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Opinion: Battle over Ex-Im Bank shifts to next Congress

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Remember when conservative Republicans were drawing a line in the sand against the reauthorization of the Export-Import Bank?

On Thursday, the Senate is expected to approve a nine-month extension of the Ex-Im Bank’s charter, from Sept. 30 of this year until June 30, 2015, as part of a bill (H.J. Res 124) to fund government operations until early December. The House passed the measure easily on Wednesday, wrapping up all the loose ends that absolutely had to be tied up prior to the November elections.

House Republicans are still going to take up two measures that repackage a number of bills they’d already pushed through the chamber on largely party-line votes. The point there, evidently, is to remind voters about the GOP’s approach to the economy, which consists mainly of drilling wells, eliminating regulations and cutting taxes.

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But postponing the decision about the Ex-Im Bank’s long-term survival suggests that the theme of “crony capitalism” -- the tea party’s main beef against the bank -- isn’t going to be a big part of this fall’s campaign. That’s not surprising, considering that most of the supposed cronies aided by the Ex-Im Bank are the small-business operators who once were the backbone of the Republican Party.

The Times’ editorial board explained the fallacy behind the crony-capitalism argument in August:

“What’s truly crony capitalism is when the government confuses private interests with public ones,” the board wrote. “A good example is when defense contractors persuade lawmakers to order the Pentagon to buy weapons systems that military officials don’t want. Or, as recently happened in Sacramento, when a company lobbies successfully for an exclusive tax break that gives it a competitive advantage over its rivals yet offers no real benefit to the public.

“The Ex-Im Bank, by contrast, doesn’t pick winners and losers when it helps finance sales of U.S. products to foreign buyers. Instead, its help -- including loans, loan guarantees for foreign buyers of American-made goods and insurance against buyers defaulting -- is available to any U.S. exporter of American goods who shows that private banks won’t provide financing on terms that allow it to compete with foreign manufacturers. The Ex-Im charges exporters less than a private lender might, which makes its aid a sort of government subsidy. But it hasn’t cost taxpayers -- at least not yet -- because it has generated more in fees than it has lost on defaults.”

The debate worth having over Ex-Im is whether its aid should be limited to small businesses. Currently it’s not, and as a result, the vast majority of its dollars are used to support a small number of Fortune 500 companies selling wildly expensive goods. At the top of the list is Boeing, whose sales to foreign airlines are Ex-Im’s No. 1 beneficiary by far in terms of total dollars.

The only reason to subsidize the likes of Boeing is because its competitors’ sales are subsidized by their own governments. Former Federal Reserve Chairman Alan Greenspan was quoted Thursday in an interview with The Hill as saying the world would be better off without such sovereign meddling. Yet Congress can only withdraw the United States unilaterally from that morass, it can’t force South Korea and other nations with vigorous export credit programs to follow suit.

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Again, the debate over the Ex-Im Bank isn’t over forever, just for the year. And if Republicans take control of the Senate, as expected, the chances of the bank staying in business will only dim. By moving the decision out of campaign season, perhaps lawmakers will be able to separate the issue posed by the lack of a cap on subsidies from the question of whether the government should help any business with export-credit problems. It would be a shame if Congress abandoned the small businesses that private lenders aren’t serving because lawmakers are justifiably tired of subsidizing huge companies.

Follow Healey’s intermittent Twitter feed: @jcahealey

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