With more and more Americans feeling unheard and disenfranchised by a political system that works for the well-connected while doing little to address their anxieties, Congress has an opportunity to deliver at least one easy victory to Main Street this year.
The question is: Will they take it?
This June, the Export-Import Bank is up for reauthorization. Ex-Im claims that its role as a government financier of private exports is essential to ensuring American economic competitiveness. This argument, however, is hogwash, as Diane Katz of The Heritage Foundation has persuasively argued.
“The fact is, there is no shortage of private investment for export financing: 98 percent of the $2.2 trillion in annual U.S. exports are financed without help from Ex-Im,” Katz writes. “The bank is little more than a conduit for corporate welfare and should be eliminated.”
The real purpose of Ex-Im is to boost the bottom lines of well-connected businesses like Boeing, General Electric and Caterpillar. But government cannot create wealth. What’s good for Boeing, for instance, is bad for Delta, which must compete with foreign carriers like Air India which get subsidies from the American taxpayer.
Some have suggested that Congress would be better off reforming Ex-Im than ending the bank. But promises of reform in the past have yielded inadequate results, and there is little reason to believe that the reforms currently on the table would do much better. The ideas some have proposed, from creating a chief ethics officer and requiring annual audits to mandating regular reports to Congress on the availability of private export financing, are largely redundant with existing rules.
Most importantly, no reforms can address the primary problem with Ex-Im: There is simply no reason for the bank to exist. The private sector is the best mechanism for allocating resources in a complex market. In contrast, government credit agencies naturally lend themselves to the sort of corruption that Ex-Im has exemplified.
What does Congress have to do to end the Export-Import Bank? Nothing.
The bank needs to be affirmatively reauthorized by Congress at the end of June. All Congress has to do to get a win for conservatives is nothing. Keep the focus elsewhere. Talk about jobs, health care, college affordability and national security.
Unfortunately, Congress is making it more difficult than that.
Soon, the House Republican Conference will have a secret, internal vote to determine Ex-Im’s fate. The bank has powerful friends on Capitol Hill, and they will be doing all they can to persuade members to give the bank a new lease on life. The best hope conservatives have of generating a win is to force members to make public commitments on Ex-Im to their voters in advance of that meeting.
In the weeks ahead, Heritage Action will launch a public list of where members of Congress stand on the issue. Their constituents have a right to know if they are standing on the side of their constituents back home or the lobbyists in Washington, D.C. Members of Congress will have the opportunity to see their name in bright lights as somebody who came to Washington, looked the cronies in the eye, and said “Enough is enough.”
For most Americans, life is tough, it is getting tougher, and it feels like nobody in Washington cares. The sad truth is that too often our federal government doesn’t care about the real anxieties of working Americans. Supporters of the Export-Import Bank have been wining and dining official Washington for years. Ending Ex-Im is a great opportunity for members of Congress to prove they came to Washington to join the fight, not the party.
