The Export-Import Bank has little reason to celebrate its 80th year in business.
With its reauthorization set to expire Sept. 30 amid growing opposition from the conservative lawmakers, this Depression-era federal agency’s future is uncertain.
Tea party Republicans other conservatives as regard it as a clear example of corporate welfare, with one beneficiary, in particular. “S&P estimates Boeing accounted for more than one-third of Ex-Im’s financial commitments from 2007 to 2013,” as the Wall Street Journal noted.
As a result, the Ex-Im no longer has the overwhelming bipartisan support it used to enjoy, especially among conservatives.
“The bank is just one example of how bureaucratic government is corrupting free enterprise through and through,” Rep. Paul Ryan (R., Wis.) said in his July 15 speech on “Renewing the American Idea” at Hillsdale College’s Kirby Center for Constitutional Studies. “Conservatives must stop defending this.”
“Neither the founders of America nor of free-market economics would recognize in this stratified system a truly open market of commerce. It isn’t open,” he added. “It isn’t equal in opportunity. It isn’t producing equitable profit growth or hope for those at the bottom of the ladder. It isn’t driven by satisfying the needs of people, but by experts, calculus, wealth, and preference.”
That’s a belief that, until recently, had few champions — and those tended to come from the ranks of political pundits.
“The liabilities of the Export-Import Bank are gigantic just like they were for Freddie and Fannie Mac,” said senior political columnist Tim Carney of the Washington Examiner in an interview with the libertarian Cato Institute. “Any conservative who actually is pro-free market and not pro-business is going to oppose reauthorizing the Export-Import Bank.”
Ryan made a similar point, acknowledging that Republicans had confused being pro-business with being pro-free market.
“I think we need to reassert that we all have made, myself included, have made this mistake,” he told reporters after his speech.
The Export-Import Bank, like alliances between business and the federal government, has a long, bipartisan history. Franklin D. Roosevelt authorized the bank’s existence in 1934 by executive order as an export facility to overcome barriers posed by exchange controls and tariffs, among other things. Ex-Im’s goal is to help American businesses, big and small, export their goods to foreign markets.
Some conservative lawmakers perceive the “help” as disproportionately benefiting transnational corporations who have greater reason, and financial resources, to export their goods across international waters than do much smaller mom-and-pop businesses.
“I think there’s a growing movement in this country that is against having government pick winners and losers in industry and the Export-Import Bank is an example of this sort of thing,” Sen. Mike Lee said in an interview with Reason TV.
“There’s a growing reluctance on the part of Americans for having government in the business sphere,” Lee also said. “People are realizing that our national government has not done a great job managing a whole lot of things” such as the Veterans Affairs and IRS scandal, Benghazi, immigration, and pollution regulations.
The Ex-Im Bank is in a vulnerable position. Rep. Jeb Hensarling, who chairs the House Financial Services Committee that has jurisdiction over the bank, opposes Ex-Im. If Congress does nothing, the bank’s authorization expires this year. Incoming House Majority Leader Kevin McCarthy (R., Calif.) said that he supports letting the bank expire after his predecessor, Rep. Eric Cantor (R., Va.) surprisingly lost to a primary challenger who attacked Cantor for supporting the bank, among other things.
Republicans seeking to kill the Ex-Im are walking a fine political line, however, because some 200,000 manufacturing jobs added in 2013 may be jeopardized; the last thing they Americans want to hear is that, that as the economy is trying to recover, the “Growth and Opportunity Party” raises the unemployment rate.
As noted by Laylan Copelin of InvestmentNewsNet.com, a web-based trade publication focusing on the insurance industry, Hensarling’s home state of Texas is especially vulnerable to the reauthorization of the Ex-Im Bank, due to the state’s status as the nation’s leading exporter for the past 12 years.
The Ex-Im Bank is “crucial” to the Texas economy, according to Copelin, making Texas the epicenter of the deepening ideological fault lines within the Republican Party.
While pro-business conservative Gov. Rick Perry adamantly supports the Ex-Im bank, Hensarling, a fellow Texan and advocate for the free market, sees it as a detriment to what should be a competitive marketplace.