South Carolina Rep. Mark Sanford has articulated with refreshing candor much of what is wrong with the U.S. Export-Import Bank, which provides subsidized financing to foreign firms for the purchase of American exports.
The subject arose during a policy forum last week sponsored by the S.C. Chamber of Commerce. In discussing whether Congress ought to reauthorize the government-run bank before its charter expires on June 30, Sanford, a Republican, acknowledged that Ex-Im primarily caters to “large corporations that are well funded and have access to a variety of different insurance and capital sources.” (Principally Boeing, which operates an assembly plant in Sanford’s district.)
Sanford went on to praise his delegation colleague Rep. Mick Mulvaney, R-S.C., as a “real hero” for opposing reauthorization of the bank and its crony subsidies. But he also admitted that he would not follow suit. “I have to be wholly inconsistent,” he explained, because Ex-Im is “deeply important to a company like Boeing.”
Indeed. The aviation behemoth (market cap $104 billion) has benefitted from more than $170 billion in Ex-Im financing between 2007 and 2014—the largest single beneficiary of the bank.
But that is precisely why the charter should be allowed to expire. The vast majority of Ex-Im financing benefits only a few major corporations. In 2013, for example, just 10 corporations were the beneficiaries of 64 percent of bank subsidies, including Boeing (30 percent); General Electric (9.5 percent); Bechtel (6.6 percent); and Caterpillar (4.9 percent).
Meanwhile, all the other American companies who generate 98 percent of U.S. exports somehow compete on their own.
If lawmakers truly want to nurture economic growth, they should end Ex-Im favoritism and focus instead on reducing the tax and regulatory barriers that choke investment, innovation and job creation.
