Here’s a half-serious question: How much do taxpayers have to pay off Boeing to make the Export-Import Bank — finally and irrevocably — go away? If the feds wrote a check to Boeing for $100 million, would they then let the Ex-Im Bank die a merciful and long overdue death?
I ask this because the airplane manufacturing company is, of course, the largest beneficiary of the Export-Import Bank. The bank provides subsidized loans and insurance contracts to foreign companies that buy American exports. It doles out billions of dollars in loans and insurance subsidies every year and has become the poster child for corporate cronyism in Washington. Think of the bank as food stamps for America’s Fortune 500 companies. Ever since the early Reagan years, conservatives have been trying to eliminate the subsidies, but the bank has multiple lives.
To listen to firms like General Electric, Boeing and Caterpillar tell the story, you’d think all of America’s exports would grind to a halt without it. That’s absurd. In a world without an Export-Import Bank, which finances just 2 percent of U.S. exporters, private financing firms can supply the insurance and credit these companies need, but at market rates that reflect default risk. And getting the federal government out of export financing would save taxpayers from having to cover the bank’s $2 billion shortfall projected over the next decade by the Congressional Budget Office.
The case against the Ex-Im Bank has been persuasively laid out by my colleagues at the Heritage Foundation and the economy experts at the Mercatus Center at George Mason University — so my mission here isn’t to regurgitate them for the umpteenth time. This isn’t a fight over who is right (we are); it is a fight over who has more political might. The Republican leadership pays lip service to defunding Ex-Im, but they don’t fully appreciate the stakes here because it now looks as if they are ready to cave and reauthorize the program. Rep. Paul Ryan of Wisconsin understands why it is so critical for Republicans to pull the bank’s funding. “If we can’t get corporations off the dole, how in the world can we credibly reform social welfare programs?”
What is most insidious about the Ex-Im Bank, beyond the cost and risk of its $140 billion portfolio of taxpayer-guaranteed loans, is that it turns business into advocates for big government. (This may explain why liberals such as Nancy Pelosi who normally hate corporations, loves the program so much.) This also explains why the largest business lobby in America, the U.S. Chamber of Commerce, is spending $1 million on a lobbying campaign to save the program from the budget knife. There’s something that stinks to high heaven about a government racket in which businesses get tax dollars from the government, they then donate some of that money to lobbyist organizations, which then use those tax dollars to lobby for more tax dollars.
The theme of the chamber’s ad blitz is this program “helps small business.” Bruce Josten, the chamber’s head of government affairs and one of the masterminds of this fatuous ad campaign, says that small businesses “can’t walk down the street and get a loan to sell their products in Kazakhstan.” Then he added: “The big guys might be able to do that, but not these firms.” Well, then why do we give all the money to the “big guys? Veronique De Rugy of the Mercatus Center estimates that the top 10 recipients get 75 percent of the bank’s benefits. There are more than 4 million businesses in America today.
What is almost comical about the chamber propaganda is that just a few years ago, CEO Tom Donohue launched a massive PR campaign to “Save Free Enterprise” from runaway government spending and debt under President Obama. So the chamber wants to cut government spending except when it’s a program that benefits its own corporate donors. Apparently, if it’s their members who get the money lifted from taxpayers, this creates jobs.
This is the same Chamber of Commerce that in 2009 supported the Obama $830 billion borrow-and spend-stimulus program. If chamber members get money, they are for it. So much for free enterprise.
When Republican Rep. Justin Amash of Michigan called the chamber’s current ad campaign “shameful,” the chamber’s political director contemptuously tweeted about Mr. Amash: “Yawn wasted vote. Wasted seat.” So the chamber even is attacking people who normally support its pro-business agenda. Rep. Jeb Hensarling of Texas, who heads the Financial Services Committee, says the chamber is spending money to support corporate welfare while it takes its eye off the big prize of a free trade deal with Asia.
Rep. Jim Jordan of Ohio, who is help leading the fight against Ex-Im funding says that “what really frustrates taxpayers more than anything else is when big business cozies up to big government.” He noted that this is “the one time that Congress can do what it does best — nothing — and this thing goes away.” How sad that Congress can’t even get that right.
The Chamber of Commerce normally does great work promoting pro-growth economics, and over the years I’ve worked side by side with the organization on tax policy and regulatory relief. The chamber may win this Ex-Im Bank battle, but its overall cause will be hurt in the long run. As a relationship counselor once told me: “The key to a loving marriage is to be aware of those things that are really important to your spouse, and make them important to you.” It’s very important to the conservative movement to be rid of the Ex-Im Bank. The chamber’s defense of the program only means that the next time something is really critical to all its members, they may discover that nobody is there to help them.
In Washington, what goes around does come around. The chamber should get back to being about promoting commerce, not cronyism.
• Stephen Moore is a Washington Times columnist and a Fox News contributor.