Speaker John Boehner recently made headlines by joining the growing chorus among conservatives on Capitol Hill calling for a “wind down” of the Export-Import Bank of the United States (Ex-Im) – signaling he might be open to a plan by U.S. House Republicans to bring the New Deal-era program of economic cronyism to an end.
The statement came before the April 30 joint Financial Services-Oversight hearing, in which Ex-Im Bank Chairman Fred Hochberg was questioned about the bank’s politically motivated international handouts and the 31 ongoing fraud investigations.
Boehner joins a large number of conservative lawmakers calling for the bank’s end. House Majority Leader Kevin McCarthy, Majority Whip Steve Scalise and House Ways and Means Committee Chairman Paul Ryan have all expressed their desire to “break the bank,” as have six Republican presidential candidates: Senators Ted Cruz and Marco Rubio, and Governors Bobby Jindal, Mike Pence, Scott Walker and former Governor Jeb Bush.
A coalition of conservative, pro-free market organizations have also jumped into the fight, including Americans for Prosperity, the Club for Growth and Heritage Action.
Originally intended to support U.S. small businesses in making investments overseas, Ex-Im instead pads the pockets of three of the largest manufacturing giants: Boeing, General Electric and Caterpillar. In fact, the bank is known as “Boeing’s Bank” since 40 percent of Ex-Im’s total authorizations – a staggering eight billion dollars – went to the wide-body aircraft manufacturer in 2014. Boeing is the largest single recipient of Ex-Im funds.
It’s no wonder lawmakers are calling for its denouement. The beleaguered bank has a history of doctoring its stats and lying about the number of small businesses receiving funds. Last year, a Reuters story reported that the “U.S. Export-Import Bank has mischaracterized potentially hundreds of large companies and units of multinational conglomerates as small businesses.”
Reuters also found that some of these “small businesses” – which received up to $8 billion in small business funds over an eight-year period – were owned by multi-billionaires Warren Buffet and Carlos Slim, not legitimate small employers by any stretch of the imagination. Ex-Im has also falsely claimed that 20 percent of its funds are allocated to help women and minority-owned businesses, when, according to their own data, only 1.02 percent of authorizations from 2007 to 2014 went to women-owned businesses.
Other issues of fraud and mismanagement are widespread. According to The Wall Street Journal, Ex-Im guaranteed staggering amounts in loans for both failed “green energy” firms Solyndra and Abound – both of which also received huge domestic loan guarantees from the Energy Department. Apparently propping up failed energy firms is now considered the job of the federal government.
Bank employees are no strangers to corruption charges, either. Just last month, the Department of Justice charged former loan officer Johnny Gutierrez with accepting bribes on 19 different instances between 2006 and 2013. Three other bank officials are currently under investigation.
While Big Business benefits, the American taxpayers pick up the tab as Ex-Im spends billions in taxpayer-backed dollars on loans to foreign corporations. The Congressional Budget Office (CBO) forecasts that the bank will cost taxpayers $2 billion over the next 10 years, with no tangible benefit to our economy. When asked by Representative Mick Mulvaney how many American jobs would disappear if the bank was not reauthorized during last week’s hearing, Chairman Fred Hochberg couldn’t answer. However, according to a recent report by the Congressional Research Service, not reauthorizing Ex-Im would have no impact on current contracts or financing arrangements.
Congressional leadership is badly needed to stop the reauthorization of the Export-Import Bank and let its charter expire in June. Speaker Boehner’s recent comments are an encouraging sign.
Join the conversation as a VIP Member