- The Washington Times - Wednesday, July 2, 2014

Soccer goalie Tim Howard may be America’s newest hero after his World Cup exploits, but not even he could save the Export-Import bank at this point, a prominent financial expert quipped.

Jared Bernstein, the former chief economist to Vice President Biden who is now senior fellow at the Center on Budget and Policy Priorities, made the dismal prediction Wednesday on the Ex-Im’s future in a blog post.

In the post, he discussed former House Majority Leader Eric Cantor’s surprising primary loss to Tea Party candidate Dave Brat. Mr. Cantor was a major supporter for the bank’s reauthorization, while many tea party conservatives argue that the bank only serves to benefit large corporations such as Boeing, which saw its stocks drop after Mr. Cantor was ousted from office.

“Brat and the Tea Party are by no means alone in their opposition to the bank’s reauthorization. From what I’ve seen in recent days, punditry opposition from left, right, and center is outpacing support by a wide margin. At this point, I’m not sure if even Tim Howard could save the bank,” Mr. Bernstein wrote.

He continued to argue against the bank’s reauthorization in his post, saying, “I join the opposition in their major critiques: it’s not clear why Boeing, GE, and other large American exporters need the subsidy, nor why rich countries need the USG to backstop their loans.”

Experts who argue in favor of reauthorization say that the bank provides jobs to thousands of American workers to manufacture the goods that are being exported, including U.S.-made airplanes. Advocates also refute the claim that the Ex-Im bank wastes taxpayer dollars on corporate cronyism, saying that it follows bank loan procedure and is one of only two profitable federal agencies.

Mr. Bernstein wrote that a total shutdown of the bank would not be in the nation’s best interest, favoring a plan to gradually phase the bank out.

“But assertion is not proof, and it would be better to test the international credit waters rather than do an experiment with full withdrawal, especially at a time when we very much need the labor demand generated by exports — and remember, we’re talking manufactured goods,” he said. “Phase-out is also a better strategy given the other main defense of the bank, which is that as long as our competitors for international sales keep their similar credit-providing institutions up and running, we’re at a disadvantage if we drop out of this market.

“As one critic wrote, that’s not a principled defense, but I think it’s a pragmatic one,” he wrote.



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