The Years-Long, Koch-Funded, Libertarian Campaign to Kill the Export-Import Bank Is About to Succeed

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June 30 2014 6:30 PM

Ex-Im Exit

The years-long, Koch-funded, libertarian campaign to kill the Export-Import Bank could finally succeed.

House Majority Whip Kevin McCarthy.
New House Majority Whip Kevin McCarthy may spell doom for what he calls “crony capitalism.”

Photo by Mark Wilson/Getty Images

It was Sept. 22, 2008, at the dizzying height of the financial crisis and the moment when Barack Obama took a commanding lead in the presidential race. He was campaigning in Wisconsin, a state he’d win easily. He softened a speech about Wall Street greed with some examples of government at its worst.

“There are some [programs] that have been duplicated by other programs that we just need to cut back,” said candidate Obama, “like waste at the Economic Development Agency [sic] and the Export-Import Bank that’s become little more than a fund for corporate welfare.”

The line landed with a quiet thud. None of the media on the scene bothered to print Obama’s quote about a New Deal-era agency that guarantees loans for companies selling overseas. The AP led with Obama’s promise to “slash federal spending on contractors by 10 percent,” the Green Bay Press Gazette with Obama accusing John McCain of “flip-flopping,” and the Chicago Sun-Times with a note about the “uncharacteristic number of empty seats” in the arena. (Someone named Sarah Palin had been a bigger draw.)

David Weigel David Weigel

David Weigel is a Slate political reporter. 

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But people aren’t ignoring Ex-Im (as it’s universally abbreviated) anymore. A government agency that was too dull to write about is suddenly the perfect libertarian target. It took years of messaging, much of it by groups funded by the omnipresent Koch network, but Ex-Im has emerged as a test for whether “libertarian populism” can win a vote in Congress.

Obama’s own Ex-Im quote stayed rather obscure until March 2012. That was when the Club for Growth, which predates the growth of the Koch network but has benefited from it, began attacking the bank’s May 2012 reauthorization vote. The bank periodically needs to be reauthorized by Congress, a process that has happened more or less routinely every few years since the 1940s. It needs to be reauthorized by Sept. 30, 2014, or it will shut down.

But the Club was not ideally positioned to lead this charge against Ex-Im, because the Club’s own president, former Indiana Rep. Chris Chocola, had a family business, CTB, that had benefited from Ex-Im assistance. When Chocola denounced the bank’s “corporate welfare,” its defenders had an exploding cigar with his name on it.

 “I never heard the words ‘Ex-Im Bank’ once when I was CEO,” Chocola says today. “Apparently someone had, because apparently we did use some of their financing in our sales. But we never once, in our sales and budgetary planning, ever talked about Ex-Im Bank and said it was critical to our success. It made no difference to us. It didn’t save one job. It didn’t create any opportunities that didn’t exist before.”

The Club targeted Ex-Im despite the Chocola embarrassment, using the Obama sound bite to make its case. American Commitment, a new group launched by Phil Kerpen, formerly of the Koch-funded Americans for Prosperity, joined the charge against Ex-Im in 2012 too.

The initial 2012 attack failed: John Boehner’s House of Representatives extended the Ex-Im charter in an easy, 330–93 vote. Republican Rep. Gary Miller had sponsored the reauthorization, and every Democrat who hadn’t abstained had voted for it. The extension squeezed in a few reforms, requiring quarterly reports from the bank. Rebellion crushed, story over, victory party over at the Chamber of Commerce, open bar.

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