Tea Party running amok
About three weeks ago, Rep. Jeb Hensarling, a Republican from Texas who is chairman of the House Financial Services Committee, gave a speech to the Heritage Foundation. Hensarling is a Tea Party favorite. His core view is that better government is less government, and that there is nothing government can do that the private sector can’t do better.
Hensarling’s speech was about economics, which, of course, meant it was about wasteful government subsidies and “crony capitalism.” He tossed off what he felt were examples of each — the failure of Solyndra; the continued existence of Fannie Mae; the bailouts of Wall Street and the auto industry — before landing on a government organization that he described as being the “poster child of the Washington insider economy and corporate welfare.”
“Its demise,” he went on, “would clearly be one of the few achievable victories for the Main Street competitive economy left in this Congress. I believe it is a defining issue for our party and our movement.” And what was this government agency that he felt so strongly about?
Would you believe the Export-Import Bank of the United States? Seriously.
Do you know what that bank does? It promotes exports — and American jobs — by backing loans made primarily to foreign entities that want to buy our goods. Sometimes the loans are small — as when a small business wants to expand and start exporting. Sometimes they are large, as when Boeing wants to sell wide-body aircraft to foreign airlines (more on that in a minute). Using numbers culled from the Bureau of Labor Statistics, the Ex-Im Bank says it has supported 1.2 million American jobs since 2009, including 205,000 last year alone.
It also costs the taxpayers nothing — not only does it support itself through the fees and interest it charges for its services, it also regularly sends money to the Treasury to reduce the debt, some $2 billion over the last five years. Its default rate is negligible. The Chamber of Commerce backs the Ex-Im Bank — and so do some unions. Basically, says its chairman, Fred Hochberg, “We support U.S. jobs, especially when those jobs are facing off against foreign competition.”
In other words, it would be hard to find a more useful government agency than the Export-Import Bank. For decades, its reauthorization was often passed in Congress without even a roll-call vote. Besides, lots of countries have agencies that do what the Ex-Im Bank does, and many countries rely on them far more heavily than we do. So how is it that this relatively small agency — of all the agencies in the federal government — has become the latest Tea Party piñata?
Two years ago, the last time the Export-Import Bank was up for reauthorization, Delta Air Lines decided to raise a stink because of the loans the bank guaranteed that helped foreign airlines buy Boeing airplanes. Delta claimed that the Boeing loan guarantees were giving foreign airlines a leg up over American carriers, and that it was unfair.
Delta claims that it was never trying to put the Ex-Im Bank out of business — protectionism was more its goal — but reauthorization was the leverage it had. For a while, Delta’s water was carried by the House majority leader, Eric Cantor, but eventually Cantor backed away after Republicans and Democrats alike made it clear that the Ex-Im Bank was too useful to their constituents to be put out of business. After some face-saving new rules were put in place, reauthorization passed easily.
This September, the Ex-Im Bank’s financing runs out. But a funny thing happened between the last authorization and the upcoming one. Or, rather, a few funny things happened. One is that groups like the Koch brothers-funded Americans for Prosperity, as well as conservative think tanks, having looked more closely at the Export-Import Bank thanks to the 2012 fight, decided it was a perfect target to raise ideological objections. And, second, an ideologue — Hensarling — became chairman of the Financial Services Committee.
What are those ideological objections? The usual: the government shouldn’t be picking winners and losers. (The Export-Import Bank doesn’t.) Companies like Boeing are receiving corporate welfare when they work with the Ex-Im Bank. (In fact, export help from the government is a critical part of airline financing; if the Ex-Im Bank didn’t help Boeing, the sales would go to Airbus, which gets plenty of its own government assistance.) And so on.
But there is also another reason these groups are attacking the Export-Import Bank. They can actually win the fight if our do-nothing Congress does nothing. Reauthorization requires the passage of a bill, and, so far, Hensarling has shown no signs of moving such a bill out of his committee. Nor is he likely to.
Thus does the fate of a most useful government agency rest in the hands of a man who believes there is no such thing.
Joe Nocera is a columnist for The New York Times.