Bipartisan corporate welfare: it's time for the Export-Import Bank to go.

Authorde Rugy, Veronique
PositionColumns - Column

ON JUNE 7, the Senate Banking Committee voted to back Fred Hochberg's second term as president of the U.S. Export-Import Bank without bothering to ask the Obama administration about the future of that expensive, inefficient New Deal-era agency. The vote, in which 28 Republicans joined 54 Democrats in supporting Hochberg, was not a good sign for anyone hoping that the GOP's latest promises of fiscal restraint would prove more trustworthy than all the broken promises before.

The bank, also known as "Ex-Im," provides taxpayer-backed loans, loan guarantees, and insurance to foreign companies, such as Air China, to buy products from some of the richest U.S. exporters, such as Boeing. It is a textbook example of Washington's bipartisan corporate welfare. Yet only two Republicans, Sens. Tom Coburn (R-Okla.) and Pat Toomey (R-Pa.), voted against Hochberg. In an online statement Toomey explained his reasons for withholding support. "I opposed his nomination due to serious concerns that the Ex-Im Bank is using taxpayer-backed loan guarantees to help some companies at the expense of other U.S. companies," he said. "The way to help U.S. exports is to reduce the tax and regulatory burden on businesses, not to pick winners and losers."

This was not the first time, of course, that Republicans have failed such a test. Last year they voted to reauthorize the Ex-Im charter through 2015 and increase the bank's portfolio (and taxpayers' exposure) to $140 billion from its current limit of $100 billion.

That increase followed a four-year expansion of the bank's annual lending, from $12.6 billion in 2007 to $32.7 billion in 2011. In 2012 Ex-Im provided an unprecedented $35.8 billion in total authorizations--up more than 9 percent from the year before. The number of Ex-Im clients has jumped from 23 in 2008 to 59 in 2012, while the number of companies whose products were purchased with bank-backed funds grew from 647 in 2007 to 789 in 2011.

What are we getting for all this money and risk? A more level playing field for U.S. exporters who often find themselves operating in hostile political or legal environments, bank advocates claim. Free marketeers might reply that it's not the federal government's role to help private companies make money in unstable markets.

But far more important is the fact that all those Ex-Im Bank subsidies are a drop in the vast ocean of global trade. According to Census Bureau data, U.S. exports supported by the Ex-Im Bank represent less...

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