A Dangerous Precedent, An Act of Desperation in the Ex-Im Bank Saga

by Ken Blackwell, Contributing Author: Advocates of cronyism just won’t give up. Last Friday, a large block of House Republicans joined Democrats in signing a discharge petition to force revival of the Export-Import Bank (Ex-Im) to the House floor.

42 Republicans joined 176 Democrats in signing on to the discharge petition, circumventing the authority of House Financial Services Committee Chairman Jeb Hensarling – whose committee has rightfully opposed the bank as corporate welfare. Hensarling responded to the move by urging Republicans to consider the ramifications of setting a dangerous precedent in using the discharge petition and reminding members that “Ex-Im supporters have so far failed to convince a majority of Republicans on the Financial Services Committee to support a vote on reauthorizing the bank.”

A discharge petition is generally a tool used by the minority to usurp control of the House floor from the majority. This is a pretty brazen move for the Republicans who signed on, as it essentially cedes control of the House floor to the Democrats. It’s also a historical move -- in the past decade and a half, only two bills have been successfully discharged from committee, despite 107 attempts.

The desperation of this move gets to the crux of the issue – 218 lawmakers, now unable to dole out taxpayer handouts to massive corporations, are so determined to hold on to their campaign donations from corporations like Boeing and GE and organizations like the U.S. Chamber of Commerce, that they upended normal House rules and used procedural ploys to get their way.

After years of mismanagement, Congress allowed Ex-Im’s charter to expire on June 30. Over the past three plus months, Ex-Im has been carrying out its obligations while undergoing liquidation – and life has been moving along just fine.

The Ex-Im Bank didn’t exist to help small businesses – at least not in recent years. Over three-fourths of Ex-Im’s financial assistance went to just ten massive corporations, the top three recipients of which were Boeing, General Electric and Caterpillar. According to a study done by Veronique de Rugy of George Mason’s Mercatus Center, Ex-Im provided support for less than one percent—0.28 percent, to be exact—of small businesses. Furthermore, in past years Ex-Im has been found doctoring their stats and mischaracterizing businesses with as many as 1,500 employees as a “small business.” Aside from manipulating data, Ex-Im has been plagued with scandal and corruption – with 31 open fraud investigations on bank employees.

Is this mismanaged, scandal-plagued institution really what these 218 representatives are fighting so hard to resurrect?

Sad to have lost their government golden goose, Boeing and GE have been spinning story after story in the media about the “detrimental” effects of the closure of the Bank, blaming its expiration for mass outsourcing and American job loss. These claims are grossly untrue.

While headlines screamed that GE was moving jobs to France because of the loss of Ex-Im, reputable journalists failed to do their homework. GE has been moving American jobs overseas for years, while still utilizing taxpayer money through Ex-Im. They already employed 10,000 workers in France, and the supposed “lost” jobs reporters clamored on about were already scheduled to be moved to France as part of a merger deal with the French manufacturing company Alstom. Clearly CEO Jeff Immelt thought using Ex-Im’s expiration as a scapegoat was a more PR-friendly move than shedding light on the fact that GE has reduced its American work force by 17.6 percent in the past decade, while increasing the number of GE employees abroad by 19 percent. Ex-Im had nothing to do with it.

When there are so many important issues for Congress to address this fall, using a procedural trick to bring an institution plagued with corruption back from the dead is inherently wrong. Republicans have got to stop talking out of both sides of their mouth on the promotion of free market principles. Ex-Im was on track to cost taxpayers $2 billion over the next ten years. It favors politically connected corporations over similarly situated small businesses. It distorts the free market in the worst way possible. It was time for it to go.
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Ken Blackwell is a former ambassador to the U.N., Ohio Secretary of State and mayor of Cincinnati. He is a contributing author to the ARRA News Service.

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