Republicans talk a good game about small government and conservatism. Republicans who are serious about their conservative credentials should understand that these credentials must extend beyond the traditional talking points of cutting taxes and spending. Shrinking government requires that politicians end corporate welfare, a somewhat new territory for a party that is often perceived to be the party of the rich. To be consistent, Republicans must also oppose handouts for those who need them least.
This certainly includes the wasteful and unnecessary behemoth that is the Export-Import Bank of the United States. Started by FDR via executive order, this bank is supposed to boost American exports by financing or insuring international transactions, a concept extremely antithetical to free-market capitalism. Trade is when two parties come together and exchange goods that each party finds more valuable than the other party. If the trade does not occur, the costs are too risky to bear or the goods are not desired. It is not free trade if the government subsidizes a transaction to take place. It is a form of protectionism where some firms are given a leg up on their competition.
The firms which receive financing from the Export-Import Bank are not in need of assistance. According to a study from the Mercatus Center, the top ten beneficiaries of the bank’s financial assistance receive 76% of the total and they receive 97% of the loan guarantees. Boeing alone has been given 40% of the financial assistance. Why do these companies need assistance? This is corporate welfare through and through.
The Export-Import Bank is one of the most egregious examples of corporate welfare and poor economic policy. Set to expire on September 30th, Senate Democrats are likely to vote on reauthorizing the bank later this month despite opposition from House Republicans. It is even possible that Senator Reid will attach reauthorization to a continuing resolution to fund the federal government. Apparently Democrats are too cowardly to allow for debate on a simple up or down vote.
Republicans will soon have an opportunity to demonstrate whether they really are consistent supporters of liberty. Those who vote against the bank will show that they stand against big government in a variety of circumstances. Those who vote for it are willing to sacrifice conservative principles for the benefit of only a few.