By Stephen Moore at The Heritage Foundation
I ask this because the aerospace giant is the largest beneficiary of the Ex-Im Bank. The bank provides subsidized loans and insurance contracts to foreign companies that buy American exports. Ex-Im Bank doles out billions of dollars of 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, you'd think all of America's exports would grind to a halt without it. That's absurd. In a world without an Ex-Im Bank, which finances just 2 percent of U.S. exports, private firms would provide the insurance and credit these companies need, but at market rates that reflect risk of default. 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 that 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 like Rep. Nancy Pelosi, who normally hate corporations, love 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 campaign to save the program.
There's something that stinks to high heaven about a government racket in which businesses profit from government subsidies, and then turn around and employ lobbying organizations 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 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, by the way, that, in 2009, supported Obama's $830 billion borrow-and-spend stimulus program. If Chamber members get money, the Chamber is for it. So much for free enterprise.
When Republican Justin Amash of Michigan called the Chamber's current ad campaign “shameful,” the chamber's political director contemptuously tweeted about Amash: “Yawn ... Wasted vote. Wasted seat.” So the Chamber even is attacking people who normally support its pro-free-enterprise agenda.
Rep. Jim Jordan of Ohio, who is helping to lead 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 them on tax policy and regulatory relief. The Chamber may win this Exim 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 senior fellow at the Heritage Foundation.