Recently, the Obama Administration expressed their “strong commitment” to extend the charter of an outdated corporate welfare agency that almost exclusively serves to line the pockets of major corporations and foreign nationals: The Export-Import (Ex-Im) Bank. This New Deal-era artifact also happens to be directly responsible for lost American jobs as domestic companies are forced to cut back to compete with their foreign, Ex-Im-subsidized competitors.
It would be easy to attribute Obama’s support for Ex-Im to the typical liberal desire to extend government regulation over the free market, but much more difficult to explain is the support for the reauthorization of the bank among some Republican members of Congress. This GOP endorsement of Obama’s plea to maintain Ex-Im gives the administration undeserved, bipartisan cover for their continued encouragement of crony capitalism. If these were true free-market conservatives, they would see Ex-Im for what it really is: a fund for corporations (some with billions in revenue) to use taxpayer dollars for sweetheart loans.
Companies receive taxpayer-backed funding from Ex-Im, while making millions of dollars each year. According to the Congressional Budget Office, Ex-Im will cost taxpayers $2 billion over the next 10 years. This directly contradicts what the bank and their allies (who certainly have motivation to paint a rosier picture) claim that the Ex-Im Bank doesn’t cost taxpayers any money. Ex-Im supporters say the institution actually turns a profit, but only based on questionable accounting rules which certain government agencies are privileged to apply to themselves. Moreover, in spite of the stated objective of the bank as an agent for small business, it instead has primarily become an instrument of Big Business.
In 2013, 60 percent of the financing from Ex-Im was given to 10 large corporations who, no matter what they think, do not need any help from the government. In the most egregious example of this, in 2014 an astonishing 40 percent of all authorizations from the bank went to Boeing, compared to just 25 percent sent to small businesses. There is no possible reason Ex-Im should devote 40 percent of its authorizations to weave a government-spun safety net for a $90-billion aerospace and aircraft conglomerate.
With the incredible amount of money supplied to Boeing, it should not come as a shock that ripple effects from Ex-Im’s actions are felt across the airline industry. Unfortunately, it has been to the detriment of U.S.-based airlines. Ex-Im gives loans to foreign, state-owned airlines such as Air India to buy Boeing planes, which ends up hindering domestic carriers. While foreign companies are able to buy the latest and greatest Boeing planes at subsidized rates, American carriers are forced to pay more for the same product, making it more difficult for those same airlines who call America home to compete on the global stage. According to the Air Line Pilots Association, the domestic airline industry has been forced to cut more than 7,000 jobs thanks to Ex-Im.
Republicans believe in free enterprise as a means for moving the country forward. But with needless government subsidies, a dangerous precedent has been set. It is time for the conservatives who stand shoulder to shoulder with the Obama Administration in support of the Ex-Im Bank to realize that the government should not give handouts to corporations who do not need any assistance whatsoever. Congress must let the Bank’s charter expire and topple a key pillar of corporate cronyism.
