Once again, conservatives have attempted to eliminate a government program that creates economic distortions and puts taxpayers at risk; and once again the Washington establishment has cut their legs out from under them.
Both the House and the Senate have passed legislation reauthorizing the Export-Import Bank (Ex-Im) and raising its lending cap from $100 billion to $140 billion. And that’s supposed to be a compromise.
The deal to reauthorize and expand this corporate welfare program was championed by none other than Republican House Majority Leader Eric Cantor.
Originally, Democrats proposed raising Ex-Im’s lending limit from $100 billion to $140 billion. Conservatives wanted Ex-Im eliminated altogether. Mr. Cantor favored a compromise of raising Ex-Im’s limit to only $113 billion. Guess where we ended up? At $140 billion, which Mr. Cantor then championed.
The Export-Import Bank loans to foreign companies, which favors some and disfavors other U.S. companies. This alone is reason enough to eliminate it. It’s corporate welfare, not only for some U.S. companies but also for foreign companies, and thus creates distortions in both trade and domestic economic production. It also lends itself to crony-driven politicized lending, and thus contributes to the culture of corruption that pervades Washington.
Are taxpayers on the hook should something go wrong? What do you think?
No doubt the bank says no, just like taxpayers were not supposed to be on the hook for the savings & loan’s in the 198os and ‘90s, or more recently for the banks, for Freddie Mac and Fannie Mae, and for the automobile industry.
But Ex-Im has ALREADY asked for a federal bailout, back in 1987.
And it’s not like taxpayers aren’t already on the hook for the Pension Benefit Guarantee Corporation (PBGC) unless congressional leaders discover some courage and principle behind a desk or under a rock somewhere.
It’s more than a little discouraging that when conservative leaders try to restrict or eliminate a dubious government program, their own leadership sells them out. Doesn’t bode well for our future.
May 17, 2012