Republicans have an excellent opportunity this year to present a robust conservative agenda and establish their vision for policies that encourage economic opportunity. There are a host of issues that many Republican leaders have vowed to push forward, including tax reform, the XL Keystone Pipeline and reducing government overreach in health care.
But one issue conservative legislators should not ignore is killing the Export-Import Bank, which currently is set to expire next June. With Ex-Im Bank critics assuming control of key committees, and a recent string of bad press that calls into question the bank’s economic claims, conservatives have a golden opportunity to end this New Deal relic once and for all.
Created in 1934, the Export-Import Bank is the “official export credit agency of the United States.” The bank offers export credit and insurance to U.S. companies in place of private financing. By guaranteeing taxpayer-backed loans, the bank can provide financing below market value, a prime example of corporate welfare that puts politically connected businesses at an advantage.
Routinely reauthorized for decades, the Export-Import Bank has faced increased opposition over the past few years. In early 2012, a small but vocal group of conservatives objected to the bank’s extension and struck a deal that initiated some reforms. Emboldened by these successes, a larger coalition of conservative legislators and outside groups spent 2014 working to shut down the bank, pushing Congress to let its charter expire on Sept. 30. Their advocacy led to a short-term extension of the bank through June 2015.
The bank's defenders highlight the jobs “created” by the institution and suggest government intervention is an “essential tool” in international markets. They also point to a 2013 report in which the bank claimed it was “reaching more small businesses than ever before.”
However a recent Reuters report calls into question whether Ex-Im is really focused on helping the “little guy.” Reuters detailed how the bank mischaracterized hundreds of units of multinational conglomerates as small businesses, calculating that "as much as $3 billion in authorizations listed as those for small business may have been misclassified over eight years.”
Prominent Ex-Im critic Rep. Jason Chaffetz, R-Utah, has taken the gavel of the House Oversight Committee, from which position he has an excellent opportunity to scrutinize the bank's claims of broad economic benefits, just as Financial Service Committee Chairman Jeb Hensarling, R-Texas, already has. Chaffetz is also empowered to investigate alleged improprieties and corruption, with subpoena power, if necessary.
A decades-old Washington bureaucracy won’t disappear overnight. Opponents need to take the next few months to demonstrate to the public that the Export-Import Bank hurts job growth, costs taxpayer money and is simply a slush fund for big corporations. In ending the bank, conservatives would demonstrate their sincerity to ending corporate welfare and expanding real economic opportunity.
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