Liberal lawmakers flip-flop on corporate welfare?

A recent hearing conducted by the House Oversight and Financial Services subcommittees provided yet another skirmish in the battle over the future of the scandal-plagued Export-Import bank. The bank, an 80-year-old creature of Washington, has come under scrutiny for taxpayer funded handouts to big businesses and state owned foreign corporations. 

While opponents of the bank questioned Ex-Im Chairman Fred Hochberg about issues such as corruption, kickbacks, and handouts to foreign governments, bank backers spoke about the jobs that might be lost if the embattled bank isn’t reauthorized by Congress in June. These supporters, many of them liberal Representatives who normally lament handouts to large corporations, had been reliable critics of the bank and the corporate welfare it represents.

{mosads}These lawmakers are of course not alone in doing a Washington-style about-face on the future of the bank.  President Obama has also undergone an epiphany of sorts on the issue. In 2008, then-candidate Obama called the bank “little more than a fund for corporate welfare” – only to flip-flop after becoming president, and assuming the role of cheerleader-in-chief for the beleaguered bank. 

Not surprisingly, Obama’s example has been emulated by some of his supporters.  More than 41 House Democrats have switched their vote for the bank between 2002 and 2014.

Perhaps the most high-profile of this cadre of converts is California’s Rep. Maxine Waters (D), who recently announced her goal to circumvent the regular order process and bypass the House Financial Services Committee and fast-track reauthorization of the bank.   In 2002 however, Waters held a different view – lamenting the bank’s “[H]istory of providing assistance to companies that have been exporting American jobs and hiring cheap foreign labor,” specifically targeting a controversial $3 million Ex-Im loan because, in her words, the loan would, “[B]uild a factory where Mexican workers will make parts for appliances that will be exported back to the United States. As a result, 1,500 American workers will lose their jobs to Mexican workers, who will be paid only $2 per hour.”

While Waters was apparently deeply concerned about the damaging effects of Ex-Im handouts in 2002, thirteen additional years in Congress has apparently given her a different perspective. 

Even so, the loan Waters cited in 2002 is just one example of the implications of using taxpayer resources to choose winners and losers.

Delta Airlines has repeatedly talked about the more than 7,500 jobs lost as a result of U.S. taxpayer assistance to Delta competitor Air China, a state-run Chinese airline that is able to undercut Delta in international markets, in part thanks to Ex-Im handouts.  Miners in Michigan and Minnesota are also being forced to compete with the richest woman in Australia – who received $694 million for mining equipment courtesy of Ex-Im’s taxpayer backed funding.  And these are hardly isolated cases.  Countless other businesses are forced to compete with those who have the political connections to secure Ex-Im financing, placing those who lack those connections at a disadvantage.  In fact a recent Cato analysis determined that the bank imposes costs on non-Ex-Im recipients of 2.8 billion dollars per year. For all the jobs bank proponents claim the Ex-Im “supports” just as many are jeopardized by handouts to foreign competition.   

Protecting taxpayers and fighting corruption should be a bipartisan issue for lawmakers.  Pulling the plug on the Export-Import bank would help accomplish both of these goals.  It’s difficult to understand why so many lawmakers on the Left have abandoned their opposition to this corrupt purveyor of corporate welfare.

Hanson is a Government Affairs analyst at Americans for Prosperity.