In a desperate, last-ditch effort to save the Export-Import (Ex-Im) Bank of the United States in all of its crony-capitalist glory, a group of U.S. Senators attempted to tie its reauthorization to one of President Obama’s major agenda items this year: the much-disputed (and needed) trade promotion authority (TPA) bill. Adding reauthorization of the bank, which is set to expire on June 30, would have been a poison pill to TPA, likely tanking a vote on granting Obama fast-track trade authority.
The Export-Import Bank is an 80-year-old institution, born out of New Deal era policies, that subsidizes loans to help foreign companies buy U.S. goods. However, the bank picks winners and losers, allocating the vast majority of its financing to deep-pocketed Big Business and special interests. These aren’t small businesses obtaining assistance loans in order to competitively export their products abroad, but are instead some of America’s largest corporations, the top three recipients of which are Boeing, General Electric and Caterpillar.
America has finally wised up to this corporate welfare scheme, however, and the outrage has been loud and clear. With a significant loss of congressional support, proponents of the bank are getting desperate. Sens. Lindsey Graham (R-S.C.), Maria Cantwell (D-Wash.), and Heidi Heitkamp (D-N.D.) attempted to obstruct a final vote on TPA and other major legislation until they secured a vote on the reauthorization of Ex-Im.
Unsurprisingly, Sen. Cantwell has been one of the bank’s most vocal supporters in Congress. And why not, since the bank’s single largest loan recipient, Boeing, is the biggest employer in her state. However, the support swings both ways. Since she’s held elected office, Boeing has been one of her top campaign contributors, filling her coffers with more than $100,000 since 1989. Boeing is the fourth largest corporate contributor to Sen. Graham, as well.
Despite the fact that rampant corruption and mismanagement have plagued Ex-Im for years, these senators are banking their reputations on its support. The most recent high profile corruption case resulted in bank loan officer Johnny Gutierrez being charged with accepting bribes on 19 different instances between 2006 and 2013 – after it was exposed that he accepted cash payments in exchange for helping a Florida company obtain financing. The fact is that there’s a lot of bribery occurring at the bank, while $112 billion in taxpayer-backed funding is at risk.
Despite what alarmists and proponents say, if Ex-Im’s charter expires, the bank isn’t going to disappear tomorrow. The wind down process will likely take years in order to fulfill outstanding obligations and allow for a smooth marketplace transition. The bank will simply stop taking new business, while complying with current contracts. The Congressional Research Service has stated that not reauthorizing Ex-Im would have no impact on current contracts or financing arrangements.
“All we have to do is nothing,” said Rep. Raúl Labrador (R-Idaho). “I feel pretty good about our prospects.” And indeed, nothing is what should be done and what Congress does best.
A behemoth of corporate welfare and a perversion of the free market, it’s time to stop subsidizing foreign transactions for America’s largest corporations and close the door on an institution plagued with corruption and favoritism. Despite some senators’ desperate, final attempts, it’s time to let the Export-Import Bank expire.