Politics & Policy

The Ex-Im Bank Is a Waste of Money

It funnels regular Americans’ taxes to big businesses that are already wealthy.

American families are fed up with Washington. And they have every right to be. They see their tax dollars being given to able-bodied people who can work but won’t. They see their hard-earned money being handed out to connected and powerful corporate interests. And they see a Congress that’s not willing to fight for them.

But now Congress has an opportunity to change things for regular Americans. The Export-Import Bank is set to expire on June 30, and Congress should let it expire. This bank is a little-known government program that operates as a slush fund for politically connected businesses, which use it to secure taxpayer-backed financing and special deals. In 2006, then-Senator Barack Obama acknowledged that the bank is “little more than a fund for corporate welfare.” Yet, nine years later, it still exists. Why?

The answer to that question involves the worst and dirtiest side of politics. Every time the bank is up for reauthorization, deep-pocketed special interests and their well-heeled friends on K Street descend on Washington with Chicken Little fables about how small businesses across America will suffer if the bank’s charter is allowed to expire. The reality is that the bank is to corporate welfare what the “bridge to nowhere” was to earmarks.

The bank’s champions say that it’s a boon to small business, but the numbers tell a different story: The vast majority of small businesses across America receive no Ex-Im assistance at all. Of all U.S. exports, only about 2 percent receive Ex-Im financing. The real beneficiaries are companies that would be more than able to compete without handouts from Uncle Sam.

In fiscal year 2013, just ten Ex-Im beneficiaries received 76 percent of the bank’s financial assistance. The biggest beneficiary is Boeing, hardly a mom-and-pop shop. Do multinational firms such as Boeing need Ex-Im funds? No — especially when countless small companies do business overseas every day without such taxpayer-funded benefits.

Ex-Im backers say the bank supports over 200,000 American jobs. But these jobs were not created by the bank, and letting the bank expire does not mean these jobs will disappear.

The real issue is that the Export-Import Bank’s very existence is anathema to free enterprise and American values.

Programs such as the Ex-Im Bank are exactly what the American people hate about Washington. They let government bureaucrats pick winners and losers, doling out taxpayer-funded handouts to well-connected corporations. Power can easily lead to corruption, and in Ex-Im’s case it has: The bank’s inspector general is currently investigating 31 cases of fraud and abuse.

Last year the House Oversight and Government Reform Committee held a hearing with Johnny Gutierrez, a former bank employee who was fired for allegedly taking bribes. Gutierrez pleaded the Fifth Amendment at the hearing, and last month he was indicted on charges of fraud. Ex-Im’s inspector general says more indictments may be coming.

The bank’s problems with transparency and corruption are nothing new. Back in the 1980s President Reagan called for reforms. Despite that, the bank continues to use accounting methods that hide real taxpayer risks and prevent adequate oversight.

Given this history, many of my colleagues in the House have asked: Is the bank fixable?

In 2012 Congress engaged in the noble task of attempting to reform some of the dysfunction at the bank. These reforms were ignored, and the problems continue. But even setting aside the litany of problems plaguing Ex-Im, the real issue is that the bank’s very existence is anathema to free enterprise and American values.

The time to let it expire is now. Every Republican presidential candidate is against it. Every outside fiscal conservative group wants it to go. The chairmen of the relevant committees — Chairman Ryan of Ways and Means, Chairman Chaffetz of Oversight, Chairman Price of Budget, and Chairman Hensarling of Financial Services — support ending the bank. Majority leader Kevin McCarthy and majority whip Steve Scalise have both expressed opposition publicly.

The best part about this is that all we need to do is nothing – something Congress is pretty good at. When will the stars better align to get rid of this prime example of corporate welfare?

Members of Congress face many daunting tasks and tough votes in the months and years ahead. Ex-Im isn’t one of those. This is an easy call. The bank is a corrupt relic of a bygone era. If we can’t allow the Export-Import Bank to expire, what good are we?

— Jim Jordan represents Ohio’s fourth district in the U.S. House of Representatives. He chairs the House Oversight and Government Reform subcommittee that has investigated the Ex-Im Bank. He is chairman of the House Freedom Caucus, which has publicly opposed the Ex-Im Bank.

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