Conservatives must stand firm against ‘Crapitalism’ as Senate Democrats line up behind Ex-Im Bank

Chuck Schumer

Conservatives in Congress are giving the Export-Import Bank a literal run for its money leading up to its reauthorization vote later this summer. The crony capitalist — ‘crapitalist’ — institution has come under fire from incoming House Majority Leader Kevin McCarthy, who suggested “the private sector can do it” when asked if he supported reauthorization on Fox News Sunday, and House Speaker John Boehner recently backed off support for Ex-Im as more House conservatives line up against it.

Michael Grunwald, TIME Magazine’s senior national correspondent, said House conservatives were right and joined the growing chorus of those who oppose reauthorization last week, writing:

The Ex-Im is, as Senator Barack Obama said during his presidential campaign, “little more than a fund for corporate welfare.” It provides cheap credit to foreign borrowers, often cash-flush behemoths like Brazil’s state-owned oil company or the emirate of Dubai, so they can buy products from U.S. exporters, often cash-flush behemoths like Boeing, Bechtel, Caterpillar or General Electric. It’s dearly beloved by the U.S. Chamber of Commerce and the National Association of Manufacturers, but it’s often earned its reputation for crony capitalism. William Jefferson, the congressman memorably caught with cash in his freezer, got his dirty money in exchange for introducing corporate executives to Ex-Im officials, and the Justice Department is now investigating potential corruption inside the bank.

Former House Majority Leader Eric Cantor—like Texas Governor Rick Perry and other talk-a-good-game fiscal conservatives—supported the Ex-Im Bank, and the Obama Administration has defended it as a jobs engine. But Cantor’s stunning primary defeat to Tea Party challenger Dave Brat scrambled the politics of Ex-Im, persuading House Republican leaders to oppose the bank despite the pleadings of the Chamber and some influential corporate giants. Cantor had rolled the Tea Party and House Financial Services Chairman Jeb Hensarling on flood insurance; his successor, Kevin McCarthy, wants to reassure the Tea Party and Hensarling, a potential rival for his job, that the leadership will put conservative principles first.

There aren’t a lot of principled arguments for saving Ex-Im. Its defenders say most of its loans help small businesses, which is technically true when they define “small” as fewer than 1,500 employees. But 30% of the cash it lends goes to Boeing and over 60% goes to 10 large corporations. The bank also boasts that it doesn’t cost taxpayers money—which is true, or mostly true, depending on how you do the accounting—because only 0.3 percent of its loans default. But that’s not evidence the Ex-Im is effective. That’s evidence the Ex-Im is unnecessary. Surely the private sector can provide 99.7-percent-safe loans to massive conglomerates.

But that doesn’t mean conservatives are going to win this battle quite yet.

In Congress, there are two political parties that funnel your tax dollars into the coffers of Big Business. And Senate Democrats are throwing their support behind reauthorization efforts.

National Journal reports:

Sensing an opportunity to capitalize on a split within the GOP, Senate Democrats will vote this month to reauthorize a favorite of big business—the Export-Import Bank.

While business groups and moderate lawmakers have mounted a campaign to get the lender’s charter re-upped, Republicans are under heavy pressure from conservative groups to let the bank die when its authorization expires in September.

It’s a split that business-friendly Democrats are latching onto in the long-shot hope that this issue might be the one that finally turns groups like the Chamber of Commerce to the Democrats’ side.

If House Democrats are anything like Senate Democrats (and they are; Pelosi is pressuring colleagues to support Ex-Im), then it’s likely moderate Republicans and their crony capitalist Democrat allies will be able to cobble together a coalition that could pass reauthorization out of the House.

Conservatives must stand firm. Raising the red flag against the Big Business left-right alliance in Washington is the only way conservatives (and their anti-corporatist liberal allies) are going to end corporate welfare. The Ex-Im Bank reauthorization vote is a critical fight for the liberty movement in Congress.

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