Perry goes from right to wrong on Ex-Im Bank

Former Texas governor and presidential candidate Rick Perry (R) recently wrote a remarkable op-ed piece in the Wall Street Journal saying that the sluggish growth of the U.S. economy “is complicated by an absurdly complex tax code” that saddles our businesses “with the highest corporate tax rate in the developed world.” He’s right. 

Perry termed “the ever-expanding federal debt” as a second major challenge “fueled by ever-rising federal spending.” He is right again.

{mosads}Finally he cited “an explosion of new regulations” caused by the overreaching Obama administration as “a third challenge to growth.” Right a third time.

Then, the former successful, jobs-focused governor said he has somehow reached the conclusion that because of all these burdensome challenges, Congress should get rid of the self-supporting Ex-Im Bank.

Less than a year ago, then-Gov. Perry wrote the bipartisan leadership of Congress a letter calling for the reauthorization of the Ex-Im Bank, extolling its virtues and rightly noting “Ex-Im is a vital export finance tool at no cost to the American taxpayer.” 

Perry, in that letter of June 25, 2014, went on to say “the bank allows U.S. companies and workers to compete on a level playing field,” and he noted, “Every major economy in the world utilizes such an institution.” He was correct then, and it’s still true today. At least 60 countries have the equivalent of an Ex-Im Bank, and they are typically much more aggressive than the United States. Witness, the Chinese provide more than ten times as much as the United States does each year in official export credit financing.

Perry added in his 2014 letter, “At a time when the U.S. economy continues to face challenges, it is especially important to maintain the role Ex-Im Bank plays in supporting U.S. jobs in businesses of all sizes and in all sectors.” 

The challenges to economic growth Perry referred to in his June 2014 letter are exactly the same ones he discusses in his op-ed piece. None of them are materially different from a year ago.

Indeed, the challenges, such as the highest corporate tax rate in the developed world—coupled with double taxation of overseas profits—and excessive, expensive regulation prevent our businesses from competing on a level playing field with foreign companies for exports. In fact, the challenges to economic growth mentioned by Perry are reasons our exporters need Ex-Im Bank support.

In America, we can export our goods or we can export our jobs. Perry, by citing the three challenges to economic growth that he sees, actually is making the case for Ex-Im Bank’s reauthorization, just as he did in his letter less than a year ago.

The idea that we should further challenge U.S. exporters and the millions of Americans they and their suppliers employ by eliminating Ex-Im Bank would be tantamount to unilateral economic disarmament for our American export community, when the real need is to give them a level playing field on which to compete.

Now, if we got rid of the huge disadvantages federal tax and regulatory policies place on U.S. businesses; if there were an enforceable agreement setting rules under which all countries’ export credit agencies must operate and eventually wind down; if you really leveled the playing field; then maybe a case could be made that Ex-Im was no longer needed because the private sector banks would suddenly want to provide the credit.

Allen was Virginia’s governor from 1994 to 1998, and was a U.S. senator from Virginia from 2001 to 2007.