LLPH orginially issued a leadership point alert on H.R. 2548, encouraging members to vote no for 2 leadership points. That will still stand, but LLPH has decided after much review to key vote against H.R. 2548, The Electrify Africa Act of 2014, which includes a 3-year reathorization of OPIC. This bill is another example of crony capitalism that is occurring in the House of Representatives, even under a GOP controlled House.
Our friends at the Heritage Action came out against the bill stating,
The Heritage Foundation has opposed OPIC for decades. In 1996, Heritage analyst Brett Schaefer noted the “irony of using a government-run program to encourage other countries to end government interference in their economies.” Schaefer concluded:
Encouraging foreign investment is an admirable goal, but it should not come in the form of government subsidies to private U.S. firms — subsidies that discourage economic reform in the target countries and put the American taxpayer at risk.
That same year, Nobel laureate Milton Friedman wrote a letter to the House budget chairman: “I cannot see any redeeming aspect in the existence of OPIC. It is special interest legislation of the worst kind, legislation that makes the problem it is intended to deal with worse rather than better…. OPIC has no business existing.”
Bryan Riley, Heritage’s Jay Van Andel Senior Policy Analyst in Trade Policy, compared OPIC to the Export-Import Bank, writing they “should not receive taxpayer backing.” Riley continued:
OPIC shifts risk to U.S. taxpayers while denying them a commensurate share of the returns. Although doubtful, this practice may have been justified when OPIC was created in 1969. But the original vision for OPIC was based on encouraging private-sector investment in developing countries, and it makes little sense to maintain government-subsidized loans, guarantees, and insurance when ample private-sector alternatives exist in today’s era of global markets and foreign direct investment in developing countries is surging.
The Examiner’s Tim Carney noted, the OPIC reauthorization is “more contentious issue” than the bill itself, “So it was convenient that a few inscrutable lines in a 22-page, non-controversial bill would do the deed.”
Timothy Carney, at the Washington Examiner wrote an excellent piece on the GOP leadership’s tactics:
The Overseas Private Investment Corp. is a federal agency thatsubsidizes U.S. companies investing in foreign countries — such as Ritz-Carlton building a hotel in Turkey. OPIC provides a taxpayer backstop for the banks and the developers in case anything goes wrong.
Instead, House Foreign Affairs Chairman Ed Royce — a former opponent of OPIC — teamed up with Democrats to stick reauthorization into the “Electrify Africa Act of 2014.”
The Club for Growth also announced that they would key vote against this bill:
KEY VOTE ALERT
“NO” on OPIC Reauthorization (HR 2548)
The Club for Growth urges all House members to vote “NO” on theElectrify Africa Act (HR 2548) which includes reauthorization of the Overseas Private Investment Corporation (OPIC). A vote is expected later today. The vote on final passage, and/or any procedural votes, will be included in the Club’s 2014 Congressional Scorecard.
OPIC is the lesser known cousin of the Export-Import Bank. It’s a government agency that puts taxpayers on the hook through loans, loan guarantees, and insurance policies to private companies and projects. It is yet another example of the government picking winners and losers in the private sector. The House should deny reauthorization of OPIC and terminate its charter immediately.
Our Congressional Scorecard for the 113th Congress provides a comprehensive rating of how well or how poorly each member of Congress supports pro-growth, free-market policies and will be distributed to our members and to the public.
LLPH will include this vote in our House 2013 Congressional Scorecard as 5 points in our 100 point scorecard. It is time to end crony big business deals in this country once and for all.