Politics & Policy

Kill the Ex-Im Bank

We don’t need a government agency that benefits huge corporations at taxpayer expense.

Thirty-seven percent.

That’s the proportion of Americans who have a favorable opinion of the Republican party, according to a recent Gallup Poll. Admittedly, at 39 percent, Democrats don’t fare much better, but the GOP has still seen a five-point drop since the 2014 elections, when the party achieved historic victories at both the state and federal levels.

This declining number should surprise no one. For the most part, Republicans in Washington have so far proven themselves unable to enact the agenda they promised voters in the 2014 campaigns. Instead, they’ve given Democrats the chance to outmaneuver them at almost every turn.

At the same time, the Left continues to peddle its favorite line — that Republicans represent “big business,” not the average voter. This, perhaps more than anything else, casts everything the GOP does in an unfavorable light.

Clearly, Republicans need to regain control of their brand and start scoring some policy victories. They can achieve both goals by getting back to basics — by putting the American taxpayer’s interests above special interests. The GOP has an opportunity to do just that in the next few months.

That opportunity is the Export-Import Bank. Its charter runs out this summer, and if Congress does not renew it, the bank will have to close up shop. By simply letting Ex-Im expire — by doing absolutely nothing — Republicans can strike a blow for taxpayers and eliminate a clear-cut example of corporate welfare.

And there’s nothing Harry Reid and his liberal colleagues in the Senate can do to stop them.

This should be an easy call for most Republican lawmakers. The bank, a New Deal–era holdover, provides taxpayer-subsidized loans, insurance, and guarantees to domestic and foreign companies. This runs against everything that Republicans believe — and if that weren’t enough, the bank’s operations have had a number of unintended consequences.

First of all, the bank is a bust for taxpayers. The Congressional Budget Office calculates that over the next ten years Ex-Im will cost hard-working Americans some $2 billion.

American jobs feel the squeeze, too. By sending money to foreign companies, Ex-Im gives them a competitive advantage over American ones. Numerous businesses have reported that the bank has caused job losses in their industries.

Such is the nature of corporate welfare — it benefits some at the expense of others. With Ex-Im, the “some” is especially small. A mere ten major multinational corporations received 75 percent of the bank’s financial assistance in 2013. Five companies received 93 percent of the bank’s loan guarantees by value. As for the “others,” they’re the 99 percent of businesses that can’t get the same preferential treatment from the federal government.

Why would Republicans ever support something like this? It plays right into the Left’s contention that the GOP is the party of “big business.” And yet, although most of Ex-Im’s supporters are actually on the left side of the aisle, a surprising number of Republican lawmakers back it, too.

The ones who don’t should be praised. Representative Jeb Hensarling (R., Tex.), the chairman of the House Financial Services Committee, was once a lone voice in the wilderness advocating the termination of Ex-Im. He is still advocating just that — in fact, his committee is holding a hearing on the issue today — and in recent months dozens of other legislators have joined his cause. Representative Paul Ryan (R., Wis.) recently described the Export-Import Bank as an exemplar of “crony capitalism.” Best of all, several potential Republican presidential candidates — including former Florida governor Jeb Bush, Wisconsin governor Scott Walker, and Senators Marco Rubio, Rand Paul, and Ted Cruz — have called on Congress to let Ex-Im expire.

Now it’s up to Speaker of the House John Boehner and Senate Majority Leader Mitch McConnell. All they have to do is refuse to take up any legislation that would reauthorize the bank before its charter expires.

That’s the right thing to do. The Export-Import Bank is the antithesis of the free-market, pro-taxpayer principles that animate the Republican party, and ending it would be a small but important step in restoring the GOP’s brand. In this case, good policy is good politics.

— James Davis, who was the communications director for the 2012 Republican National Convention, is the executive vice president of marketing and communications at Freedom Partners, a nonprofit organization that promotes free markets and a free society.

 

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