Next week, the House may vote reauthorize and expand the federal Export-Import Bank. The ExIm Bank provides taxpayer-subsidized loans to American exporters. The Heritage Foundation has described "the ExIm Bank as Fannie Mae for exporters" which ultimately means taxpayers end up "holding the bag for bad loans."
Yesterday, the Wall Street Journal editorial board came out swinging against the reauthorization:
If you thought Fannie Mae, Freddie Mac and Solyndra would teach Congress a lesson about politicized credit, think again. The federal Export-Import Bank is up for reauthorization, and the only question seems to be how much more taxpayer money Washington wants to put at risk.
The WSJ points out supporters of the ExIm Bank often "play the patriotism" but at times "it helps foreign companies at the expense of American" companies:
But this [export] subsidy means that foreign airlines can then buy newer aircraft more cheaply than their U.S. competitors. This gives them an advantage in the global air transportation market. In a letter to Congress last month, Delta estimated that ExIm cost the U.S. airline industry up to 7,500 jobs and $684 million a year.
A look at the numbers reveals this is not so much about increasing exports as providing subsidies. According to the WSJ, the ExIm Bank's contribution to exports is "negligible." The editorial continues:
The way to help U.S. exports is to reduce the tax, regulatory and lawsuit burden on business, negotiate new market opening abroad, and reduce American energy costs. That's what business should be lobbying for, not favors for some businesses over others.
Last fall, Heritage Action brought to light the Washington Establishment's big problem:
The Bigs - Big Wall Street, Big Government, Big Labor, and Big Business - are all protected classes in the American political system. The tax code, regulatory regime, and campaign finance laws are all written by those powerful enough to hire an army of lobbyists to descend on Washington.
The Wall Street Journal summed up the fight on the ExIm Bank perfectly: If the GOP wants to have a principled battle about fiscal waste and market distortions, this is a good one.
The bank should be eliminated, and conservatives around the country will certainly be watching.