Hensarling: It’s time to end the Ex-Im Bank

posted at 6:31 pm on September 1, 2014 by Ed Morrissey

In my final interview from AFP’s Defending the Dream summit in Dallas, I spoke for a few minutes with Rep. Jeb Hensarling (R-TX), chair of the House Financial Services Committee, about two pressing issues for Congress when it returns to work this week. With the FY2015 budget on the table, a decision has to be made whether to reauthorize the Export-Import Bank, the government-supported exchange that ostensibly assists American companies in selling their products and services abroad.  Critics allege that Ex-Im really exists as a crony-capitalism crutch for the biggest corporations, which gives them an unfair competitive advantage over smaller firms and wastes taxpayer money on efforts the big players could afford on their own.

Count Hensarling among the latter. He has pushed back hard against funding Ex-Im this summer, and one of its biggest beneficiaries has pushed back just as hard: Boeing. Hensarling brought up the aerospace giant in this interview. “If you delve in deeply,” Hensarling advised, “what you will find is the US companies who benefit from this tend to be some of the largest, most well-financed companies in America — like Boeing.” Hensarling argued “most of these companies could finance exports on their own,” and should.

Supporters of Ex-Im claim that the bank doesn’t actually cost taxpayers any money, but Hensarling disagrees. Ex-Im uses “funny Washington” accounting, not true-value GAAP accounting, which the CBO says would show that Ex-Im really does cost taxpayers. The real point, according to Hensarling, is that Ex-Im conducts political and ideological lending, not free-market lending. “Ultimately, this is about bureaucrats making decisions about credit allocations,” Hensarling said, “and not free people in a competitive marketplace. They do ideological lending,” Hensarling continued. “I mean, they’ve got a “green” quota. They have a no-coal policy. They have a sub-Sahara African lending mandate. … And then, there’s all the cronyism.” Since 98% of all exports are financed outside Ex-Im, the argument that closing Ex-Im will seriously damage the American economy isn’t serious, Hensarling argued.

The correct way to level the economic playing field is to reform the tax code and enact tort reform. Liability costs are more than twice as high in the US as they are abroad, Hensarling points out, and the corporate tax burden both the highest and most complicated in the world. If the US flattened the tax system and leveled the playing field on liability, whatever perceived need for Ex-Im that exists would evaporate, along with the crony-capitalism leverage that exists right now. That brought up the topic of tax inversions, which have escalated recently with Medtronics and Burger King both escaping the US for tax relief. That’s the right approach, and it’s also “for voters to punish President Obama and his supporters in the next election,” Hensarling said. “For over two hundred years,” he pointed out, “business enterprises have been trying to get to America. … After a few years of Barack Obama, they’re trying to get out. That’s the real tragedy here.”

 

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“Barack Obama is chasing business enterprises — and jobs — away.”

Only the ones that can’t be filled by third world new democrat voters.

VorDaj on September 1, 2014 at 6:35 PM

Too big to fail.

Part Deux.

predator on September 1, 2014 at 6:37 PM

Or is it part D’eux?

I’ve lost count.

predator on September 1, 2014 at 6:38 PM

Critics allege that Ex-Im really exists as a crony-capitalism crutch for the biggest corporations, which gives them an unfair competitive advantage over smaller firms and wastes taxpayer money on efforts the big players could afford on their own.

Count Hensarling among the latter

Well then, where’s Dizzy Lizzy Warren?? She’s supposedly “fighting for the little guy!” /s

dpduq on September 1, 2014 at 6:44 PM

not true-value GAP accounting

GAAP, Ed. Not GAP.

BacaDog on September 1, 2014 at 7:00 PM

Isn’t this bank the reason Eric Cantor lost his primary election?

Khun Joe on September 1, 2014 at 7:02 PM

For over two hundred years,” he pointed out, “business enterprises have been trying to get to America. … After a few years of Barack Obama, they’re trying to get out. That’s the real tragedy .

+100

BacaDog on September 1, 2014 at 7:03 PM

After a few years of Barack Obama, they’re trying to get out. That’s the real tragedy .

They are the ones that won’t make the high jacking payoffs to democrat operatives.No pay,no play.

docflash on September 1, 2014 at 7:30 PM

not true-value GAP accounting

GAAP, Ed. Not GAP.

BacaDog on September 1, 2014 at 7:00 PM

Under Obama, it’s GAP accounting.:)

faraway on September 1, 2014 at 7:42 PM

GAAP, Ed. Not GAP.

BacaDog on September 1, 2014 at 7:00 PM

Yup — I’ve fixed it above. Got an e-mail on it too. Thanks!

Ed Morrissey on September 1, 2014 at 8:03 PM

Or is it part D’eux?

I’ve lost count.

predator on September 1, 2014 at 6:38 PM

More like part Doh!

Happy Nomad on September 1, 2014 at 8:32 PM

“For over two hundred years,” he pointed out, “business enterprises have been trying to get to America. … After a few years of Barack Obama, they’re trying to get out. That’s the real tragedy here.”

THAT should be the QOTD.

Cleombrotus on September 1, 2014 at 8:51 PM

Stop talking about it and just do it.

Another Drew on September 1, 2014 at 8:52 PM

The real point, according to Hensarling, is that Ex-Im conducts political and ideological lending, not free-market lending.

Yes, this is exactly what I’ve hears.

“I mean, they’ve got a “green” quota.

Yup. I heard this, too. Far too much money being lent to non-sensical “green” companies – companies as bad as Solyndra.

corkie on September 1, 2014 at 10:25 PM

Of course this bank costs taxpayers. They ALL do.

Wait until they start garnishing people’s bank accounts to cover their losses.

You ain’t seen nothing yet.

Dr. ZhivBlago on September 1, 2014 at 10:30 PM

He’s An IDIOT – they’re IDIOTS ALL!!!

…..we wouldn’t have The Passive Nuclear Plants in China OR The U.S. without this Bank – yeah, HE’S Been STEALING FROM IT FOR YEARS, Now……..THIS Won’t Save his Rotten Hide……

We Need To Do The SAME THING to these Politicians that we need to do to ISIS!!!

williamg on September 2, 2014 at 1:40 AM

Stop talking about it and just do it.

Agreed. Stop talking and start cutting, and cutting, and cutting.
-All corporate welfare first, then all social welfare.
-Cut regulations. That’s what torts and the courts are for.
-All you good Christians out there should rise up as a political block and demand your tax dollars so that you can start giving the charity that government just won’t anymore.
-But since charity is rarely beneficial, start a business and start employing people.
-Everyone should boycott every taxed item they possibly can. Stop buying tobacco and alcohol. (Do I need to mention lottery tickets?)
-Buy the most fuel efficient vehicle you can, not in the name of any environmentalism lie, but in the name of starving the national government of fuel tax.
-Stop buying government issued bonds and sell the ones you own.
-Take your money out of government enslaved banks.
-Quit your government job and find an honest job in the private sector. You will make less money and earn more pride.
-Stop bidding on government contracts for the exact same reason.

WyattsTorch on September 2, 2014 at 8:18 AM