The Corner

Washington Isn’t Very Divided, Ex-Im Edition

In a recent interview, Mark Leibovich, the chief national correspondent for the New York Times Magazine, noted that “one of the misconceptions people have about politics in Washington is that it’s hopelessly divided.” He’s right. While lawmakers from both parties are divided on a few policy issues, they are too often in total agreement about expanding or at least preserving the size and scope of government.

Take the Export-Import Bank, for instance. This is the clear case of a government program that should be abolished. It is not free-market, it introduces many distortions in the capital market, it is unfair, it engages in careless lending and fraud, it benefits a few politically connected winners at the expenses of many losers, and its advocates are misleading the public and Congress about its usefulness

But if the facts are not enough, I would add that the Ex-Im Bank is a program that Republicans should be ready to kill as a matter of principle too. The good news: Congress doesn’t have to do anything to make that happen. It can just sit on its hands and wait for June to roll around and for the Bank’s charter to expire. 

And yet . . . there is bipartisan action in supposedly divided, gridlocked Washington! Fighting alongside the Democrats, many Republicans are trying to keep Ex-Im alive.

Take Representative Stephen Fincher. He’s a Republican who occasionally will argue that he believes in free-markets. But right now, he’s trying to be build support for a five year Ex-Im reauthorization. The Hill reports:

Fincher argues that his bill would include reforms to make the bank’s financing programs more transparent. For example, he would add requirements that the bank offer more public disclosure of its efforts.

The bill would also reverse Ex-Im guidelines that prevent financing for overseas power plants that decline to adopt green technology. Such a policy reversal is heavily championed by the coal industry and opposed by environmentalists.

As I have mentioned before, in 2012, Fincher was against the Ex-Im reauthorization, But today he believes that including some cosmetic reforms, like requiring Ex-Im staffers to disclose financial dealings and limiting the Ex-Im president’s term, could fix the program. Even if these actually sounded substantial, why would Mr. Fincher believe these things will happen when the 2012 Ex-Im reauthorization included a host of similar reforms that were willfully ignored by the bank’s staff? 

Also, it’s not clear Fincher has really thought through his proposal.. It includes a provision that calls on the president to get other countries to eliminate export subsidies — a nice idea in principle, but that’ll be a heavy lift for the president when the U.S. just authorized export subsidies through 2019.

The Ex-Im fight is an important test of the GOP’s commitment to free markets and small government over interest groups. It looks to me that Mr. Fincher won’t pass it — what about the rest of them?


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