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End the Export-Import Bank and the Corporate Welfare it Promotes

By George Leing
Candidate for Congress in Colorado
Congressional District 2

I oppose the Export-Import Bank of the United States (Ex-Im), backed by some members of Congress, including my opponent Representative Jared Polis. Ex-Im is up for renewal by September 30, 2014.  Fiscal conservatives and free-market advocates such as myself consider the bank a wellspring of crony capitalism, favoring companies that are well connected in Washington, and hindering the flow of capital in the free-market. 

The Ex-Im Bank specifically, and corporate welfare generally, is tantamount to the government picking winners and losers in the marketplace.  Politically-connected companies and industries get handouts, their competitors are hurt, and taxpayers pick up the bill.  Instead of this top-down approach to growing our economy, I favor a bottom-up approach, in which every company gets to compete on a level playing field.  We need an organic economy driven by competition and choice instead of an artificial economy characterized by corporate welfare.

The antithesis of a free market approach, the Ex-Im bank issues loans and loan guarantees to foreign governments or companies to support the purchase of U.S.-manufactured products.  It manipulates the market by funding a few big companies with our tax dollars, leaving little chance for smaller start-ups to compete in the same foreign markets.   This results in a disruption of the natural rise and fall of supply and demand and causes price inflation back home.  Ninety-eight percent of U.S. exports do not receive assistance from Ex-Im.  However, ten multi-billion dollar conglomerates, like Boeing and General Electric, comprise 75% of the recipients of Ex-Im assistance.  Though Ex-Im is required to help small businesses, they fail to meet goals every year and provide financing for just 0.009% of all small businesses in America. I am not recommending small businesses should receive funding from Ex-Im, but merely highlighting the stench of cronyism emanating from this unconstitutional disbursement of our tax dollars.  Even President Obama said in 2008, Ex-Im is a form of “corporate welfare”.

It was reported that 93 companies in Colorado have been assisted by Ex-Im since 2007. As a believer in Colorado-based business, I support the growth and prosperity of our homegrown companies seeking to compete oversees.  To achieve that goal, I would prefer to see such entities compete in the free-market by endeavoring to qualify for business loans from non-government subsidized lenders, including local and regional banks. 

I part ways with certain fellow Republicans in Congress who offer their wholesale support for Ex-Im.  I encourage supporters of Ex-Im to take a hard look at its poor performance.  The GAO and the Inspector General have both warned that the bank is not protected as it should be against fraud, abuse and waste and that its loan-loss rate is unreliable. Due to contract law governing contracts already set, it would be unwise to cut the Ex-Im in one act.  Still, like anything that is unhealthy and has festered for years, it takes time to heal and restore.  With the Chinese and other governments playing at the same game, as much as I oppose Ex-Im, we have to set a sunset date to prevent future Ex-Im activity for future stability and to lead to an ultimate end of what amounts to corporate government hand-outs.

I oppose the renewal of Ex-Im and favor the end of the federal government picking winners and losers in the global marketplace.  This would help set the market free for healthy competition, while removing the barrier of entry for small and big business alike wishing to enter foreign markets, but which have not had the benefit of Ex-Im support.