As it had long been clear he would, President Barack Obama has signed H.R. 22, the five-year, $305 billion federal highway bill that also revives from the dead conservatives’ and libertarians’ least-favorite zombie: the Export-Import Bank.

In fact, the forces aligning for Ex-Im’s inevitable reauthorization began aligning even before June 30, when the bank’s statutory charter expired after 81 years of reliably providing pork to some of the nation’s biggest corporations. They date back to a deal made in May by ostensible Ex-Im “opponent” Senate Majority Leader Mitch McConnell, R-Ky., with Sen. Maria Cantwell, D-Wash., and others from states where the presence of Boeing (beneficiary of 40 percent of the bank’s activities) could be felt.

In exchange for agreeing to support Trade Promotion Authority, McConnell promised he’d allow Ex-Im reauthorization to be attached to a moving vehicle. The first opportunity was the vote on the National Defense Authorization Act in June and, when that didn’t work out, the highway bill became the next logical target.

By October, when former tea party stalwart Rep. Stephen Fincher, R-Tenn., broke ranks and teamed up with House Minority Leader Nancy Pelosi, D-Calif., to use a discharge petition to go around House Financial Services Committee Chairman Jeb Hensarling, R-Texas, and bring the measure directly to a vote on the House floor, reauthorization was a fait accompli.

It’s hard to find anything to say about Ex-Im that hasn’t already been said, and said most forcefully and eloquently by Veronique de Rugy of the Mercatus Center at George Mason University. While the bank’s apologists have tried to pitch its reauthorization as some kind of win for small business, de Rugy has shown that less than 0.3 percent of small-business employees and less than 0.04 percent of small-business establishments benefit from its operations.

Meanwhile, taxpayers are back on the hook for Ex-Im’s $140 billion in liabilities. This, too, inevitably gets brushed aside by the bank’s partisans, who point to the $674 million in “profits” the bank returned to the U.S. Treasury last year. A few years back, analysis by Christopher Papagianis and Jason Delisle of the think tank e21 showed that application of fair-value accounting standards to the bank’s books demonstrate that it actually costs taxpayers about $200 million a year, as loans are made at such generous terms as to constitute about a $0.01 subsidy for each $1 borrowed.

So can any silver lining to be found in the crapstorm that is Ex-Im renewal? There is one, but you have to dig deep to Page 455 of the 490-page bill to find it:


(a) IN GENERAL.—Notwithstanding any provision of the Export-Import Bank Act of 1945 (12 U.S.C. 635 et seq.), the Export-Import Bank of the United States (in this section referred to as the ‘‘Bank’’) may establish a pilot program under which the Bank may enter into contracts and other arrangements to share risks associated with the provision of guarantees, insurance, or credit, or the participation in the extension of credit, by the Bank under that Act.


(1) PER CONTRACT OR OTHER ARRANGEMENT.—The aggregate amount of liability the Bank may transfer through risk-sharing pursuant to a contract or other arrangement entered into under subsection (a) may not exceed $1,000,000,000.

(2) PER YEAR.—The aggregate amount of liability the Bank may transfer through risk sharing during a fiscal year pursuant to contracts or other arrangements entered into under subsection (a) during that fiscal year may not exceed $10,000,000,000.

(c) ANNUAL REPORTS.—Not later than 1 year after the date of the enactment of this Act, and annually thereafter through 2019, the Bank shall submit to Congress a written report that contains a detailed analysis of the use of the pilot program carried out under subsection (a) during the year preceding the submission of the report.

(d) RULE OF CONSTRUCTION.—Nothing in this section shall be construed to affect, impede, or revoke any authority of the Bank.

(e) TERMINATION.—The pilot program carried out under subsection (a) shall terminate on September 30, 2019.

In essence, this provision would open the door for Ex-Im to offload up to $10 billion a year, primarily of its book of trade credit insurance, to the private sector through the use of reinsurance. This is welcome news on at least two fronts.

  1. It offers opportunities for reinsurers, who have been clamoring to take on more risk, given a flood of capital and years of “soft” pricing conditions.
  2. It takes those risks off the backs of taxpayers and spreads them out into the global market.

Success of the pilot program also will offer proof-positive that there is no reason not to just cut out the middleman next time and allow the private market to take Ex-Im’s duties entirely. Thus, we can keep our fingers crossed that the bank’s next expiration, in 2019, truly will be its last.

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