Export-Import Bank

Dem Proposes Saving Ex-Im Bank with Even More Cronyism


"There's always money in the Export-Import Bank."
Credit: Third Way / photo on flickr

(Edited because I accidentally left out "West" in "West Virginia")

It's probably safe to say Democratic Sen. Joe Manchin of West Virginia's political future may depend on how well he is able to tamp down the Obama administration and the Environmental Protection Agency's regulatory "war on coal," at least in his home state.

So with the rhetoric heating up over the "crony capitalism machine" (Reason Contributing Editor Veronique de Rugy's words, not mine) known as the U.S. Export-Import Bank and its future in jeopardy, Manchin apparently sees an opportunity to create a bipartisan push to save a mechanism to give money to favored business interests. He's hoping the ability to let the Ex-Im Bank loan money to coal companies would draw in some Republicans to renew the bank's charter come fall. Politico takes note:

The West Virginia Democrat's measure would extend Ex-Im's charter for five years and lift its lending authority from $130 billion to $160 billion. But it would also roll back a rule Ex-Im put in place last year that bars assistance to environmentally "dirty" projects.

That provision helped attract four Republican co-sponsors: Sens. Mark Kirk of Illinois, Lindsey Graham of South Carolina, Roy Blunt of Missouri and Mike Johanns of Nebraska. But it has also drawn the ire of environmental groups and liberal Democrats like Sen. Barbara Boxer of California, leaving Manchin at risk of losing support from within his own party.

Other Democrats said they don't have a problem with Manchin's pro-coal provision, although they said they fear it could open the door to a raft of reform proposals that could slow any renewal down.

"I'm concerned about starting to add things and conditions, and making it more complicated and bogging it down that way," said Sen. Sherrod Brown (D-Ohio). "I don't particularly object to Manchin's efforts, but I think that sets us down a path we may not want to go."

Manchin's efforts at the potential cronyism gravy train it may inspire by other members of Congress is exactly why the Ex-Im Bank is such a problem in the first place. This is pork at its most obvious. Any additional "reforms" are bound to favor the states or congressional districts of the reformers.

Rep. John Campbell (R-Calif.) is also proposing some reforms that would reauthorize the bank but reduce the amount of money it loans a year to $95 billion. Campbell also tells Politico that he is a bit surprised at how much attention to usually unknown Ex-Im Bank is getting these days:

"The vast majority of the American public has never heard of it. I'd never heard of it before I was elected to Congress," he said.

"Here's this obscure little thing that has become the poster child of being either in favor of business and jobs or against crony capitalism, depending on which side you're on," Campbell said. "And I think it's overrated in both those senses."

But killing off the Ex-Im Bank a test of commitment for actual support of small government. De Rugy has detailed in the pages of Reason, and elsewhere, and even before a House Committee, that the defenses of the bank can easily be shot down, and there's little evidence the bank is actually necessary. If this cronyist patronage appendix in the federal government cannot be surgically removed, is there anything in the federal government that can actually be cut?

Maybe that's why progressives like Sen. Elizabeth Warren (D-Mass.) end up supporting the bank, even though there's no rational or ethical reason anybody on the left should feel anything but revulsion toward the thing. The Export-Import Bank is proof that the size of government can and should be cut and evidence that the federal government is too powerful. If the bank is permitted to die, it may well embolden both politicians and average Americans who believe the government does too much.