A bad deal for the Buckeye State
Do Ohio’s representatives in Congress even read the polls? If they did, they’d see that more than two-thirds of Americans think politicians give special favors to special interests. You’d think they’d want to prove us wrong. Instead, they do exactly what we think they do.
Ten members of Ohio’s congressional delegation – six Republicans and four Democrats – have now voted to bring the U.S. Export-Import Bank back to life. This little-known agency uses taxpayer money to prop up a small number of politically connected companies. It hurts the economy in the process.
It’s corporate welfare, plain and simple.
Congress refused to re-authorize the Ex-Im Bank earlier this summer. For the past few months, Ohio companies have been competing with each other on a level playing field. Yet those ten representatives chose to bring back the corporate welfare. They are: Republicans Reps. Jim Renacci, Bill Johnson, Bob Gibbs, Mike Turner, David Joyce, Steve Stivers and Patrick Tiberi; and Democrat Reps. Marcy Kaptur, Joyce Beatty, Marcia Fudge and Tim Ryan.
In principle, the Export-Import Bank is supposed to provide taxpayer-backed financing to boost American exports. The bank now has taxpayers on the hook for over $110 billion. Yet this staggering sum only supports 0.7 percent of our state’s exports.
So where’s the money going? To a well-connected few, of course. About two of every three taxpayer dollars Ex-Im spends benefits only ten companies. Some years it’s even higher – in 2012, only one company benefitted from over 80 percent of the bank’s loan guarantees. It shouldn’t come as a surprise that these companies want to keep the taxpayer on the hook for their profits. They’re lobbying Congress around the clock.
Yet when the taxpayer is unwittingly forced to pad these businesses’ bottom lines, it simultaneously hurts countless others.
Apparently the bureaucrats who run Ex-Im never took basic economics. Taxpayer money for one company helps it do better than its competitors. That’s bad enough – the federal government picking winners and losers using our money. But the harmful side effects don’t stop there.
Ex-Im’s main purpose is to help foreign companies buy American products. That means Ohio taxpayers are helping businesses in Russia, China, Brazil, India, and more. When they get our help, they can better compete with U.S. businesses. Put another way, Ex-Im is giving foreign companies a leg up on American ones – and we’re paying for the whole deal.
This hurts manufacturers the most – the heart of Ohio’s economy. Experts at the Cato Institute found that nearly 200 types of manufacturers are harmed by Ex-Im. Included in the list: tool manufacturers, engine equipment manufacturers, rubber manufacturers, and hundreds more. All told, these and other businesses are losing at least $2.8 billion thanks to the Export-Import Bank.
That money could have been used to create jobs and grow wages for hardworking Ohioans. Instead, a few large and profitable businesses get ahead, while the rest of us pay the price.
That’s the worst possible kind of corporate welfare. And given that taxpayer dollars are at stake, it shouldn’t be a surprise that Ex-Im encourages corruption. Some businesses are willing to do anything to get their share of the taxpayer handouts. Almost 800 cases of fraud have been reported in the last decade. One employee recently admitted that he took nearly $80,000 in bribes.
This begs the question: Why do those ten Ohio congressmen support this? By voting to reauthorize the Export-Import Bank, they’re putting special interests ahead of the people they’re supposed to serve. If only they’d surprise us just once and do something that puts Ohio first.
Myers is the Ohio deputy state director for Americans for Prosperity.
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