to this. It doesn’t have to be this way. This is a choice that Russia and President Putin in particular has made.”

Obama also said Tuesday he is not considering providing arms to Ukraine’s government in its fight against the separatists.

In commentary posted to The Daily Signal last week, Nile Gardiner, director of The Heritage Foundation’s Margaret Thatcher Center for Freedom, recommended the U.S. offer assistance to the Ukranian government, exclude Russia from the G20 Summit in Australia and withdraw from New START, the nuclear arms reduction treaty.

Tuesday’s measures fell far short of that, but Gardiner welcomed the broader sanctions and the collaboration with the Europeans.

“The president needs to outline a coherent big-picture strategy for dealing with the mounting Russian threat,” Gardiner said. “But he’s still looking like a deer in the headlights in terms of the crisis in Ukraine and Putin’s aggression. Obama has to go beyond just announcing another wave of sanctions to send a clear message to Moscow. He has to project real strength, because right now, Putin views him as a weak foe.”

This article has been modified.

Obama Administration Halts Export-Import Bank Deals With Russia - Daily Signal

Obama Administration Halts Export-Import Bank Deals With Russia

Ryan Olson / Robert Moffit / Olivia Enos / Mike Needham / Elizabeth Slattery / Kelsey Harkness / Alex Anderson / Mary Tillotson / Josh Siegel / Melissa Quinn /

The Export-Import Bank announced today it would halt financing deals with Russia and Russian companies.

The Department of Treasury notified House Financial Services Chairman Jeb Hensarling of the decision to include Export-Import Bank financing in President Obama’s latest round of sanctions against the country.

In a statement, the Texas Republican commended Obama for his decision:

The president made the right decision. There is no justifiable reason why the Export-Import Bank should be allowed to continue financing deals that benefit Russian companies, so I’m pleased the president took this action today that I suggested.

According to The Hill, the Export-Import Bank also immediately stopped all new deals with Russia because of an “expected increased risk that retaliatory actions and other anticipated events will materially affect reasonable assurance of repayments from legal entities in the Russian federation.” Politico reported the decision “won’t affect deals for which letters of credit have already been issued.”

Hensarling, who is leading the charge against reauthorizing the bank, sent a letter to Obama last week asking why his administration was still offering “sweetheart deals to Russian companies” in light of the growing conflict in Ukraine and downing of Malaysia Airlines Flight 17.

>>> Obama Faces Pressure Halt Export-Import Bank Deals With Russia

The Obama administration hit two state-owned Russian banks — Vnesheconombank and Gazprombank — with sanctions earlier this month. The firms benefited from $497 million and $22.6 million, respectively, in financing from Ex-Im.

Neither bank was affected by the initial round of sanctions.

Obama and the European Union expanded sanctions to Russia’s energy, arms and finance sectors today. The sanctions are in response to the downing of Malaysia Airlines Flight 17, which was shot down in Eastern Ukraine by a surface-to-air missile fired by pro-Russian separatists. The administration contends Russia provided the separatists with the missile.

Fired Export-Import Bank Official Pleads the Fifth at Hearing on Corruption, Fraud - Daily Signal

Fired Export-Import Bank Official Pleads the Fifth at Hearing on Corruption, Fraud

Ryan Olson / Robert Moffit / Olivia Enos / Mike Needham / Elizabeth Slattery / Kelsey Harkness / Alex Anderson / Mary Tillotson / Josh Siegel / Melissa Quinn / Melissa Quinn /

An Export-Import Bank official who was fired on suspicion of taking cash in exchange for helping a Florida company obtain financing cited his Fifth Amendment right in declining to testify today during a House hearing examining corruption and fraud at the bank, a federal agency.

Johnny Gutierrez opted not to answer questions after being subpoenaed  to appear before a subcommittee of the House Oversight and Government Reform Committee.

Rep. Jim Jordan, R-Ohio, chairman of the Subcommittee on Economic Growth, Job Creation and Regulatory Affairs, sought to question Gutierrez, who earlier had refused to appear voluntarily before the panel.

Jordan hoped not only to shed light on the reasons for Gutierrez’s firing but to provide Americans with a better understanding of the inner workings of the Export-Import Bank, an 80-year-old agency that provides taxpayer-backed loans and loan guarantees to foreign countries and companies. Its charter expires Sept. 30.

Jordan said:

“What better time to discuss real concerns at the Export-Import Bank than when we’re looking at the issue of reauthorization? I think this would be the appropriate time to have this kind of hearing and look at these very issues. … Given such massive government largess, the bank is a natural target for fraud and its employees are natural targets for bribery and corruption.”

Oversight and Government Reform Chairman Darrell Issa, R-Calif., ordered the subpoena of Gutierrez. But as Jordan began questioning the former Ex-Im Bank official, he  cited his Fifth Amendment right not to incriminate himself.

Export-Import Bank Chairman Fred Hochberg and Heritage Foundation research fellow Diane Katz testified before Jordan’s subcommittee on allegations of fraud and corruption at the agency.

At issue for Republicans on the panel was a June report in the Wall Street Journal exposing allegations of gifts and kickbacks as well as “attempts to steer federal contracts to favored companies” by four bank officials, one of whom was Gutierrez.

Gutierrez and two other bank employees were fired. The fourth was placed on administrative leave as Ex-Im officials investigate the charges.

The other three Ex-Im officials have not been identified, and Jordan today repeatedly pressed Hochberg for their names.

Darin Miller, a spokesman for Jordan, told The Daily Signal that the Ohio Republican was pointing out that Hochberg had chosen to obstruct a congressional investigation by withholding the officials’ identities. Neither the agency’s inspector general nor federal law prohibits the bank’s chairman from identifying the employees, he said.

Hochberg, who took over Ex-Im in 2009, said he is committed to running an agency with high ethical standards and pointed to Ex-Im’s ethics program as proof. The bank, he said, adheres to standards designed to quell corruption and fraud, including:

Hochberg said it was important for the bank maintain a commitment to ethics. He said:

“We operate at the public trust. We’re here to level the playing field and support jobs, so it’s important that everybody at the bank operate with the highest ethical standards. It starts with top management. It continues through the training we do and making sure we have a culture that when people see something that’s awry or suspicious, they alert the proper authorities so they can take a look at it.”

But many lawmakers fear the bank’s culture breeds corruption.

Ex-Im’s inspector general is investigating 40 complaints of possible fraud, Republicans on the panel noted. Hochberg, however, said the inquiries could involve companies that benefited from Ex-Im financing, not bank employees.

Jordan went on to point to 74 “administrative actions” taken by the inspector general as the result of integrity investigations, actions that Katz brought to light in her research and writing on the bank.

House Financial Services Chairman Jeb Hensarling, R-Texas, is leading conservatives who are against reauthorizing the bank and would rather Congress not take action to extend its life. In a statement on today’s hearing, Hensarling said:

“The Export-Import Bank has a long and unfortunate history when it comes to ethical lapses and mismanagement, and today we shockingly learned there are 40 active and ongoing investigations of fraud at Ex-Im.

It’s important for every member of Congress to understand the full extent of Ex-Im corruption, mismanagement, and cronyism before deciding whether the bank should continue.  That’s why the Financial Services Committee will soon be requesting information and records from Ex-Im about these 40 active investigations of fraud at the bank.”

Hensarling and other critics argue that Ex-Im furthers corporate welfare and cronyism. Supporters, meanwhile, insist that the agency helps small businesses compete in the global market and creates jobs in the United States.

During today’s hearing, Rep. Matt Cartwright, D-Pa., praised the bank. He said:

“We have to level the playing field for our companies because other countries are putting their thumbs on the scale in favor of their own manufacturers. If we don’t level the playing field for our companies, our companies and our workers face an unfair disadvantage.”

Sen. Joe Manchin, D-W.Va., is expected to introduce a bill reauthorizing the bank for another five years.

Rep. John Campbell, R-Calif., has floated the idea of introducing legislation to reauthorize Ex-Im with some reforms.