- - Sunday, June 12, 2016

ANALYSIS/OPINION:

Government funding for the Export-Import Bank, which was organized during the Depression years to subsidize loan guarantees for major American exporters, has been a target of Republican reformers and their campaign to eliminate corrupt federal agencies that only waste money. But the Ex-Im Bank is regarded as the crown jewel of corporate welfare, and it survived the budget knife only barely last year.

Now the reformers have devised a new strategy to scale back, if not eliminate, the Ex-Im Bank. Republicans, led by Sen. Richard Shelby of Alabama, the chairman of the Senate Banking Committee, are out to hold hostage the nomination of Mark McWatters to the Ex-Im board. At present the bank lacks a quorum needed to make loans of more than $10 million. For the Fortune 100 companies like Boeing, General Electric, and Caterpillar, which have profited most from the Ex-Im loans, the Republican strategy is intolerable. Their lobbyists have enlisted Democrats in both houses to rally against Republican “obstructionism.”

Fans and supporters of the bank argue that in some years the government actually makes money on Ex-Im Bank lending, which is what the housing lobby used to say about Fannie Mae and Freddie Mac until the housing market crashed and required a $175 billion taxpayer bailout. Some “investment.” What always twists this argument into a pretzel is why, if the bank is a money maker, the private banking or insurance industry won’t make such guarantees. The answer is that they are too risky for a private business, which must turn a profit to prosper and survive. Government disasters, like Ol’ Man River, just keep rolling along.

Only about 2 to 3 percent of American exporters actually get support from the Ex-Im Bank. The other 97 percent prosper without it. Yet the battle grinds on. Linda Dempsey, the vice president of international economic affairs for the National Association of Manufacturers, calls this a “critical issue” for her trade group. “We support the efforts of lawmakers on both sides of the aisle to ensure Ex-Im is operating at full capacity, and urge the Senate to take action on the pending board nomination,” she says. This is special pleading, always shameful, and the U.S. Chamber of Commerce, which says it stands for free enterprise, behaves no better.

The best way to help American businesses compete in international markets is to eliminate corporate welfare and use the savings to cut the corporate income tax in half. In the meantime, Sen. Shelby refuses to submit to the corporate pressure. He and other conservatives like Sen. Mike Lee of Utah continue to fight, even though they sometimes feel overwhelmed, like Custer at Little Big Horn. “It’s programs like Ex-Im Bank that make people disgusted with Washington,” Sen. Lee says. Republicans must remember that it was its uncompromising stand for free-market principles that got them to the House and the Senate. Voters will reward them if they do, and punish them if they don’t.

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