The Corner

Economy & Business

Zombie Ex-Im Bank Makes for a Ghoulish Halloween

The Ex-Im Bank was dead. Not “dead dead” but the closest it had ever been to being truly six feet under. Defeating this 81-year-old crony program was a tremendous victory for the free-market and against K Street lobbyists. It was a sign that the super-powerful and super-connected don’t always win. It was a sign that the unseen victims of cronyism can be heard and represented in Congress. It was important step in revamping the image of Republicans as more than just the party of big businesses.

Unfortunately, last night 127 Republicans joined forces with all but one Democrat to bring the Zombie Ex-Im Bank out of its grave. The list of those who voted to bring back Ex-Im is stunning. All the contenders to replace Paul Ryan as the Ways and Means chairman, a Freedom Caucus lawmaker, and even congressmen who have fought with me to end the Department of Energy’s 1705 loan program. Then, of course, you have your traditional big-business, big-government Republicans, the “moderate” Republicans as the press call them.

Needless to say, this is not good news. However, it doesn’t mean that Ex-Im is completely back from the dead just yet: The majority leaders in both chambers, Kevin McCarthy and Mitch McConnell, are in favor of keeping Ex-Im dead. McConnell has even said he won’t allow of standalone Ex-Im bill to the Senate floor.

The next tactic for Ex-Im supporters would be to attach the zombie bank to the transportation bill. That move failed in July. But it is more likely to succeed this time around if (and only if) the person in charge of scheduling votes in the House allows an Ex-Im bill to come to the floor at all. On the House side, that’s McCarthy’s call. He is against Ex-Im and could be our greatest ally. This is an easy move, too, since all it means is doing nothing. Happily, in this case, doing nothing means doing the right thing at the same time. Win-win.

In addition, soon-to-be-Speaker Paul Ryan can decide to flex his political muscles and announce that, no matter what, this is a victory he is not going to let get away. He has many incentives to do this. First, he says he is opposed to Ex-Im on principle. Second, he must know that, in the current context, this would go a very long way to appease the pro-freedom wing of his party and give an important sign that the Republican leadership still has a vague memory of what free-market principles are all about. Third, after the Boehner-Obama budget deal, there is no reason to work with the president on this. The reality is that this victory can be won by doing nothing – and there is no threat of a veto-override. Finally, zombie Ex-Im has been dead for over three months and yet the sky hasn’t fallen on our heads. Boehner’s threats that thousands of jobs would instantly disappear hasn’t materialized; and the claims of dramatic consequences (made by Ex-Im’s main corporate beneficiaries) have not stood up to scrutiny. In other words, in spite of  the many political tantrums, the world is still turning even without Ex-Im.

As Tim Carney correctly wrote last night:

If Ex-Im is to be revived, it will probably take the cooperation of McConnell, McCarthy and presumptive speaker of the House, Paul Ryan — all of whom oppose Ex-Im.

So here’s the question: Who’s party is this? Is it Paul Ryan’s Party or Steve Fincher’s Party?

Ryan, for years, supported corporate welfare. Under Bush, Ryan voted for Ex-Im, the Medicare prescription drug benefit, the Wall Street bailout and the Detroit bailout.

Since the late 2008 bailout bonanza, Ryan has had the zeal of a convert against corporate welfare. He wrote an op-ed in 2010 headlined “Down With Big Business,” channeling a famous Wall Street Journal editorial from the late 1970s.

“The problem we have had as a party,” he said, “is we have often confused being pro-market with being pro-business.”

This Halloween seems like the perfect opportunity to show that he means business by keeping the Zombie Ex-Im Bank in its grave.

Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.
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