Export-Import Bank no friend to Nevadans

In about two weeks, an obscure federal agency known as the Export-Import Bank is set to expire. This agency loses taxpayer money, picks winners and losers in the economy, and endangers American jobs. Nevadans would be better off without it, and Congress can let it die by doing what it does best: nothing.

But that’s harder than it sounds. Unfortunately, Ex-Im is one of the few issues on which Congress acts decisively, year after year. No wonder: The big businesses that benefit from the bank have sent swarms of lobbyists to Washington to persuade Congress to keep it alive.

In fact, the Ex-Im bank is a perfect example of the business-government collusion Americans despise. Even President Barack Obama once called Ex-Im “little more than a fund for corporate welfare.” That’s why Nevadans need to stay vigilant and ensure that our representatives in Congress do the right thing: let Ex-Im expire.

We can start by reminding them how the bank works, and how it harms us in the process.

Ex-Im subsidizes American exports by giving taxpayer-backed financing to the foreign companies that buy them. In doing so, Ex-Im harms Nevada’s economy. Nevada’s prime exports include gold, aviation parts and resources such as copper. Ex-Im financing goes to foreign businesses that produce all those same goods, according to the bank’s data. Although Nevadans need to rely on the commercial market to secure financing, foreign businesses get a boost from the taxpayer-funded Ex-Im.

This is special treatment for foreign companies competing directly with American businesses. As a result, Ex-Im causes economic losses and lost jobs here at home, because our competitors have a taxpayer-backed advantage. Research produced by the Cato Institute finds that Ex-Im costs many companies dearly: Certain key manufacturing industries lose $14 million every year because of it. In Nevada, 80 percent of manufacturers are negatively affected. The total hit to the national economy is $2.8 billion.

These losses are just another damper on our economic recovery. And hard-working Nevada taxpayers are financing them. Trade is great, but not when it has to be propped up by unwilling participants.

But before you take the bank’s word that this is what keeps America’s economy afloat, keep in mind that only 2 percent of the country’s exports get Ex-Im subsidies. As for that 2 percent, Ex-Im beneficiaries are a fairly exclusive club of major multinational companies. In 2013, the top 10 beneficiaries received three-quarters of Ex-Im’s total funding. Last year, 40 percent of the bank’s funding went to just one company.

Although Ex-Im’s financing goes to a chosen few, the bank gets its money from everyone. Taxpayers are responsible for backing all of Ex-Im’s transactions, via a guarantee from the Treasury. The bank and its business backers claim that it makes money for American taxpayers. That’s not accurate. The government’s main accounting agency, the Congressional Budget Office, recently found that Ex-Im actually adds $200 million to the deficit every year.

So who benefits from all this favoritism and corporate welfare? Besides a few well-connected businesses on these shores, Ex-Im has given financing support to countries such as Venezuela — when it was run by socialist Hugo Chavez.

Even now, the bank freely supports deals with state-owned companies in countries such as Saudi Arabia and China, to name but a couple. It recently suspended operations with Russia, but only after sending billions in U.S.-taxpayer-backed support to Russian state-owned businesses and oligarchs.

Hard-working Nevadans shouldn’t be forced to put our tax dollars and local economy on the line to prop up a few big businesses. It’s up to us to hold our representatives in Congress accountable on this issue.

They have a chance to show us that they prioritize our economic well-being over welfare for the well-connected. They can stand with us, or they can stand with the lobbyists and the big businesses that benefit from the Export-Import Bank.

That shouldn’t be a difficult decision.

Adam Jones is the Nevada director for Americans for Prosperity.