Nations Mayors Drink the Ex-Im Kool-Aid

By Ken Blackwell, CP Op-Ed Contributor Tuesday, February 24, 2015

Ken Blackwell is the Senior Fellow for Family Empowerment at the Family Research Council, and the Ronald Reagan Distinguished Fellow for Public Policy at the Buckeye Institute in Columbus, Ohio

There's an old saying that all politics is local. If that is the case, it should follow that local politicians should be among the best informed, armed with iron-clad facts as they weigh in on issues that affect not only their areas, but the nation as a whole. The U.S. Conference of Mayors, however, has generated some confusion recently by throwing their support behind the embattled Export-Import Bank of the United States – apparently on the strength of some questionable data.

The group has supported the bank in the past and passed a resolution in favor of renewing Ex-Im's charter last June as the debate over the it's reauthorization raged in Congress. At that point, politicians from both parties along with a number of groups and individuals outside government were questioning the necessity of this eighty-year-old institution to the American people.

The bank is supposed to provide funding to facilitate deals between U.S. and foreign companies so that American products can be exported overseas. In practice, this has often translated into a government institution picking winners and losers. Ten large corporations, for instance, end up receiving more than half of Ex-Im's total funding. One of these, Boeing, received more than $8 billion by itself.

The Conference of Mayors came down on the bank's side last summer and so did legions of lobbyists in the employ of its corporate pals. Eventually, Ex-Im was granted a temporary extension of its charter until the end of this June.

America's mayors have reaffirmed their support for the agency, sending a letter to the Republican and Democratic leadership in both the U.S. Senate and House of Representatives calling for reauthorization of the bank in order to avoid "putting U.S. jobs in jeopardy."

Some of their data regarding these jobs does not appear to add up, however. The letter claims that Ex-Im's "support for small businesses" specifically supported 46,000 jobs in Florida and another 134,000 in California. Interestingly, they also praised the bank earlier in the letter for "supporting more than 205,000 jobs nationwide." This would suggest that small businesses in just two states were responsible for 180,000 of the 205,000 jobs supported by Ex-Im in the entire nation – about 88 percent. An analysis of the letter's claims by The Daily Caller points out that under 14 percent of the Bank's funding went to Florida and California combined, which makes the jobs numbers seem somewhat outsized.

It would not be entirely fair to hold the Conference of Mayors responsible for any potential statistical errors. Any faulty numbers may well have come straight from the source, as Ex-Im has a severely blemished reputation when it comes to record-keeping. This is, after all, the agency that sent nearly $25 billion over seven years to industries recorded simply as "unknown."

The bank is even worse, apparently, at keeping tabs on their small business funding, which could explain the head-scratch-worthy claims made by the mayors. Presumably due to a bureaucratic error, about $3 billion worth of authorizations went to businesses Ex-Im classified as "small" but which were in fact quite large, according to a Reuters report last year. Among the misidentified "small" companies were some of Warren Buffett's holdings, along with Bechtel that employs about 50,000.

Friends of the Ex-Im Bank have been caught trying to inflate its impact on certain sectors of the economy in the past. The U.S. Chamber of Commerce, which has argued stridently on behalf of big business for the bank's reauthorization, tried to claim that 20 percent of Ex-Im's funding went to businesses owned by minorities or women. The Huffington Post promptly debunked this using Ex-Im's own data, which revealed a more accurate figure of 13.7 percent.

If the Conference of Mayors is truly concerned about "putting U.S. jobs in jeopardy," perhaps they should worry about jobs at their local airports. When the Ex-Im Bank helps foreign airlines buy Boeing jets with preferential financial terms not available to domestic carriers, it hurts U.S. jobs in the American air travel industry. Instead of propping up a failing institution with dubious numbers, local officials should seriously consider what Ex-Im's picking of winners and losers is really costing their communities.

Ken Blackwell is the Senior Fellow for Family Empowerment at the Family Research Council. He serves on the board of directors of the Club for Growth and the National Taxpayers Union. He is also a member of the public affairs committee of the NRA. Mr. Blackwell is also the former Mayor of Cincinnati and a former Ambassador to the United Nations Human Rights Commission.