Pete Sepp is executive vice president of the National Taxpayers Union.
Senate Majority Leader Harry Reid is rallying the support of Democrats (and some Republicans) in the upper house to increase the taxpayer-backed loan limit of the U.S. Export-Import Bank. The program, which according to its mission statement undertakes "credit and country risks that the private sector is unable or unwilling to accept," can leverage $100 billion in lending authority and has made some strange bets. Among these are failed businesses from the energy sector, including Solyndra and Enron.
After these and other revelations, including this week's news that more than $450 million in Export-Import financing underwrote a solar panel company's sale of products to one of its own Canadian subsidiaries, perhaps Congress might want to just let the bank's authority expire in May and relieve U.S. taxpayers of additional future risks. After all, as my National Taxpayers Union colleague Nan Swift has pointed out here and here, Export-Import's possible liabilities to taxpayers are high while its contributions to exports are low. Yet, Reid and company instead seek a boost in the loan limit to as high as $140 billion. Equally troubling, other opportunities to boost exports without putting tax dollars on the line are being stymied.
[See a collection of political cartoons on the economy.]
As Bloomberg columnist Caroline Baum noted last week, the U.S. shale gas boom has been likened to the crumbling of the Berlin Wall by PFC Energy CEO Robin West for its massive future-changing potential. Energy economist Phil Verleger recently told National Public Radio that he predicts America will no longer need to import crude oil within 10 years, and will become a net exporter of natural gas. If realized, this would have a major impact on not only U.S. energy policy, but on our entire economic (and by extension foreign) policy as well. Still, right now that's a big "if".
So far the lion's share of the natural gas boom has occurred on privately owned lands, as the Obama administration continues an on-again, off-again approach to the permitting process. On balance, the increase in domestic production has occurred more in spite of White House policies than because of them.
America must move forward with proper, responsible private sector development of natural gas resources. Doing so would lead to far greater U.S. competitiveness abroad than anything the bureaucratically run Export-Import Bank could achieve by taking billions more in taxpayer resources.
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Reader Comments Read all comments (1)
R.L. Schaefer of CA 11:42AM March 21, 2012