DALLAS MORNING NEWS EDITORIAL: CONGRESS SHOULD LET EX-IM CHARTER EXPIRE
By Dallas Morning News Editorial Board
June 1, 2015
Congress returns to its business facing a question that manifestly affects our business: How much should the federal government jam a meaty thumb onto the scale and favor one company over another?
This is what the Export-Import Bank of the United States has done for more than 80 years. It gives taxpayer-backed financing to foreign governments and companies at below-market rates to help them buy U.S. goods. So, in theory, select U.S. exporters, their foreign customers and the banks that get loan guarantees all benefit.
The problem is that for each U.S. company that benefits, its domestic competitors face a tougher road. By definition, this puts the government in the position of choosing winners and losers in what should be a free market.
The nonpartisan Congressional Research Service reflected a consensus among economists in arguing: “Subsidized export financing merely shifts production among sectors within the economy, rather than adding to the overall level of economic activity, and subsidizes foreign consumption at the expense of the domestic economy.”
It was true in 2002, when those words were written. It’s true today.
The good news is that Congress need do nothing to end the Ex-Im bank; its charter, after a last-ditch nine-month renewal, expires at the end of June. In recent weeks, we have seen intensified lobbying on the bank’s behalf by those U.S. corporations that benefit from its taxpayer-backed loan guarantees to foreign customers.
Chief among the lobbyists is Boeing Corp., airplane builder and aerospace company. No surprise there. Some critics call Ex-Im “Boeing’s bank” because it and another multinational, General Electric, together benefit from as much as 40 percent of those loan guarantees.
The bank’s defenders insist that it’s invaluable to small business and that jobs would disappear without it. And this might be true if Ex-Im backed more than 2 percent of all U.S. exports and roughly two-thirds of its financing did not go to just 10 large corporations.
This newspaper would rather see the playing field leveled for the 98 percent of exports that gain nothing from Ex-Im financing.
Americans overwhelmingly believe, polls show, that their government gives favored treatment to the companies with the best political connections. This might stand to reason, but it doesn’t have to be the only way business gets done.
We stand with Rep. Jeb Hensarling, Dallas Republican and chair of the House Financial Services Committee, who one year ago staked out the moral high ground in opposing Ex-Im’s renewal. If Republicans are going to criticize government for such boondoggles as the Obama administration’s Solyndra solar cell deal, they should apply that logic across the board.
Government and big business don’t always have to align against the little guy, and Congress can take one step toward convincing a skeptical public by letting the Ex-Im charter expire for good.
WHAT HE SAID
“Whether it is termed public-private partnership, mercantilism, industrial policy or crony capitalism, regrettably a great deal of economic activity that masquerades today as free enterprise is not. For the sake of our republic, our movement had best unmask the impostors and come down clearly on the side of free enterprise.”
U.S. Rep. Jeb Hensarling, from his May 2014 address to the Heritage Foundation, “A Time for Choosing”
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