Congress is reviving a ghost bank to reanimate taxpayer-subsidized “zombie tax breaks” for corporations, warns Americans For Prosperity as part of its recently launched "Unrig The Economy" campaign.
“It’s corporate welfare and part of the reason why the majority of Americans think the economy is rigged against them,” Americans For Prosperity-Florida [AFP-F] spokesman Andres Malave told The Center Square.
Americans For Prosperity [AFP] is among conservative and liberal groups challenging the reauthorization of the U.S Export-Import Bank [EXIM] before its charter expires in September.
Allowing EXIM to function without reform means “reauthorization of corporate tax extenders, reauthorization to dole out taxpayer-funded handouts,” Malave said. “That seems to be gaining a little traction now that they are reauthorizing it.”
EXIM was established by executive order in 1934 as a component of FDR’s National Recovery Act. Since 1945, it has operated as an independent executive branch agency, but requires Congressional reauthorization.
EXIM is the United States’ official export credit agency. It provides financing and insurance for American exporters and for foreign companies seeking to buy American products.
The bank has long been the target of bipartisan criticism as a “tool of crony capitalism.”
In 2014, EXIM financed about 2 percent of the nation’s exports with 65 percent of the deals it brokered benefiting 10 mega-corporations, including General Electric, Caterpillar and Boeing, which received 40 percent of its loans that year, according to the Congressional Budget Office [CBO].
That same year, the CBO found EXIM-financed projects would earn the U.S. government about $1.4 billion a year for the next 10 years but would lose about $2 billion during the same period.
In 2015, the House balked at reauthorizing EXIM and the bank’s charter expired. That December, it was reauthorized in an amendment to a transportation bill through September 2019.
Congress, however, refused to fill four vacant board positions, leaving EXIM without a quorum and, thus, unable to approve loans of more than $10 million. Its activities dropped from $21 billion in 2014 to $3.6 billion in 2018.
On May 8, the Senate confirmed President Donald Trump’s three EXIM board nominees, re-establishing a quorum and restoring its full financing capacity. Two more EXIM nominees await confirmation.
The House Financial Services Committee recently reviewed, and the House Ways & Means Committee will soon receive, EXIM’s reauthorization request.
Critics, ranging from the AFL to Friends Of The Earth, say reauthorization language has none of the reforms suggested when Congress let EXIM’s charter expire in 2015.
Stopping the pending reauthorization of EXIM is “the next first step” in continuing the “good work” that began with Tax Cuts & Job Acts of 2017 [TCJA], Malave said.
The AFP is lobbying 33 Ways & Means Committee members to oppose the reauthorization with a “seven-figure direct mail and digital ad buy.”
The first mailer cites “zombie tax-break extenders” that expired in 2017 “but special interests are trying to bring them back from the dead.” Its headline reads: “TAX LOOPHOLES ARE LIKE ZOMBIES … THEY JUST WON’T DIE.”
Appeals to specific House Ways & Means Committee are on the back of each mailer. In Florida, they direct voters to contact Rep. Stephanie Murphy, an Orlando Democrat who sits on the Ways & Means Committee.
“Representative Stephanie Murphy can Unrig the Economy,” it reads. “Tell her to oppose tax extenders.”
“It is important to call on folks who were previously our champions or who are ‘movable’ on these issues,” Malave said. “We would love to see Rep. Murphy step up in making the tax code fair and get rid of these loopholes. Stephanie Murphy has a real opportunity to be a leader in this.”
“We will work with anyone to unrig the economy, so all Americans have a better chance to realize their potential,” AFP President Tim Phillips said in a statement.
Malave said the "Unrig the Economy" campaign will also include “finding a solution on DACA,” criminal justice reform, deregulation and occupational license reform.
“While AFP has been effective at fighting corporate welfare in the past, we’ve never waged a national campaign at this magnitude and with this focus,” Phillips said. “‘Unrig the Economy’ will work across the country to stop government favoritism that tilts the playing field to the benefit of the powerful and well-connected.”
Florida is ahead of the curve in “unrigging the economy,” AFP-F State Director Skylar Zander said.
“Florida lawmakers are changing the culture in Tallahassee that was previously riddled with corporate welfare and special deals for the well-connected,” Zander said in a statement. “Whether it’s been the exhaustive taxpayer giveaways by Enterprise Florida, pro sports subsidies or Hollywood handouts, we’ve seen lawmakers focus on policy outcomes that have turned off the taxpayer trough to special interests. Our D.C. delegation should take this opportunity to work together and lead by example – the Florida way.”